The biggest downtown commercial development in a generation cleared a crucial step Friday when the Minneapolis City Council unanimously approved a plan to bring offices, housing and retail to the barren eastern edge of downtown.
“We now for the first time have an official vote of the City Council saying, unanimously, ‘Keep going. We like this idea. Come back to us with details,’ ” Mayor R.T. Rybak said after Friday’s vote. Further votes are expected this fall, when the council must give final approval to the specifics of the public-private land deal.
The $400 million development will materialize in the shadow of the $975 million Vikings stadium slated for the site of the Metrodome. All five blocks in question are owned by the Star Tribune, which new estimates show could make upward of $38 million from the sale.
The unanimous City Council vote approving the concept comes about two months after city leaders unveiled the proposal to build a massive mixed-use project, parking facilities and a large public park on land adjacent to the new stadium.
The deal is one of the largest office developments in Minneapolis since First Bank Place — now Capella Tower — opened downtown in the early 1990s, according to city officials.
The latest action authorized city staff to develop a term sheet with developer Ryan Cos., which hopes to build a million square feet of office space, more than 300 housing units and retail space on two blocks.
The city would be responsible for, among other things, borrowing $65 million to help build a 1,300-stall parking ramp and a two-block park. The ramp is required by the Vikings stadium legislation, which passed the Legislature last year.
The terms of the Star Tribune’s agreement with Ryan have not been disclosed. But a city development official, Chuck Lutz, said Friday that the average price per square foot is about $71. That would make the 12.5-acre plot of land worth about $38.6 million. Star Tribune management and Ryan, which has not yet bought the land, declined to comment on the estimate.
The owner and tenant of the development’s office space is expected to be Wells Fargo. The company still has not made a firm public commitment, however. “We are just pleased with the continued progress of the project and we’re continuing to do our part, which is evaluating our participation in it,” Wells Fargo spokeswoman Peggy Gunn said Friday.
Several questions remain unanswered, including what to do with two major streets, Park and Portland avenues, which would bisect the park.
City finance officials must also find cash, possibly through development and naming rights, to pay for $10 million to $15 million in park amenities beyond grass and streetlights.
Council President Barb Johnson said Friday that building out the park would be “the big challenge.” “I think we’re going to have to look at private dollars,” Johnson said, adding that the Vikings and the Minnesota Sports Facilities Authority (MSFA) also should pay for their use of the land.
The MSFA is overseeing construction of the stadium.
The city and the Minneapolis Park and Recreation Board are contemplating a special concessions arrangement to pay for operating the park, which may include what Rybak dubbed a “destination restaurant” on its westerly portion.
Park Board President John Erwin said that his agency would like to own and operate the park but that it will need a non-property-tax revenue source.
Parking revenues key