Sep. 27, 2006 - Minneapolis' landmark Foshay Tower officially changed hands Tuesday in a deal worth about $15 million that will see the 32-story office building redeveloped into an upscale hotel.

Ralph Burnet, chairman of Coldwell Banker Burnet Realty, said Tuesday he holds the largest stake in the building, while former owner Basant Kharbanda, a Minneapolis entrepreneur, retains a small share. Ryan Companies and four other local investors who Burnet declined to name also hold meaningful stakes in the property.

Burnet said work could begin late this year to transform the building into a W Hotel, a trendy brand of New York-based Starwood Hotels & Resorts. Ryan will oversee construction, which should be complete by spring 2008, Burnet said.

"The Twin Cities wasn't originally part of [Starwood's] plans for W, but they came to town and saw the Foshay and just fell in love with it," Burnet said. He said it's too early to put a price on the redevelopment, but said it will preserve the Art Deco design that has earned the Foshay, which opened in 1929, a place on the National Register of Historic Places.

All but about 20 tenants have relocated to other downtown buildings, Burnet said. Keys Restaurant will remain, although it will close for about a month early next year because of work taking place directly above it to build a hotel spa. Burnet said discussions are being held with other retail tenants that could also be asked to stay on.

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