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ST. PAUL, MN-Ramsey County has again put its 590,172-sf Government Center West and the adjacent 122,410-sf Adult Detention Center up for sale, following the failure of a deal with Ryan Cos. to build a $65 million, mixed-use condominium and retail project on the site. The county has purchased a new building and is moving in by 2012, though any purchase would include a sale-leaseback for 250,000-sf in the West building for county offices until that deadline.

The county would have received about $3.4 million for the property under the Ryan deal, but the local condominium market has softened abruptly. The County Board of Commissioners has hired United Properties to market the buildings, though it is not naming a price, says Pete Rand, a vice president with United. “Right this minute is not the prime time to do a condo project,” he tells GlobeSt.com.

Rand says the large, 10-story building, formerly the headquarters of West Publishing, could again be used as a corporate headquarters. “It could also be purchased by an investor and be used as office with retail on the first floor. There’s a lot of different possibilities, some people are talking about putting hospitality there, in that use the building would be scraped. More than likely, with the remaining SLB, an investor would lease out to other tenants and then decide how to move forward with the building,” he says.

The seven-story jail building could also see some sort of reuse, whether residential or office. “It’s not your garden-variety jail, with the way it was built and the impressive glasswork, but there is a strong probability that the building will be scraped and the site redeveloped,” Rand says.

Both buildings are on West Kellogg Boulevard are near the city’s CBD and overlook the Mississippi River. The main building was constructed in phases in 1886 and 1964, with the jail being added in 1979.

Rand says the lease rate will likely mirror the area’s average office lease rate of $12 to $15 per sf, gross. “While the vacancy rate for the local office market is in the 20s, it’s a good, strong investment market, a number of properties have traded. I would label the office market as recovering,” he says. It’s not likely the new property owner would get tax incentives, as the county wants the property to contribute to the tax rolls.

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