The man behind a new nonprofit has quietly taken control of the debt on some of downtown St. Paul’s largest and emptiest office blocks, including the 25-story U.S. Bank Center, and is pitching conversions and repairs as the way to revive the core. The moves follow months of acquisitions and a city-commissioned study that mapped which towers could become housing. City officials and developers say the portfolio shift could be the most consequential downtown stabilization effort in years.
The Saint Paul Downtown Development Corporation bought the distressed mortgage on the U.S. Bank Center, closing on Dec. 30, 2025, according to Finance & Commerce. The lender was First Interstate Bank of Omaha, and SPDDC said private investors, not public money, fully funded the purchase. Controlling the loan gives the nonprofit leverage over leasing, security and long-term reuse of the 516,000-square-foot tower.
The group had already taken title to the long-vacant Alliance Bank Center and other Madison Equities properties, a string of moves that local reporters say puts the nonprofit at the center of any revival along the 5th Street corridor. MPR News reported the Alliance Bank Center transfer last fall, and municipalities and developers have been watching to see how the SPDDC will marshal private capital for repairs and reuse. Neighbors and business owners say basic stability at those sites would feel like an immediate relief after years of uncertainty.
Gensler Study Shows Conversion Potential
An office-to-residential analysis by architecture firm Gensler rated 20 downtown buildings and found that half were strong preliminary candidates for conversion, with the top ten candidates potentially creating nearly 4,000 housing units. The study reviewed floor plates, mechanical capacity, facades and neighborhood context and also estimated significant carbon savings from reuse, according to the Saint Paul Downtown Alliance. That analysis forms the backbone of the Alliance’s downtown investment strategy and helps explain why the SPDDC targeted these particular properties.
The U.S. Bank Center was singled out in the study as one of the better conversion candidates, and reporting shows its current office occupancy at about 26 percent, a level that has made redevelopment far more urgent. That low occupancy, combined with the high cost of retrofitting large towers for housing, is why nonprofit leaders and city officials are weighing a mix of repairs, public-private incentives and targeted sales to get projects moving, according to the Pioneer Press. Investors and community groups are watching to see how the SPDDC balances safety, cost and speed.
Short-Term Fixes Before Long-Term Projects
For now, the SPDDC is focused on safety and basic operations. Local briefs note that it purchased the condemned Capital City Plaza parking ramp and aims to reopen it by the end of 2026, while skyways and other access points remain under assessment, according to St. Paul Publishing. The ramp purchase came with continued skyway closures around the Alliance Bank Center as crews review safety and security. SPDDC describes those short-term interventions as prerequisites for larger conversion plans and future retail recruitment.
Legal And Financial Realities
The legal path from holding a mortgage to owning a deed is not automatic. A foreclosure auction for the U.S. Bank Center’s mortgage was scheduled for last Monday, and officials note that deed transfers still require either a foreclosure or a deed-in-lieu, reporting shows. Those limits, along with the SPDDC’s choice not to disclose the investors who backed the debt purchases, complicate timelines for redevelopment, according to the Pioneer Press. Still, acquiring the loan itself makes the SPDDC the note holder and gives it leverage to shepherd reuse, a role described by Finance & Commerce.
Community Engagement And Next Steps
The Downtown Alliance has launched a Reimagine Downtown engagement process to gather resident and business input on how the core should evolve. That public portal and mapping tool remain open as stakeholders weigh options, according to the Alliance’s materials. The engagement effort, which the Alliance says will inform predevelopment priorities and design choices, is intended to feed directly into which buildings are pursued for conversion and what amenities are required, according to the Saint Paul Downtown Alliance. Officials say the coming months will be about lining up financing and firm reuse plans for a handful of the most promising sites.
“U.S. Bank Center is a key asset on Fifth Street,” SPDDC President Dave Higgins said in a statement about the debt purchase, Finance & Commerce reported. For downtown residents and business owners, the looming questions are who pays for conversions, how quickly new units can be delivered and whether these short-term fixes will translate into sustained foot traffic and long-term neighborhood investment.
