Ryan sweetens deal for project near Vikings stadium

Minneapolis city leaders are considering a modified development proposal with Ryan Companies for land across from the new Minnesota Vikings stadium.

The new plan, which includes terms aimed at preventing construction delays, comes a week after the team offered the city more money to develop the land.

Ryan would pay the city $3 million to build apartments beside a new parking ramp near the Vikings stadium, $2.6 million less than the company had originally promised. The ramp is being financed largely through city debt.

The terms of that proposed payment have changed since a City Council committee discussion last week. The new terms presented to a committee Wednesday would allow the city to buy back the land for $1.6 million if Ryan fails to deliver a project within an agreed-upon timeline. The new agreement also makes Ryan pay $1 million once the building is complete, rather than when 70 percent occupancy is reached, as outlined in an earlier deal.

"That's not a minor change," said Council Member Jacob Frey, who represents the area. "That's pretty serious."

Ryan's initial proposal, which included both a hotel and apartments, fell through largely due to disputes over parking.

Ryan had hoped to use some of the 1,600 spots in the parking ramp for its residents, but the Minnesota Sports Facilities Authority said that was not legally possible. The company's hope to build an additional level of parking on the ramp to house 200 parking stalls met some resistance from the Vikings, who are worried about the traffic impeding fans.

"That egress would account for approximately 30 seconds of additional time," Frey said. "So to get additional economic development, to have eyes on the [Downtown East] park, to generate tax revenue, [the Vikings] would not allow 30 seconds."

When Ryan tried to modify its initial offer, the Vikings stepped in with a last-minute $4.6 million offer to build a residential, retail and television studio on the site. Vikings Vice President Lester Bagley warned Wednesday that the Ryan proposal does not guarantee development and could extend construction on the land past the stadium's 2016 opening.

"There's no certainty in timing. It's an option," Bagley said. "And our proposal is certainty."

The new terms give Ryan six months to submit a development proposal once the additional parking level is approved, or by Dec. 31, 2015, whichever occurs sooner.

The new agreement still depends on the additional parking level being approved. Last week, authority chairwoman Michele Kelm-Helgen was optimistic the issue could be resolved. The authority, which is overseeing construction on the $1 billion stadium, will own the ramp.

The city has a lot at stake in the amount of revenue made from the development of the ramp since the money will go to pay for the nearby Downtown East park. The full build-out of that park is expected to cost $6.3 million to $10.5 million. Ryan has agreed to help lead fundraising for the nearly two-block urban park.

The city is relying on parking revenue to pay off the $62 million in debt for the ramp and nearby park. Ryan has pledged to pay for shortfalls for the first 10 years, however.

"It is kind of a parking house of cards because it's using parking revenue and parking revenue bonds in order to pay off the bonds to do all these other things," Council Member Lisa Goodman said.

But she said she is confident the ramp will be well used, citing Vikings attendance figures and the potential for the new Wells Fargo campus across the street.

Council Member Lisa Bender was troubled by the reliance on parking revenues in an area where the city hopes to discourage driving. "I'm one of these people that hope people will drive less in the future," she said.

A final vote on the matter is expected Friday.

Eric Roper • 612-673-1732