How a chunk of Downtown wasteland could be worth millions in Minneapolis' ballpark deal
It is a spit of land in a deal that might not happen. It could be worth nothing, or worth millions. On Feb. 13, the city of Minneapolis and North Loop landowners struck a deal to buy a ballpark site if a state legislative committee selects Downtown as the preferred site.
The deal for the 8-acre "Rapid Park" site between Target Center and the garbage burner has a Plan A and a Plan B. In Plan A, some government (probably Hennepin County) would pay the landowner, Investment Management, Inc., up to $12.95 million for the site. A final price would be established by mutual agreement sometime after Minneapolis wins the prize.
Disagreement would trigger Plan B: the county or city would condemn the land. Investment Management has agreed not to fight condemnation in court, allowing government to take land title in 90 days. A condemnation court judge would settle the price later.
Under either scenario, government would get the land within three months. That's the point of the deal: to demonstrate to state legislators that our side of the river would have a ready-to-build site -- unlike St. Paul, whose site ownership is fractured.
Lee Sheehy, the city's negotiator, said the $12.95 million price was based on the land's current $10 million assessed value. As with homes, assessed value is usually below market value, so negotiators bumped up the maximum sale price 30 percent.
However, a little-noticed provision gives Investment Management an added sweetener: up to 4 acres of "offset land" -- abandoned right-of-way owned by the city, county and state on what would be the ballpark's southwest border.
Today, the uneven parcel is studded with utility lines, bridge pilings and the blankets of the homeless. Tomorrow, pricey homes could rise there, at least according to Investment Management's "Twinsville" plan.
Like the sale price, how much offset land Investment Management gets hasn't been determined. But it gives them a possible trade any baseball owner would kill for: 8 acres of parking lot for 4 acres abutting a new ballpark -- plus $12.95 million.
A lot of ifs
Unless you're a bicyclist, homeless or a developer, you probably haven't noticed the offset land -- a roughly triangular wedge penned in by Glenwood Avenue, the Burlington Northern Railroad and a three-story-high 10th Street overpass.
A giant blue metallic utility pole spears the middle of the triangle, carrying garbage-burner-generated electricity. A dishwasher-sized box topped with ratty blankets, possibly containing a human hermit crab, sits beside the the Downtown trailhead of the Cedar Lake bike path. Elsewhere, the brown stalks of last summer's weeds are matted down in person-sized clumps; on a hill above the melting slush, a two-person sleeping bag is laid out as perfectly as a made bed.
If the deal goes through, this land would lie just beyond the ballpark's first-base stands, as close to foul balls as Wrigley Field's apartment rooftops.
Investment Management Principal Richard Pogin said, "The absolutely best-case scenario is that this land could be high-rise condos. Quite frankly, that's what the city wants, too."
Then again, he added, "You look at the access issues, and it could be absolutely worthless."
It's not hard to envision either scenario. If you mentally replace the looming utility pole with a towering condo, you can picture some fairly choice balcony views of Joe Mauer swatting a homer over right field. Then again, someone would have to pay to move the utility pole. And anyone living on the third floor would more likely breathe car exhaust off the 10th Street overpass-- unless someone pays to re-do that, too.
Another development uncertainty: how much offset land the city would need for stadium access -- the ballpark, after all, is the big dog that wags this wasteland's tail.
Sheehy, who heads the city's Department of Community Planning and Economic Development (CPED), rates offset land housing as "a possibility."
Not a good one, or a great one, just...one.
"We did a North Loop Master Plan that looked at uses, and housing is certainly one of them," Sheehy said. "I think the [offset] pieces are the least likely to be developed, though. People who are smarter than I say it's more likely housing will be developed on the [northeast] side of the ballpark, toward Washington Avenue and the river."
Pogin notes other obstacles, among them cleaning up possible site pollution and building stories-high retaining walls to hold back the uneven grade.
Still, there's probably enough money under them thar weeds that Pogin and his partners asked city negotiators to put the land in the deal, Sheehy said. (Pogin says the inspiration was a "mutual thing.")
How the deal could go down
The City Council approved the pay-or-condemn deal 11-1. Because the city can't contribute more than $10 million to a ballpark without voter approval, it made the land deal "assignable" to another government, almost certainly Hennepin County.
In the Minneapolis stadium bid presented to a state task force this winter, the county would pay for the ballpark with taxes, money from Twins owner Carl Pohlad, and contributions from the city and (perhaps) the state. The city would kick in $7 million from (presumably) new parking ramp revenues generated by fans parking in city-owned ramps.
Sheehy stresses that the $12.95 million plus the offset land is a cap on a final sale price -- should government and Investment Management agree. If they don't -- for example, politicians feel the maximum is too rich but Investment Management refuses a lower price, the parties go to condemnation court.
There, it's a roll of the dice -- a judge could award far more, or less, than $12.95 million plus the offset land.
Sheehy said the deal allows politicians to limit taxpayer risk if they fear condemnation. "I'm recommending we proceed with $12.95 million and the remnant land so the public will have certainty about what to pay," he said, adding that the likeliest payment is the maximum price plus the land.
Pogin predicts politicians will risk condemnation because it will take time to fully know the stadium's cost -- and the offset's land value. "I think the likely scenario is that they will file a condemnation and own it in 90 days. They're not going to make any [financial] proposals until the design issues are resolved," he said. "Then everyone will step back and say 'what do we do?'"