The developer proposing a massive project next to the new Vikings stadium is asking the public to pay for skyways not required by the legislation passed last year — likely about $6.4 million.
Ryan Cos. also would retain the right to build on part of a 9-acre plot of land that plans have set aside for a public park.
These are among new details revealed in city documents, obtained by a public records request, about the $400 million mixed-use project being proposed in Minneapolis. The still-fluid plan would transform the eastern edge of downtown near the planned $975 million stadium, an area that has failed to attract significant development in three decades.
City leaders and Ryan rolled out the project last month to reshape the five city blocks owned by the Star Tribune into a commercial-residential development, a public park and a parking ramp. The proposal, including a municipal bond issue, is subject to City Council approval.
An outline of the plan shows that the Minnesota Sports Facilities Authority would pay about $6.4 million for three skyways connecting Ryan’s two, 20-story office buildings with each other and nearby parking ramps, a cost often incurred largely by the private owner. The skyways would connect the stadium to downtown Minneapolis.
The sports authority is overseeing construction of the stadium, much of which is funded with state and city money. The three skyways are included in Ryan’s pending bid to win a parking and skyway contract from the authority, said Rick Collins, the company’s senior vice president. That bid, which the authority will decide on later this month, covers additional, legislation-mandated skyways connecting parking facilities to the stadium.
Collins said the project has advantages for the public entities, but it also entices a corporate tenant — possibly financial giant Wells Fargo & Co. — to move downtown rather than the suburbs. “So what we did was try to find ways to deal with costs that would not traditionally be incurred in a suburban campus,” he said. Wells Fargo spokeswoman Peggy Gunn declined to comment on the project Monday.
Skyways: A ‘priority’
Michele Kelm-Helgen, chairwoman of the authority, said she did not have a position yet on whether they should pick up the tab for the skyways, as they consider the competing proposals. But connecting the stadium to downtown via skyway is a “priority.”
“I think … from an economic development standpoint as well as just a user standpoint, to have skyway connection to the downtown would be a big benefit,” she said.
The proposal also envisions the city borrowing about $65 million to acquire and build a bare-bones, two-block park and a 1,300-stall parking lot, which partly satisfies a requirement in the stadium legislation. What was described as a 10-year Ryan guarantee to cover shortfalls, however, is slightly more nuanced.
The plan indicates that the city and the authority could be on the hook for up to $150,000 a year if several parking ramps have not banked any profits, which Minneapolis’ chief financial officer Kevin Carpenter called “a worst-case and very unlikely scenario.” Ryan will cover shortfalls above $150,000, for either 10 years or until the ramps generate a $4 million annual profit. Ryan’s and the public’s shortfall payments would be paid down later if the ramps generate a profit.
Collins said this provision was included in case the mixed-use development did not move forward, but legislation still requires the parking ramp to be built. That would eliminate the thousands of new office workers who are expected to use the ramp.
The Star Tribune and Ryan have declined to disclose terms of the purchase agreement. The only projected cost for Star Tribune land listed in the documents is $7.7 million to acquire a block for the parking ramp.
In addition, a key tenet detailed in the documents involved Ryan’s right to purchase space across from the Minneapolis Armory to develop into more residential or office space, in return for guaranteeing the bonds used to fund the parking ramp. The amount Ryan would pay the city was redacted from the documents, and Collins declined to disclose it on Monday.
That land has been set aside for a 9-acre park, which stretches for two city blocks along S. 5th Street toward downtown, ending near the Hennepin County jail. As planned, it would be the largest contiguous stretch of green space in the central business district, and it serves as a key cornerstone to the area’s overall development.
Documents state that Ryan could build on up to a third of the block, which would be in addition to the office towers, parking ramp and residential units already proposed by the developer along S. 3rd Street.
Collins said the market will determine what the development on the park land will entail — or if it’s built at all.
“It will be an opportunity to review the continued improvement in the housing market to determine whether it will be market-rate apartments, or condominiums or townhouses, or if there’s sufficient demand for office space,” he said. “We figure there will be a significant amount of momentum generated for more development at that point.”
Ryan must exercise its development rights for the park land by July 1, 2016, about the time the new stadium is slated to open. The developer has a year after that to begin construction.