An additional thought about the current discussion of downtown retail and
Brookfield. If the future of downtown retail was so important to Brookfield
why did they decide last month to close all of the property they manage,
including City Center and Gaviidae, on Sundays?
How are residents being encouraged to shop downtown if most of the stores
are closed ½ of the weekend? Is retail downtown just for the downtown
workforce? I'd be willing to bet my 26,500 neighbors downtown will now look
for somewhere else to shop on Sunday. I just hope Dayton's and IDS don't
follow the Brookfield's lead.
Lisa Goodman
Loring Park
-----Original Message-----
From: David Brauer [mailto:[EMAIL PROTECTED]]
Sent: Thursday, February 22, 2001 3:55 PM
To: Goodman, Lisa R
Subject: RE: [Mpls] St. Anthony Gaviidae piece
Post this to the list!! [EMAIL PROTECTED]
D.
-----Original Message-----
From: Goodman, Lisa R
[mailto:[EMAIL PROTECTED]]
Sent: Thursday, February 22, 2001 3:52 PM
To: 'David Brauer'
Subject: RE: [Mpls] St. Anthony Gaviidae piece
If downtown retail was so important to the folks at
Brookfield why did they
just decide to close City Center and Gaviidae on Sunday's.
Seems like a
slap in the face to residents who shop on weekends!
Lisa Goodman
-----Original Message-----
From: David Brauer
[mailto:[EMAIL PROTECTED]]
Sent: Thursday, February 22, 2001 8:03 AM
To: Mpls list
Subject: [Mpls] St. Anthony Gaviidae
piece
Thanks, Tim for noting the revealing Neal
St. Anthony Strib
piece. The
deal's critics got some column inches at the
end, but
mostly, it was a
revealing look at how Brookfield's Harold
Brandt and the
MCDA's Steve Cramer
think. The piece is at:
http://startribune.com/viewers/qview/cgi/qview.cgi?story=83595425
The story left a lot of questions, which I
hope some public
official,
especially at the MCDA will take time to
address to the
list:
First, I reiterate Tim's point: why does the
MCDA need the
cash now? Is a
cash-flow crunch pushing them to discount
the Gaviidae loan?
2. If so, how did that happen? Does this
situation reflect
fiscal
mismanagement by the city?
3. Brandt takes credit for Gaviidae/Saks
spurring a $280
million
development. ("The incentives worked,"
Brandt said. "The two
department
stores were a catalyst for those
developments.") The city
loaned $30 million
at 6 percent interest (much below
market-rate) in 1987-91 -
a nice subsidy
even without the new discount. But were the
retailers key to
the office
component in any way? Or was it like Target,
where the
office tower was
going to be built regardless and the retail
was a means to
its own end?
4. St. Anthony tacitly compares the $30
million Gaviidae
loans to "$130
million in government-financed roads and
other
site-preparation" for the
Mall of America. But MofA worked, and
Minneapolis's project
didn't. Critics
here at the time complained about getting
into a high-end
retail bidding
war. Looks like they were right. Also note:
because of its
subsidy,
Bloomington won't see any net tax-revenue
benefits from
MofA, something the
Strib has written about.
5. The game appears to be keeping City
Center high-end
retail, which pays a
higher tax rate, rather than office space,
which earns (and
pays taxes on)
half the retail rate. Cramer seems to want
to subsidize City
Center to keep
the tax rate up.
But why bother? Is City Center "going
office" that bad? If
it cost $18
million in subsidy to prop up the higher
rate, how soon does
that generate
additional revenue compared to a lower - but
unsubsidized -
office rate?
6. And of course, the big question: why
should the city be
directing this
sort of (retail) use when the market
dictates otherwise
(high demand for
office, low for retail).
7. Cramer makes a bow to Tony Scallon, the
genius behind
linking NRP to
developer deals: ""They've [Brookfield]
generated millions
in property
taxes, which has helped fund the
Neighborhood Revitalization
Program and
other priorities. They came along at time
when there was a
real question
about the future of retail in Minneapolis.
They aren't
generating the sales
figures or per-square rents that retailers
like. But they're
viable and
people are shopping in downtown Minneapolis
and we have a
chance to make
improvements as the downtown work force and
residents
increases over the
next decade."
Cramer seems to be saying, "hey, they did
something for us
15 years ago
(even though the $30 mil at 6 percent
interest was a big
subsidy to
Brookfield then), so we owe them even more
now." Let's hope
we don't put
such costly good will in our development
contracts.
Then Cramer argues city subsidy has WORKED
-- if not for
Brookfield then for
the city because workers and residents are
increasing. If
so, why do any
more pump-priming. Won't the market respond
to a successful
environment?
8. Media Kool-Aid-drinking alert! St.
Anthony writes: "The
Dain/Gaviidae
developments are important, throwing off
$5.7 million in
property taxes last
year, part of a downtown district that
yields more than 40
percent of the
property taxes in the entire city."
Downtown yield 40 percent of the taxes, but
Gaviidae is a
tiny part of that.
That's like giving me credit for Kingfield's
resurgence. It
would have
happened without me (and I'm not trying to
renegotiate my
mortgage!). It's a
credit to unsubsidized office developments,
prudent and
genuinely public
infrastructure.
Yes, Dain/Gaviidae pays a nice chunk of
property taxes...but
still will,
with or without the proposed loan deal
unless Brookfield is
threatening to
shutter Dain/Gaviidae. The biggest howler is
THIS is a
project that has
settled into the dreaded
"retail-turned-office" scenario we
were frightened
about a few paragraphs ago. Now it's being
touted! Most of
the $5.7 million
comes from the (unsubsidized Dain) office
component. We'd
get the benefits
regardless of Gaviidae, unless the office
wouldn't have gone
in without the
retail.
8. Brandt wraps himself up in the hair
shirt, talking about
keeping City
Center retail: "I feel Brookfield has been
the retail
first-aid guys for too
long," Brandt said. "We need to see a
commitment from
Minneapolis."
Um, Harold - the city contributed its own
big bandaid in the
late '80s with
below-commercial-rate financing...and added
a few million in
exterior
improvements in recent years. We taxpayers
have been there
for you. The
question is whether either of us should
still be there.
9. Last question (to all insiders, please
post to list): how
likely is it
that a new subsidy deal will pass 7-to-6?
David Brauer
Kingfield - Ward 10
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