Jungle Boogie

Two buildings, one loan: A tragedy in three acts

Act One: The Bright, Beautiful Future

As the curtain rose on 1991, the Jungle Theater opened near the intersection of Lake Street and Lyndale Avenue in south Minneapolis. To call the 89-seat theater intimate would have been an understatement. During intermissions, if there wasn't enough room to stand around the cappuccino bar, patrons would have to step outside and watch the traffic. But from its first show, Only You, the venue was drawing sellout crowds. Subsequently, the nonprofit won critical raves for interpreting the work of Samuel Beckett and David Mamet, hosting stellar local storytellers like Kevin Kling, and providing a launching pad for a late-night cabaret called Balls. It also didn't hurt that, before or after a show, theatergoers could take advantage of the neighborhood's distinctive cuisine. It's Greek to Me was right across the street, and the Blue Nile, a popular Ethiopian restaurant, was just around the corner.

Hennepin County Commissioner Mike Opat is unhappy about the Jungle Theater's failure to redevelop the Latham Building
Tony Nelson
Hennepin County Commissioner Mike Opat is unhappy about the Jungle Theater's failure to redevelop the Latham Building

Two years later the Jungle Theater was so successful its board began to look beyond its rental space for a larger, permanent home. The Latham Building, a three-story brick structure built in 1901, seemed perfect. After all, the place was in need of rehabilitation. Hennepin County had taken it over through tax forfeiture and the upstairs apartments had been vacant since a fire the year before. The theater made a pitch to the Minneapolis Community Development Agency (MCDA): The Jungle would gut the building, then rehabilitate it to create an inviting, three-story performance space featuring 175 to 200 seats. The proposed plan would cost $900,000. The Jungle would be seeking up to $775,000 in city loans to help pay for the project.

But the Latham Building did have a tenant: the Blue Nile. And the restaurant owners had a counterproposal. They would renovate their space and restore the upstairs apartments for just $337,000, $70,000 of which would come from the MCDA. But the agency's staffers were not convinced the project would generate enough cash flow, and also fretted over the restaurant's parking requirements. The Jungle also had the support of the Calhoun Area Residents Action Group (CARAG) and the Lyn-Lake Improvement Association.

Ultimately, the MCDA recommended the Jungle over the Blue Nile and the Minneapolis City Council (wearing their hats as the MCDA Board of Commissioners) approved the deal in January 1994. In April that same year the Hennepin County Board of Commissioners voted 4-3 to sell the Latham Building to the MCDA for a dollar. The MCDA would then sell the building to the Jungle for one dollar and provide access to redevelopment loans. As a part of the deal, the Jungle would have to kick in $20,000 for the Blue Nile's relocation costs.

Hennepin County Commissioner Mike Opat was one of the "no" votes. "I objected to giving away the building for nothing; I thought the Jungle could have afforded to pay something for it," he recalls. "The marketing pitch to us was, 'Hey, we're a poor theater, we just want a performance space. If you give it to us for a buck, we'll make it happen.'"

Today the Latham still sits empty--boards on its windows and a For Sale sign stuck to the bricks. Money from the sale will be used to pay off the city and ease the Jungle's mounting debt load, bringing the curtain down on the Jungle's attempts at redevelopment.

Act Two: A Change of Heart

Not long after the Jungle took control of the Latham Building, the edifice began to lose its appeal. After retaining an architect, the board realized that the rehabilitation would be more costly and problematic than originally thought. "It was just too small a site, too small a building," explains Eric Galatz, current chair of the theater's board of directors. Besides, he says, "a better opportunity came up."

In 1995 the building housing Knickers Pub and Fantasy House, an adult-accessories store, went on the market for $500,000. Sitting kitty-corner from the Latham and just north of Lake Street, the building seemed like a bigger, better option. "That did look like something that could be turned into a theater," says Julia Sand, the Jungle's managing director.

The Jungle staffers went back to the MCDA to draft a new script. Instead of using an MCDA loan to rehab the Latham, they wanted to use that money to turn the Knickers building into their main stage. As part of the loan-restructuring pitch, the Jungle professed its goal to eventually turn the Latham into an 80-seat space for "alternative programming," with room for administrative offices and rehearsals on the upper floors. In June 1995 the city council--functioning as the MCDA board--approved the changes.

According to an MCDA report, the initial estimated cost for both projects was $2.1 million. But that's not the way the plot unfolded. Sand says the capital campaign, once designed to raise money for both projects, yielded about $2.5 million. But the Knickers rehab would prove to be much more expensive than anticipated (by the time the Jungle opened its new theater in February 1999, the cost was $3 million). The Jungle managed to get $100,000 from CARAG's Neighborhood Revitalization Program (NRP) funds to help fix up the Latham Building, along with $335,000 in state bonding money. They spent $125,000 to begin the rehab, sought an arts-oriented partner to help complete the overhaul, and even got bids from two different construction companies. But it wasn't enough. The debt load on the Knickers project alone was too much for the Jungle to absorb. "We spent so much time on [the Latham] building," Sand recalls wearily.

Meanwhile, the Blue Nile found a home on Franklin Avenue, near Minneapolis's West Bank.

Act Three: The Debt of a Salesman

The Jungle's $450,000 loan (including interest) from the MCDA was about to come due in July 2000, when representatives from the theater went to the agency, hats in hands, and asked if the debt could be forgiven. MCDA analysts rejected the idea. Instead, they recommended that the Jungle put the still vacant Latham building on the market and use the money to pay back the city. A sale sign was tacked up earlier this year. The price tag: $695,000.

To Hennepin County Commissioner Opat's way of thinking, it was a tragic ending for the county, who could have sold the building in the first place: "So we gave them a building for a dollar, and they want to sell it for $700,000? I think our board would be wise not to do any deals like this in the future with arts groups--anybody who's not going to escrow their firstborn until they carry out the representation they make to us. It ends up being a pretty gross misrepresentation."

Since the Latham project never really got rolling, the NRP funds and state money earmarked for the building never made it to the Jungle. "I think when we bought the Knickers building it might have been prudent to give the Latham Building back to the city and the county," the Jungle's Sand allows now. "It's been troubling to us that we haven't been able to develop it, because it's an empty building here. The problem is, in 1994 they really thought that they'd raised the money to renovate it."

Susan Hagler, the current president of CARAG, says the dollar figures involved have prompted some tongue-wagging among the neighbors--especially those intrigued by Latham's potential as a community space. "A few of us kind of raised our eyebrows at this. They got the building for a dollar and they're going to go and sell it to pay their debts," she says. "We do feel like the Jungle is an asset to the neighborhood, but they're basically getting a really good deal in being able to sell that building."

According to an MCDA staff report, the Latham will have to sell for $600,000 to ensure that the city gets all of its money back. That's because the city has agreed to let the Jungle first pay costs associated with the sale of the building, as well as other debts, including $10,000 to reimburse Hennepin County for environmental studies. The report guesses the property could sell for anywhere from $300,000 to about $900,000. If there's not enough money from the sale to pay the entire MCDA loan, council member Lisa McDonald, whose Tenth Ward includes the dilapidated Latham, opposes forgiving the balance. Council member Jim Niland, whose Sixth Ward includes the new Jungle, is in favor of cutting the theater a break.

Today, while the Latham sits empty, the revitalized hub of Lake and Lyndale is bustling with new businesses, including the Herkimer Pub and Brewery and La Bodega Tapas Bar. Mike Finkelstein of Suntide Commercial Realty is handling the sale. He acknowledges that the Latham Building is in disrepair and will require substantial rehabilitation. What might fit in the old building? Maybe a restaurant or a retail space on the first floor, says Finkelstein, with offices or apartments on the upper floors. Maybe something like the Blue Nile, which once sat on the ground floor of the Latham Building--a fine spot for dining after the theater.

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