The St. Paul Port Authority staff is recommending Milwaukee-based developer Irgens as a partner in the effort to redevelop the Midway Shopping Center property next to the Major League Soccer stadium site.
If approved by Port Authority officials, Irgens will enter a joint venture with the Port and the Minnesota United soccer team to eventually purchase a 15.6-acre site that contains the shopping center — part of which needs to come down to make way for the stadium.
The property makes up a significant portion of the 34.5-acre area at Snelling and University avenues where, in addition to the stadium, a mixed use development with commercial, residential, retail and entertainment space is planned.
The selection of Irgens — which has worked on hundreds of commercial and health care real estate developments across the country — has not been finalized. Capital City Properties, a nonprofit subsidiary of the Port Authority, will vote next week on a resolution to negotiate and enter into a joint venture with Irgens and the soccer team.
Irgens will have 60 percent ownership in the joint venture, the soccer team will have 30 percent and the Port Authority will have 10 percent. However, the Port Authority, which is a nonprofit government agency, will not contribute financially to the redevelopment of the site, President Lee Krueger said.
The Port’s investment was taking the risk of entering into a master lease with RK Midway, which owns the shopping center, he said. The Port Authority stepped in as a master tenant to help navigate financial complications with the property, he said.
When it comes time to shift from leasing the property to purchasing the site — exactly when that will be is not yet clear — the Port will say “no” and United and Irgens will take over, Krueger said.
“A lot of people are looking at this project and saying, ‘Why is the city and the Port doing all this public sector investment on it?’ Actually, that’s not what’s going to happen,” Krueger said.
“It’s going to be a private sector development, and we’re just going to be a conduit.”