Downtown East to be transformed in Ryan Companies’ proposal
$400-million project would build 1.2 million square feet of office space, plus residential, retail, parking, skyways and new downtown park — “The Yard” — in area currently dominated by surface parking lots
Would generate $3.5 million in property taxes in first year
May 14, 2013 (MINNEAPOLIS) — Minneapolis Mayor R.T. Rybak and City Council President Barbara Johnson today joined with representatives of Ryan Companies and the StarTribune to propose a major new development, in an area currently dominated by surface parking lots, that would connect the downtown core to the new Vikings stadium with one of the largest redevelopments in Minneapolis history, and transform Downtown East.
“A year ago, we committed that the new stadium would not be surrounded by a sea of parking lots, but by a vibrant neighborhood. Today, one year after the bill was signed and before ground is even broken on the stadium, we begin delivering — in a big way,” Mayor Rybak said.
City Council President Johnson said, “I’m so pleased that this proposal is an outgrowth of the stadium. Critics said that the East Downtown stadium site would never deliver on the promise of economic development. It took just one day after the unveiling of the design of the new stadium to answer them.”
The development proposal
Ryan Companies’ proposed $400-million redevelopment leverages the already-existing requirement in State law that a new parking structure be built for the new stadium, and well as significant ongoing investments in transit in the area, to build:
- two office towers totaling approximately 1.2 million square feet of Class A office space, approximately the size of the IDS Tower, to house 5,000–6,000 workers;
- a new, 1,328-stall parking structure;
- 300–350 residential housing units;
- 40,000 square feet of retail;
- skyway connections between the downtown core and the new stadium;
- and “The Yard,” a new two-block park that provides a physical and visual connection between the downtown core and the new stadium.
The proposed development would add $3.5 million in property taxes in the first year, including $1 million to the City of Minneapolis. Over 30 years, the proposed development would generate $30–50 million in property taxes to the City of Minneapolis, even before options for future development were exercised.
The project would also create more than 1.4 million hours of construction work for 2,000–2,500 workers in the building trades.
Rick Collins, vice president of development at Ryan Companies, specified that Ryan has “been working with Wells Fargo as the potential end-user for this project for several months and will continue to do so. We’re excited to have Wells Fargo as the company considering participation with this project.”
The office towers, parking structure and The Yard would be built on five blocks in Downtown East that are currently owned by the StarTribune.
StarTribune Publisher and CEO Michael Klingensmith said, “While we’re very proud to have enjoyed decades of success on Portland Avenue, it’s equally true that, as our business continues to evolve, these headquarters are no longer ideally suited to our current business.
“For some time now, the StarTribune has aspired to move our headquarters to a new space in Minneapolis that more properly reflects the mission and capabilities of a 21st-century news organization. But it has also been of paramount importance to us that we do so in a way that affirms our commitment to the future of our city.
“Today, thanks to the exciting and thoughtful plans being put forth by Ryan Companies and the City of Minneapolis, all of our interests are now aligning with the plans for the new stadium and pointing toward a dynamic and vibrant future for Downtown East and the greater Twin Cities area.”
Mayor Rybak stressed the importance of the major new public amenity that is The Yard. “Every Minneapolis neighborhood, except downtown, has a park within six blocks — until now.” The Yard will be devoted to Vikings-related activities on game days, but will be available to downtown residents, workers and visitors every other day of the year.
Mayor Rybak stressed that the proposal as currently structured allows the City to develop The Yard to a basic standard, with the extent and expense of more active uses of the park to be determined. The City will own The Yard, with management operation of the park also to be determined.
Ryan Companies proposes to develop the office space, retail and residential components of the project privately, with no public financial participation. The Minnesota Sports Facilities Authority would develop the skyway connections, with no City financial participation.
The City of Minneapolis’ financial participation is limited to financing the majority of the construction costs of the State-mandated ramp, purchasing the two blocks for The Yard and developing those blocks to a basic level. The City would issue approximately $65 million in General Obligation bonds for those purposes.
For the first 10 years, the City’s bonds would be repaid by guarantees from Ryan Companies. In years 11–30, revenues from the new parking ramp and two other area ramps are projected to be sufficient to cover the City’s obligation to the parking-ramp bond issue, with any shortfalls to be covered by the Minnesota Sports Facilities Authority.
The proposal is expected to generate $30–50 million in City-only property taxes over the first 30 years, which will more than cover the City’s financial exposure, even in the worst-case scenario that no one parks in the three ramps in years 11–30.
City property-tax receipts would grow more if Ryan exercises other development rights, and if the proposal spurs other private development in the area.
Mayor Rybak stressed that the advantage that the proposal takes of the State-mandated parking structure for the stadium that is already required to be built. The City’s proposed financing of the construction of the parking structure turns it from one that would have been used by fans only 8–10 days a year into one that will be used 365 days a year. It is thus the linchpin of a project that provides not only a better game-day experience for Vikings fans, as envisioned in State law, but one that facilitates one of the largest redevelopments in Minneapolis history.
Turning the proposal into reality is contingent on three major steps: Ryan Companies’ landing an anchor end-user, Ryan’s winning the Minnesota Sports Facilities Authority’s contract to construct the State-mandated parking ramp, and various City approvals.
Following the completion of those steps, Ryan would complete environmental review by the end of November, purchase the land from the StarTribune by the end of 2013, and break ground in spring 2014. The office towers, parking ramp and The Yard would be delivered in phases between late 2015 and early 2016, several months in advance of the opening of the new stadium.
A fact sheet with highlights of the proposal is available here. Renderings of the proposed development are available here and a fly-through is available here.
Published May. 14, 2013