Ryan Companies proposal for a $400 million redevelopment of five blocks now dominated by surface parking lots between the downtown central business district and the new stadium. It includes 300 housing units, 40,000 square-feet of retail and 1.16 million square feet of office space in two 20-story towers. Credit: Renderings courtesy of Ryan Companies
Pedestrians pass in front of a Wells Fargo & Co. bank branch in New York, U.S., on Thursday, April 11, 2013. Wells Fargo was ranked as the largest U.S. residential mortgage servicer at the end of December, with contracts on $1.87 trillion in unpaid home loans. The bank said in 2011 that it would stop originating reverse mortgages. Photographer: Scott Eells/Bloomberg
Scott Eells, Bloomberg
Schafer: Wells Fargo sees value of stadium's proximity
- Article by: LEE SCHAFER
- Star Tribune
- October 26, 2013 - 10:41 PM
The proposed Downtown East real estate project in Minneapolis has been pushed along by the developer Ryan Cos., but it’s clear that it has been a Wells Fargo deal since Day One.
Any remaining doubts were dispelled by plans showing just how much Wells Fargo wants its name all over the buildings. The bank’s name is going to be in 5-foot-tall letters on each of the twin office towers, with retail branding and monument signs at street level.
That’s pretty standard stuff, but what’s clever is how Wells Fargo plans to grab some of the naming rights value from the new Minnesota Vikings stadium next door. That’s because much of the roof on each building will be covered with a bright red and yellow Wells Fargo logo.
No customer would be able to see these logos while standing at an ATM. But a television viewer might, when a photographer on a passing blimp happens to be shooting for the broadcast of a National Football League game.
About the only place the name Wells Fargo does not yet appear is on an executed contract for its participation in the project. Along with the prominent role played by the Minneapolis-based Ryan, that has helped mask the fact that this project appears to be a pretty straightforward type of real estate deal called a “build to suit.” That means a capable development firm like Ryan will do the building to suit the needs of a user like Wells Fargo.
The Wells Fargo buildings would be at the heart of an overall development project proposed by Ryan Cos. that will include park land on most of two city blocks, a parking garage and space for housing and retail. It’s one of the most ambitious projects in the city’s history, on five blocks of land that today get used mostly for surface parking and are owned by the parent of the Star Tribune.
This project appears to be very far down the road, but let’s be clear: No Wells Fargo means no mixed-use development, no office towers and no parks in front of the new stadium. And if Wells Fargo walks away from the project, I will have to come to work longer in the newspaper’s drafty old building.
The bank, officially and curiously, is acting like this is still an idea that it’s sort of kicking around. A spokeswoman e-mailed that “while we are still in the stage of evaluating the opportunity to participate in the Ryan project, we are not discussing individual aspects of it.”
It was apparently Minneapolis Mayor R.T. Rybak who pitched the idea to Wells Fargo, which was considering sites in the Twin Cities to consolidate employees. Wells Fargo didn’t think there was a site in Minneapolis big enough, and the mayor pointed out the several blocks of mostly surface parking near the proposed stadium.
The site was big enough, offers a great location for transit and was next door to a new, $975 million stadium. So there’s no real mystery about why the two proposed 679,000 square-foot officer towers will have a Wells Fargo logo on the roof and a branch in Blaine or Lakeville will not.
“That one’s easy, on the why,” said Jim Vos, a principal with real estate advisory firm Cresa in Minneapolis. “On the worth, you’d have to go to an ad agency to figure out, because this is what they get out of it: Every time the Vikings play a football game, there’s an aerial shot. It’s going to show Wells Fargo in the middle of the picture.”
Ryan’s Rick Collins said the proposed sign package, including Wells Fargo in text on the front of each building — 5 feet tall and 50 feet across — is consistent with precedent for signs elsewhere in the city. As for the sky-view graphic, he said, it’s not specifically addressed by city ordinance, and “I haven’t heard any formal pushback.”
So the call was made. The response could have been easily predicted. The Vikings hate it.
The Vikings’ Lester Bagley actually apologized for the conversation, because he made it clear he was not interested in stirring yet another controversy.
The team is guaranteed naming rights to the stadium. In New Orleans, that was worth $8.9 million per year; $7.9 million per year in Miami.
The Vikings have started talking with potential corporate partners, he said, “and it looks like there’s another company that is going to guerrilla-market the stadium situation for the millions of eyeballs that tune in to NFL football. It can have a significant impact” on the Vikings’ potential deal.
Without any confirmation, U.S. Bancorp is routinely said to be a contender for the rights. Think about the appeal of those rights with its rival so close. It would be roughly akin to the Vikings seeing the Green Bay Packers’ big G appear in every overhead shot.
Even if the Vikings succeed in heading off any rooftop logo, it’s still a fabulous gameday branding opportunity for Wells Fargo. The site is between the stadium and the rest of downtown. The fans will have to flow around Wells Fargo buildings and signs to get to the game, because the back of the stadium will be walled off by freeways. Even a Vikings fan can’t drink enough Bud Light to make crossing six lanes of freeway traffic on foot seem like a good idea.
“From Wells Fargo’s perspective they’re making a $300 million investment in this area of downtown,” Collins said. “They will anchor it with 5,000 to 6,000 employees. They are owners, not just tenants. They see this as a very long-term investment. [Visibility] is a very important part of what was attractive to them about the location.”
E.J. Narcise, an experienced naming rights adviser and principal with Maryland-based Team Services, would advise the Vikings to relax. In a big corporate headquarters center like the Twin Cities, he said, naming rights would remain a “fantastic” asset.
“They cut those overhead shots so tight that unless they put that Wells Fargo building in the parking lot, you won’t see it anyway,” he said. But he added, “it’s still rather shrewd and creative on the part of Wells Fargo.”
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