Walking by the AT&T Tower, the latest company to announce it’s moving out of downtown Minneapolis, Steve Cramer, the CEO of the Minneapolis Downtown Council who moved to the city in 1979, reminisced about bustling streets and booming business.

That hustle and bustle in the heart of downtown Minneapolis is mostly left to memory. 64% of office employees have returned to downtown offices at least one day a week from pandemic-prompted remote work, Cramer said.

The City, as a result, is grappling with how to reimagine the space as businesses continue to downsize their offices or move to the suburbs.

“This was something that was probably inevitable,” Mayor Jacob Frey said Tuesday. “But it got expedited by about five to eight years by COVID-19.”

The reality is downtown will never be what it once was, but it can be re-imagined, Mayor Frey said, starting with the roughly $92 million conversion of the former commercial Northstar Center East building into housing.

Like several towers near it, the 13-story Art Deco-style building built in 1916 is largely empty office space, and according to the Mayor, it’s about to undergo what is arguably the biggest transition downtown has seen in a century.

“When you have a gap in between the office space that is being filled and the capacity that we presently have, it makes sense to fully utilize the space. How do you fully utilize that space? One option is housing,” he said. “We need housing. We have a housing crisis.”

It was not a new concept. Cities from Chicago to Washington D.C. have explored the idea that’s been met with criticism from some large-scale developers who say converting office space into living spaces can cost at least as much as new development.

“In some cases, they’re right it’s not a practical use of space,” Mayor Frey said when asked why that would be different in Minneapolis. “From my understanding, in talking with a number of these developers and owners, the more historic, the older buildings are more conducive to being transitioned from Commercial to Residential. The newer ones it doesn’t make as much sense, just given how the footprint is set up and how the windows are situated.”

The Northstar East plan, developed by Sherman Associates, includes turning 20% of the space into affordable housing, Frey said.

Asked for his thoughts on converting this and other commercial buildings into residential ones downtown as the City intends, Cramer said, “Well, definitely not, not every building is going to be a candidate for conversion.”

“Although we have a history of that happening in our downtown,” he added, citing the historic Rand Tower that was converted into a Marriott hotel.

Commercial to residential conversion is one of several solutions, according to the mayor and Cramer who is a part of the ‘Vibrant Downtown Storefronts WorkGroup’ preparing to present plans to the City at the end of May to fill the sidewalks and vacant towers in a new way.

“I think part of it is going to be what kind of uses are permitted, and so rather than a really strict definition of traditional retail, other types of things to again, activate the space,” Cramer said when asked for a preview of the upcoming presentation still in the works. “Maybe art galleries or performance spaces where retail used to be but probably can’t be anymore.”

“It’s not going to be the cities that are clinging white-knuckled to what once was that are ultimately successful here,” Frey said. “It’s going to be those that are embracing the change. We want to be at the forefront of that.”

The City was in the process of finalizing the financing for the Northstar East project with developer Sherman Associates as of Tuesday, according to the Mayor’s office, and construction is expected to begin in the coming days with plans to re-open the doors in the summer of 2024.

Note: A previous version of this article included an incorrect statement from Mayor Frey’s office that dormitory-style shared bathrooms will be a part of the affordable housing portion of Sherman Associates’ plan for the Northstar East Tower conversion project. Sherman Associates has since confirmed to 5 EYEWITNESS NEWS that each unit will have its own bathroom.