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Warehouse District property owners feel shortchanged by Minneapolis’ Downtown Improvement District

MinnPost photo by Corey Anderson
Property owners in the Warehouse District are not happy with either their assessment or level of service they receive.

If you travel in downtown Minneapolis, you’ve probably seen the people dressed in bright green and navy blue who clean the sidewalks and tend the planters.

Those are workers from the Downtown Improvement District, a public-private partnership between the city and the Minneapolis Downtown Council.

Funding for the improvement district comes mostly from assessments on business and property owners included in its 120 square blocks. Within its boundaries are 650 parcels.

The district’s annual budget is about $6.5 million, and some members of the district aren’t happy with how much they’re paying for what they’re getting.

Property owners in the Warehouse District are not happy with either their assessment or level of service they receive and came to City Hall this week to ask that their assessments be cut in half and be extended to downtown residential property owners who are not currently part of the funding mechanism.

“We feel that the Downtown Improvement District and the services were created to meet the needs of the core business district without much consideration for the needs of the Warehouse District,” Nancy Aleksuk told members of the Transportation and Public Works Committee on Tuesday as it considered renewing the partnership with the Downtown Council for the next five years.

“We do believe that the Warehouse district has very distinct issues when you compare us to the core,” said Aleksuk, chair of the Steering Committee of the newly formed Warehouse District Improvement Association.

“We do not have the same issues as the business district, the retail on Nicollet Mall, Marquette and Hennepin.  Our buildings are primarily low-intensity,” she said.

The Downtown Improvement District, created in 2008, began operations in 2009. The ordinance creating the district contains a sunset clause, which requires renewal every five years. If it’s not renewed this year, it will cease to exist in 2014.

The Warehouse District includes 17 blocks of the Downtown Improvement District and pays an estimated $900,000 in assessments, according to Jim Erickson, the government relations counsel for the Warehouse District Improvement Association.

“We’ve come here to tweak the Downtown Improvement District, not tarnish it,” said Erickson. “We know it does good things.”

Extending the assessment to residential property owners was quickly eliminated as an option for now. Such an assessment would require a change in state law.

The ordinance’s sunset provision eliminates the District if 35 percent of those assessed object to extending operations for another five years.

Erickson pointed out that provision to committee members but later said the primary goal of the Warehouse District Improvement Association is to work with the district, not seek its demise.

“The Warehouse District is one of the jewels in the crown of downtown Minneapolis,” Mark Stenglein told committee members. Stenglein is president of the Minneapolis Downtown Council, which oversees the downtown district.

“All of us know that when a visitor comes to Minneapolis, they are going to say that those folks in the green suits are really nice,” said Stenglein, who did not support the Warehouse District request for a 50 percent assessment reduction. He did not rule out negotiating a reduction at some point.

“There is absolutely no reason to delay this any longer. This is a widely loved service,” said Council Member Lisa Goodman, who worked to create the downtown district five years ago.  “Issues with regard to property owners are not uncommon, given that everyone wants to push the cost off to someone else.”

The committee agreed with Goodman, voting to approve another five years. The committee also directed city staff to amend the district contract to ensure that its meetings are open to ratepayers and to require a written business plan detailing financial management and service implementation.

“We’re disappointed,” said Aleksuk after the meeting. “We would like to see a little more movement in our direction and an acknowledgement that the Warehouse District has been over-assessed, under-serviced and definitely under-represented.”

Extending the contract for the district does not eliminate the option of the Warehouse District Improvement Association trying to negotiate lower assessments.

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Comments (6)

  1. Submitted by Ray Schoch on 05/16/2013 - 10:38 am.

    Who? What? Where?

    While I live inside Minneapolis, I have no idea where the “Warehouse District” is, nor any of the other entities mentioned in the article, which displays much of the aura of behind-the-scenes whispering at the imperial court. It would be helpful, if this is a genuine issue, to identify where the “Warehouse District” actually *is,* and why its representatives feel over-assessed and under-served. Do the people in the green suits not come to the “Warehouse District?” Quoting a spokesman saying “We have different issues” than other downtown entities or districts is not very helpful unless those issues and differences are pointed out or explained.

  2. Submitted by Joe Laha on 05/16/2013 - 01:21 pm.

    I too am a little confused as to how the Warehouse District feels it’s being under-served. I see the DID folks out there all the time.

  3. Submitted by Steve Titterud on 05/16/2013 - 03:13 pm.

    Joe, you better tell Ray where it is !

    It seems you’ve been there. I have only a vague idea. It seems to me they start using terms like “warehouse district” and “loft space” when they have priced the artists out of the neighborhood.

  4. Submitted by Tom Bydalek on 05/16/2013 - 03:59 pm.

    DID Under-served

    I work in the heart of the Warehouse District and, although the DID folks make their rounds through this area, the focus on Nicollet and Hennepin Avenue is undeniable and understandable. No doubt those two areas are important parts of the downtown area, but, as Nancy stated, that area has a different set of issues as the Warehouse District. 1st Avenue does not attract the same volume of pedestrians and thus does not get the same attention by the DID in terms of number of ambassadors, landscaping, hardscaping, sidewalk repair, graffiti removal response, snowplowing, street sweeping, etc. As an example, the DID’s beautiful 2011 Annual Report cover has 24 pictures of the DID’s accomplishments – none of the 24 pictures were taken in the Warehouse District.

    The issue is that the Warehouse District property owners are paying the same assessments as the skyscrapers along Nicollet, the so-called “Core” rate, but clearly the same amount of money is not being spent on 1st Avenue North and Washington Avenue. Three sides of the Core pay at the “Standard Plus” rate – 50% of the Core rate, including St. Thomas campus, the area around the Convention Center, Ameriprise, Thrivent Financial, Mpls Grain Exchange, and north of Washington Avenue from 3rd Ave S to 2nd Ave N. Downtown East pays at a “Standard” rate, which is assessed at 25% of the Core, including the StarTribune, HCMC, and Kraus Anderson. Why do those areas get a discount and not the Warehouse District?

    To put the DID’s annual budget into context, the DID spends $64,000 per block. Sign me up for 2 blocks please.

    Ray, a map of the Warehouse District is here:

    • Submitted by Steve Titterud on 05/16/2013 - 08:12 pm.

      Thanks, you’ve fleshed out the issues much better than…

      …the article did.

      Perhaps the key is what Goodman said: “…everyone wants to push the cost off to someone else.”

      Her statement implies she has heard the pleas of others, and the Committee has chosen the winners in the push-off she describes, and seems quite satisfied with the result.

      The argument that DID is much loved is irrelevant to the issue of fairness in the way its costs are apportioned. Maybe it’s just a matter of those skyscraper interests being more loved by the Committee than the interests in the Warehouse District.

  5. Submitted by Brad Conley on 05/23/2013 - 08:52 pm.

    Loring Park, too…

    is funding the DID and not seeing the benefits. Our businesses on Nicollet Ave pay excessive taxes for the DID whose, services that stop where the Mall stops, leaving Grant St to I-94 and the surrounding area unattended. Not cool.

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