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March 8, 2007

Trying to make sense of all of this

First of all, I'm sure I'm going to make a mistake somewhere in this. So, if you see something that doesn't look right, please let me know. Secondly, I have to send a huge shout out to Alex for his description of the eminent domain process. In fact, he stole my thunder a little bit. I've been writing people for a couple of days now trying to understand what the process is, and then Alex just comes in and nails it. I think it is important for people to understand so I will print it again:

There are two different sets of proceedings: The quick take and the regular take.

Under the quick take, the county deposits what they think the land is worth, and they take title to the land, thus work can begin. The final price is agreed upon after the fact by the court, and the county either pays the difference, or gets some money back, depending on the outcome. The advantage is that they take title to the land right away, the disadvantage is that they are bound to whatever price the Court determines.

Under the regular take, the county does not take title to the land until all of the court proceedings are finished. That gives them an opportunity to bail out on the process if they don't like the way they think a Court will rule. This method goes through numerous hearings, which the County is doing. They've already gone through the notice requirements and determined that the stadium does in fact constitute a public use.

In short: If the county uses the quick take, there is no turning back. If their infrastructure and land costs then exceed 90 million, they've just violated the law. If the county uses the slow take, they gain more time to continue to negotiate while retaining a legitimate threat that they can acquire the land via ED. However, they can back out of that at any time, unlike the quick take.

Beautiful description. Just beautiful. The County is currently in the process of the regular take, and a value could come out of that process as soon as June 1st. According to Rich Pogin, that would set the world speed record for eminent domain proceedings which is especially amazing considering we've also heard this might be the most complex building project in the history of Minnesota.

Having said all of this, we are now hearing that a parking ramp could finally rid us all of having to think about this. Wouldn't that be nice. To quote the Strib:

[T]he ramp's importance could come from granting development rights above it to the landowners, who could, for example, generate revenue by building condominiums atop the two-level ramp. Downtown Council President Sam Grabarski said including the ramp in a land agreement could provide Land Partners II and Hines Interests, the two companies that own and control the stadium site, with additional compensation to bridge the sale-price gap between the county and the landowners.

What has become more clear in this is that Hines Interests, the Houston based partner of LPII, is becoming more and more front and center. In fact, when I asked Rich Pogin about the possibility of this parking ramp idea solving everything, he said he has been instructed by Hines not to comment on the negotiations.

And while Rich didn't say anything to me, he did say something to MPR this morning. Take some time to listen to the audio from this interview.

If you don't want to listen, I'll provide a little synopsis. Hines is handling land negotiations with the Twins and the County, and Rich is handling eminent domain proceedings. Rich also states that the Twins have made a proposal to the County to help bridge the gap that we've talked about ad naseum on this site. Rich speculates that some cash and some land rights will be a part of the deal. Rich also states that the court hearing for the regular take may be moved up to May 14th which would be even more amazing than June 1st.

Rich next says that the Twins stepping up and helping with the quick take would not make him happy because he would "spend six months to a year in a room with a bunch of lawyers." What is odd about this statement is that it sounds like a quick take would mean the whole eminent domain proceedings would start over.

Rich closes by saying he is "clueless" on parking ramp idea and that he thinks the idea came from Bruce Lambrecht. He hopes a deal is imminent and thinks that silence on this issue from all sides means we are close to a deal.

I am of the opinion that the parking ramp idea is a little sketchy at this point but that it has some merit. I have received confirmation though that the air rights around the stadium are the Minnesota Ballpark Authority's to award. In addition, if the MBA gives a lease to Hines for the air rights on top of the parking ramp, it will not count against the $90 million cap currently limiting the County. That is definitely a good thing.

Now remember, in his radio interview above, Rich mentions that a potential deal would probably include land and cash. It appears the land issue is potentially being resolved with the parking ramp idea. Let's talk about the cash.

The County still may need to come up with some extra cash to make sure they can cover the value as determined by the condemnation proceedings. It seems this is what the Pioneer Press article today was all about:

The owners of the downtown Minneapolis parking lot slated to be the site of the Minnesota Twins ballpark said Wednesday the team has made an offer to the county to help cut through the thorny land negotiations.

Hines Interests Limited of Houston, the managing partner in the deal handling negotiations for the owners, met with the team, which made a proposal to Hennepin County, according to Rich Pogin of Land Partners II, who represents the owners. The county is considering the offer.

I have received confirmation that if the Twins don't step up with more cash this whole thing is "dead." Minus, of course, the possibility that the County could go back to the legislature to change the site. But we all know nobody wants that, especially the Twins.

When you think about it, the Twins have always said that they feel an appropriate contribution for the team is one-third of the cost of the stadium. Right now, the Twins are contributing $130 million, and the County is putting up a whopping $350 million. This means that the Twins are only putting up 27% of the cost of the entire project. In other words, the Twins definitely can step up and still be within their "one-third" desired contribution. (And I understand the Twins probably only wanted to pay for one-third of the stadium, not one-third of the entire project including infrastructure. I just don't think that is realistic.)

I would like to think that the reason the Twins fought so hard to limit their contribution to $130 million in the enabling legislation was because they knew they would be called upon to spend more during the construction of the ballpark. This may be a little earlier than the Twins expected, but again, I would like to think the Twins somewhat expected this necessity.

This is how I understand today's news. Again, I could be wrong about some of it, or most of it. But I will close by saying everyone I corresponded with today were optimistic that a deal will be reached. I think we are close. Let's keep the faith.

UPDATE: I need to clarify something. While the County is currently going through the regular take, June 1st (even May 14th) is too late to keep this project on schedule. What I think the County is doing right now is getting their ducks in a row for the quick take. Obviously the Twins are playing a big part in this. Also, yesterday's news that Pogin testified the land is worth $10 million in 2001 further solidifies the County's stance and gives them more confidence they can proceed with the quick take. Keep in mind though that the County needs to make absolutely sure they have enough lined up to cover any possible valuation that turns out to be more than $13.35 million. They will not proceed with the quick take until they are sure the Twins will step up. Discussions are ongoing and it sounds like the Twins have made a proposal of some kind.

In the meantime, the MBA and the County are also talking with Hines and the Twins about the parking ramp. There is a possibility (and I think it is remote) that these negotiations could result in an agreement without proceeding with condemnation. More than likely, though, these negotiations will result in an agreement for the air rights over the stadium for Hines/LPII. Then, if the County is sure they can "bridge the gap" in terms of the eminent domain proceedings, they will go forward with the quick take.

This is what I think is happening. I could be wrong. In fact, I probably am. Let me know ...

Posted by snackeru at March 8, 2007 9:17 PM

Comments

oh yippie....what can we name it? Waste Management Field? The Trash Dump? At any rate, they should take a page out of our Chase Field here in Phoenix. We have the swimming pool in center field sponsored by Leslie's Pool Supply.
Maybe there could be a landfill in right field sponsored by BFI? I've got free gasmask day at the ballpark already circled on my calendar..but cheap Carl will only give to the first 15,000 fans.

Shane, you know as well as anyone that I want the Twins to have a new ballpark, OPEN AIR...but I just hate this site. I've been down there before on hot humid days and it STUNK! Sure it doesn't smell today, it's 30 degrees...Just wait until July.

Posted by: kevin in az at March 8, 2007 10:41 PM

Rest assured that once the ballpark opens, if odor is a problem, steps will be taken and the problem will be corrected. Fans will not be forced to sit in that stench.

Thank goodness things are looking better!

Posted by: John at March 8, 2007 10:53 PM

Kevin, I understand your concern, but I too would think they would do whatever they had to do to mitigate it, up to closing/moving the garbage burner if it's truly problematic. Neither the Twins or the county is going to let a garbage burner ruin a $500 million dollar baseball stadium.

It's good to hear this now looks optimistic. Though Sid was cranky and pessimistic today. Three days ago it was his column that seemed to offer the first real hope. So this is still a bit fluid. I do think it will get done now though.

Posted by: David Howe at March 8, 2007 10:58 PM

I stopped by on the eve of the expiration of my prediction. Alas, no deal is eminent (pun intended).

There are many reasons for this sad day. Of course, first and foremost, to Shanes chigrin, I blame Opat (correct spelling so as not to offend). I believe he is wrong not to pursue "quick take" and is merely delaying the inevitable. I still stand by my statement: "no quick take = no stadium."

I don't know what happend in the previous couple of weeks, but how did "regular take" become a topic of conversation? stick with the facts, people. Any path that does not prove viable is chatter and background noise. "Regular take" would be a nightmare! like Shane mentions, IF the 1st hearing gets moved to 5/14, that's only the first hearing! there's usually a 2nd and a 3rd and if either party doesn't like the outcome, they appeal and start over!

If we're sitting here in May waiting on a regular take hearing to determine the value of this land....this deal is dead. LP2 knows this, Hines knows this and more importantly, HC knows this. Regular take is simply not a valid way to get this done. It will take longer than the current legislation allows and therefore is a hollow threat.

HC needs to spend money now! rack up all sorts of bills and sign construction contracts and get people moving! then come back to the legislature with their tails between their legs, begging for more money, which they'll get, to finish the job. Unfortunately, that's how the system works. Shame on Opat for trying to do it the "right way." It'll end up costing us a stadium.

Posted by: Stadiumshill at March 8, 2007 11:01 PM

Shill, I absolutely agree and I'm upset I didn't make this more clear. The outcome of all of this is either a negotiated settlement (unlikely) or the "quick take." Anything else (the regular take) will take too long and result in a detrimental delay.

Nice to hear from you again. Sorry your prediction didn't come true. Believe me, I really am.

Posted by: Shane at March 8, 2007 11:05 PM

shane, u just said in your piece that you are optimistic of a deal. and now you say that is unlikely? so which is it? you're optimistic the quick take will go forward?

Posted by: mullen at March 8, 2007 11:51 PM

I would put it this way: I don't have a whole lot of faith in HC doing what it takes to make this happen because governments generally don't prove to be effective in these types of situations. And Opat and co. have for some reason become very timid after being very couragous to make this happen in the first place.

However, I do have a decent amount of faith in the Twins and LPII/Hines/whoever the hell is in charge to do what is in both of thier best interests and pocketbooks. I think whatever movement has occured in the last two weeks is because of them, and if this gets done it will be because these two business entities work it out. HC just needs to stay out of the way, or at most be willing to take the Twins at thier word and condemn with the Twins serving as thier "back stop."

Posted by: David Howe at March 9, 2007 12:06 AM

"---determined that the stadium does in fact constitute a public use."

Is this so? I believe LP2 merely conceded the point in order to facilitate quick take. Not the same thing.

Posted by: BMac at March 9, 2007 12:52 AM

I actually thought Shane's summary put it well (in light of the context of the past few days).

The county's best 'worst' option is the quck take. However, once that option is pursued, everything else is off the table. Thus they want to postpone actually doing it until the last possible second.

While this is frustrating to us outside observers, this is certainly the right course of action.

Posted by: tato at March 9, 2007 12:54 AM

For a couple of years my company had offices in the Ford Centre adjacent to the ballpark site and the garbage burner, so I have spent a lot of time in that neighborhood.

I've also been down there numerous times recently on hot days, cold days, and everything in between.

I have never once -- not even a single time -- noticed any odor associated with the garbage burner. It's a total non-issue.

I'm still in favor of tearing the thing down and putting the ballpark on that land (which they could do legally without returning to the Legislature because that site is included in the law as part of the actual development area), but it doesn't sound like anyone at the county has interest in such a plan.

Rick
+

Posted by: Rick at March 9, 2007 4:05 AM

Oputz got into this mess. Let him figure out a way to pull his butt out of this fire. If my butt isn't sitting in a new ball park seat in 2010, then.......I'm gonna make a mean face!

Posted by: Casual Fan at March 9, 2007 7:07 AM

There is a very simple solution to all this:

The Twins players each take a 10% wage cut.

The Twins layoff administration and cut the wages of the remaining employees by 10%.

Ticket fees are raised $3.50 per seat.

This would raise more than enough money for Carl Pohlad to fund the entire stadium over 20 years counting his initial $130 million contribution.

Other businesses are forced to make these hard decisions every day in America; why can't Carl?


Posted by: charles at March 9, 2007 7:27 AM

Shane and Alex,

Thanks for putting up the info on E/D. I didn't have a chance to come back here last night and explain it in more detail.

While I agree, that ultimately it ends up as a Quick Take with the Twins indemnifying the county of anything over $13.5 million, a full E/D hearing does not have to drag out for years. That would be up to both parties.

Posted by: pragmatic_cynic at March 9, 2007 9:08 AM

This "full E/D hearing" would have to be completed within 60 days in order to keep on track. I would bet HC has a better chance of raising the money through winning the lottery than they have of settling this within the time frame alotted in the current legislation, through "regular take". That's what renders this option moot.

Posted by: Casual Fan at March 9, 2007 9:47 AM

Shane, thanks for the shout out on the ED explanation. I'm interested in urban planning and urban design, and legal aspects of those fields is a rather important, but often overlooked, factor.

(Great site, by the way. I'm glad I can help with the content a bit)

I agree that the parking structure air rights will hopefully seal the deal in one way or another. In fact, I was rather shocked when I first saw the plans for the park that included that structure, rather than development above it. I think developing those air rights are vitally important to how this park will function from an urban design perspective. Well-designed buildings there could help bridge the gap over the trench and connect the north side to downtown, link the park to the farmer's market, and so on.

CF,

Whether the regular take happens or not is irrelevant, the point is that it still can happen, and that's what makes it a good negotiating tool, at least for the time being.

Posted by: Alex at March 9, 2007 10:04 AM

Rick,

I read your site, in addition to the Greet Machine, and appreciate your insight. However, there are a few problems with your solution of tearing down the garbage burner and putting the ballpark there.

First, I'm sure that garbage burner is expensive, and it is certainly being used frequently. If HC tears it down for a ballpark project that already costs upwards of $500 million, where are they going to get the money to put up a new garbage burner somewhere else? I agree that at some point the garbage burner might be torn down (and personally hope that day comes sooner rather than later), I just don't think it will or could happen now.

Second, it would take a lot of extra time to build on the garbage burner site due to the need to tear down the garbage burner and redo ballpark prep activities such as environmental studies, redesign, infrastructure, etc. All of the problems that come from a new site also accompany the garbage burner solution (other than having to switch the site in the legislation), but the garbage burner solution has the added problem of time spent to tear the garbage burner down.

Finally, the garbage burner solution puts the stadium that much further from downtown, and Twins fans would have to rely on LPII to put something on the current site (which is on the way to the garbage burner site) that adds to the baseball experience, which they won't necessarily care to do. They certainly wouldn't be putting a general space for fans to enjoy (nor should they have to, they are a private business). They will probably just put up a large condo tower (which could be a plus in that it might add to the skyline view), or they might just keep their parking lot... you never know because it's ultimately their decision. Additionally, putting the ballpark further from downtown only adds to the infrastructure needed to effectively link it to downtown.

Just my reaction...

P.S. For those of you who are not familiar with the garbage burner solution, visit this link: http://www.twinsballpark2010.com/20060609.html

Posted by: The Rational Actor at March 9, 2007 10:18 AM

Alex - You're right about one thing; the "regular take option is irrelevant."

because it CAN'T happen in the time frame necessary to get this thing built by 2010. For that reason, its NOT a good negotiating tool and everybody knows this.

It's like pointing a gun at someone who knows it isn't loaded.

Posted by: Casual Fan at March 9, 2007 10:33 AM

It's like pointing a gun at someone who knows it isn't loaded

You know, Casual Fan, there are a lot of us who are intimidated by guns pointed at us regardless of whether the gun is loaded.

Also, I think all of this "ED" discussion is going to bring some new and interesting search hits to the Greet Machine. ;)

Posted by: spycake at March 9, 2007 12:54 PM

Just checking in if somethings new, or if it's same ole, same ole.

Posted by: Rich P at March 10, 2007 12:20 PM

I'm gonna take a hint from the lack of posts here, and just about everywhere, and news stories anywhere in the media, that no news is good news.

Posted by: Rich P at March 10, 2007 3:16 PM

i would have to agree rich p. i like to get updated from shane every day but he must not have heard much cuz its the weekend and all.

Posted by: victor at March 10, 2007 3:50 PM

It's also important to keep in mind that Shane has a life and a family...And it is the weekend

Posted by: kevin in az at March 10, 2007 4:35 PM

that is correct kevin in az. that is what i basically said.

Posted by: victor at March 10, 2007 5:19 PM

Rich P are you Rich Pogin? If so, you tell us what the news is... :-)

Posted by: David Howe at March 10, 2007 6:18 PM

http://www.startribune.com/507/story/1046434.html
This was just posted on the Star Tribune website. Things might be looking up.

Posted by: RichP at March 10, 2007 9:15 PM

Nope, I'd have major inter-ussues if I were.

Posted by: RichP at March 10, 2007 9:18 PM

I meant to say inner-issues.

Posted by: Rich P at March 11, 2007 11:04 AM

That's just some of Sid's drool. He really didn't say anything new.

Posted by: BMac at March 11, 2007 1:30 PM

I think it did speak to the fact that the Twins are ready to step up to cover the cap in the quick-take process. They are probably holding out until their PMs say they can't hold out anymore. Let's hope they shut out both Hines and LPII on the air rights. Increase the remaining appraised land around they will still hold and tax the hell out of them.

Posted by: YesSir at March 11, 2007 1:42 PM

yea, then we can tax the hell out of Richard Schulze (Best Buy) and Glen Taylor and Carl Pohlad and give all the money to the Vikes. That'll show those greedy billionaires!, we'll teach them NOT to make money in our state!

What a moron.

Posted by: Kaz at March 12, 2007 8:09 AM

Any updates Shane?

Thanks!

Posted by: MOJO at March 12, 2007 9:12 AM

News from our friend Shooter....I would assume this is good news.....

"On Tuesday and Wednesday, a delegation of Twins officials, Hennepin County officials and Minnesota Ballpark Authority officials will be in Kansas City, Mo., to conduct a thorough review of the Twins' ballpark design, which was produced by the HOK architectural firm there."

Posted by: MOJO at March 12, 2007 10:45 AM

Nothing. Nada. Zip.

Let's forget about this and enjoy the nice weather! The fact that the Twins, HC, and the MBA are all still plugging along and "thoroughly" reviewing designs means, I think, that we shouldn't worry about this anymore.

So, let's not.

Posted by: Shane at March 12, 2007 3:52 PM

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