A $400 million vision for a glittering new east side for downtown Minneapolis, complete with an enticing two-block city park and two corporate towers, is heavily dependent on landing a parking contract.
Minneapolis developer Ryan Cos. must win the critical contract from the Minnesota Sports Facilities Authority to make the real estate project it announced this week work as planned. That’s because parking ramps are the essential revenue generator to provide the city with money to make its payments on $65 million in general obligation bonds it plans to issue to fund the big, new urban park.
Ryan has guaranteed the money to make the city’s bond payments for at least the first 10 years the parking ramps are operating, taking on the risk of any shortfalls in parking revenue during those years. The ramps would serve both a new Vikings stadium and the office towers, which could accommodate up to 6,000 workers. Wells Fargo is in discussions as a possible anchor tenant.
“We are only providing that guarantee if we manage the parking ramps and we develop and build the parking ramps,” said Rick Collins, vice president of development for Ryan Cos. “The urban park we have proposed is a critical component of our redevelopment because it significantly improves the appeal of the downtown east area for any entity that is prepared to invest several hundred million dollars in office space or other development.”
Ryan’s project would go on five blocks that currently include the headquarters of the Star Tribune, which would sell the land and move elsewhere downtown.
Proposals for the parking contract are due Monday to the Minnesota Sports Facilities Authority, the public authority overseeing development of the new Vikings stadium.
The request for proposal (RFP) calls for 2,000 parking spaces within one block of the stadium, connected by a skyway or tunnel to the stadium, and at least 500 parking spaces within two blocks of the stadium with a dedicated walkway on game days. Interviews have tentatively been set for May 28; a selection date hasn’t been set.
So far, according to the sports authority, two parties are submitting proposals: Ryan Cos. and Minneapolis entrepreneur and real estate owner Basant Kharbanda. Other proposals could emerge since there was no requirement to voice intent before the RFP deadline, according to the stadium authority.
It would not be surprising if few developers raise their hands, said Dennis Mulvey, senior vice president at Adolfson & Peterson Construction in St. Louis Park. “It’s an RFP that would be responded to by people that control property close to the stadium site,” Mulvey said.
With so much at stake in Ryan getting the contract, Minnesota Sports Facilities Authority Chairwoman Michele Kelm-Helgen insisted that the proposal process is completely open and fair.
“We do this all the time,” Kelm-Helgen said in an interview. “Any developer could come in and respond to that RFP. There’s nothing in particular that would have to be done specifically by Ryan that would be any different from any other developer.”
As for whether or not other proposals commit parking revenue to the city to meet bond payments, Kelm-Helgen said “that would have to be looked at.”
Chuck Lutz, deputy director of the city of Minneapolis Community Planning and Economic Development, said he too believes the process is fair. Since the sports authority is a public agency, “they have to go through a legit procurement process,” he said.
Ryan Cos. proposes three ramps, including one existing underground ramp near the stadium and two new ones.
Kharbanda said his proposal calls for developing four parking projects around the stadium on land he already owns, some of which already has existing parking ramps that he would expand. One of the new facilities would include a station for loading and unloading buses, and include a rooftop helicopter pad for VIPs.
Kharbanda said some of the new parking would accompany two new multiuse developments he has planned on the same properties. One, at the corner of Washington Avenue and Chicago Avenue, about 1 ½ blocks from the stadium, would include a building with retail, office and a hotel.
Kharbanda said in an interview that he, too, would dedicate parking revenue to help the city pay off the $65 million bond debt.
Caren Dewar, head of the Urban Land Institute in Minnesota, said she hasn’t studied the Ryan Cos. project. But Dewar said the two-block city park could be the long sought-after catalyst for development in the area. She called using the parking ramp revenue to finance the public space “innovative.”
“Where do you get the money to support parks?” Dewar said. “Where? There’s no source for it.”
Jennifer Bjorhus • 612-673-468