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Sunday, January 21, 2007

If you swim in a sewer....

At some point you'll get some on you.

Ballpark land deal now goes to court
Unable to agree on a price with the landowners, Hennepin County makes a move to condemn the land.

By Mike Kaszuba, Star Tribune

With the start of the construction season fast approaching, the push to begin building a stadium for the Minnesota Twins now heads into the courtroom.
Hennepin County's move to condemn land for the 40,000-seat stadium in downtown Minneapolis will go before a judge today for the first time. With preliminary work to begin in mid-March, and with the stadium projected to open in three years, the county has asked to be given title to the land as early as Jan. 30.

The owners of the land west of the Target Center where the open-air stadium would be built -- a limited liability partnership with more than 100 investors -- has rejected the county's initial offer, and both sides appear to be tens of millions of dollars apart on a sales price. Although there has been some progress toward an agreement over the past two weeks, what happens next -- and whether it delays, or even jeopardizes the already-controversial $522 million stadium -- is drawing much interest.

The Legislature limited so-called infrastructure spending for the stadium to $90 million, which includes not only land purchases, but also roads, soil remediation and related projects.

The spending cap, according to county officials, limits how much money the county has to buy the land and still do the other work necessary to build the stadium. It has also set off speculation whether the Twins, who have committed $130 million to build the ballpark, will be forced to help with the land purchase.

Since November, when the county filed its condemnation notice, each side has been granted motions for new judges.

For the county, proceeding with condemnation raises other problems. Although it would quickly gain title to the property and could begin building the stadium, the county would not know until later how much it would have to pay for the land. That would leave the county unsure how much would be left for other stadium infrastructure costs. A negotiated sale, without condemnation, would enable to county to know its financial exposure before work began.

"We don't like that option -- the option of leaving to chance the land price," said County Commissioner Mike Opat.

Opat was the lead negotiator for the County Board on the stadium deal.

Meanwhile, there have been other problems on the project.

The latest rift occurred when county officials, in a document filed with the state Environmental Quality Board two months ago, said the Twins planned to include "up to 64,000 square feet for potential residential, retail or office use" within the stadium. The disclosure surprised the landowners and their development partner, Texas-based Hines Interests, who have their own plans for residential and retail development on surrounding land that they also control. Any attempt by the Twins to build retail or residential units within the stadium would likely be seen as competition.

Team backs off

David St. Peter, the Twins president, said the team considered -- but has since dismissed -- the idea of including development within the stadium. "It's been off the table here for probably at least a couple months," he said.

Opat said the proposal was discarded because the county cannot legally issue tax-exempt debt for a "non-ballpark use" at the site, such as residential units. Hennepin County is a major financial contributor to the stadium's construction through a 0.15 percent countywide sales tax that began being levied Jan. 1.

Despite the many hurdles that remain, a sale agreement might lie ahead. "I'm reasonably optimistic that we can reach a deal in the coming month or so," said Dan Rosen, an attorney for Hines and the landowners.

A legal hurdle

The county's first legal undertaking Monday will be to determine whether the landowners will agree that the stadium's construction, under state law, serves a "public purpose." If the landowners challenge the "public purpose" of the project, particularly at this late date, the move would almost certainly lead to a protracted -- and costly -- legal battle that would probably prevent the stadium from opening in 2010. Opat said that the property owners have not given a clear answer and that, without such an agreement, "we won't have a project."

Richard Pogin, the chief financial officer for Investment Management Inc., which represents the landowners, indicated the owners would not challenge the project's "public purpose" but stopped short of an unqualified answer. "If 'public purpose' is building a ballpark, if that's the central issue ... I don't anticipate an objection to that," he said.

Hennepin County and team officials have privately bristled that "public purpose" -- fundamental to the project -- is even in doubt at this time given the landowners' previous actions. Bruce Lambrecht, the president of Investment Management Inc., had long publicly lobbied for building the stadium on the property.

During the first six months last year, when the stadium awaited approval from the Legislature, state records showed that Twinsville, a group that wanted the project on the property, spent $33,000 on lobbying with Lambrecht's involvement. The year before, state campaign finance records show, Twinsville spent $40,474 while Lambrecht was the principal lobbyist, and another $90,280 in 2004.

Lambrecht also publicly endorsed the stadium agreement at a kickoff press conference in April 2005, and three weeks ago mingled with county officials at a swearing-in ceremony for Opat and others.

"I think there's some irony there," St. Peter said.

Though county officials have not made their initial offer public, Pogin said the county had $13.5 million to buy the land. The property, according to county records, has an $8.37 million assessed value. Three years ago, the property owners had given an option to sell the 8-acre site to Minneapolis for $12.95 million. The option has since expired, and also included other nearby land that the property owners would get from the city.

How much, really?

Pogin dismisses reports that the landowners now want between $40 million and $60 million for the property, but said the county is undervaluing it. "What they're really saying is, 'We're afraid of what the fair market value of the land is,' " Pogin said in describing the county's negotiations.

Thank you very much, Mike Opat, Randy Johnson, Mark Stenglein, Peter McLaughlin, Tim Pawlenty, Brad Finstad, Steve Kelley, Steve Sviggum, Laura Brod, and the rest of the slack jawed crooks who got Hennepin County into this mess.