Minneapolis meets with owners of land key to Vikings stadium

  • Article by: JANET MOORE , Star Tribune
  • Updated: June 7, 2012 - 8:43 AM

A view from the Star Tribune building to the southeast shows a couple of the key parcels. At left is part of the Downtown East light-rail station, on the block owned by Minneapolis Venture LLC, with ties to developer Bob Lux. On the other side of S. 5th Street is the parking lot for the Hennepin County morgue and crime lab. The morgue and lab building is visible to the back right.

Photo: David Joles, Star Tribune

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Private talks have begun to acquire several key pieces of land for the new $975 million Vikings stadium, even before the leaders who will oversee its construction have been named.

Owners of the properties are already talking to city officials about selling their land for the project. Such deals must be made swiftly so that construction can be completed in time for the stadium's 2016 debut.

Acquiring the land for the project isn't expected to be as thorny as it was for Target Field five years ago. But one parcel involved in the project, the Hennepin County morgue and crime lab, could prove to be a hurdle because it would cost millions to move.

"We know all the owners at this point, and we're hoping the negotiations will be seamless," said Chuck Lutz, Minneapolis' deputy development director who is involved in preliminary discussions with the landowners.

If not, the land could be taken by eminent domain, an option "nobody wants," Lutz noted.

"It boils down to whether or not the current owner of the property is willing to sell," said Dan Kenney, executive director of the Minnesota Ballpark Authority, the owner of Target Field. If condemnation comes into play, the process could drag on and inflate the amount needed to purchase the land, which was the case with Target Field.

But Vikings officials say it's still too early to speculate about impending real estate deals, at least until five high-profile members of the new Minnesota Sports Facilities Authority are named, perhaps next week. Because the authority will buy and own the land, it will conduct the private wheeling and dealing of real estate that will make the stadium a reality.

The Vikings plan includes the current home of the Metrodome, a mishmash of surface parking lots and a busy light-rail stop. The new 65,000-seat stadium will be located a little east of the Metrodome, and the surrounding five-block area will become a public plaza, tailgating venues, a VIP parking ramp and additional "mixed-use" development.

Facing a few hurdles

Vikings officials say $25.8 million has been set aside out of the nearly $1 billion stadium budget to acquire the blocks in play, a figure devised by the team after consulting with the city and the Metropolitan Sports Facilities Commission, the soon-to-be-extinct owner of the Metrodome. The four privately owned tracts of the group have an estimated market value of $10 million, according to Hennepin County property records. But the actual purchase price of the land may very well be more, and negotiations could prove tricky.

Hennepin County officials have expressed concern about the inclusion of a parking lot off 5th Street and Park Avenue S. that is attached to the Hennepin County medical examiner's office and crime lab. Vikings renderings indicate the lot will be part of a public plaza for the new stadium.

County Administrator Richard Johnson said the parking lot is an integral part of the morgue and crime lab operation -- the two are inextricably linked.

"The lots provide critical access to the building, which is a 24/7 operation," he said. "You have bodies that are being brought in, and taken out by funeral homes, and crime scene evidence."

An option would be to relocate the entire operation, but that presents some challenges. "We don't want to be an impediment [to the stadium], but at the same time what we do there is relatively specialized," Johnson said. "It would take maybe four or five years to relocate. It's not like you can throw it up in an office building."

Hennepin and Dakota County officials are discussing a merger of their medical examiner operations, but Johnson said no firm plan is in place.

Hennepin County Sheriff Rich Stanek, who oversees the crime lab portion of the complex, has written two letters to Johnson and to the Hennepin County Board in recent months sounding an alarm about the Vikings plan. Construction costs of relocating the crime lab could cost between $15 million and $25 million, he wrote.

"This is an extremely busy, valuable and critical piece of infrastructure for public safety across the county," Stanek said, noting the lab processed nearly 3,300 cases serving 32 suburban Hennepin County law enforcement agencies last year.

Lester Bagley, the Vikings' vice president of public affairs and stadium development, said the team "has a good relationship with Sheriff Stanek and his office, we've been in communication with him over the last couple of years." Beyond that, he deferred land-acquisition and urban planning questions to the soon-to-be-named Facilities Authority.

Other parcels and players

Another key block across from the Dome, which contains an underground parking lot and the light-rail station and plaza, is owned by Minneapolis Venture LLC that has ties to developer Bob Lux.

A partner with Minneapolis-based Alatus LLC, Lux also owns the challenged Block E retail complex off Hennepin Avenue downtown. Lux and his partners bought the stadium-adjacent underground parking lot in 2001 and were reportedly close to selling it to the Vikings in 2007. This week, Alatus declined to comment on the impending negotiations regarding the land, which has an estimated market value of $4.5 million, according to county records. The talks, Alatus said, are private.

Another key block slated for the stadium development is owned by the Star Tribune. Now containing a parking lot and a vacant building, the block encompasses six parcels that are valued at $3.3 million in total, county records state. The newspaper actually owns five blocks in the vicinity of the Metrodome, but just one block along S. 3rd Street is part of the initial development plan pitched by the Vikings.

The Star Tribune recently hired Russ Nelson, a broker with Minneapolis-based Nelson, Tietz & Hoye, to handle real estate dealings regarding its downtown land.

Michael Klingensmith, publisher and CEO of the Star Tribune, said there have been no substantive talks regarding the sale of the property. The newspaper has editorialized in favor of building a Vikings stadium at the Metrodome site, but Klingensmith said he doubts "our editorial position would have any impact on the discussions about the land; the value is what it is. I would hope that the process goes smoothly, but that will depend upon whether we are offered a fair price."

A previous deal calling for the Vikings to buy four of the Star Tribune blocks for $45 million fell apart in 2007. The team, citing turmoil in the credit markets, backed out of the deal.

When asked what a fair price would be now, Klingensmith declined to comment.

Sale of the two remaining blocks will presumably proceed with little fanfare since they are owned by entities associated with the Wilf family, professional real estate developers from New Jersey who own the Vikings. The land, along 3rd Street and 9th Avenue S., are valued at roughly $2.2 million by the county.

Bagley, the Vikings spokesman, declined to comment how much the land might sell for.

Janet Moore • 612-673-7752

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