The owner of the historic Ceresota senior apartment building in Minneapolis' Mill District filed for bankruptcy last week, after defaulting on a bank agreement.
The Ceresota Funding II LLC, at 155 S. Fifth Av., filed for Chapter 11 bankruptcy protection in court on July 1, stating it had both assets of between $10 million to $50 million and liabilities of $10 million to $50 million and up to 49 creditors.
John Lamey III, the attorney filing the bankruptcy on behalf of Ceresota Funding II President Ross Dworsky, wrote in an e-mail that the bankruptcy reorganization "filing was to preserve that business on an ongoing basis. The filing was done to stave off a foreclosure by a mortgage holder. We filed the morning of the sheriff sale."
Late Tuesday, the facility's tax credit investor, MinnWest Bank, filed a motion asking a federal court to dismiss the bankruptcy case. MinnWest Bank said it notified the managing member of Ceresota on Jan. 20 that the Ceresota project was in "material default."
It also said that in March, it exercised its right to become the managing member of the project and that it never authorized any bankruptcy filing. A July 29 court hearing is scheduled.
The Ceresota structure is a historic landmark located near the Stone Arch Bridge. The 11-story building started out in 1908 as the Northwestern Consolidated Milling Co. Elevator and was converted into offices in 1987.
It was renovated yet again into a senior-living facility around 2015. According to court records, Ceresota's business is referred to as Millers Landing Senior Living and has about 35 senior residents and memory care patients at the site.
The property's conversion to senior apartments was a coup for city officials who in 2013 pledged to foster the creation of 35 senior-living apartments across the city by 2025.
The Ceresota project was one of the first market-rate senior-living facilities in the downtown riverfront area. It was joined by other projects across the city, including the five-story Abiitan Mill City assisted-living facility across the street on the corner of 5th Avenue and 2nd Street.
Sue Lee, the spokesperson for Abiitan Mill City, said her company has a "commitment to downtown" and is proud of its "beautiful senior housing building. We love our location." She declined to discuss the Ceresota facility or discuss demand for senior housing in Minneapolis.
But others noted that while some senior apartments focus on affordability and income restrictions, not many offer amenities geared toward the elderly in downtown.
Many people aging out of apartments and condos move out of the city to live in facilities near relatives in the suburbs, said Mary Bujold, president of the market research firm Maxfield Research.
"There isn't a lot of senior housing in Minneapolis, period," Bujold said.
Besides Ceresota and Abiitan, the city has a smattering of senior apartments, including the Kenwood Isles Condos in Kenwood, Augustana Apartments in south Minneapolis, the Waters on West 50th Street, and others in Uptown, southwest Minneapolis and near Lake Nokomis, she said.
With respect to the Ceresota building's bankruptcy, "I think what will happen is they will reorganize, or will potentially get somebody else to buy them out," Bujold said.
