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Minneapolis’ Upper Harbor Terminal request greeted with skepticism by state Senate committee

On Tuesday, city leaders appeared at the state Capitol to ask lawmakers to set aside $20 million in bonding money to help build a music venue that’s key to the city’s plans for the Upper Harbor Terminal redevelopment project.

Concept rendering of the community performing arts center
Concept rendering of the community performing arts center at the Upper Harbor Terminal.
City of Minneapolis

The city of Minneapolis has embarked on a critical step in its efforts to build a massive amphitheater in north Minneapolis: convincing state legislators the project is worth financing with Minnesotans’ tax dollars.

On Tuesday, city leaders — including Mayor Jacob Frey and City Council Member Phillipe Cunningham, in whose ward the venue would be located — made their first appearance at the state Capitol to ask lawmakers to set aside $20 million to build the facility on a piece of industrial land along the Mississippi River as part of the city’s Upper Harbor Terminal redevelopment project.

“Done right, north Minneapolis business owners will call Upper Harbor Terminal home,” Frey told the Senate’s Capital Investment committee. “This is a location that doesn’t become available very often.”

But he and other supporters face an uphill fight for the money, which would cover about half of the projected total cost for the venue.

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Besides critics who say the venue could raise property taxes and displace existing north side residents, Gov. Tim Walz’s 2020 bonding proposal does not include any money for the music venue. And even Sen. Bobby Joe Champion, the Minneapolis DFLer who wrote the bill requesting the money for the venue, said he’s “comfortably stuck in the middle” on whether to set aside the funding. 

Minneapolis Mayor Jacob Frey
MinnPost photo by Jessica Lee
Minneapolis Mayor Jacob Frey
Meanwhile, other senators on Tuesday questioned the project’s environmental impact, and said the city needs to do a lot more work specifically to allow more opportunities for residents in Greater Minnesota to get involved in order for lawmakers to consider funding the venue.

“If we’re going to spend state dollars on this that entails a lot of people in Greater Minnesota that care just as much about the Mississippi,” said Sen. Justin Eichorn, R-Grand Rapids.

Skepticism from senators

Minneapolis officials have already had some success at the Legislature. Last spring, state lawmakers agreed to provide $15 million in bonding dollars to help build the public’s right-of-way and new utility systems underground as part of the project. The city of Minneapolis and MPRB set aside matching funds for the same reasons.

But the proposal for the amphitheater is more controversial, with critics of the music venue worried it could raise property taxes and displace some of the people who currently live in the surrounding Jordan, Folwell, Webber-Camden, McKinley and Hawthorne neighborhoods. Opponents are asking state legislators to deny the city’s bonding request and for project leaders to go back to the drawing board.

“We’re hoping for a pause in the process to re-anchor ourselves,” said Eric Hoffer, the pastor of north Minneapolis’ Salem Lutheran Church. “We have not found the city being receptive to draw out the process.”

Hoffer, who is working with a group of faith leaders on the north side who share his position, believes the city has not adequately sought the public’s feedback nor outlined clear ways for north side residents to benefit economically from the redevelopment. 

Also opposing is the nonprofit Friends of the Mississippi River, which submitted a letter to lawmakers this week that describes the city’s approach as a “lightning rod for controversy” and asks project leaders to determine more specific goals for creating jobs with the venue and running the venue. Critics who testified at Tuesday’s hearing echoed those concerns.

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“It’s important that the redevelopment will provide equitable benefits to … community members rather than allowing private interests to take the lead and reap the majority of the benefits of publicly owned property,” Audua Pugh, president of the Jordan Area Community Council, told lawmakers.

David Luce, a longtime north Minneapolis resident, told lawmakers that instead of working with United Properties and First Avenue in the early days of planning, the city should have reached out to community groups to learn what they want for the area. “If we had a community plan, it could lead to the transformation of north Minneapolis… instead of someone making excuses for a facility that will be attractive to suburban kids, and we won’t be able to afford to even go there.”

State Sen. Justin Eichorn
State Sen. Justin Eichorn
Senators seemed receptive to the complaints. Eichorn agreed that the public benefit of the project at this point seems unclear and that the city needs to do additional work to determine how the venue would impact the surrounding area’s air quality and pollution levels, as well as how the proposed development would affect the safety of the riverbank’s seawall.

“It’s a good project that needs a lot of work,” he said.

Sen. Jeremy Miller, a Republican from Winona, raised concern over the outdoor music venue’s noise and how the sound could affect people living or working in the surrounding neighborhoods. “Is there enough space?”

Cunningham said the city is planning to answer those questions with an environmental study that will begin in coming weeks and be completed this fall. Already, he said their plans call for new park land that would separate the venue from other properties and triple-pane windows on neighboring buildings that would block sound from the performance venue.

A unique proposal

Now home to a cluster of industrial buildings used for storage, the Upper Harbor Terminal site got its name by previously serving as a barge shipping terminal. In 2014, federal authorities closed the terminal to avoid the spread of invasive carp, and the city of Minneapolis has been debating what to do with the T-shaped piece of property ever since. 

Early on, city and Park Board officials picked United Properties as the project’s master real-estate developer, overseeing big-picture concepts and designs for the roughly $200 million redevelopment project. Then, United Properties selected First Avenue — which currently operates five venues across the Twin Cities — to develop and operate the music venue. 

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“It’s a catalyst for the north side and the entire state,” First Avenue CEO Dayna Frank told lawmakers.

The company has promised to raise matching funds to construct the venue, should lawmakers approve the $20 million bonding request. That type of financial commitment from a private entity to a public project is unusual, said Sen. David Senjem, a Republican from Rochester who chairs the Senate Capital Investment committee. Typically, local municipalities — not the private industry — use their tax money to match the state’s bonding allocations for infrastructure projects.

“The way this all works is bonding projects are approved and usually matched with local government funds,” he said. “This is somewhat unique in that a private organization is matching.”

Frank said the company has raised about $5 million so far and will rely on corporate and philanthropic partners for the rest.

While First Avenue is in charge of constructing and running the facility, the city of Minneapolis must legally control the venue under existing agreements — a setup much like the one the city has with the Guthrie Theater. Additionally, the citizen-led planning committee is exploring if a community-based group — perhaps a nonprofit Community Development Corporation or a community-investment trust — should co-manage the amphitheater with First Avenue.

That push is a result of opponents’ concerns that the private groups have too much say in the redevelopment project. Initially, United Properties signed on to the project with the intention of completely controlling the land. But recently, the real-estate developer and other partners agreed that the city or a community entity will serve as landowners and maintain long-term leases with property owners. “They will be able to work with the city, work with the community to figure out tenants,” Cunningham said.

Supporters see venue as a catalyst

At the outdoor music venue, the city and First Avenue envision hosting up to 30 big-name shows and 40 community events throughout the year, attracting up to 363,000 people to the area.

“This is not a pie-in-the-sky dream,” Cunningham said, pointing to similar amphitheaters in cities such as Nashville, Los Angeles and New York City.

The concert-goers will spend time and money at nearby businesses building a new economy that will attract businesses and pay for new development, Cunningham said. Also, the venue would boost the area’s economy with about 560 new jobs in construction and 270 new positions in sales and operations once it opens.

“This music venue opens the door for so much more opportunity,” said Markella Smith, executive director of the McKinley Neighborhood Association and leader of a citizen-led planning group for the Upper Harbor Terminal.

In other words, Cunningham and supporters believe funding and building the music venue will make it possible for them to pay for other aspects of Upper Harbor Terminal project, which includes park space, trails, commercial space, offices, a utility hub and between 300 to 500 homes. 

But should the Legislature hold off on fulfilling the city’s request, Champion said the city could miss its opportunity for the $20 million altogether. “That’s the uncomfortable tension that we always share,” he said. “If it passes you by, then we’re back to the same narrative that there’s always disinvestment in north Minneapolis.” 

A staunch advocate for alleviating Minnesota’s wealth disparities, Champion also said project leaders should consider that, while some Minneapolis residents don’t want property taxes to increase as a result of the new development, other homeowners buy property for that main reason for its value to increase. 

“The whole reason I bought my house was for it to appreciate,” he said. “And then you’ve got to think deeply about, how does that impact seniors who are in their house on fixed income? How does that affect others when their property values go up and now other people are coming into their neighborhood. Do you want to price them out or not?”

Despite his work writing the bonding proposal, Champion said in an interview Tuesday he’s not picking a side on whether lawmakers should set aside the $20 million or hold off. He said Tuesday’s discussion showed opportunity for both opponents and supporters to find common ground before the end of the legislative session and senators raised important questions that the city should address.

“What is true is that I didn’t hear anyone say we don’t want to have anything happen at the Upper Harbor Terminal site  but whatever happens we want it to be reflective of all of us,” he said. There’s nothing that will say that it will go forward there’s nothing to say that it won’t.”