U.S. Bank has renewed its lease at its downtown Minneapolis headquarters, the 32-story U.S. Bancorp Center at 800 Nicollet Mall. At the same time, the commercial banking giant has chosen not to renew a major lease at Meridian Crossing in Richfield, underscoring widespread fears of office consolidation in the era of remote work. The Richfield location spans some 340,000 square feet.

“Part of the goal here is to have more employees co-located with people they work with,” said Jeff Shelman, a U.S. Bank spokesman, on Monday, noting no corporate positions would be eliminated in the shuffle. “Most of the 1,400 employees in Richfield will go to Excelsior Crossing in Hopkins. Some will move to downtown Minneapolis.”

What’s that mean for St. Paul, where U.S. Bank has a sizable presence in three separate facilities?

The crystal ball isn’t so clear, as the company’s lease at U.S. Bank Center, 101 E. Fifth St., doesn’t expire until October 2024.

While U.S. Bank maintains some 10 floors — or 118,000 square feet — of office and retail space in the 26-story U.S. Bank Center building, it maintains an even larger presence in its two St. Paul facilities outside of downtown. The company’s location at Energy Park Drive hosts an operations center, and the West Side of St. Paul is home to a corporate building with a call center.

Together, the three St. Paul locations have some 2,000 workers. Nationally, U.S. Bank maintains more than 70,000 employees across 26 states,

No decision on downtown St. Paul offices

Consolidation within St. Paul would keep jobs inside the capital city, but it would still add up to a sizable blow to downtown if the positions relocate to the two U.S. Bank facilities outside of downtown proper, which has lost badly-needed foot traffic in the era of both online work and online shopping.

“Those are both significantly bigger in terms of square footage than the downtown St. Paul location,” Shelman said. “We don’t have any decision on downtown St. Paul … in part because that lease doesn’t expire until a little further down the line. We’re still about a year out.”

Consolidation would mean bad news for building owner Madison Equities and downtown restaurants and retailers, but it could also spell trouble down the line for the city’s tax coffers.

“It would decimate the building in terms of occupancy, and it would hurt the city in terms of real estate taxes,” said Jim Crockarell, principal with building owner Madison Equities. “The value of the building would go down dramatically. That’s true of many buildings across St. Paul. They’re all facing lower tax payments and lower valuations because their tenants are leaving when leases are coming up for renewal.”

Crockarell blamed the government sector as much as the private sector for failing to revive downtowns in the aftermath of a pandemic that sent office workers home by the thousands. On its website, Madison Equities advertises vacancies on 10 floors of the U.S. Bank Center, including all of the 19th and 20th floors.

Madison Equities faces management scrutiny

Still, Madison Equities has faced scrutiny for both its management practices and the physical condition of some of its older properties. In August, a U.S. Bank Center tenant sued Madison Equities over an elevator malfunction and break-in within the building, which dates back to 1973.

“I don’t think there was transgression on anyone’s part,” said Crockarell, of the elevator mishap. “We have at least 60 elevators throughout downtown. The city’s Department of Safety and Inspections certifies all of our elevators. That has nothing to do with building management, or the competence of Madison Equities. These are outside union vendors who are obligated to keep elevators safe and secure for the tenants.”

In June, Minnesota Attorney General Keith Ellison’s office sued Madison Equities after security guards alleged they were told to punch out of work and clock back in as if working for a separate company as they walked from building to building, allowing various limited liability corporations associated with the building owner to work them long hours without paying overtime rates.

“It’s our position that the statue of limitations has run out,” said Crockarell. “We argue we don’t owe anything. We’re totally in compliance with the law.”

In a sign that could be interpreted as hopeful for downtown, U.S. Bank recently renewed its lease for a customer-facing skyway branch in the U.S. Bank Center.

“Their retail committee has told me they would like to extend their lease for the skyway retail facility, and also their signage on the building,” Crockarell said. “Their office committee hasn’t made a decision yet. I can’t tell you what they’re going to do with the office facility. I can tell you U.S. Bank has been a good citizen for downtown St. Paul for many years, and it would really hurt downtown to see U.S. Bank go across the river. Downtown St. Paul needs all the help it can get bringing employees back to downtown.”

“I’m very optimistic that being the good citizen that they are, they’ll make the right decision and stay downtown,” he added. “I thought it was encouraging to see U.S. Bank committed to having a major presence in downtown Minneapolis. They’re moving many of their employees from the suburbs to downtown Minneapolis so they can help support the downtown economy. I hope they have the same attitude when it comes time to renew their lease in downtown St. Paul.”

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