I wanted to weigh in on the Target piece by Mike Meyers.
This was one of the best development pieces I can remember in the Star
Tribune because it laid out in detail why this project has been such a
monumental mistake, including the massive overall subsidy, the hidden
subsidy to office development (which breaks a 20-year precedent), the
inexplicable shafting of Opus when it was prepared to present a competing
proposal, the shifting set of numbers that made it unclear to even some
council members voting on this how much taxpayers were really spending, the
conflicting roles played by Rebecca Yanisch.
One of the biggest disappointments to me personally is that city's bumbling
of this project undercut years of work by me, and others, to get a Target in
downtown Minneapolis without a massive subsidy.
The article was correct in saying I've been a long time supporter of
bringing a Target..in fact, I was a major player in convincing them to open
the first urban Target in downtown Minneapolis. But the article was not
correct in saying I supported a subsidy. Over the years I worked on several
alternatives that could have brought the store here without subsidy,
including a project with Opus and one with Carlson Real Estate on land it
owned with Dayton Hudson (where the current Target office tower now sits.)
And when the Ward's space became vacant I proposed to both Target and
Brookfield that the store be located there.
(As I've written before on the list, if I had been Mayor at the time I would
have opposed the Target project...and Block E. Instead I would have put the
Target store in the former Ward's space, the library on Block E and sold the
land the library is now on for a fund for affordable housing. Find more
detail on the front page of www.rtformayor.com by clicking: "A better
downtown for millions less.")
--------------------------
The Star Tribune story really starts about the time Ryan got into the
picture but to understand all this you need to go back a few years earlier:
In the mid 80s, the city had put a lot of money into high priced retail:
Saks, Gaviidae, the Conservatory. Woolworth's was in trouble and it was
becoming clear that we were building a downtown that most of the people who
live here couldn't afford.
So I went to my board at the Downtown Council and got approval to start a
drive to try to get mid priced retail here. Most people we talked to said
they weren't going into any downtowns and a good share of them said the only
way they would do it was if there was a mid priced anchor store....like a
Target.
Pretty much everyone in real estate said building a Target downtown would be
impossible because the numbers wouldn't add up.
So I went to Peter Hutchinson (an unsung hero in all this) who was then
head of the Dayton Hudson Foundation to see if the corporation would put a
store here making less than they normally would as a contribution to the
community.
For about a year we met with the real estate and store planning people to
make the case that a Target could make it downtown, plan how the store could
be laid out to fit on a block that could have other development, decide how
many parking spaces would be needed, etc. Finally they made the decision
that they would do it if they could find a way to pull it off for the same
price that they pay in a typical suburban location.
Armed with that I brought the idea to Carlson Real Estate, which co-owned
the block where the Target office tower now stands. (The two companies
bought this block in the 70s on behalf of the city when business leaders
were trying to find a place where they could attract Nieman Marcus.) The
idea was that both companies may be able to write down the land they owned
to make the downtown Target work.
For about a year I worked with Carlson, first on a development with other
mid priced retail above it that would pay the rent so the project wouldn't
need a subsidy. At one point we talked to Lunds about becoming a joint
tenant, but they weren't ready yet and putting the two together created huge
traffic problems and required a massive subsidy (I can't remember the exact
numbers but I'm virtually certain that the subsidy on this Target-Lunds
project would have been less than the subsidy now on the Target-alone
project.)
Then we talked to other joint venture developers. The most promising was
Homart, then a division of Sears, which took a short but really promising
run at building a project there with a bunch of mid priced tenants they
worked with elsewhere.
That could have worked but about this time the real estate market crashed
and everything fizzled out.
About a year later I was running my own consulting company and the head of
Target real estate called to say they still wanted to look at doing this
project again. So they hired me as a consultant to work with their internal
store team to assess potential locations, design options, etc. That work
also included helping to pick a developer and we started working with Opus.
Working with Opus we chose the block where the Target is now being built.
Much of this work involved trying to fit the store onto the block without
taking down the American Linen building. We knew American Linen had just
remodeled and acquiring this property would be too expensive. (I
was,therefore, pretty shocked as a taxpayer, to see later that the Target
project went ahead, taking the full American Linen piece of property and
adding many millions more to the project costs.)
Once Opus was working on the project, my role was done. Next thing I read
was that Ryan had suddenly become the developer of the project....and Mike
Meyers picked up the story from there.
There has been a lot written about the Opus-Ryan battle over this project.
I wasn't involved at the time so don't know anything that hasn't been in the
papers or court already. I do know that Opus had quietly acquired property
on the block at what I have to assume was far less than the city ended up
paying for it.
That may be more background than most want but I think it's important to
remember that this started out at Target doing a good thing for the
community, and a lot of people giving up a lot of their time to help keep
downtown retail strong and affordable. The city was delivered the a great
tenant that almost any downtown in American would drool over....but when the
project got into the development system downtown it was badly badly botched.
Almost nothing makes me more upset than seeing the Mayor, Jackie Cherryhomes
and Joan Campbell defending their actions by saying this is what it takes to
build a strong downtown. Nothing could be further from the truth. We
didn't have to spend this money and we could have gotten much, much more.
R.T. Rybak
www.rtformayor.com
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