A Bloomington skyway could shape the future of Minneapolis' signature street.
For more than five years, the Mall of America and the city of Bloomington planned a pedestrian bridge connecting the south side of the mall to a scattered group of hotels and restaurants on the far side of Killebrew Drive. An agreement was finally reached in 2012 for a skyway, built at a cost of $3.6 million, which opened the following year.
Now a judge has rejected the way the funding was divvied up among the mall, the city and those neighboring businesses.
The attorney who won a lawsuit against the project said it could potentially affect plans to fund half of a $50 million renovation of Nicollet Mall through a special assessment on downtown properties.
But Minneapolis officials say the cases are different, and they're confident their funding plan will stand up to any challenges.
"You can't assume that something is a benefit to surrounding properties just because it's a good thing," said Minneapolis attorney Rob Shainess, who won the case against the Bloomington pedestrian bridge. "You can't assume that proximity to a good feature will generate an increase in value.
"And I challenge the city of Minneapolis to prove that an update of Nicollet Mall has special value to the surrounding properties. These properties already have the Nicollet Mall."
Mall wanted to pay less
The Bloomington case centered on a skyway connected from street level to the new Radisson Blu hotel, giving access to the mall through the hotel lobby. The other end deposits pedestrians outdoors on a median between busy Killebrew Drive and a frontage road. From there they can walk several hundred yards across vast parking lots to a handful of hotels and restaurants in the area, including an IHOP, a TGI Friday's and a Homewood Suites by Hilton.
The mall's share of the project was roughly $1.2 million, or one-third of the cost. The city would pay nearly $1.4 million, and the rest would be covered by a $1 million federal transportation grant.
But even before the first shovelful of dirt was turned, the mall began lobbying the city to reduce its share of the bill. The businesses on the other side of Killebrew Drive should pay part of the cost, mall officials said.
In an e-mail to a city administrator months before construction began, mall executive Kurt Hagen asked whether the city planned to talk to neighboring businesses about helping to pay for the pedestrian bridge.
That set off a flurry of memos and e-mails in which Bloomington city planners and engineers repeatedly pointed out that the bridge was being built primarily to benefit the mall, not surrounding businesses. The major benefit of the bridge, they said, was to improve traffic flow to the mall by getting pedestrians off the street level.
Mark Bernhardson, then-Bloomington city manager, called the mall's idea of sharing the cost "a long and ultimately fruitless slog for little benefit."
The Bloomington City Council overrode the staff's objections, voting to assess the neighboring businesses for a share of the bridge's cost. The numbers were small; most of the businesses were hit with a special tax of between $15,000 and $35,000. The overall impact reduced the mall's share by about $200,000.
A Mall of America spokeswoman said the mall would not comment on the case.
One business fought the deal
Only one business, Homewood Suites, chose to fight the tax. And it won, in a decision handed down this month by Hennepin County District Judge Philip Carruthers. In his ruling, Carruthers said Bloomington failed to prove that the skyway would increase the value of the neighboring businesses.
Bloomington Mayor Gene Winstead, who voted for the special assessment in 2012 along with the rest of the City Council, said the council believed it was "apparent" that the neighboring businesses would benefit from the skyway.
"I just love that — one of the hotels thinking there's no benefit to people walking across the street to the mall," he said. "The judge slammed the gavel, and that's that. I'm not going to try and retry it.
"I think when you come to the Nicollet Mall thing, how it's assessed will be interesting" in light of the Bloomington decision, Winstead added.
Minneapolis has no worries about its Nicollet Mall plans, said Peter Ginder, deputy city attorney. Minneapolis is being far more meticulous than Bloomington was in preparing the ground for its assessment, he said. Properties will be assessed different rates based on the type of property and how close they are to Nicollet Mall.
"We've spent a lot of time and effort to get a pre-assessment valuation," Ginder said. He noted that the city has hired the Shenehon Co., "the most knowledgeable downtown assessment firm," to handle the process. Ginder said he's confident that Minneapolis won't face the same issue on which Bloomington lost its case.
Shainess, the winning attorney in that case, isn't so sure.
"Minneapolis will come up with some market data," he said. "And if the market data is unpersuasive to those property owners, then there will be meritorious appeals of those assessments."