Minneapolis sticks with Ryan for developing land near Vikings stadium

Minneapolis officials agreed ­Friday to accept less money from Ryan Cos. to develop a key parcel of land downtown.

The development company will pay the city $3 million — down from the $5.6 million initially anticipated — to build a residential tower of at least 25 stories on a parcel tucked beside a future parking ramp near the new Vikings stadium.

The Vikings offered more money for the right to build on the site — $8.1 million by Friday morning — but failed to sway the City Council.

Precisely how much was derived from the land sale is important, since the money is needed to fund a nearby downtown park. A fully built-out park with amenities will cost between $6.3 and $10.5 million, only about $3 million of which is accounted for with the development deal. Ryan has agreed to lead a ­fundraising effort for the park.

"We want to build something as big as we can and as fast as we can to generate these benefits for the city," said Council Member John Quincy, chairman of the city's budget committee.

Denying Ryan's bid would have likely meant seeking other competitive offers, a delay several council members were not willing to endure. Under the deal approved Friday, the city will soon receive $300,000 to help pay for design services on the park.

"The first step is to get the vision," said Council Member Jacob Frey, who represents the area. "You can't fundraise before you have a vision."

The parcel in question sits on 4th Street between Park and Chicago Avenues, on a block formerly owned by the Star Tribune. The block will eventually be home to a 1,600-stall parking ramp required by the stadium legislation.

Ryan still faces hurdles ahead, such as reaching a deal to build an extra level of parking above the stadium ramp for its tenants. The Vikings had previously expressed concern about how that will impact gameday traffic, though the Minnesota Sports Facilities Authority — which will own the ramp — is optimistic that it won't hinder the deal.

"Although this was an important milestone, it's still the first part in a very complex project," said Ryan Vice President Tony Barranco after the vote. "And we still have to get to work tomorrow with all the same stakeholders involved."

The developer had initially offered $5.6 million to the city to build a more complex structure on the site, including a hotel. But the deal fell through partly because of parking problems. Ryan had initially hoped to use some of the spots in the stadium parking ramp for its tenants, but was told this was not legally possible.

Those spots are expected to accommodate stadium attendees as well as Wells Fargo employees who will occupy a new corporate campus across the street. How often the ramp gets used is important to the city, since parking revenue is needed to pay back the city's $62 million debt on the ramp and nearby park. Ryan has committed to backing revenue shortfalls for the first 10 years.

The Vikings have said they are predominantly worried the entire development may not be complete before the stadium opens in fall 2016. But Lester Bagley, the team's vice president, said Friday they also have problems with the height of Ryan's tower. The Vikings' proposed building had a maximum height of 18 stories — compared with Ryan's 35.

"The height is an issue to us and to our architectural experts," Bagley said. "We want to have a building that's in context and scale with the Wells Fargo buildings and others in that area."

Former City Council President Paul Ostrow says he is concerned with how much power the Vikings appear to have over usage of the ramp.

Ostrow filed a lawsuit last year asserting that the city's financing of the ramp amounted to an additional contribution to the stadium, exceeding what was outlined in legislation. Judge Mel Dickstein ruled that it wasn't, however, since the ramp was more integral to the entire Downtown East development.

"It is now clear that regardless of stated intent the primary purpose of both the ramp and [the nearby park] will be to serve the stadium development," Ostrow wrote in an e-mail. "It is anyone's guess how the Court may have ruled had these facts been available to the Court at the time of his ruling."

Bagley said while they do not have official veto power over usage of the ramp, the legislation requires the Vikings and Sports Facilities Authority to agree on all decisions relating to the stadium. That extends to the parking ramp.

Eric Roper • 612-673-1732

Twitter: @StribRoper