Lawsuit challenges Downtown East financing

By Janet Moore and Eric Roper

A lawsuit filed Wednesday in Hennepin County Court challenges a key financing mechanism for the proposed $400 million Downtown East mixed-use real estate development.

The suit was filed by two former mayoral candidates and a former City Council president. It names the city, the Minnesota Sports Facilities Authority and Ryan Cos., the developer of Downtown East development.

The complaint alleges that funding for the $1 billion Vikings stadium limits the city's share of stadium costs to $150 million.

The financing package for the Downtown East development, which is located next to the new stadium, involves the city issuing up to $65 million in bonds to help pay for a parking ramp that will be used by stadium-goers, and a public park. This, the suit charges, "violates the limitation on city funding for stadium improvements."'

The plaintiffs are software executive Stephanie Woodruff, 60s-era city council president Dan Cohen and Anoka County prosecutor Paul Ostrow -- a former council president. Woodruff and Cohen ran for mayor, and Ostrow chaired Woodruff's campaign.

The suit also alleges that the City Council has no authority to establish or maintain a park under the city charter -- that is the purview of the Minneapolis Park and Recreation Board.

The suit calls for a temporary injuction barring the city from final council action on the project "until this matter can be determined on the merits."

Mayor R.T. Rybak's office rebuffed allegations from Woodruff earlier this week about limits on city funding for the stadium. Rybak spokesman John Stiles said the deal is allowed because they are financing the ramp (and expect to be paid back) and is permitted under a section of the stadium legislation.

That section, 473J.17, says in part:

"The city may make expenditures or grants for other costs incidental and necessary to further the purposes of this chapter and may, by agreement, reimburse in whole or in part, any entity that has granted, loaned, or advanced funds to the city to further the purposes of this chapter. The city may reimburse the authority or a local governmental entity or make a grant to the authority or such a governmental unit or be reimbursed by the authority or local governmental entity for site acquisition, preparation of the site for stadium development, and stadium infrastructure."

City Council is expected to sign off on the Downtown East plan, which includes the bond issue, on Friday.

Ryan Development Complaint by eric_roper