Ryan Cos. says ramps are key element in its $400M, five-block development.
The Minnesota Sports Facilities Authority on Monday awarded a key parking contract for the $975 million Vikings stadium to Ryan Cos. in a deal that is inextricably linked to Ryan’s development of nearby offices, apartments, retail shops and a park that will transform a barren stretch of downtown.
Minneapolis-based Ryan has pitched a $400 million mixed-use development on five blocks adjacent to the stadium that includes two 20-story office towers, 300 to 350 residential units and a public park spanning two city blocks. But the ambitious proposal partly hinges on the parking contract, the details of which will be ironed out in coming weeks.
The deal involves intricate negotiations that call for constructing two parking ramps and purchasing a third to meet requirements specified in stadium legislation requiring 2,500 parking spaces.
“Our primary goal with the stadium project was to not only create construction jobs but [to spur] economic development” in its environs, said authority Chairwoman Michele Kelm-Helgen. “It’s amazing that we haven’t even broken ground and there’s a $400 million development in the works with 5,000 to 6,000 jobs coming.”
Ryan is currently negotiating with financial giant Wells Fargo & Co., which may relocate about 6,000 workers to the Downtown East development.
Rick Collins, Ryan’s vice president of development, said the authority’s vote Monday marks “great progress that we needed before moving forward.” Conceptual plans for Downtown East will be presented to the Minneapolis City Council on July 19.
Ryan’s plan calls for the construction of a 1,328-space parking ramp on a block hemmed by Chicago Avenue S. and Park Avenue S. on land now owned by the Star Tribune — a facility that would be shared among workers at the new office complex, the general public and stadium-goers alike.
A second and smaller parking ramp with 407 parking spots is proposed for about 2 acres of land just north of the stadium currently owned by entities associated with the Wilf family, which also owns the Vikings. It’s unclear whether the authority will have to buy the land from the Wilfs — Hennepin County records indicate the parcels are worth at least $2.4 million.
“That’s something we’ll have to look at,” Kelm-Helgen said.
A final cog involves the authority purchasing a 455-space underground parking garage from owner Alatus LLC, an entity linked to Minneapolis developer Robert Lux. The garage, which is located underneath the Downtown East light-rail station, was one of five parking ramps purchased by Lux from the city for $65 million in 2007. County records indicate the market value of the land eyed for stadium parking is about $4 million.
When asked how negotiations were going with Lux, Kelm-Helgen said, “they’re going.” Lux could not be reached for comment Monday.
The remaining parking spots may be leased from neighboring landowners.
The city of Minneapolis would borrow $65 million to finance the larger parking ramp and the expansive public park, which will hug the light-rail line along S. 5th Street. Although the authority will own the ramps, Ryan will guarantee a stream of payments to the city from parking revenue for at least 10 years if the ramps aren’t sufficiently profitable. The city would then use the money to repay the bonds.
The authority’s request for proposals includes skyway and tunnel connections that ultimately lead downtown. The skyways would snake through the Downtown East development, parts of which would be owned and maintained by the office building’s owner, which could be Wells Fargo.
Reached late Monday after the authority’s vote, Wells Fargo spokeswoman Cristie Drumm said, “We are encouraged by the progress this step represents, and we continue to discuss this unique opportunity with Ryan.”
Two other suitors who bid on the contract include Vedi Associates, a “subconsultant” to HKS Architects, the Texas firm that designed the stadium, and Timeshare Properties, an entity associated with the Basant Kharbanda family, which owns several properties near the stadium.
If all goes according to Ryan’s plan, the purchase of the five blocks for the Downtown East project from the Star Tribune should be finalized by the end of the year. Ground will be broken next spring, with completion of a first phase slated for early 2016.
Janet Moore • 612-673-7752