The reconstruction of the iconic Coliseum Building, now underway, marks an important milestone in the drive to rebuild East Lake Street.
During the civil unrest following the murder of George Floyd in 2020, the 100-year-old landmark at 27th and Lake was badly damaged and has remained vacant and boarded for the last three years.
Now, thanks to the efforts of the non-profit Redesign Inc., the Coliseum is undergoing a $29 million make over.
In 2021, Redesign purchased the 85,000-square-foot building from an out-of-state owner who had planned to tear it down.
“That is something we never considered doing,” said Taylor Smrikarova, who is overseeing the Coliseum redevelopment for Redesign. “We are sometimes asked if it wouldn’t be cheaper and more efficient to demolish the building and build new on the same site, but that is not the case.
“New construction is nearly as expensive as rehabilitation so we really would not have saved much money by starting over with a new building. And, if we had built new, the structure would have been smaller than the existing Coliseum; maybe only two stories. Now, we have a larger building and we will be able to accommodate more small businesses. The bones are good. We have lots of windows that will bring in light, the ceilings are high. All of that is positive.
“By saving the Coliseum, we are able to preserve a Lake Street landmark that helps define this community. It is much better to use what we have now rather than putting more debris into landfills.”
In order to generate the funds needed to cover the cost of the $29 million project, Redesign drew on more than 10 separate funding sources that included state, county and local public programs along with private corporate and foundation support. Redesign’s major source of funding came from a federal program known as New Market Tax Credits. The New Market credits enable private investors to receive federal tax benefits in exchange for providing up front cash for community development projects like the Coliseum.
The Coliseum’s $29 million price tag includes expenses that are usually covered by the tenants in more conventional real estate ventures. “In those projects, tenants receive raw space known as ‘a plain vanilla shell’ when they move into the building,” Smrikarova explained. “They have to pay for the improvements needed to make the space usable – the wiring, plumbing, and painting. But we don’t want to do that. We wanted our tenants to be able to move into their space on day one with their improvements all ready in place. That’s why our costs on a per square foot basis are somewhat higher than they might be in a more conventional project. “
The Coliseum’s redevelopment also marks a departure from standard real estate industry practices when it comes to the ownership structure for the project. Currently, the Coliseum has three private owners in additional to the non-profit Redesign. They include Chris Montana from Du Nord Craft Spirits, Alicia Belton with Urban Design Perspectives, and Janice Downing at Commonsense Consulting @work. Montana intends to own and operate a tap room for Du Nord on the Coliseum’s first floor. Belton will use a cooperative structure to provide ownership opportunities for BIPOC businesses that will occupy the second floor.
“After the near wholesale destruction of the area, the Coliseum is still standing; that means the building can represent resilience within the community but only if the building is put back into use,“ said Montana.
“The recent history of the area demands that the building is not just rebuilt but is repurposed to address the underlying cause of its near-destruction. I’m proud to be a part of the effort Redesign, Alicia, and Janice are making for BIPOC collaboration and growth at this most important intersection.”
“For several years, we have had a dream to own a building where we can be a part of and create a community that values and supports business owners like us,” added Belton. “Redesign’s vision to make the Coliseum an opportunity to provide asset ownership is in alignment with our dream. What this means to us is that people who have been marginalized, overlooked, navigating systemic and institutional barriers will have a pathway to build capacity and achieve sustainable growth.”
The three businesses and Redesign own the building together through a partnership. That arrangement will remain in place until the tax credits are paid off in about seven years. At that point, Redesign will bow out and the three businesses will have full ownership of the property.
“With the traditional model of development there are owners and tenants but we rejected that model,” Smrikarova said. “One of our goals as always been to provide opportunities for community ownership in the aftermath of George Floyd’s murder. That means we have to provide ownership opportunities for people who aren’t able to bring piles of cash to the project. They don’t come from well-to-do families who can provide financial support and they don’t come with expertise in development.
“Redesign went to our partners and offered them an opportunity to participate without a large equity contribution. We had to use this non-traditional form of development in order to meet the goals of the project.
“Our response to the events of 2020 has always been to use development as a tool for achieving racial justice. That is why we are redeveloping the Coliseum in this new way.”
Redesign’s efforts to acquire the Coliseum have generated strong support from Lake Street area businesses. “At over 100 years old and 80,000 square feet, the Coliseum building is one of the largest and most consequential buildings left standing on Lake Street,” noted the Lake Street Council’s Marie Compos. “Without efforts like Redesign’s, we risk losing small businesses, which means losing local ownership, entrepreneurship, and control. I am really excited to see existing Lake Street businesses like Du Nord Craft Spirits expand into the Coliseum. It will be amazing to see their growth alongside flourishing BIPOC entrepreneurs in the building’s planned incubator space.”