A key city committee on Tuesday approved the concept behind a $400 million development planned for a barren stretch of downtown Minneapolis near the new Vikings stadium.
“I would say this is an important milestone,” said Rick Collins, vice president of development for Ryan Cos., the Minneapolis firm proposing the Downtown East project.
The 4-1 vote by the City Council’s Community Development Committee is one of many hurdles Ryan must clear before breaking ground next April on the massive project. Members of the committee and Mayor R.T. Rybak praised the Ryan plan, noting that land near the Metrodome has stubbornly resisted development for decades.
“We’re not here today to negotiate details of the financing,” said City Council member and committee chair Lisa Goodman. “We’re here to say, ‘We’re in and we think it’s a good idea.’ ” She noted the project, which is located in her district, spurs development without relying on “corporate welfare.”
The City Council will vote on the conceptual plan on July 19.
The developer is pitching two 20-story office buildings, 40,000 square feet of retail and restaurant space, a 1,300-space parking ramp, 300 to 350 residential units, and a public park that could span up to two of the five city blocks slated for the project. The Star Tribune owns the five blocks.
Also on Tuesday, Wells Fargo & Co. appeared to move closer to confirming that it will be the corporate tenant and owner of the office towers, which will span 1.2 million square feet. About 6,000 Wells Fargo employees would be located on the campus, although no formal agreement has yet been reached between Ryan and the financial giant.
However, the bank’s Minnesota CEO, Dave Kvamme, told the committee that the company is “excited about the Ryan development,” and that an affirmative vote by both the Community Development Committee and the City Council would serve as “important signals of progress.” Ryan officials have said that proceeding without a committed corporate tenant could prove difficult.
Should all necessary city approvals be granted, Kvamme said Wells Fargo’s goal would be to own the office portion of the project, though he declined further comment after the meeting.
Meanwhile, the city would issue $65 million in bonds to finance the parking ramp and the expansive park, known as the Yard.
The $45 million ramp, located on a block bounded by Chicago and Park Avenues S. between 3rd and 4th Streets, would serve stadium-goers, office workers and the public, and is a key component of the project.
The Minnesota Sports Facilities Authority, the body overseeing construction of the $975 million Vikings stadium, would own the ramps, but Ryan will guarantee a stream of payments to the city from parking revenue for at least 10 years or if the ramps aren’t sufficiently profitable. The city would then use the money to repay the bonds.
Last week, the sports authority awarded the parking contract for the stadium to Ryan, a deal that would include multiple parking options beyond the 1,300-stall ramp. The remaining $20 million from the city bond issue would go toward purchasing and preparing two blocks for the park.
Ryan would have an option to purchase a third of the western block along 5th Street S., abutting the Hennepin County jail, for future development. The purchase price would be about $2.5 million, and Ryan would have to exercise that option by July 2016, according to city documents.
It was this detail that troubled Council Member Cam Gordon, who was the lone dissenting vote Tuesday. “It’s too much detail, how much we would pay at this point in the game,” he said.
The committee vote authorizes city staff to move forward and negotiate all necessary agreements with Ryan and the sports authority, including financial terms. Assuming Ryan wins additional approvals from the city, the first phase of the project is expected to open the first quarter of 2016.