One of the largest redevelopments in Minneapolis history:
Office, residential, retail, parking, skyways and a new downtown park
The development proposal
Ryan Companies’ proposal for $400-million redevelopment of five blocks, currently dominated by surface parking lots, between downtown and the new stadium
Takes advantage of investment in stadium parking already required in State law
Office, residential and retail developed privately, without TIF
Adds to tax base, with potential $3.5 million in property taxes in the first year
· 1,160,000 square feet of office space in two 20-story office towers on the two blocks bounded by 3rd and 4th Streets South and Park and 5th Avenues South, to be developed by Ryan Companies. The office space would support 5,000–6,000 jobs downtown for an anchor user.
· Leverages already-planned investment in stadium parking, required in State law, with a 1,328-stall skyway-connected parking structure on the McClellan block, which would accommodate office workers, game-day fans, stadium event spectators and the general public 365 days a year.
· 40,000 square feet of retail.
· Skyways that connect the new stadium and development to the rest of downtown, via the Haaf Parking Ramp.
· About 300 units of housing units adjacent to the office development and parking ramp.
· Project to be developed on land currently owned by the StarTribune, which is actively planning to relocate downtown.
· Office, residential and retail portions of the development will be built privately, without using TIF.
· Project could generate $3.5 million or more in total property taxes in the first year, including $1 million for the City, potentially increasing in future years. Property-tax base would grow further if Ryan exercises additional development options.
Proposed new downtown park: The Yard
New, multi-use green space in the heart of the emerging stadium area
Acquired and developed to basic level by City
· The Yard: a new park in the heart of the emerging Stadium area on the two blocks between Park and 5th Avenues South and 4th and 5th Streets South. Available year-round for game-day activities, daily use by office workers, neighborhood sports and gatherings, and special events of all kinds. Major public amenity that will spur further private development in the stadium area.
· Visual and pedestrian connection between the stadium plaza, emerging neighborhood and downtown core that, on game days, will link downtown to the new stadium with an urban “railgating” experience for fans.
· City would purchase land and develop to basic level. Can be developed for more active uses.
Ryan Companies responsible for office, housing and retail space — no TIF
MSFA responsible for skyways — no City participation
City bonds issued to finance a new parking structure and The Yard
City participation to be repaid with revenues from new parking structure and other parking facilities in the area, certain guaranteed payments from Ryan and MSFA, other general financial resources
During the first 30 years, City-only property tax gains of $30–50 million
· Office space, housing and retail. Ryan Companies is proposing to privately develop the office space for an anchor user, along with housing and retail.
o No TIF for the office, residential and retail development.
· Skyway. The Metropolitan Sports Facilities Authority is proposing to develop the skyway connections, with no participation from the City.
· Parking ramp on the McClellan block. The City would issue General Obligation bonds to finance a majority of the construction costs of the new, 1,328-stall parking ramp on the McClellan block. The MSFA would own the ramp.
· The Yard. The City would also issue General Obligation bonds to acquire the two blocks for The Yard and to develop it to a basic standard.
· City participation in project costs would total approximately $65 million, plus applicable financing costs, with roughly two-thirds financing the construction of the parking ramp, and one-third financing the land acquisition and basic development of The Yard.
· For first 10 years, guaranteed payments from Ryan would cover bond debt service. For years 11–30, bonds are expected to be repaid by mix of:
o Parking revenues from three area ramps;
o Certain revenues from MSFA;
o Other general City financial resources, for the bonds related to The Yard only.
· Worst-case scenario: no one parks in three area ramps for years 11–30. Even in that case, under current proposal, City-only property-tax gains of $30–50 million over first 30 years offset any City exposure.
o Proposal estimated to add $1 million in City property taxes alone in the first year, with growth expected in future years.
· Property-tax base would grow further if by 2016, Ryan exercises an option to purchase and develop the westerly one-third of the block that is bounded by 4th and 5th Streets South and 5th and Portland Avenues South.
· Property-tax base would grow further if and when the air rights above the McClellan parking ramp are sold.
· Other economic benefits from 5,000–6,000 more jobs downtown, more residents, more visitors.
Published May 14, 2013