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Land price is tripping up ballpark deal

With time growing short, Hennepin County and the property owners are far from agreement on the price of the Twins stadium site in downtown Minneapolis.

By Mike Kaszuba, Star Tribune
Last update: January 05, 2007 – 10:12 PM

An escalating dispute over the price of land where the new Minnesota Twins stadium will be built is threatening to derail the property's sale just two months before work is to begin on the site.

With construction schedules calling for workers to begin clearing the land in March, Hennepin County officials acknowledge that a sizable gap -- likely in the millions of dollars -- separates them from the property's primary owners, Land Partners II, a limited liability partnership with more than a hundred investors. Under state legislation passed last May authorizing the $522 million project, the county is responsible for acquiring the property, and in November it moved to condemn the land while continuing negotiations with the owners.

Richard Pogin, chief financial officer of Investment Management Inc., which represents the property owners, said Friday that the county has budgeted a maximum of $13.5 million to buy the site, which he said is far below its fair market value. County officials have declined to make public what they have offered, though county records list the property's assessed value at $8.37 million.

As a Jan. 22 court date over the condemnation proceedings approaches, a war of words has begun over whether the project could be scuttled.

The first salvo was fired a week ago when Hennepin County Commissioner Mike Opat, the lead stadium negotiator on the County Board, was quoted in the Star Tribune as saying the project was being jeopardized and Jerry Bell, the Twins stadium negotiator, said the land owners were being "stubborn" and "getting greedy." "What's been said is so far from the truth as to be absurd. It's just reckless," Pogin said Friday. "If it wasn't tragic, it would really be funny."

The two sides have traded barbs even as Investment Management president Bruce Lambrecht, who has had personal and political ties to Hennepin County Commissioner Mark Stenglein, attended a swearing-in ceremony Tuesday for county officials, including Opat and Stenglein. Opat said he and Lambrecht briefly discussed the property-sale stalemate at the ceremony.

Pogin and Lambrecht formally responded to Opat and Bell's comments in writing, saying that the county was underestimating the land's value and that the property owners were looking forward to condemnation proceedings because a court would affirm that belief.

A $90 million limit by law

Pogin also said the legislation authorizing the downtown Minneapolis ballpark had in effect financially handcuffed the county: The county's total infrastructure budget for the project, which includes property acquisition, is capped by law at $90 million. So the more money the county spends to buy the land, he said, the less it has for the soil remediation, roads and bridge work and other infrastructure projects that are necessary at the site.

"I'm certainly not optimistic a deal's going to be done unless the condemnation moves forward," Pogin said.

Opat all but confirmed the county's dilemma in an interview Friday. "We will not sacrifice public infrastructure to unduly enrich the landowners," he said. Opat also suggested that the county may not pursue condemnation -- an indirect acknowledgment that the county may be wary of its outcome.

Opat's confident of a deal

"We will not start a process where we're not certain we can build a first-rate ballpark with public infrastructure that's functional," said Opat, who declined to comment on the $13.5 million figure, but said he remained confident a solution can be found.

Should there not be a negotiated agreement, he said, the county would face "a very unfortunate circumstance" because county officials had nowhere to turn for additional money. Under the stadium agreement, Hennepin County is levying a 0.15 percent sales tax without a citizen referendum to help pay for the project, a move that served as a rallying point for critics opposed to using public money for the ballpark.

Sellers offered no figure

While Opat said county negotiators had given the landowners a suggested sale price, he said the property owners had not responded or made an offer of their own. He also said that negotiations with the city of Minneapolis, Burlington Northern Railroad and the state Department of Transportation, all of whom own minor parcels at the stadium site, were going well.

"It's curious that we're working things out with everybody but Land Partners II," he said.
Whatever happens, arriving at a land price will be complicated. Land broker Charles Pfeffer Jr. of Minneapolis, who said he handled a transaction involving Pogin and that land years ago, said he would not venture a guess at its value today. He said a host of factors would affect the value, including the scarcity of available downtown real estate and the revenue being produced by the property, which is primarily used for parking.

Though the proposed 40,000-seat stadium faces a host of other issues, including building both light-rail and commuter-rail stations adjacent to the ballpark, the property sale has become pivotal. Project officials have released timetables calling for construction to begin as early as August in order to keep the ballpark on track to open in April 2010.

Top-level talks Monday

In a sign of the importance of reaching a solution, Pogin said both Lambrecht and Opat would for the first time take part in negotiations on Monday. In a letter to the editor in today's Star Tribune, Pogin and Lambrecht take exception to the comments by Opat and Bell. "Are those who smeared us unwilling to pay fair market value for our property?" the letter asks.

Even with the negotiations reaching a sensitive point, Lambrecht said he was not uncomfortable attending the swearing-in ceremony. Lambrecht, who once leased Stenglein office space during Stenglein's mayoral campaign in 2001, said he and his wife were invited to the ceremony by Rich Stanek, the newly elected county sheriff, whom he said he had also politically supported.

Stenglein said that when the county filed for condemnation two months ago, Lambrecht said to him, "God, Stenglein, you guys are condemning our livelihood." Stenglein said that while he often talks to Lambrecht, he has stayed away from discussing the land negotiations.

'Totally distracting'

Lambrecht downplayed the significance of his attending the ceremony. "I think it's totally distracting [and] gets into the whole connecting-the-dots thing," Lambrecht said. "I think I talk to everybody when I see people."

Opat agreed. "I said hello, as I always do. I like Bruce," he said. Opat said he briefly talked to Lambrecht about the negotiations at the ceremony, telling him that "we should sit down and figure it out."


Staff writer Joy Powell contributed to this report. Mike Kaszuba "¢ 612-673-4388 "¢ mkaszuba@startribune.com