Representatives from Minneapolis-based real estate firm Ryan Companies US, Inc., joined city officials at a Tuesday press conference to unveil what they’re billing as “one of the largest redevelopments in Minneapolis history.”
Rick Collins, vice president of development for Ryan, and Mayor R.T. Rybak announced plans for the $400 million redevelopment of a five-block area in Minneapolis’ Downtown East neighborhood. The land is near where the new Vikings stadium will be built and currently comprises surface parking lots, as well as the headquarters of the Star Tribune, which owns the land.
The plan calls for the construction of two 20-story office towers on the two blocks surrounded by Third and Fourth Streets South and Park and Fifth Avenues South. The office towers would be developed by Ryan and would feature 1.16 million square feet of office space, which could support between 5,000 and 6,000 jobs, the company said.
Collins confirmed that Ryan has been in discussions with San Francisco-based Wells Fargo to be the “key potential end user” for the development—meaning the company is in talks to serve as the anchor tenant for the office development. Rybak said that Wells Fargo has expressed a need to expand its local operations to accommodate growth.
The Vikings stadium deal called for the construction of nearby parking, and Ryan’s proposal includes a 1,328-stall, skyway-connected parking structure. It also includes 40,000 square feet of retail space and 300 apartments, which would be built adjacent to the office development and parking ramp.
The Star Tribune is looking to relocate its headquarters. Publisher Michael Klingensmith said Tuesday that the land is “an important and strategic asset” to the city, and “all of our interests are now aligning” under the plan proposed by Ryan. The Star Tribune is currently “evaluating several alternatives” for its new headquarters and is focused on remaining in downtown Minneapolis, Klingensmith said.
Ryan has entered into a purchase agreement to buy the land by year’s end from the Star Tribune, although terms of the deal were not disclosed, according to a Tuesday report by the newspaper.
Meanwhile, the City of Minneapolis plans to purchase two blocks between Park and Fifth Avenues South and Fourth and Fifth Streets South to develop a multi-use green space to be called “The Yard.” The area is meant to connect the stadium to the downtown core and would feature space for so-called “rail-gating.” It would be available year-round for gatherings, and the new public amenity would “spur further private development in the stadium area,” according to the city.
Regarding financing, Ryan would be responsible for the office, residential, and retail components, and the Minnesota Sports Facilities Authority (MSFA)—which is charged with the design, construction, and operation of the new Vikings stadium—would develop the skyway connections, with no participation from the city.
City bonds, meanwhile, would be issued to finance a new parking structure and The Yard. The city said its participation could total about $65 million of the total cost, but Ryan will guarantee bond payments for the first 10 years, and they would be repaid through a mix of parking ramp revenues, MSFA funds, and “other general city financial resources” after that. The city said it expects the project to generate $30 million to $50 million in property taxes during its first three decades of operation.
Collins said Ryan expects to break ground on the project in early 2014. One of the proposed office towers is slated for completion in late 2015, while the second is expected to be finished in early 2016—although the project as a whole is contingent upon three primary components.
First, Ryan must win a contract from the MSFA to build the parking ramp. Second, Ryan must land an anchor tenant (Wells Fargo, if it officially signs on, although Ryan is open to discussions with other interested parties). Last, the project must gain necessary approvals from the city council.
Tuesday’s announcement came just one day after the Minnesota Vikings unveiled the design of their new $975 million stadium.
Ryan's Rick Collins joins R.T. Rybak, Michael Klingensmith, and others at Tuesday's press conference.