Committee to weigh Vikings stadium plan

By Burl Gilyard
Dolan Media Newswires

MINNEAPOLIS — City documents offer more details on the nuts and bolts of a $400 million proposal by Minneapolis-based Ryan Cos. US Inc. to redevelop five city blocks in the Downtown East area of Minneapolis.

A staff report prepared for its Tuesday meeting of the Community Development committee of the Minneapolis City Council recommends that the council “authorize staff to develop a funding plan and negotiate term sheets and/or agreements with Ryan and the MSFA [Minnesota Sports Facilities Authority].” The full Minneapolis City Council is expected to vote on the issue July 19.

Chuck Lutz, deputy director of the city’s Community Planning and Economic Development department, said that at this point, the council is being asked to sign off on a conceptual framework of the plan. The Ryan Cos. plan calls for redeveloping five blocks of land owned by the Star Tribune near the site of the new $975 stadium for the Minnesota Vikings.

“This is just a first step on the road here,” Lutz said. “The two developments, Ryan plus the stadium – intertwined as they are – is the most complex deal that I’ve ever worked on. And I’ve done a lot of complex deals.”

According to the city’s staff report, Ryan Cos. would privately finance the office, residential and retail components, expected to cost about $350 million. Ryan has proposed almost 1.2 million square feet of office space, 300 to 350 residential units and 40,000 square feet of retail space. San Francisco-based Wells Fargo & Co., which is considering the proposal, would own the two 20-story office towers under the plan.

Ryan Cos. could not be immediately reached for comment.

The MSFA would finance about $35 million in project costs for construction of skyways, a smaller parking ramp near the new stadium and a portion of the larger ramp on the so-called McClellan block. That money is part of the overall $975 million budget for the new Minnesota Vikings stadium.

The city would issue about $65 million in bonds to finance part of the McClellan ramp, a new city park called The Yard, and “other non-park project costs.”

Lutz said that under the plans that are being discussed, the city would buy two city blocks from Ryan Cos. paying $71 a square foot for the new city park. That works out to about $15.5 million, Lutz said, which would be covered through the city’s bond issues.

At a price of $71 a foot, the entire five city blocks owned by the Star Tribune would sell for somewhere between $38 million and $39 million. Ryan Cos. and Star Tribune representatives consistently have declined comment on what Ryan is slated to pay for the land.

The mixed-use office/residential/retail project would be developed on two blocks bounded by Fifth Avenue South, Third Street South, Fourth Street South and Park Avenue. The new park, The Yard, would cover a two-block stretch bounded by Fifth Avenue South, Fourth Street South, Fifth Street South and Park Avenue.

Ryan is proposing a 1,328-stall ramp on the McClellan Block – bounded by Chicago Avenue, Park Avenue, Third Street South and Fourth Street South – which is owned by the Star Tribune near the stadium site. Ryan also is proposing a second, smaller ramp of about 400 spaces on a collection of smaller sites: 300 Ninth Ave. S., 309 Ninth Ave. S. and 811 Third St. S. in Minneapolis – which are owned by entities connected to Vikings owner Zygi Wilf.

The city’s report notes that more money would be needed to develop The Yard beyond a basic park space. According to the city’s staff report: “A fully improved and developed Yard is estimated to require an additional $10-15 million in capital expenditures, initial funding for which could come from the sale of development rights and sponsorships.”

Lutz acknowledged it is not clear where more money for the park could be found. And he said that the budget for the park is not known.

“That’s to be determined,” Lutz said. “We won’t know that until we know what the design is going to be.”

According to the report, Ryan would have an option to buy back the western one-third of the western block of the park space for $2.5 million for potential additional development.

Ryan also is seeking development rights on top of (“air rights”) and adjacent to the parking ramp on the McClellan block. Lutz said that discussions continue.

“The value of the rights depends on what’s going there,” Lutz said.

The MSFA voted July 1 to “finalize negotiations” with Ryan Cos. for parking development near the stadium. Ryan prevailed over two competing proposals.

City leaders have been bullish on the Ryan plan, which was unveiled at a mid-May press conference with Minneapolis Mayor R.T. Rybak.

The city’s staff report notes: “For years, the city, local neighborhoods, business leaders and others have grappled with the challenge of bringing more consistent activity and new development to the Downtown East area around the Metrodome. The area has languished. … The Ryan Companies’ proposed project is an opportunity to correct that imbalance and bring significant new investment, development and amenities to Downtown East.”