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July 11, 2007

Setting the record straight

Well, now you've gone and done it. You've made the Savior of Baseball in Minnesota upset. Actually, not exactly upset, but stunned, I suppose, by the misinformation being written on these pages. So he has decided to write a little something something to try to set the record straight. So, enjoy!

[Seriously, this is an email message I received from Mike Opat that addresses some of the questions and misconceptions written on this site. It also includes some information on the agreement between the Twins and the County regarding the Twins paying extra in case of a larger than expected condemnation reward. Thanks for taking the time to put this together Mike!]

Mike says:

Let me try to correct a few of the biggest myths, and you can post this whole email if you want, and hopefully we can calm down the rhetoric a little bit, step back and take a look at what's really going on here. Before I get into that though, I hope you've seen a copy of the recently disclosed secret option agreement between Hines and Land Partners.[I have]

The County has been trying to get its hands on this agreement for a long time, and we've always been turned down. Now we see why. It shows that in June 2006 -- less than a month after the ballpark legislation was passed -- LPII and Hines agreed on $25,111,665 as the sale price for all of the LPII parcels, about 10.5 acres in total. The County is only looking for about 70 percent of that land; after the ballpark is built, LPII will still own a big chunk north of 5th Street. When you use the price in the Hines/LPII agreement, 70 percent of all LPII is worth $17.6 million. That's a pretty far cry from the $65 million -- that's right, $65 million -- they've demanded in court.

Now, fast-forward a bit: In March of this year, Hines notified LPII that they will exercise the option and buy all of the LPII parcels. $25.1 million, then, is a sale price for all 10.5 acres. It's not a made-up, imaginary or theoretical figure. It's what LPII and Hines are using as the base price (there will be a small escalator to cover inflation costs) when Hines closes on the sale.

Somehow, Hines' own number on the value of the land we need for the project jumped from $17.6 million to $65 million between March and May. And that's why I've said that the County will not be strong-armed. We will not agree to purchase land at a preposterous price, not just because our appraisers say that the land is worth much less than $65 million, but because Hines and LPII agreed in their option agreement that the land is worth a tiny fraction of that amount.

Let's move on to some myths that have surfaced on the Greet Machine lately:

-- Why not start with this one: "The only party that really benefits during condemnation are the lawyers." To be honest, I sometimes feel this way myself. I went to the opening arguments at the condemnation hearing and saw a courtroom packed with lawyers. It is too bad. I can only justify this kind of expense by saying two things: Good legal advice is expensive. And I would rather have the public represented by the best legal team available than go with a subpar legal team and see a lousy performance in court. Let me also say that I have never heard anyone suggest, as the recent Star Tribune article does, that our legal expenses will approach $8 million. That is a huge figure and it has no basis in fact. The County's current contract with Leonard, Street & Deinard is for $950,000. I understand that we may have to increase that amount as the case proceeds, but it should give you a sense of scale. That contract, by the way, was unanimously approved by the County Board. Even my colleagues who opposed the ballpark project voted to protect the public interest in court.

[I asked for further clarification on this point and received this information: "The attorneys fees come out of the infrastructure or ballpark fund (not general county revenue funded by property taxes). PLEASE keep in mind that the $8 million figure cited by the Strib is completely groundless. I've never seen an estimate that high. Ever. It came from the landowners, but it's based on nothing.

To give you an idea of where we are right now: our contract with Leonard Street & Deinard for legal fees, which started last August, is capped at $950,000. That contract includes not only condemnation work but also legal work drafting and vetting the development agreement with the Twins, the grant agreement with the Ballpark Authority, and any number of other legal documents." -- Back to Opat's email.]

On to some bigger myths:

-- "Land Partners II and Hines were neutral or negative toward building the ballpark." I don't know how anyone could say this with a straight face, but we've seen it time and again. You've seen the lobbyist disclosure reports. LPII spent tens of thousands of dollars and countless hours of time at the Capitol to get the legislation passed. The irony is, we appreciated their help in passing the bill! LPII was our partner at the Capitol. When the bill finally passed, after countless failures in years past and hours and hours of work with legislators to win their support, Bruce Lambrecht told my colleague, Commissioner Stenglein, that LPII would be fair in selling the land to the County. If only it were so.

-- "The County has hurt LPII/Hines by 'taking them to court.'" This is great spin from the LPII/Hines "media consultant." Condemnation sounds ugly, and we see that it certainly is expensive. But in the end, it's also supposed to be a fair way of determining just compensation for land. And it's the way LPII/Hines said they wanted to resolve the land issue. Going back to Jan. 1 of this year, the Strib reported: "' I'm certainly not optimistic a deal's going to be done' unless the condemnation moves forward, Pogin said." It is unfortunate that the County could not find a reasonable land seller and buy the land out of court and avoid the expense. But we have to deal with the landowners we have, not the landowners we wish we had, to borrow a phrase.

-- "The County never tried to negotiate to buy the land." Nothing could be further from the truth. I met with Bob Pfefferle and Bill Chopp from the Minneapolis Hines office on June 5, 2006 -- just days after the Governor signed the ballpark legislation -- to talk about acquiring the ballpark site. County staff and I continued to meet with LPII, Hines and their many lawyers throughout the summer and fall of 2006 and early 2007. Our inability to reach a fair agreement for the ballpark land was not due to our lack of trying. It was due to only one party truly being interested in a negotiated sale, and I say that because even after we made multiple offers to LPII and Hines for the land, we never received a counter offer. We weren't told what they viewed the land value to be. We saw why in court this week: they hired their Chicago-based appraiser in March 2007, well after the County had launched negotiations.

When our Minneapolis-based appraisers come in between $13.8 million and $17.2 million, when the land is being assessed (for tax purposes) between $8 million and $9 million, and when we later find out that LPII agreed to take $25.1 million for the entire parcel, or about $17.6 million for the piece we need for the ballpark, I think I know in the end why the County's attempts to strike a deal were fruitless. This is a squeeze play by Hines, pure and simple, on the public.

-- "Mike Opat 'begged' the Twins for additional help to buy the land, and they agreed to cover anything above $13 million." Here's what really happened. Earlier this year, when it became clear that we were not going to be able to strike a deal to buy the land, the County Board voted to pursue condemnation. It is unfortunate that we arrived at such a place, knowing that attorneys fees are expensive and the deal would not be done for some time. Condemnation was a hard sell for me. I had worked hard to buy the site through negotiating, and I didn't want to expose the public to the risk that condemnation could return a wild judgment -- as has happened in the past. That does not mean I lost confidence in our appraisals. I simply wanted to make sure that we could build a great ballpark with great infrastructure -- within the $90 million cap -- even with the huge variable that condemnation brings. I approached the Twins and they agreed to fund an additional amount to the infrastructure budget.

It is not an unlimited amount. The team will not cover "any" difference between our appraisals and the condemnation judgment. The only reason we have not specified what the Twins' contribution will be is because we do not want to divulge that kind of budget information to the other side while we are in court with them. [That sounds like a very good reason not to make this amount known.]

-- "The Vikings' recent land deal shows how badly the County miscalculated." This is an easy one. The Wilf group, when it reportedly closed on land owned by the Star Tribune, was buying four blocks of prime real estate; within the Central Business District; adjacent to an operating light-rail line; including income-generating buildings. The Rapid Park site has none of those features. I suppose it does have a garbage burner next door, which the Wilf site does not have. (The HERC, by the way, will not interfere at all with the ballpark when it's built.) The Rapid Park site the County is seeking is also much smaller than the Wilf land. Wilf was also buying political good will; purchasing property near the site appears to invest him in building a football complex.

-- "The public will somehow end up paying more for the project." Another easy one. We can't, and we don't need to. The ballpark law specifies our budgets: $260 million on the ballpark and $90 million on related infrastructure. There is no need, no justification, and no appetite to seek authority to spend more. We don't need to rehash the whole debate about whether or not the County should be involved in building the ballpark. I believe that Major League Baseball in Minneapolis, in Hennepin County, is important. I believe the deal struck with the Twins -- that they pay at least $130 million for construction, fund all cost overruns, pay annual rent and capital expenditure payments, and most recently, provide an additional infrastructure amount -- is a good deal for the public. I anticipate that the County will spend every penny of its ballpark and infrastructure budgets to create the best facility possible. That can and will be done without more public money.

This is a lengthy email, Shane, but the project is complicated. We knew it would be. Public/private partnerships to build stadiums are some of the most complicated deals local governments can do. This site makes it even more complicated by squeezing a bike trail, proposed LRT and commuter rail, parking ramps and other infrastructure nearby.

But none of those factors -- nor the current drama in the media, in court or on your blog -- has persuaded me that this project will be anything short of a world-class, beautiful facility that will serve the public for generations. It will be a great ballpark. I hope your readers agree.

Mike

Posted by snackeru at July 11, 2007 12:12 AM

Comments

Great post, Shane. Thanks for the info. And thanks to Mike Opat for all his hard work and conviction on this.

Posted by: David H. at July 10, 2007 11:48 PM

Amen. The guts of this project aren't perfect....... I would like to have seen more Pohlad dollars and fewer public ones....... but I want baseball in MN and Mike Opat has made it happen. For all of the complaining from pro-stadium crowd on strategy, timing, ect. let's remember who made this happen.

Posted by: Russ at July 11, 2007 12:02 AM

Webcam is now up and running

http://minnesota.twins.mlb.com/min/ballpark/new_ballpark_webcam.jsp

Posted by: kevin in az at July 11, 2007 6:53 AM

Thanks Shane, Wow!! You sure swing a mighty sword with this site. I had always wondered what Mr. Opat's take on all this was, and you brought it right to us. I think Mr. Opat and the county were able to find the microscopic-sized window of opportunity and somehow squeezed this project through.
I agree, it is far from perfect, but these things never satisfy everyone. I think he took lemons and made us Twin's fans a nice big jug of lemonade. Thanks Mike!

Posted by: zooomx at July 11, 2007 7:42 AM

I expect to see a "zoomx and Mike need to get a room" post from STM any minute (even though STM technically retired from posting on this site).

Posted by: Aaron at July 11, 2007 8:16 AM

I was hoping to lure STM out of retirement. I need a good laugh today!

Posted by: zooomx at July 11, 2007 9:44 AM

Coolness. Nice post Shane/Mike.

After reading the 60+ posts after the $65mm figure was thrown down, I was thinking that the site would go for $25-$30mm.

After this, I'm back down to the $18-$20mm range. What does this mean? The shock value works, at least initially; "well, maybe it's worth a little more than the stingy buyers are willing to give those poor little old ladies...", but with that purchase agreement in hand and going public, Hines is screwed.

Go Opat!

Posted by: Drake33 at July 11, 2007 10:06 AM

So Mike still thinks his blunder will be ?a world-class, beautiful facility that will serve the public for generations. It will be a great ballpark?, and; ?I believe that Major League Baseball in Minneapolis, in Hennepin County, is important?

So, how come he’s consistently failed to explain why imposing a regressive tax on a populous already suffering from double digit increases in food and fuel costs to support a billion dollar private entertainment business is ?important?? How is strong arming over half the residents of Hennepin County into paying for something they’ll NEVER SEE, whether it’s because they’re not interested, or most likely can’t afford to, any different than Hines attempting to strong arm Hennepin County?

We don't need to rehash the whole debate about whether or not the County should be involved in building the ballpark THERE WAS NO DEBATE. I watched every single televised meeting where the “nay’s? out numbered the “yah’s? by an easy 3 to 1 margin.

This is nothing more than a pet project of a rogue politician who’s assured himself of a cushy baseball front office position when the public office gig doesn’t work out. Sure, some people are happy because they get what they wanted. The rest of us have to wait for those responsible to get what they deserve. It’ll happen. It always does.

This email is just another calculated (albeit simple) slander attempt against LPII and Hines. His email will now be in “cyberspace? forever. It won’t be long before we find out if he knows anything about what he’s talking about and what “myths? are. Here’s a sample right off the bat, Mike says; “ The Rapid Park site the County is seeking is also much smaller than the Wilf land? The Wilf land is 8.5 acres vs. 7.5 for the ballpark – is that much smaller Mike? I’m assuming you’re using the same emphasis on “much? as you did the word “important? earlier.

Posted by: STM at July 11, 2007 11:12 AM

I've got a question.

Mike, the Vikings have proven to be tremendously more popular than the Twins. What are you planning on proposing for the Vikings stadium and why?

Posted by: Purplepride at July 11, 2007 11:16 AM

I did want to thank Mike for his email. Even though he's patently wrong, it does prove that he's not a eunuch.

Posted by: STM at July 11, 2007 11:26 AM

that was very funny... thanks!!

Posted by: zooomx at July 11, 2007 1:24 PM

"that will serve the public for generations"

Does anyone really buy that line?

Posted by: Ben at July 11, 2007 1:27 PM

Great job Shane!

Also thanks to Mike Opat.

I read the comments and wonder what color the sky is in the world of many of the anti-stadium people.

Posted by: Erik H. at July 11, 2007 1:33 PM

"But none of those factors -- nor the current drama in the media, in court or on your blog -- has persuaded me....."

I'm not sure this is the kind of closed mindedness that serves the public well. It seems he had his mind made up before he started and has subsequently dimissed anything and everything else.

Posted by: Darren at July 11, 2007 1:39 PM

Well, right now their sky is a depressing, dark gray I would imagine. We are building a stadium, and they can't stop thinking about how their lives are ruined and their gov't has failed them.

And speaking of hyperbole:

"that will serve the public for generations"

... perhaps, but who knows? If Yankee stadium can last almost 90 years, why can't Wheaties Field? All I do know is in thirty years, when the Twins start begging again, I will not be on the front lines. In fact, I'm getting my "Save Wheaties Field" campaign materials ready.

And Darren, have you ever met STM? I have a feeling you know him quite well.

Posted by: Shane at July 11, 2007 1:42 PM

Well, if history repeats itself, the Twins will be complaining about something about their stadium within 15 years or so. If that's a "generation" in Mike's world....whatever.

STM - is the ranting, Oputz hating, clear headed, rational, less government is more individual of several alter egos on this site. I admire his effort.

Posted by: Darren at July 11, 2007 1:49 PM

You say potato, I say STM is a crazy fruit loop with too much time on his hands. And he needs a new hobby.

Posted by: Shane at July 11, 2007 1:53 PM

sticks and stones...glass houses, rocks and check the mirror, "web master."

Posted by: STM at July 11, 2007 1:55 PM

I prefer the term "web sovereign."

Posted by: Shane at July 11, 2007 1:56 PM

Okay, your "sovereigness." At times, you've attempted to deviate from the monotonous stadium good/bad debate, without much success keeping interest going. Just a suggestions, but if you got time and the inclination, I'd be a little curious about your political leanings outside this issue. Are you a conservative that just happens to support a tax and spend policy in this instance because of your love of baseball; or, are you more for government to provide more amenities and services through a marxist redistribution of weath policy? If nothing else, it might give more to mock.

Posted by: STM at July 11, 2007 2:06 PM

Opat rocks. STM doesn't. Enough said.

Curt in Grand Forks

Posted by: Curt Hanson at July 11, 2007 2:44 PM

Well, quite frankly STM, you haven't earned the right to know more about me, especially considering I know absolutely nothing about you other than you are against the Twins stadium and you are a Vikings fan. You know as much about me as I am willing to divulge. I'm sure the same is true for you.

Secondly, I don't do this for your entertainment, or really anyone else's for that matter. I do it for my own. I write about what I want and what I'm interested in. If someone likes it, great! If not, oh well. When I started this blog, three people read it: my mom, Cheesehead Craig, and Curt in Grand Forks. I'm still surprised that I've managed to cobble together the readership I have because for the past three years I've always written about what I wanted (with a heavy dose of stadium discussion). I don't plan on changing that any time soon.

So, any more thoughts on the Opat piece above? One thing I really wanted to clarify was the misleading Strib headline last week that said, "Taxpayers' costs for Twins ballpark may be going up." That really isn't true.

Posted by: Shane at July 11, 2007 2:52 PM

Nice post Shane. You know I'm no fan of the public-funded pro sports facility model, but Minneapolis doesn't rank among the worst offenders in that department, and I'm actually quite pleased that they've at least capped the public costs. And disregarding one's preconceived notions of the man, Opat's forthcoming nature on this has been quite refreshing.

And it's very true that the Star Tribune has been absolutely awful on this issue lately -- from the misleading, if not completely false headline cited by Shane, to a recent editorial that completely ignored the Twins willingness to absorb at least some infrastructure costs. I think their careless sensationalism seems to indicate any current problems are more of a bump in road than serious derailment.

Posted by: spycake at July 11, 2007 3:10 PM

It's hard to understand how anybody can be "for the stadium" so while I didn't want you to open a vein here, I thought that some background could help in that regard.

Our "second" reasons are the same.

I've read the Opat email a couple of times now. The problem I have with the email is; I don't consider any of the "myths" he's trying to dispel, as he put it, as grossly inaccurate enough to warrant this level of address. I'm just curious if he truely was urged to straighten out misunderstandings, or try to start a ferver over this "secret agreement" he opened his email with. There seems to be a disproportionate amount of attention paid toward that "myth" that I don't think he helped to clear up, but rather just call attention to.

-the only party that benefits is the lawyers is more of a cliche' than a myth. I don't think anybody was advocating that either party goes in under represented. Did that "myth" really require clarification?

I could go on and on here, but the impetus to write this email is suspect, to me.

Headlines sell newspapers, that isn't news. But I think it's funny how the anti-stadium group felt they were getting the short shrift during the legislative session, and now the shoes on the other foot.

Posted by: fairness at July 11, 2007 3:17 PM

Fairness --

If you've been following the mainstream press, all of the "myths" that Opat addresses have been frequently and sloppily printed in the Star Tribune. One prime example is the news story reporting legal expenses at $10 million, followed by the letters to the editor which repeated that figure, etc. In light of stuff like that, I think Opat's clarification is good.

It's probably unnecessary, since the current stadium questions aren't really being decided by public opinion anymore -- the present issue is in the hands of the court. That said, it's nice to see an effort towards open communication throughout the process. (Insert anti-stadium rant about Opat going against the will of the people here.)

Posted by: spycake at July 11, 2007 3:35 PM

Lisa Goodman responds to Aaron Kahn in the Strib.

http://www.startribune.com/562/story/1297476.html

Posted by: kevin in az at July 11, 2007 10:08 PM

"How do the taxpayers get a return on the ballpark investment if additional public funding is required to support any additional development?"IT CAN'T "If the surrounding neighborhood is hard to get to and from, if economic and social activity in the area don't flourish, or if the public spaces are not filled with quality lighting, pedestrian connections, greening and the promise of a truly urban ballpark, then the decision to move forward without a referendum to gauge real public support will have proven to be a major mistake." IT ALREADY IS COMING TO LIGHT

Posted by: ItsStarting at July 12, 2007 8:16 AM

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