Minneapolis’ plans to build new city offices downtown could include a parking garage swap.
Under a proposal to be considered by a City Council committee Tuesday, the city would trade its parking garage on 5th Street S. for a privately owned garage that shares the same block. The deal would earn the city more than $6 million and set the stage for a new office building kitty-corner to City Hall.
By acquiring and demolishing the privately owned ramp, the new city building could face the plaza between the Hennepin County Government Center and City Hall. The idea is to make it easier for the public to utilize city offices and for government employees to access each other.
“It’s much easier when all city and county facilities really do face that governmental plaza,” said Minneapolis Chief Financial Officer Mark Ruff.
The city currently has employees scattered at sites across downtown, including the Public Service Center and City of Lakes building behind City Hall. The council decided in July to demolish the Government Center Ramp at 415 5th Street S. and build there.
While many details are still being worked out, construction is expected to begin in mid-2018 and finish in 2020.
If the council approves the parking garage swap, Minneapolis will sell the Government Center Ramp to Urban Growth Property Trust in exchange for the InterPark Ramp at 501 4th Avenue South. The InterPark Ramp would eventually be demolished to make way for the new city building.
Urban Growth is the umbrella for InterPark, a Chicago-based company that owns parking facilities in cities across the country, including five in downtown Minneapolis, according to its website. InterPark President J. Marshall Peck could not be reached for comment.
For InterPark, the swap means gaining 329 more parking stalls than it has at its current facility. For the city, Ruff said, it’s about building offices as close as possible to City Hall, while also making some money.
InterPark will pay the city $6.5 million for the 43-year-old Government Center Ramp, plus about $2 million in rental fees between July 2017 and June 2018 and a cut of parking revenue during the 2018 Super Bowl. After that, InterPark will own and operate the ramp.
Minneapolis plans to put the money toward its Parking Fund, which pays for and earns money from the operation of on- and off-street parking and the city’s impound lot. The $6.5 million will go toward paying off some of the fund’s outstanding debt, Ruff said.
The Government Center Ramp’s earnings — currently a net of more than $1.5 million a year — will be a loss for the city upfront. But long-term payoff will come from property taxes on the Public Service Center and City of Lakes sites, which will be sold and turned into private development, Ruff said.
Still, nothing is final until the Council decides to move forward. If for some reason the office building project doesn’t happen, Ruff said, then ownership of the parking garages will revert to what it was originally.
“We’re trying to give the City Council options,” he said, “but not [lock] them into anything that’ll restrict their ability to make decisions in the future.”