Lawyers square off about future of Downtown East as contract expires.
A new twist has emerged in the messy legal battle between the owner of the Downtown East plaza adjacent to the Metrodome and the public body in charge of building the new $975 million Vikings stadium.
Plaza landowner Minneapolis Venture LLC and the Minnesota Sports Facilities Authority are feuding over a 2003 agreement that permits Vikings gameday events on the public plaza — until Oct. 31. If an extension agreement is not reached by then, the plaza won’t be available for the team’s four home games in November and December or any playoff games, although that appears unlikely at this point.
The dispute landed in a drab courtroom in Hennepin County District Court Monday as lawyers for both sides argued the intricacies of contract law before Judge Ronald Abrams. After more than an hour, the judge took the matter under advisement but urged all parties to continue discussing the matter.
The broader issue is whether the stadium authority will buy the plaza, and if so, for how much. The plaza itself is not needed to construct the new stadium, but because it’s home to the busy Downtown East light-rail station as well as an underground parking garage, it’s considered a crucial part of the area’s overall development. The new stadium is slated to break ground next month, with completion set for summer of 2016, just in time for the NFL season.
Yet both sides appear to be far apart in land negotiations, and it’s unclear whether the property will be purchased outright or taken by eminent domain. The market value of the parcel is about $4.5 million, but in a statement last August, authority chairwoman Michele Kelm-Helgen said Minneapolis Venture is demanding $24 million to $26 million for the property. Norman Baer, the Minneapolis attorney representing Minneapolis Venture, said Monday those figures are “not accurate,” although he declined to quantify what price his client is seeking.
Minneapolis Venture filed suit against the authority in August claiming that negotiations over the land next to the stadium site have been “perplexing and unproductive.” The suit seeks clarity from a judge on whether the property is part of the stadium’s broad reach.
For years, few in the real estate development community cared much about what is now known as the Downtown East plaza, a patch of concrete bordered by Park Avenue S. and Kirby Puckett Place between 4th and 5th streets.
Minneapolis Venture, which includes developers Robert Lux and Phillip Jaffe and financier Irv Kessler, purchased the plaza land and a 455-spot underground parking garage from the city of Minneapolis in 2007, part of a $65 million deal that included five parking ramps. (The trio also owns the Block E entertainment complex in downtown Minneapolis.)
But with the addition of the Metro-Transit light-rail stop, which will expand once the Green Line connects it to St. Paul next year, the impending construction of the Vikings stadium, and a $400 million mixed-use development planned for nearby land, Downtown East now appears primed for the kind of wholesale development that has eluded the area for more than two decades.
Baer said it’s difficult for Minneapolis Venture to develop the now-prime real estate plot because it’s unclear if the authority really wants it. “We’re not looking to sell it, we’re looking to develop it, but it’s a moving target at this point,” he said. “We can’t do anything until we know whether they’re going to buy it.” But lawyers for the authority claim in court documents that Minneapolis Venture is using the gameday contract dispute to “inflate the valuation of the Downtown East property in either negotiations or an eminent domain proceeding.”
In the meantime, the pressing issue is whether the Purple Faithful can party on the plaza. If an agreement is not reached between the two, concession tents will still be located along Kirby Puckett Way outside the Metrodome, according to authority spokeswoman Jennifer Hathaway. However, the public restrooms, the stadium bag check and some concession tents on the plaza will be off-limits. Then, after the Vikings finish their final season in the Metrodome, they’ll move across town to play two seasons at TCF Bank Stadium at the University of Minnesota.
Janet Moore • 612-673-7752