In conjunction with the construction of a $1 billion Minnesota Vikings stadium, the city’s largest real estate market project in 20 years is underway. In May, city officials broke ground on a $400 million mixed-used development which will be constructed next to the new stadium. This project is reversing the disappointment that accompanied the lack of real estate development that the 31-year-old Metrodome did not generate and the current status quo of crumbling asphalt parking lots, tired buildings and insufficient housing.
Plans for the five-block Downtown East project include two 18-story office towers for Wells Fargo, a six-level parking ramp, approximately 24,000 square feet of retail space and a four-acre urban park near the stadium’s northwest corner. Mayor Betsy Hodges said that the project is part of a goal to double the current residential population to 70,000 and that she hopes to incorporate affordable housing into the Downtown East commercial real estate projects.
Progress on achieving the project occurred in February when the Star Tribune Media Company sold five city blocks. Minneapolis-based developer Ryan Companies agreed to purchase four of the properties and one was sold to the Minnesota Sports Authority which is the public body overseeing construction of the stadium. The newspaper staff will relocate.
This sale followed 18 intense months of negotiations that culminated in a contract negotiation period involving 30 conference calls, 10 law firms and 59 documents. Executives at Ryan Companies said that the complex negotiations involved a group of private and public stakeholders that had to reach agreements.
Wells Fargo will also move 5,000 of its employees into the new towers. Its Minneapolis workforce is second only to Charlotte N.C. in size in this county and these workers currently work in 17 spaces throughout Minneapolis. It made a $300 million investment in the project.
Construction of the stadium, however, was accompanied by a protracted battle over financing and was approved by a 7-6 City Council vote. The state is partially financing this construction.
These types of public-private commercial real estate transactions are extremely complex and involve a myriad of stakeholders. Legal advisors are important players in these deals.
Source: The New York Times, “In Minneapolis, a blueprint for a bustling downtown,” Christina Capecchi, May 27, 2014