Vikings, Avista talk again over Star Tribune land deal

As bidding on the Star Tribune property closed, the Vikings still appeared to be the likeliest buyer.

By PAUL LEVY, Star Tribune

Last update: May 14, 2008 - 12:12 AM

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Months after the Minnesota Vikings canceled a $45 million deal to buy Star Tribune property near the Metrodome, the two sides resumed negotiations and the Vikings continued to buy property in the area that would surround their proposed new stadium.

As Tuesday's deadline for bids on the Star Tribune's five blocks near the Metrodome passed, Avista Capital Partners, the newspaper's parent company, remained mum about potential buyers. But Avista Vice President Greg Evans acknowledged in an interview April 17 that the company has had several discussions with the Vikings' owners concerning the 12.4 acres of land -- a point verified Tuesday by Vikings Vice President Lester Bagley.

Evans declined to comment Tuesday, but other area property owners believe Vikings owner Zygi Wilf still envisions building a stadium on the Metrodome site and developing the land around it.

Just days after the Minnesota Vikings killed the deal to buy four city blocks owned by the Star Tribune this past August, local property owner Mike McDonald said he received a call from Vikings representatives telling him the Wilfs still were interested in his property on 3rd Street near Chicago Avenue.

McDonald's family owns A.Y. McDonald Manufacturing and purchased land in downtown Minneapolis nearly a century ago. A.Y. McDonald sold a section of that property to the Wilfs Oct. 11, McDonald said Tuesday.

Basant Kharbanda, another downtown property owner who said he was contacted by Zygi Wilf, said the Wilfs have asked some landowners if they would abide by development plans the Wilfs have choreographed -- even if the Wilfs don't buy their property.

"But they've always concentrated on the Star Tribune land first," Kharbanda said months after the original Vikings-Avista deal dissolved.

Changes in circumstances

That deal was made before the land compensation hearings for the Twins ballpark revealed that the land on which a new Twins ballpark is being built was valued at far less than what the Vikings agreed to pay for the Star Tribune land that would surround their proposed $954 million stadium.

Much has changed since then. Star Tribune Publisher Chris Harte, who was out of town Tuesday and referred calls to Evans, has denied a report in the New York Post saying that the newspaper was near bankruptcy. But Avista has hired the Blackstone Group to help restructure the debt Avista used to buy the newspaper.

Even when he was offering to buy the four blocks the Star Tribune then was making available, it was the fifth block -- the 425 Portland Av. block, where the newspaper is housed -- that Wilf coveted. It is directly in line with the Metrodome and an underground parking lot that Wilf and the Metropolitan Sports Facilities Commission -- owner of the Metrodome -- acquired an option to purchase from businessman Bob Lux. Wilf has said he hopes to convert the lot to a Winter Garden light-rail station.

But there have been other changes for the Vikings, including falling real estate values and rising construction prices. The Vikings also failed to persuade Gov. Tim Pawlenty and the Legislature to support a new stadium during the 2008 session.

"Our stadium prospects have dimmed," Bagley said. "We can't do it alone. We need constructive engagement by state leaders. Our ownership is doing everything they can to resolve the stadium issue."

Other possible bidders for the Star Tribune land could include brokers who hope for a quick profit by buying the land and then turning it over to Wilf.

Potential property bids are being handled for the Star Tribune by CBRE, a California-based real estate service. OhSang Kwon, one of the Avista partners, did not immediately return calls for this report.

Paul Levy • 612-673-4419