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January 03, 2007
Land acquisition blues
OK everyone. Let's explain the entities that we are dealing with. First there is the Minnesota Ballpark Authority (MBA), the future owners of the ballpark. The MBA will oversee the construction and maintenance of the ballpark. Then there are the owners of the land. Obviously, they expect to get a fair price for their land and quite frankly they are probably hoping for more than a fair price. I think anyone would be. Next we have New Ballpark, Inc. New Ballpark is managing the advisory and feedback process to make sure that the ballpark meets the needs of the surrounding community. Then we, of course, have the Twins. The Twins have some very specific needs for the ballpark and the surrounding infrastructure. Finally, we have Hennepin County. Right now, Hennepin County is involved in the actual land acquisition and obviously from the tone of Sid's column, they are growing very frustrated. In Sid's column, Mike Opat said:
"The biggest thing that I worry about right now is, are we going to be able to buy this land and afford the project? If they want to hold us hostage, then we probably don't have a project. If they think that we're going to pay any price, they're wrong, and we'll face a decision whether or not to even do the project."There is $90 million set aside for the stadium site land acquisition, pollution cleanup and other infrastructure.
And that, my friends, is the crux of the problem. $90 million. The Twins stadium bill only set aside $90 million dollars for Hennepin County to pay for all the infrastructure around the stadium. That $90 million must also pay for the land acquisition, and when you combine land acquisition costs with infrastructure costs it seems $90 million may not go as far as we need it to. The limitation of $90 million looks to be, in hindsight, the biggest misstep of the Twins stadium bill.
So, enter in the owners of the land. According to feedback I've received from New Ballpark Inc., and the feeling I get from the land owners themselves, they feel they are not being treated fairly. I may have to agree. According to New Ballpark Inc, when all of this was being worked out back in 2004, the County and the land ownership group submitted a joint proposal to the governor's stadium committee that suggested the Rapid Park site as the best site for a new stadium. As part of that proposal there was an agreement between the county and the ownership group that said the group would get somewhere in the neighborhood of $120/sq foot for the land (further note: the value of $120/s.f. was computed based on the agreement of cash and a potential land swap, not cash alone. Regardless, according to the original proposal a maximum of $45 million was earmarked for land acquisition.).
Again, according to my contact at New Ballpark Inc, that figure is now off the table. In fact, the so called negotiations for the acquisition of the land seem to be at a standstill because they never really started. It sounds like the only contact the land ownership group has had with the County is a report from the County appraiser suggesting that the land is worth much less that $120/sq. foot. and the formal notice of condemnation. This has, of course, set up an "adversarial" tone since the land ownership group is being told that they won't get what they were expecting, and if they don't accept that they will be forced to accept "fair market value" through a condemnation process. I can honestly say if I was the land ownership group and this was the only "negotiations" that had taken place so far I would probably be a little upset too. In fact, Rich Pogin, the spokesperson for the land ownership group wrote me with the following statement:
Let me summarize by saying I am shocked by the willful and blatant misrepresentations of the facts [in Sid's column and elsewhere]. When you see the response I think you will as well. More to follow...
The more to follow is a document he hopes the Star Tribune will print to clear up these misunderstandings. He has promised to let me see it also. I will post it when I have it.
Furthermore, while the condemnation process could indeed get the land purchased, it could also cause delays in the process (which could increase costs) because the "quick take" necessary seems to be muddled by the fact that the ballpark and surrounding infrastructure is being built for a private entity: the Minnesota Twins. For a "quick take" to happen there must be evidence of "public purpose." We can argue all we want about the public purpose of a ballpark, but when it gets to the courts it probably becomes more complicated.
Anyway, that is what I know, and my report is probably full of holes. My initial reaction to all of this is that it seems there are a lot of entities that need their backs rubbed and it is just flat out a complicated process. All of the above doesn't even take into account the problems we've been hearing concerning transit, light rail, and bike paths at the new ballpark! Can you imagine having to deal with all of this? Right now it must feel like herding cats.
To summarize, there is $90 million to pay for the land and the infrastructure. The County is making the realization that it probably isn't enough, and the land ownership group probably wants to be paid at least what was agreed upon in 2004. There will be no going back to the legislature for more money. They have to make this work. Does this mean the Twins will have to step in and bridge some of the gap? Does this mean they will have to scale back on some of the design of the surrounding infrastructure so they'll be able to afford paying for the land? Or does this mean there will be a condemnation process in the courts that could delay construction? According to a message I received from Dan Kenney, executive director of the ballpark authority:
"It's going to be an interesting couple of months ... [K]eep the faith."
Like you, all I want is a new ballpark. We've come too far to let something like this get in the way. I am confident something will be worked out.
Posted by snackeru at January 3, 2007 08:04 AM
Comments
OMG! Tony Spazadorka was right! This will never work!
Posted by: Cheesehead Craig at January 3, 2007 10:05 AM
Are we ever going to get a new ballpark?!?!?!?
This makes me nervous!
Posted by: MOJO at January 3, 2007 10:17 AM
Shane, good stuff here but I feel it is one-sided,tilted toward the landowners. I wish you could have gotten as much detail from the County side.
That being said, here are a couple of things that caught my eye:
An agreement to sell the land for $120/s.f. First I'd really like to see that "agreement." My guess is that this is something the landowners proposed. But more importantly, this is an absolute huge number that I'm almost positive could not be supported by the market. As an example, the surface parking lots that the Strib owns were sold for about $50 a square foot. Now I could be convinced that the Twins Ballpark parcels are more valuable but 2.4 times more valuable? No way.
Second, the landowners somewhat played their hand by declaring the "quick take" process muddied by the fact it may not be for a public purpose. The quick take process allows a public entity to take land through emminent domain before an agreement on price has been made, usually determined in court or by an arbitrator. Land owners hate quick take because it takes away one of it's trump cards: The need to get the land quickly will force the buyer to pay more than a market rate price. Quick take allows the seller to gain control of the land while the price is being negotiated. The landowners are going to argue that there is no public purpose so that a quick take can't happen, hopefully forcing the buyer to pay a premium for timeliness.
Of course the ballpark is a public purpose, it is being developed by a public entity and paid for essentially through public means. i.e. the sales tax.
Sorry this is so long but your post was tilted strongly toward the landowners point of view and I wanted to fill in some of the gaps.
Posted by: Freealonzo at January 3, 2007 10:51 AM
True, freealonzo, this is slanted towards the landowners. That is the information I had. Sid's column certainly was slanted toward the county, and the information I received from New Ballpark, Inc. (a non-partisan group) suggested all of this. Anyway, if it is wrong or too slanted hopefully someone will tell me. Like you, for example.
And good detective work on the Strib land value. $120 per square foot is probably asking too much.
Furthermore, thanks for the explanation of "quick take" strategies. I kind of inferred this, but it is nice to see things spelled out.
I'm hoping to get some information from the county, but I don't have a contact there anymore with the creation of the Ballpark Authority.
Posted by: Shane at January 3, 2007 11:36 AM
Excellent post Free! It's always easy to accept that a big corporation or the government is always in the wrong.
Posted by: Cheesehead Craig at January 3, 2007 12:17 PM
