The MCDA staff person who worked on the 900 Nicollet Project (aka Target)
asked that I post to the list the following comments on the Star and Tribune
article.
Role/Financing of City Parking Garage:
The Star and Tribune article (and John Moir) largely ignores years of master
planning by the City for the South Nicollet area. The Downtown 2010 Plan
(written by the Planning Department) adopted prior to Ryan proposal
specifically calls for additional short-term, retail supportive parking to
be developed in the South Nicollet area and recommends an increased role of
public sector in providing and operating this parking.
Tax increment from private development on these three blocks is subsidizing
public parking for both the City-owned 900 Nicollet ramp and the adjacent
Downtown Interdistrict School Ramp. The net parking revenues support only a
portion of the construction costs of these ramps, not including any site
acquisition cost allocation to the ramps. Because these ramps are financed
with General Obligation TIF Bonds instead of Parking Revenue Bonds, the City
does not have to encumber its Parking Fund with a one-year debt service
reserve.
Project "Subsidy" vs. Public Project Cost:
The reporter uses $62 million interchangeably as "subsidy" and "public
project costs".
Actual Public Project Costs: $59,949,671 (This was given to Mike Meyers.)
Of this amount, $17,762,038 is the construction cost of the City-owned
parking ramp.
If one-third of the site costs and skyway costs are allocated to the City
ramp (it covers 100% of the site), an additional $13.5 million of the Public
Project Costs could be fairly allocated to the ramp. This leaves $28.6
million of public costs to be allocated to private improvements ("subsidy").
None of the projects compared to 900 Nicollet in the article include a
City-owned ramp.
Cost to Target:
Actual purchase price Target will pay at completion of construction is
$16,271,272. The $6.7 million Meyers cites was the minimum amount
identified in the 1997 Development Contract.
Office Parcel Purchase Price:
Actual purchase price to Ryan was $3,672,640, not "about $2 million".
Contract Bidding:
The City Ramp Construction Contract and the Skyway Contracts are Lump Sum
Design/Build Contracts as authorized by State statute. The Site Preparation
Contract was bid out by Ryan under a Guaranteed Maximum Cost Contract in
which all savings in the environmental remediation line goes to MCDA and any
savings in the demolition, excavation, and shoring is split 1/3 to Ryan and
2/3 to MCDA. We anticipate a savings of $1,000,000 to MCDA which is
reflected in our current budget.
Conversion of Ryan Pay-Go Note to General Obligation Bonds:
This was done with the recommendation of John Moir after the development of
the US Bancorp Center and Target Plaza South were complete and the 900
Nicollet project (with the Retek Tower) was well underway. This virtually
eliminated the risk of any Tax Increment shortfall for debt service, and
resulted in substantial savings in debt service to the City.
Zoning Variance for Parking:
This was granted with the recommendation of the Planning Department, which
found on November 8, 1999:
"The current Zoning Code and City's Comprehensive Plan are not fully
consistent as regards the subject block. Current Planning Department
practice is to zone to B4-2 those areas located within the Primary Office
District. The draft of the new Code reflects this practice by rezoning the
entire subject site to B4-2. Were the new Code in effect, the parking
requirement virtually disappears."
Fiscal Disparities:
Fiscal Disparities contributions apply to all commercial/industrial tax
base, not just to those benefiting from public assistance. The hypothetical
Opus project would have resulted in a larger "expense" to the City than does
the Ryan/Target Store project.
Robert Cooper
Minneapolis Community Development Agency
Community Outreach Department
155-5th Avenue South
Minneapolis, MN 55401
voice: (612) 673-5239
fax: (612) 673-5259
web: http://www.mcda.org
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