Size of details, stakeholders could push work to next year.
The largest downtown Minneapolis real estate project in a generation remains plagued by unresolved issues as city officials scramble to get it approved before City Hall leadership changes in just over six weeks.
The $400 million proposal to build a massive mixed-use development, parking ramp and park adjacent to the new Minnesota Vikings stadium is a complicated work in progress. The City Council has not yet reviewed the details of the public financing package, primary office tenant Wells Fargo & Co. is demanding controversial signage and historic preservationists Tuesday tried to save the Star Tribune building, which is in the middle of the project.
Many competing players have a stake in the outcome, including the city, developer Ryan Cos., Wells Fargo, the Vikings and the Minnesota Sports Facilities Authority, the public body overseeing construction of the stadium. Called Downtown East, the private development includes two office towers, apartments and retail space on five blocks now owned by the Star Tribune.
“It’s one of the largest and most complicated development projects that has come before us in many years, ” said Jeremy Hanson Willis, the city’s chief development official. “So there are many issues still under discussion that need to be resolved.”
Hanson Willis said the goal is to win City Council approval by the end of the year, before seven new council members assume power in January. Given that timetable, a groundbreaking is anticipated in the spring. But time is running short.
“We don’t have a finance plan in front of us,” said Council Member Lisa Goodman, head of the council’s Community Development Committee. “And I’m not going to be party to moving something forward that’s not specific and detailed.”
But Rick Collins, Ryan’s vice president of development, says a last-minute scramble is common in complicated projects like this one. “I think there’s a concerted effort from all parties to overcome these issues,” he said.
The public component of the deal involves the city borrowing about $65 million to help build a 1,625-spot parking ramp and basic public park, using expected parking revenues to pay off the debt. Hanson Willis said that the total that the city will need to borrow has changed but not significantly.
The council unanimously approved a conceptual framework for the financing plan in July. But the finer points of how the bonds will be repaid, how the park will be operated and developed beyond just plots of grass, and whether the city would sell a portion of the park to Ryan for use as housing are still being negotiated. Questions also surround Ryan’s guaranteed payment to the city in the event of revenue shortfalls, as well.
In addition, the Vikings and the Stadium Authority are counting on the construction of the parking ramp, because stadium legislation requires 2,000 parking spaces within a block of the stadium.
“With the concerns being raised by council members and now with the denial of the demolition permit by the [Heritage Preservation Commission], I would say it would be less likely that this will be resolved before the end of the term,” said Council Member Robert Lilligren, who is leaving the council. “And I know a lot of the people involved wanted it resolved before year’s end.”
Mayor R.T. Rybak’s office did not respond to a request for comment.
The sign issue surfaced between Wells Fargo and the Vikings at a city Planning Commission meeting last week. Wells Fargo is intent on placing a rooftop sign bearing its corporate logo on top of each of the two 17-story office towers, signs that would likely be illuminated at night. City regulations, however, prohibit these signs.
Brent Hanson, vice president of corporate real estate for Wells Fargo, told the commission the signs are an expectation tied into its investment of more than $300 million in the deal.
When pressed for details this week, Wells Fargo spokeswoman Peggy Gunn indicated the financial giant might not be willing to negotiate. “We do have a contingency in our proposed agreement with Ryan that allows us to withdraw from the project if it does not include factors that we consider important to our significant investment,” she said in an e-mailed statement.
This has drawn the ire of the Vikings, partly because the signs would be widely visible from national television shots during football games. Vikings spokesman Lester Bagley called Wells Fargo’s move “ambush marketing.” The signs would have an adverse impact on the team’s ability to negotiate a naming rights package, he said.
In an effort to maintain control over the project, city officials are seeking to use the city’s Port Authority, which promotes development in industrial districts, to bypass the part-citizen Board of Estimate and Taxation, which approves borrowing. That also allows the City Council to approve the bonds with seven rather than the nine votes sometimes required and more easily add parcels to the deal later on.