Hyatt hotel planned along with luxury apartments in old St. Paul post office

A 149-room Hyatt Place hotel, 202 luxury apartments and a street-level restaurant will occupy the looming former downtown St. Paul post office and customs house on Kellogg Boulevard when its renovation is complete in spring 2016.

Exeter Group, which bought the art deco building in 2013, sold much of its first five floors last week to Des Moines, Iowa-based Nelson Construction & Development. Nelson will build the hotel, while Exeter handles the rest of the development.

"Our plan is to bring back some of the building's historic charm," said Herb Tousley, chief development manager for Exeter Group.

Named Custom House, the 17-story riverfront building will be restored in the original 1930s style -- a job made easier by the stacks of plans left behind by the U.

Herbert Tousley IV of the Exeter Group walks across a huge room that will eventually be converted into an open air swimming pool, hot tub, community room and other amenities for apartment residents in the former post office building overlooking the Mississippi River in downtown St. Paul on Wednesday, February 25, 2015. Hyatt plans to announce a new hotel in the space, along with apartments and other amenities. (Pioneer Press: Ben Garvin)

St. Paul-based Exeter began work on the lobby and residential floors in November, while Nelson Construction plans to begin gutting its portion of the building in March.

"St. Paul is a great market for us," said Danny Heggen, Nelson's project manager. "There's a lot happening in Lowertown right now that it makes this a prime opportunity for the Hyatt Place brand."

He noted the building's proximity to the recently opened Green Line train, the restored Union Depot and CHS Field, the new home of the St. Paul Saints baseball team, scheduled to open in May. There are no plans to connect the building to St. Paul's downtown skyway system.

The renovation will cost an estimated $125 million and employ nearly 400 people.

The 750,000-square-foot building, mostly built during the Depression and listed last year on the National Register of Historic Places, sits on a downhill sloping block diagonal from the federal courthouse. At one time it housed government offices, including a customs house and mail-sorting facilities. The last postal operations there ceased in 2013.

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Hyatt hotel planned along with luxury apartments in old St. Paul post office