Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About

Trending Topics

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni

    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor & Employment
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations

    Industries

    View All

    • Cannabis
    • Consumer
    • Energy
    • Entertainment
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Non Profit
    • Real Estate
    • Technology

    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    1. Home
    2. Insights
    3. Alerts
    4. Minnesota court ruling stalls foreclosure on historic rehabilitation projectAlerts

    Alert / Tax Credit Alert

    Minnesota court ruling stalls foreclosure on historic rehabilitation project

    Aug 12, 2021

    Share

    By Louis Dolan, Jr. , Scott Sergio and Myra Benjamin

    Investors and developers interested in property rehabilitation opportunities should take note of a state court's ruling in favor of parties committed to historic preservation.

    What’s the Impact?

    • This ruling reflects an important recognition of different types of financing for developments, including the use of historic tax credits.
    • Experienced counsel can advise on tax instruments available for protecting and preserving the nation’s historic structures.

    DOWNLOADS

    On August 9, 2021, Judge Susan Burke of the Hennepin County District Court in Minnesota granted a temporary restraining order in favor of the owner/developer of the historic Dayton’s Complex in downtown Minneapolis to postpone a foreclosure originally scheduled to proceed on August 23, 2021.

    The oldest portion of the Dayton’s Complex is the flagship Dayton’s Department Store Building, which was constructed in 1902. The building is of great historical and cultural value, and the National Park Service has designated it on the National Register of Historic Places. A large scale renovation of the property, known as the Dayton’s Project, commenced in 2017, with the goal of turning the complex into a glamorous new arena for dining, shopping, and entertainment for Minneapolis residents. The project was supported in part through the allocation of historic tax credits (HTCs) through the federal Historic Tax Credit Program.

    Plans to open the Dayton’s Project to the public were put on hold due to COVID-19 and further disrupted as a result of civil unrest in Minneapolis stemming from the George Floyd murder. Since then, a myriad of legal and financial issues has arisen related to leasing and use of the property, the latest being an attempt by one of the financers, New York-based Monarch Alternative Capital LP, to foreclose on its loan based on technical defaults.

    In response to the efforts to foreclose, owner/developer 601 Minnesota Mezz LLC filed a lawsuit in the Hennepin County District Court and requested a temporary restraining order to prevent the foreclosure.

    On August 9, Judge Burke granted 601 Minnesota Mezz LLC’s request for a temporary restraining order, finding that a change in ownership at such a late stage would cause significant harm not only to 601 Minnesota Mezz LLC but to the State of Minnesota, as a new owner may not share the same commitment to the historic preservation of the complex. Specifically, the court held that “[p]laintiffs will suffer irreparable harm if they lose control over the management of the Dayton's Building, a unique property of eminent historic importance to the City of Minneapolis and the State of Minnesota. Public policy for historic preservation and the revitalization of the Minneapolis downtown will be undermined if the project is taken over by a buyer that does not share the same commitment to historic preservation of this recognizable Minneapolis landmark.” In so ruling, the court recognized the importance of not only the historic aspects of the project but the federal and state HTCs as well, even though 601 Minnesota Mezz LLC failed to make a strong showing that it would ultimately prevail on the merits of the case.

    Although the case continues, this ruling reflects an important recognition of different types of financing, including through use of HTCs, and the importance of these instruments in protecting and preserving the nation’s historic structures.[1]


    1. A copy of the opinion can be accessed here.
      [Back to reference]
    Real Estate

    Practices

    Community Development FinanceCommercial Lease DisputesReal Estate Finance

    Insights And Happenings

    • Alert

      Treasury publishes far easier rules for using ARPA funds in LIHTC projects

      July 27, 2022
    • Press Release

      Nixon Peabody welcomes Sharone Levy to Project Finance and Public Finance practice

      March 4, 2022
    • Press Release

      Nixon Peabody advises on financing deals for California charter school, creating generational impact in Los Angeles

      Oct 5, 2021

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • © 2023 Nixon Peabody. All rights reserved
    • Privacy Policy
    • Terms of Use
    • Statement of Client Rights
    • Supplier Diversity Program
    • Nixon Peabody International LLC
    • PAL