The takeaway on the Downtown East ruling

  • Article by: STEPHANIE WOODRUFF, DAN COHEN and PAUL OSTROW
  • Updated: December 26, 2013 - 7:03 PM

Why we filed our lawsuit, and what the court did and did not decide.

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The Minneapolis Downtown East development proposal.

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We are the three plaintiffs who brought suit over plans by the city of Minneapolis for the Downtown East project.

On Dec. 20, Hennepin County District Judge Mel Dickstein denied our request for a temporary injunction on the grounds that it was premature. Nonetheless, his ruling, and the claims in our lawsuit, raise critical questions regarding transparency, citizen input and financial stewardship.

We are not naysayers. Plaintiff Woodruff is vice chair of the city’s Audit Committee, a former Fortune 500 executive and the chief revenue officer of a software company. Plaintiff Cohen is a former City Council president who currently serves on the Planning and Charter commissions. Plaintiff Ostrow is a former City Council president who played the lead role on the City Council on the development of Target Field.

It is important to stress what the court decided and what it left undecided.

We claimed that by using city resources to fund a $42 million parking ramp, the city of Minneapolis was exceeding its financial obligations under the stadium bill. The city never refuted our argument that absent city funding of the ramp, the Vikings would be required to finance and operate the ramp as a part of the required “infrastructure costs” for the stadium. The court did not reach the merits of our argument, holding, rather, that since the City Council created Downtown East as a separate development from the stadium, the council was within its authority to publicly fund the ramp.

The court also held that the City Council did not abuse its discretion by designating the development area as “marginal property” and by creating an “industrial development district.” We continue to believe that the use of this authority, generally reserved for the redevelopment of blighted areas, for the redevelopment of an area adjacent to a billion-dollar stadium and a light-rail-transit station, is bad public policy.

Finally, the court clearly and unequivocally ruled in our favor as to the exclusive authority of the Minneapolis Park and Recreation Board to purchase, maintain and operate “the Yard.” The court stated that allowing the City Council to acquire and operate parks could result in the two bodies “working at cross purposes” and would be contrary to “the rules of statutory construction, logic, common sense, and the advancement of effective government.” Our points exactly.

The Park Board should immediately incorporate the potential acquisition, improvement and maintenance of “the Yard” into its long-term planning and capital budget processes. The board should fund “the Yard” only to the extent that public input determines that the reallocation of resources from other park priorities is consistent with its comprehensive plan.

What now? With a new City Council and mayor coming on board, it is very important for the city to work with the state in a manner that will inspire the public’s trust.

For example, Metropolitan Sports Facilities Authority is required to submit a report to the Legislature by Jan. 15 on its operating and capital budgets. This report must be transparent and provide the public with a line-by-line analysis of all stadium expenditures. To date, the city and the state are paying for the required parking, skyways and open spaces surrounding the stadium. This is contrary to both the letter and the spirit of the legislation.

Also, the City Council and the Park Board should independently monitor and enforce the financial terms of the legislation. The city should ensure that all of its stadium-related costs are credited to the required $6 million annual operating subsidy and $1.5 million annual payment for the capital reserve. Operating losses on the parking ramp and capital maintenance needs for the ramp should come from these required annual payments and should not be an additional city subsidy to the stadium project. Similarly, “the Yard” or a similar green space is a required stadium design feature in order to “provide community and civic uses.” A fair share of the annual costs for the operation and maintenance of such a space should also be funded from the city’s required annual stadium subsidies.

Finally, the City Council should make a commitment to greater transparency, especially as it relates to city finances. The Downtown East project was approved without any public disclosure of anticipated parking revenues or projections of the long-term impact of the project on the city’s general fund. As stated recently by former Gov. Arne Carlson, the financial terms resembled a Rube Goldberg cartoon.

We are encouraged that several new council members have called for greater transparency at City Hall. We can think of no more important task as they begin their work in January.

 

Stephanie Woodruff and Dan Cohen were candidates for mayor in 2013. Paul Ostrow was a member of the City Council from 1998 to 2009.

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