NRPA Article: Park Board rejects Downtown East park

The following article was published as the Feature Article in the October 2014 issue of the National Recreation and Parks Association’s magazine.  Richard J. Dolesh, the author, is NRPA’s Vice President of Conservation and Parks.  (Park Watch correction: The comment “The gift that keeps on taking” was attributed to Arlene Fried, but it was Park Board President Liz Wielinski who first said it.)

‘No Thanks’ Minneapolis Park and Recreation Board Rejects Offer of Downtown East Park
Imagine this: Your city plans to build a vibrant urban park adjacent to a new stadium in an underutilized portion of downtown that will enhance and expand the urban core of your city. It will be a public space pulsing with energy, people and economic activity. Every other week or so, a huge influx of people will fill the city center for the day — people bent on eating, drinking and having a good time. They will stay in hotels, eat in restaurants and congregate in the new downtown park, producing business receipts and tax revenue. Best of all, your new park will periodically provide a dramatic backdrop and focal point for one of the biggest sports spectacles in America — a National Football League game.

For many in the business community of the City of Minneapolis, this is the long-awaited vision for the rebirth of the Downtown East area of the city. This redevelopment will be a dream come true. But in the eyes of the Minneapolis Park and Recreation Board, the public park agency of the City of Minneapolis, the Downtown East Park would be a nightmare come true that could lead the agency to financial ruin if it were to accept the agreement to operate the new park.

Arlene Fried, president of the Minneapolis volunteer advocacy group ParkWatch, pronounced her verdict on the agreement for the new Downtown East Park: “It’s absolutely outrageous!” she says, “And you can quote me on that!”

As the negotiations behind the deal for the new park were revealed, it came as no surprise that the Park Board, which was in the dark about its terms, rejected the proposed Operator’s Agreement. What originally seemed like a great deal for the city — a new public park built at developer expense to complement the “People’s Stadium” — no longer appeared so favorable.

An editorial in the Minneapolis Star Tribune that grudgingly supported the city’s plan to move forward without the involvement of the Park Board drew a mostly negative response.

Commenters criticized the deal, the elected officials who put it together and the corporate interests that will benefit from it. “The taxpayers will be on the hook for this boondoggle,” commented one. Another asserted, “This will, in NO WAY, ever be a public park.” Former City Council Chairman Paul Ostrow, who eventually led a taxpayer lawsuit to attempt to derail the project, told NRPA, “It’s an unbelievable story — people were deceived, public funds were squandered. You could write a book about this.”

To say the least, substantial disagreements remain about the plans for the proposed public park that will be built by the Ryan Companies, the Minnesota Sports Facilities Authority (MSFA) and the owners of the Vikings, in association with the new stadium. Compounding the disagreements, in August 2014, the Park Board formally rejected consideration of the Operator’s Agreement to manage what has been envisioned as a $6 million park in the initial phase because of what they considered wholly unacceptable terms.

How the situation arrived at this juncture mystifies virtually everyone who has followed the progress of the deal. Many are asking what transpired during the negotiations to turn what should be a win-win for the city into a huge headache. Most of those who have been involved in this project agree that the park at “The Yard” will eventually come to be funded, built and operated, but how it will be funded and who will assume operations are questions that remain to be answered.

The complex negotiations to create a public park with private funds on city-owned land adjacent to a privately owned stadium represent a cautionary tale not just for Minneapolis, but for any other urban metropolitan area contemplating a similar arrangement for a stadium park.

New Vikings Stadium Catalyst for Proposed Urban Park

The Downtown East area of Minneapolis has always been an unlikely candidate for a large-scale urban redevelopment project because it is mostly isolated from the downtown core of the city. Prospects for revitalization brightened, however, when the Star Tribune Company agreed to sell its substantial land holdings and Wells Fargo & Company announced plans to invest up to $300 million in two office towers to create a corporate campus for 5,000 employees. Former Minneapolis Mayor R.T. Rybak was an early champion of the stadium and the redevelopment of the Downtown East area. “Our goal from the outset was to have the stadium lead the development of a new urban neighborhood in what has been a sea of parking lots,” he says.

The original plans called for a large plaza in front of the stadium that could accommodate game-day gatherings and be used for other stadium-related events. It was to be operated by MSFA, a state-chartered board. Such a plaza is vital for any state-of-the-art stadium plan, according to Michelle Kelm-Helgren, the chair of MSFA. “It is essential to have this kind of infrastructure to support big events you hope to attract, such as the Super Bowl or the Final Four,” she says.

However, the original orientation of the stadium was changed during negotiations. “The city approached us and said they would like a public park space and that they would also need parking for the new Wells Fargo development,” says Kelm-Helgren. “As we put all that together, we essentially gave up our own plan for our park in exchange for a public park on a parcel owned by the city. Because we are a public body and we understand the public good, we supported the larger-scale development plan.” Rybak said the city felt this new plan was better for all and it would expand the size of the park. Rybak also believed that this space should be public. “It was important that the land not be tied up [by MSFA].” He felt the city should own and use the land as a public park.

“What changed our view of what the stadium could do was the need for a new parking ramp [garage],” Rybak says. “We believed that the parking ramp could produce revenue on nongame days.” The city envisioned the parking ramp as being used for employee parking by Wells-Fargo and others during the week, thus generating revenue, and being available for game parking and stadium events on weekends.

Taxpayer Lawsuit Complicates Plans for Park

“The Park Board was not even envisioned to be the operator of this park at the outset,” Rybak says. He points to what he calls a “frivolous” lawsuit filed in the middle of negotiations for the stadium that drew the Park Board into the deal. Ostrow, who championed that taxpayer lawsuit, sees it differently, saying, “This is a publicly financed park that was sold to the public as a privately financed park. It is not, and it absurd to think that it is.” Ostrow admittedly is no champion of the Park Board’s autonomy since he tried to legislatively gut its authority during his time on the council. Still, in the lawsuit, he asserted that the city charter gives the Park Board exclusive authority to manage and operate public parks within the city.

Many were puzzled about the lack of participation by the Park Board in the negotiations over who would manage Downtown East Park, since they are the legal entity that owns and operates public parks in Minneapolis. Liz Wielinski, president of the Park Board, says the agency was never engaged in the details of the project until they were brought in to the deal as a result of the lawsuit in 2013. Additionally, Wielinski says the Park Board was surprised to learn the terms of the deal when they were announced in 2014. Approximately 40 days were reserved by the MSFA for stadium-related events and approximately 40 days were reserved by the Vikings for all home NFL games and playoffs — not just for game days, but also set-up and take-down days. The Park Board also learned that, “The park was to be maintained to [MSFA/Vikings] standards,” Wielinski says.

Additionally, no operating revenues or added capital funding was to be transferred to the Park Board. The only source of potential revenue for operation and maintenance of the park would be that which the Park Board could generate from events and rentals on the remaining days of the year that were not reserved by the Vikings and MSFA. Jayne Miller, superintendent of the park system, says, “Given what the deal was and what the use agreements were, we had to determine what the implications would be for us as a park-managing agency.”

“Our fear was that we would end up in a box,” Wielinski says. “We are already facing a $1.1 million shortfall next year. The operating costs for this park could have affected every single park and recreation project we have. It was just too risky of a choice for the Park Board to make considering all the other uncertainties.”

The staff of the Park Board prepared an analysis of what it would cost to operate and maintain the “basic park” that was envisioned to be in place at the time of the opening in 2016, and the costs to operate the so-called “ultimate park” that is expected to be built in three to five years at an estimated cost of $20 million. Annual operating cost estimates ranged from $500,000 for the basic park and between $2 million and $3 million for the completely developed park.

Many found the proposed deal that was presented to the Park Board to be deeply flawed. Fried of ParkWatch said those negotiating the deal apparently assumed that the Park Board could recoup funding for operations and maintenance from rental fees generated from the remaining unreserved dates, variously estimated to be about 70-80 usable weekdays and a handful of good-weather weekends, but “the number of days or the dates available for park use were never specified. The public would be second choice at all times,” Fried says. “The Park Board could not schedule an event that couldn’t be pre-empted. When you drill down, the MSFA and the Vikings had total control. How could the Park Board ever make any money with these kinds of conditions?” Fried has called the proposal to operate the park as “the gift that keeps on taking.”

In August 2014, in light of the staff analysis of conditions and costs and after consideration of the Operator’s Agreement, the Park Board formally voted 6-2 to release the city from further discussions with it regarding ownership and operation of the space. “The Park Board displayed real backbone,” says Fried. “It was very courageous of them to reject the operation of this park, but it was what they needed to do.”

Park Board Rejection Creates Many Uncertainties

Local freelance writer David Smith has written extensively about the history of the Minneapolis Park and Recreation Board. In a recent blog post, he detailed how the Park Board strayed from its purpose in the past and the results were negative more often than not. Smith notes similarities in how the Park Board was drawn into this project and why he thinks the proposal was faulty from the outset, saying, “This would not be a park built for park purposes. No one involved in this deal ever said, ‘This area needs a new public park.’ No one looked at this project from the public’s perspective.” The Downtown East Park, Smith says, “would be built because it is an amenity to the stadium and its primary purpose would be to serve the stadium functions, not as a public park for the community.”

Smith says this outcome of the creation of a separate conservancy or foundation to run The Yard would compromise the Park Board’s integrity. “The value of the Park Board is that the board and professional staff have had to take a city-wide view of parks and needs of the citizens. As soon as you go the route of foundations and conservancies, these organizations don’t have a city-wide view.”

So What’s Next for The Yard?

The city is close to moving forward with a plan to create a conservancy or entity similar to those created for privately funded public parks in other cities. Parks such as Millennium Park in Chicago, Bryant Park in New York or the BeltLine in Atlanta have been put forth as models for how the city could engage the private sector to operate Downtown East Park. In many of these cases, a conservancy solicits contributions from the private sector for capital costs — generally an easy lift, since corporations like to associate themselves with such public-private partnership projects. The heavier lift is to find ongoing funding for the annual operating and maintenance costs.

In some cases, such as Bryant Park or The Yards Park in southwest Washington, D.C., funding has been provided through the creation of a Business Improvement District (BID) or other self-replenishing method that provides adequate operating and maintenance funding. The Operators Agreement for Downtown East Park would present a problem for any entity formed to operate this public space, however, considering it reserves more than 80 days per year for exclusive use by the MSFA and the Vikings for events and rentals. Such pre-conditions raise substantial questions about the viability of generating reliable and sustainable operating and maintenance funding for the park, so much so that Rybak now no longer supports the deal for the park. “My concept was for the MSFA and Vikings to have about 30 days reserved.  That seemed about right,” Rybak says. “After I left office, the Vikings and MSFA got far more than I ever anticipated — more than they needed, and more than is helpful to create a useful, valuable public space”  Does that mean he would support reopening negotiations, as many have called for? “Yes,” he says. “And I believe the city has the authority to do so.”

So, where does this leave plans for The Yard? “I think the solution is for a downtown conservancy to operate the park and not give MSFA as many days as they have negotiated,” Rybak says. When asked where the operating funding would come from for such a conservancy, the former mayor noted that the city expects a property tax windfall from the anticipated $700 million in development that will be associated with the stadium, and that could help provide those funds.

The Park Board does not seem inclined to stand in the way of a new conservancy if that is what it will take to provide a qualified and responsible operator for the new park, but many questions remain about whether such a conservancy would be beholden to the interests of the owners of the Vikings, the MSFA or other entities over the interests of the citizens. Rybak insists it is possible to have a positive outcome. “In spite of the complexity here, I am very optimistic that something good will be worked out,” he says. “It is up to all of us to make this work for the public.”

The tale of the Downtown East Park certainly has not yet run its course, but it is providing a number of cautionary lessons for other cities and represents additional evidence that privately funded public parks are not just dramatically reshaping urban metropolitan areas in ways that were not anticipated even a decade ago, but reshaping the very concept of what urban parks do and who they serve.