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Minneapolis’ Downtown East redevelopment: Where’s Wells Fargo?

Mayor R.T. Rybak outlines ambitious plans for “The Yard,” but apparently Wells Fargo’s participation is not yet nailed down.

The development would rise on land currently owned by the Star Tribune, which would abandon its dreary headquarters and vast parking lots for new digs elsewhere downtown.
Ryan Companies

It’s been a whirlwind. My neighborhood, Downtown East, probably hasn’t heard so much news about itself since the Guthrie Theater opened back in 2006.

In case you don’t know the area, it’s the acreage between the Mississippi River and Seventh Street to the north and south and from I-35 to Portland Avenue from east to west. Its major landmarks, aside from the Guthrie, are the Metrodome and lots of surface parking lots. By thine empty parking lots do I know thee, oh Downtown East.

Anyway, on Monday night, the Minnesota Sports Facilities Authority, the Vikings and their architects, the HKS Group, with all the fanfare they could muster, including music, videos and sports stars, revealed plans for the new $975 million stadium. In case you missed it, the building will have a transparent roof pitched to shed snow, glass walls and sleek modern lines that are somewhat reminiscent of the main branch of the library on Hennepin.  

Less than 24 hours later came more news—the announcement Tuesday of a $400 million redevelopment of five blocks between downtown and the new stadium. Word had it that Wells Fargo was going to build an office complex flanked by apartments. The development would rise on land currently owned by the Star Tribune, which would abandon its dreary headquarters and vast parking lots for new digs elsewhere downtown. So said Mike Klingensmith, the paper’s publisher who’s looking for about 130,000 square feet.

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I got a sneak preview by (unintentionally) arriving early at the surface parking lot where the press conference was to take place. Public relations factotums were struggling to hide the seven-foot tall architectural rendering under a green cloth that the wind kept blowing aside. But I had a peek. The scene it displayed looked west from the vantage of the new stadium. Brightly lit hi-rise offices and residential complexes bordered an elegant city park where crowds lounged on the grass taking in a movie. It was beautiful. I wanted this in my neighborhood. Wait! This was my neighborhood, and I would soon be living in this scene. Goodbye surface parking lots. Hello, urban sophistication.  

New era announced

It wasn’t long before Mayor R.T. Rybak, infuriatingly unwrinkled and unsweaty in the 90-degree heat, took the podium to announce the beginning of a new era. “The dog days are over for Downtown East,” he declared. Coming soon are two 20-story office towers, 40,000 square feet of retail, 300 units of housing, all of it to be built with private money. No tax incentives, government lending or grants involved. The development, if all went well, would produce $3.5 million a year in property taxes in the first year.

Rick Collins, vice president of development for the Ryan Companies, the moving force behind the plan, chimed in with some numbers of his own: 1,700 parking spots, 5,000 to 6,000 office workers, ground-breaking in early 2014, open for business in 2016. “It’s impossible to imagine how different this will look,” he said, nodding toward our bleak surroundings.

The park, which Rybak has branded The Yard—because people living nearby could use it like their own space to play with the dog, sit in the sun and maybe toss a ball—would play host to concerts, fairs and public events (Amy Klobuchar’s presidential campaign launch speech?) while visually connecting the stadium to downtown and supposedly to the University—although, I hate to remind these enthusiastic civic boosters, but there’s an immense barrier between the last two called I-35.

Where is Wells Fargo?

By this time I was wondering: Where is Wells Fargo? Surely, one of their luminaries would have shown up to proclaim how happy and proud the bank was to take part in this immense reclamation of downtown Minneapolis.

In any case, Rybak and Ryan had worked out a clever financing mechanism for the park—and it was all based on, yes, a parking ramp. The city would issue general-obligation 30-year bonds to build a 1,300-stall ramp for the Minnesota Sports Facilities Authority, which Ryan would build. (The Vikings stadium legislation guarantees the creation of at least 2,000 spots.) And the city would issue more bonds to pay for The Yard.

The whole shebang would cost $65 million, not counting interest, which, these days, is almost negligible anyway. The Sports Authority would own the ramp, but the city would collect the parking fees to repay the bonds. In Minneapolis tradition, the ramp would be jam-packed on game day but sit empty the rest of the week. With two office towers nearby, however, the development’s backers are predicting that the ramp would do plenty of business.

Even if its income isn’t sufficient to repay the bonds, the Ryan Companies have pledged to cover any shortfalls for the first 10 years and half of any deficits in years 11 to 30. But all that doesn’t matter, said the mayor. Even if not one single person ever parks in the ramp, the $30 million to $50 million in extra property taxes generated by the development of the office towers and apartments would more than offset the expense.

To get this done, three things have to happen: First, approval by the Minneapolis City Council. Judging by the number of members of that body milling about, that shouldn’t be a problem. Second, winning the bid to build the parking ramp from the Sports Authority. That may be a tougher nut. It has recently commissioned its own parking study, and who knows what the consultants will come up with? Third, a tenant for the office towers.

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What? Wells Fargo had not signed on yet?

Well, no. Apparently, the bank’s participation in the project is not yet nailed down. One reporter asked if there was a plan B, in case Wells decided to expand its operations elsewhere. The response: “We’re working very hard on Plan A.”

Was Ryan planning to build this all on spec? Immediately to my mind came the picture of a high-rise office tower sitting empty, flanked by unoccupied apartments alongside a weed-choked empty lot. I asked Collins: “We would never build anything on spec,” he assured me.

So if Wells Fargo fails to sign on, the project is a no-go.

Back at home an hour later, my brain operations restored by air-conditioning, I wondered why the mayor and Ryan Companies had decided to unveil the plan before Wells Fargo had made a commitment. After all, without them, the plan is—I hate to say it—pie-in-the-sky. I shot Collins an email to ask why, but he, perhaps wisely, hasn’t answered.