Star Tribune - May 31, 2007

Pohlads lining up land near ballpark

The family that owns the Twins is now working on development opportunities near the site of the team's new stadium.

By Mike Kaszuba, Star Tribune
Last update: May 31, 2007 – 11:38 PM

The family of Twins owner Carl Pohlad is already moving to reap the benefits of the taxpayer-subsidized stadium being built for the Minnesota Twins.

Although the Pohlads remained largely behind the scenes as funding for the new stadium was debated, Twins president David St. Peter recently confirmed that United Properties Inc., a national real estate development company owned by the Pohlad family, now is trying to purchase the Ford Centre -- an 11-story office building across the street from the site where the 40,000-seat stadium will be built in downtown Minneapolis.

The negotiations for the Ford Centre -- which has an estimated market value of $7.6 million -- come as the Twins and the newly created Minnesota Ballpark Authority, which will own the stadium, have reached a preliminary agreement on a separate land parcel near the stadium that will also likely benefit the Pohlads. That agreement was changed from earlier versions to more directly benefit the team.

Under the agreement, the Twins would gain parking and development rights on a three-acre parcel of land just southwest of the ballpark and opposite the stadium from the Ford Centre.

According to the new agreement, the Twins' enhanced development rights for the property are compensation for the team's payment to Hennepin County -- a figure that both the county and the team have refused to disclose -- to help build infrastructure around the stadium.

The county and the ballpark authority, according to the agreement, will build a surface parking lot on the parcel for the team, which will pay $20,000 a year for its use. In addition, the team will initially pay $10,000 annually for the right to develop and lease the parcel, including any potential development built above the parking lot. Should the property be fully developed, the team's annual rent for the parcel will not exceed $250,000, according to the agreement.

Twins and county officials downplayed the significance of the Ford Centre and parking lot moves, but together they indicate that real estate interest in the property surrounding the proposed $522 million, open-air stadium is heating up.

Over the past two months, Texas-based Hines Interests Inc. has been privately showcasing its own redevelopment plans for the land parcels it controls near the stadium, and it has unveiled an ambitious plan involving the area northeast from the stadium toward Washington Avenue in downtown Minneapolis.

Hines holds purchase option agreements on several land parcels east of the stadium, and adjacent to the Ford Centre.

"From a Twins perspective, and I think I can speak on behalf of the Pohlads, they're certainly interested in terms of what happens around the ballpark," St. Peter said. In addition to the land and air rights agreement with the ballpark authority for the parcel southwest of the stadium, he said, "we've certainly had, as an organization, internal discussions about the Ford Centre as well as potential other locations down there."

About more than a ballpark

Whether or not the Twins have cut an advantageous deal with the county in terms of the parking lot property has already begun a debate. "It's smart for them to look at those opportunities since they're making a big investment in that area already," said Bob Pfefferle, Hines' project manager in Minneapolis. "It's always been about more than just a ballpark."

Others, however, reacted negatively to the maneuvering. "I am not surprised," said David Bicking, a stadium opponent. "This has been more about making money than about bringing outdoor baseball to Minnesota. ... What I've been saying is that this is going to cost [taxpayers] more than we know."

Bicking said the parking lot agreement showed that the Twins' undisclosed contribution to the county, which was cast as an act of "generosity" by the team and the county, came with strings attached.

In earlier negotiations with the county, the Twins eyed the stadium's development potential. The team at one point envisioned incorporating retail, housing and office into the stadium design, although that proposal was later dropped.

The Pohlad family did not have a large public presence during the emotional, two-year debate over whether the new Twins stadium should be built with a 0.15 percent sales tax in the state's most populous county. Although stadium opponents often cited Carl Pohlad's personal wealth -- he is listed by Forbes Magazine this year as being the second-richest Minnesotan, with a worth of $2.6 billion -- as a reason not to use public money to build the new stadium. He was rarely seen in public advocating for the project.

A low profile

The Pohlad family has a variety of business interests, apart from the Twins and United Properties. A 2005 listing of the family's holdings spanned financial management, soft drink bottling, real estate and corporate jet servicing. Five years ago, Pohlad sold Marquette Bank to Wells Fargo for $1 billion.

The Twins' interest in not only building a stadium but also cashing in on nearby development is not unique. In St. Louis, the world champion Cardinals opened a new stadium last year and tore down the old stadium that sat next door. Now the team is trying to use public subsidies to turn the old stadium site into an entertainment district.

Hennepin County officials said they had only indirect knowledge of what the Pohlad family was contemplating near the stadium, which the team will contribute $130 million to help construct.

The county is contributing $260 million to build the ballpark, plus another $90 million of infrastructure costs.

"United Properties is one of their, what, 10 companies or something, or probably 20 companies," said Commissioner Mike Opat, the lead stadium negotiator on the County Board. "I've had maybe, over three years, three conversations with [Carl's son] Jim Pohlad, all sort of [the] 'bare knuckles' negotiating.

"There wasn't a lot of small talk, [like], 'So, what's up with United?' It just wasn't part of the deal," he said.

Hennepin County Commissioner Mark Stenglein, another stadium supporter, said he, too, had heard of the Pohlad family's interest in stadium-related development, but said he had few details.

St. Peter said the parking lot southwest of the stadium would be used to store construction materials related to the stadium, and would not be available to the team for parking or development until after the stadium opens in 2010.

He said the team was "quite optimistic" that the parcel would evolve into more than a parking lot, and that under the agreement the county would have to assist the team in finding a "comparable parking" site for the Twins near the stadium should development push out the parking.

Several key players in the stadium's development potential were silent on the Pohlads' plans.

Martha Nevanen, a spokesperson for United Properties, which was founded in 1916 by the owners of the Hamm's Brewing Co., said the company would have no comment on the Ford Centre or the company's intentions near the new stadium.

David Frank, a spokesman for Schafer Richardson, a Minneapolis investment, leasing and development company that owns the 300,000-square-foot Ford Centre, likewise said the firm would have no comment.

Although it is now used for offices, the Ford Centre initially held an assembly plant and automobile showroom when it was built in 1912 by the Ford Motor Co. But Frank acknowledged that the building was a "terrific location with the ballpark and transit [nearby]."


Mike Kaszuba "¢ 612-673-4388 "¢ mkaszuba@startribune.com