St. Paul eyeing public money to spur Midway development

St. Paul officials want to replace the damaged and vacant Midway Shopping Center with an ambitious $500 million mixed-use development of office towers, hotels, housing and parking structures surrounding Allianz Field. And on Wednesday, they set up a public financing plan they hope does just that.

With a 6-1 vote, the City Council approved a new Midway tax increment financing (TIF) district that would make up to $209 million available for infrastructure and affordable housing. Under that plan, the city would subsidize the project by paying for site improvements using increased property taxes generated by rising values — financing that Council Member Dai Thao said is needed to spur development in what so far has been a dormant area around the stadium.

"We are at a time where it's critical for us to utilize all the tools we have as the city of St. Paul," Thao said. "We want to draw developers in."

But Council Member Jane Prince criticized the plan, saying not enough had been done to explore plan specifics.

"I don't feel that this was brought forward in a transparent manner," said Prince, who cast the dissenting vote.

Tom Goldstein, a Midway resident, echoed Prince's concerns. He said the city turns to this type of financing too often. For example, St. Paul is providing more than $100 million in similar subsidies to the developers of Highland Bridge at the former Ford Motor Co. site. For the life of the district, the increased taxes will not go to city, county or school services.

"This is how St. Paul is — we let developers come in and dictate the terms," Goldstein said. "The City Council is laying the groundwork for another giveaway."

Fully developed, city officials say, the 30-acre site could provide 1 million square feet of office space, more than 420,000 square feet of retail, 400 hotel rooms, more than 4,500 structured parking stalls and 620 units of housing, according to the financing proposal. About 200 of the housing units would be affordable for people with lower incomes.

A developer has not been named, and a development agreement would have to be in place before any money was made available.

Construction is expected to begin late this year or early 2022 and be completed by the end of 2031, when the site will have an anticipated market value of more than $514 million, according to the proposal.

In the summer of 2015, when St. Paul was still wooing the Minnesota United to build their soccer stadium in the Midway, a 30-plus-acre "superblock" was touted for its development potential. In 2016, the council approved a site plan for the stadium and a master development plan for the surrounding area. Plans at the time included parkland, parking spaces, rain gardens, bicycle and pedestrian access, and a transit plaza to accommodate shuttles that would transport fans to the stadium.

Prince said more study must be done to determine whether the St. Paul market even wants all that office and retail space. Goldstein agreed.

"Some people are never in favor of TIF. But we should use all of our tools," he said.