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Peter Kiewit Sons’ Inc. Buying Blackstone

September 7, 2007

By Steve Jordon, Omaha World-Herald, Neb.

Sep. 7–The 91-year-old Blackstone building at 36th and Farnam Streets is being purchased by a longtime neighbor: Peter Kiewit Sons’ Inc.

The construction and mining company said Thursday it is in the process of buying the former luxury hotel, now an office building that has some Kiewit employees already.

“It is an opportunity for us to own a significant amount of property adjacent to our headquarters building,” said Kiewit spokesman Kent Grisham. “We don’t anticipate any immediate changes to the building, nor do we have any specific plans at this time to discuss.”

Grisham said he didn’t know when the purchase would take place and would not disclose the proposed price in the purchase agreement with the owner, Reuben Investments LLC.

Attorney Bryan Mick said the principals in Reuben Investments are Michael Sortino and Randy Williams, who are business partners in Omaha, and Council Bluffs businessmen Lonnie and Michael McMullen.

Blackstone tenant Mark Huber, chief executive of Payflex Systems USA Inc., said the purchase is logical for Kiewit.

“They’re kind of landlocked where they are,” Huber said of Kiewit’s present office building and property, Kiewit Plaza, on the corner across 36th Street.

Kiewit recently expanded its parking garage to the south and is bounded on the east by WOWT television. The 2.7-acre Blackstone property includes parking lots.

Georgia Mace, a vice president of tenant IAT Reinsurance Group, said the present owners have done a good job of maintaining the old building. “I’m sure Kiewit will, too. It’s a perfect fit for them.”

Some Kiewit personnel have moved into the building in recent months, occupying space vacated by MidAmerican Energy Holdings Inc., which moved to One Pacific Place near 103rd and Pacific Streets.

MidAmerican began as a Kiewit division and now is part of Berkshire Hathaway Inc., which has its offices in Kiewit Plaza. Other tenants in the Blackstone include the Knights of Ak-Sar-Ben Foundation and the Omaha Community Foundation.

Reuben Investments is a private investment group named in honor of the Blackstone’s role in the creation of the Reuben sandwich.

Douglas County Assessor’s records show that Reuben Investments bought the property in 2004 for $5.5 million. For tax purposes, the assessor values the 98,100-square-foot Blackstone at $4,276,500.

Built in 1916 by Bankers Realty Investment Co. for a reported $500,000, the Blackstone was Omaha’s grandest hotel for a half-century. Originally it was a “residential hotel,” where guests rented quarters by the year. Apartments ranged from one to six rooms, all without kitchens because hotel services included cooking.

Besides the Reuben sandwich of corned beef, sauerkraut, Swiss cheese and salad dressing, the hotel’s Orleans Room restaurant has been credited with creating butter brickle ice cream. Its Golden Spur restaurant on the ground floor offered more casual dining.

During its heyday, guests including Eleanor Roosevelt, Jimmy Stewart, Bob Hope and Richard Nixon, who rode in the hotel’s private car, a Pierce Arrow, and read its magazine, the Blackstonian. Its top-floor ballroom, now occupied by the Ak-Sar-Ben Foundation, and rooftop gardens were a high-society gathering spot within the surrounding Gold Coast area of stately homes.

Austrian immigrant Charles Schimmel bought the Blackstone in 1920 and began renting rooms by the night. The Schimmel family sold it in 1968 to Radisson Management Corp. of Minneapolis, which closed it in 1976.

The building stood vacant until 1984. A $2.5 million renovation converted it into offices, preserving its dark brick and terra cotta exterior and winning a spot on the National Register of Historic Places as Blackstone Centre.

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Copyright (c) 2007, Omaha World-Herald, Neb.

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