The High Price of Phantom Development

By Tom Goldstein

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Last August, after little discussion and no opportunity for public input, the Saint Paul City Council voted unanimously in favor of a resolution to support the construction of a professional soccer stadium in St. Paul on the old Bus Barn site in the Midway. The resolution, sponsored by City Council President Russ Stark, pledged to permanently exempt that site from property taxes so long as the city has “strong, specific evidence that the stadium and public infrastructure investments will help catalyze additional investments on the Midway Shopping Center site consistent with the Snelling Station Area Plan.”

Since that time, the city’s effort to gather that strong, specific evidence has consisted of presentations by city staff and Minnesota United FC owner Bill McGuire to the Mayor’s hand-picked Citizen’s Advisory Committee (CAC). The two “open houses” on the proposed soccer stadium have limited public participation to small-group breakout sessions, ensuring that any concerns about the stadium, or opposition to it, would not be voiced before a larger audience.

The CAC has conducted something akin to a “visioning” process for the Midway site at bi-monthly meetings since late December, but those discussions have been largely hypothetical because no master plan was forthcoming from the team or RK Midway, the owner of the adjacent and long-neglected Midway Center. Then, in late February, the team and R.K. Midway, produced attractive artist renderings of what the site could look like—provided RK Midway can round up the estimated $450 million for its end of the project.

Though the daily newspapers treated the artist sketches as evidence that a genuine master plan is falling into place, the only progress R.K. Midway has made to date is “talking quietly with some prospective developers,” according to an article in the Minneapolis St. Paul Business Journal. And as RK Midway’s Rick Birdoff himself acknowledged in the same article, there is “no timeline for when the area around the stadium would be developed” and any future development would be “based on market demand.”

In other words, like many grand visions—remember Jerry Trooien’s ill-fated $1 billion “Bridges of St. Paul” entertainment complex planned for the West Side Flats a decade ago?—what might be possible for the Midway is nothing more than a concept. The only commitment Birdoff has is from McGuire to build a soccer stadium primarily on land owned by the Metropolitan Council and leased to the city. And even that deal hinges on approval from the Minnesota Legislature to permanently exempt the site from property taxes and waive all sales taxes on construction materials.

No matter. The entirely speculative redevelopment vision was enough evidence for the City Council to approve—over the opposition of council members Dan Bostrom and Jane Prince—the expenditure of $18.4 million in infrastructure improvements around the proposed stadium.

For those familiar with how St. Paul government has operated for the past decade under Mayor Chris Coleman, this outcome should come as no surprise. Like other major projects for which the City Council has showed no interest in conducting its own due diligence or holding public hearings (e.g., approval of the $65 million Saints ballpark and last year’s 10-year cable franchise renewal with Comcast), the soccer stadium infrastructure giveaway was limited to a mere 15 minutes of opposing testimony before the council voted.

Although 30 years of economic studies have definitively shown that professional stadiums at most simply shift spending patterns around rather than spur bona fide development, the majority of the City Council is happy to throw the dice on yet another stadium project. As Stark acknowledged at the hearing: “it’s true we don’t have a specific proposal in front of us for what that additional investment will look like…only the potential for a ‘win-win’ of private investment.”

Ward 3 City Council member Chris Tolbert, who represents Highland Park, talked about the $18.4 million being a “a great investment in a neighborhood that will benefit all of our neighborhoods.” If it’s such a great investment, why hasn’t Tolbert pushed for the soccer stadium to be located on the Ford Plant site where it would occupy only a small portion of the land? We all know why: Highland Park neighbors would be in an uproar over traffic and parking issues, not to mention the prospect of devoting a prime piece of real estate to a soccer stadium.

But hey, it’s just the Midway, where no attempt has been made to gauge neighborhood sentiment beyond anecdotal testimony from soccer fans and business groups. Mayor Coleman assures us that 50 percent of fans will be taking public transportation to the stadium, a claim he has pulled wholly out of thin air.

The council was willing to support the stadium project even though no transportation or parking studies have been completed. Those who live in close proximity to the stadium know exactly what that means: They’ll have the pleasure of hosting the traffic and noise because the city has no plans for additional parking beyond a VIP lot that the city will be providing tax-free to the team.

City Council member Dai Thao, in whose Ward 1 the stadium would be built, believes that “people are smart enough to know this is a good deal” and that somehow a soccer stadium will address the 32 percent unemployment rate among teenagers. He praised former Ward 4 City Council member Jay Benanav and his former aide Prince for their efforts 15 years ago to lure Allina’s corporate campus to the Midway, citing the stadium as somehow the culmination of those efforts.

What Thao failed to mention is that Allina ended up relocating to South Minneapolis, where its presence has stabilized a crime-ridden neighborhood and helped turn the Midtown Global Market into a thriving hub of ethnic food establishments—the very thing that would have been ideal for the culturally diverse Midway area.

As council member Prince pointed out in her comments, the city created an “artificial deadline for a complex deal . . . before any serious expression of developer interest in the RK Midway site . . . and before independent analysis of this deal could be completed to guide against unintended consequences . . . including no estimates of public costs of plans for the northern half of Midway site.”

Of course, there is at least a sliver of a silver lining in this project—knowing that any environmental remediation for the site will be handled by the St. Paul Port Authority. That’s the same entity that acquired and demolished the Gillette Building to make way for the Saints ballpark.

Unfortunately, that decision resulted in a $7 million cost overrun because of a failure to include a standard clause in the purchase agreement to protect the city from any liability for the contaminated soil that everyone involved with the project knew existed.

You can’t make this stuff up. Even in St. Paul.

Tom Goldstein is a resident of the Hamline-Midway neighborhood, a lawyer and former St. Paul School Board member. He was a candidate for the City Council in St. Paul’s Ward 4 last fall.

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