The following letter was sent to the Mayor and Council Members from Paul Ostrow, Stephanie Woodruff and Dan Cohen on January 18, 2014:
TO: Mayor Betsy Hodges and Members of the Minneapolis City Council
RE: Downtown East Development Project/Stadium Development
Dear Mayor Hodges and Council Members:
Congratulations on your election or re-election. We thank you for your service and wish you well as you strive to improve the lives of everyone who lives in our great City.
We are the Plaintiffs in the now concluded litigation entitled Woodruff, Cohen and Ostrow v. City of Minneapolis and the Minneapolis Park and Recreation Board. The Court’s recent order requiring a $10 million surety bond makes further pursuit of our claims impossible. We are filing a dismissal of our lawsuit in Hennepin County District Court effective immediately. The important issues raised in the litigation now return to where they are most appropriately addressed – the Minneapolis City Council and the Minneapolis Park and Recreation Board.
As you know, no development contracts have been signed and based upon representations by the City Attorney at the hearing held on January 15th, the City, Park Board representatives and Ryan Companies are still negotiating the final terms of a development agreement. It would appear that significant elements of that agreement must be changed to reflect the Court’s ruling in the recent litigation that the City has no authority to own or maintain parkland in the City.
We believe that the vote of the City Council on December 13, 2013, approving the now to be amended development agreement and authorizing the issuance of $57 million in bonds, is null and void. We believe that the Council action is null and void because it was based upon an assumption and upon legal advice that the City Council had the authority to establish “the Yard” and to ensure its proper maintenance and programming. The request for Council action dated December 10, 2013 states clearly that the City Council will own, operate and maintain the park. Judge Dickstein’s ruling makes it clear that the Minneapolis Park and Recreation Board has the sole and exclusive authority to “devise, adopt and maintain parks.”
Whether or not the Council action is legally suspect, we believe that each of you has both the authority and the responsibility to review this project in light of recent developments and revelations. In addition to the Court’s findings that the Council lacks the authority to create or maintain “the Yard,” we have learned the following:
1) The stadium legislation placed a legal limit on the City’s required contribution to the stadium or stadium infrastructure of $150 million. The same legislation included “plazas, parking structures, rights of ways, connectors, skyways and tunnels” in the definition of stadium costs. The Court held that the City was within its authority to purchase the land for the parking ramp and to subsidize its operation. The Court did not address the wisdom of that decision. The City has never responded to our claim that since the City is already contributing $150 million to the construction of the stadium through its sales tax that the Minnesota Vikings have a legal obligation to finance any land purchase and parking ramp construction required by the legislation.
2) We now know that unlike the City, the State of Minnesota is using the sales tax revenues generated in Minneapolis and not additional state dollars, to fund their portion of the skyways and parking ramp costs for the project. Recent disclosures by the Metropolitan Sports Facilities Authority confirm that bond proceeds from the now delayed state bond issuance are needed to finance the Downtown East development project. The City Council has apparently never considered using a portion of its $150 million capital contribution through the city sales tax to the cost of the parking ramp or open space that will be used by the new stadium. The subsidies for the parking ramp and the park represent an additional public subsidy to the stadium development that most of you opposed in the last election….hence why most of you got elected.
3) Recently published reports make it clear that the Minneapolis Park and Recreation Board has no interest in funding any of the costs of operating and maintaining “the Yard.” The MPRB has wisely stated that it has other more urgent priorities and is not interested in reducing funding to neighborhood parks and riverfront projects in order to fund “the Yard.” It would appear that the MPRB’s interest is limited to accepting the parkland as a gift and using funds raised from private contributions or the City to operate the park. Since no funding source has been identified for operating or maintaining the park, the only certainty is that the Minnesota Vikings and MSFA will have access to the vacant land for events at the stadium.
4) Finally, throughout this litigation, we have seen a troubling lack of transparency and a basic failure to perform financial due diligence on this development. The Plaintiffs filed a request for documents on December 12, 2013. None of those documents were ever received. The requested documents included revenue and cost projections for the parking ramps, copies of any appraisals or valuations of the property to be purchased from the Star Tribune and a copy of the proposed development agreement between Ryan Companies, and the City of Minneapolis. Perhaps most disturbing is the issuance of taxpayer supported general obligation bonds for the purchase of property without any independent appraisal of the value of the land. The purchase price for the land is $38 million – more than double its current assessed value of approximately $17 million.
Since our litigation is now closed, there is no reason to keep the public in the dark regarding proposed changes in the development agreement and recent events and disclosures. The public is entitled to have their elected representatives publicly discuss the wisdom of the public subsidies in this project in light of those developments. It is not too late to do the right thing. We are asking Council Member Quincy to place this matter on the Ways and Means Committee agenda on January 21, 2014, for a full report from staff and a public discussion regarding the changes to this project. We are also asking the full City Council to consider whether or not to approve the amended development proposal and related bond issuance at its next Council Meeting on January 23, 2014.
In closing, we want to make it clear that we are not against the development of Downtown East. We are not against Ryan Companies. They are an experienced and trusted developer and Ryan has partnered with the City on many great projects. However, we are against additional public subsidies to the stadium project.
–We are against the use of public funds to finance the $38 million purchase of land without any independent appraisal of its value.
–We are against squandering scarce public resources and compromising the City’s long-term financial future.
–We are against a lack of transparency and accountability endemic to this proposed development.
We realize that you will probably be pressured to do nothing and let this matter go forward without any public debate or discussion. We believe that inaction and silence would betray the principles upon which so many of you recently campaigned. We urge you to act now before it is too late.
Stephanie Woodruff, Dan Cohen, Paul Ostrow
cc: Minneapolis Park and Recreation Board