HomeMy WebLinkAbout2A, TCAAP Stadium Update -"iRQEN�HILLS
MEMORANDUM
DATE: June 1, 2011
TO: Honorable Mayor and City Councilmembers
FROM: Patrick Klaers, City Administrator ��
Jill Hutmacher, Community Development Director
SUBJECT: Analysis of Ramsey County Agreement with Minnesota Vikings
A March 21, 2011, letter from the City Administrator to the Ramsey County Manager outlined
the City's principal concerns with a stadium development. On May 10, 2011, Ramsey County
(the "County") and the Minnesota Vikings (the "Team") announced that they had come to an
agreement to jointly pursue the development of a new multi-purpose stadium on the TCAAP site
in Arden Hills. The County and the Vikings released their "Principles of Agreement for the
Development of a New Multi-Purpose Stadium" (the "Terms") which essentially is a term sheet -
outlining the components of future legal documents to be executed by the County and the Team.
The Terms address several of the City's issues identified in the March 21, 2011, letter, but does
not wholly alleviate the City's concerns. As this project may move forward at a rapid pace in
June, with a special session being anticipated before the end of the month, Staff recommends that
the City ascertain which concerns have not yet been addressed and work with the County to
ensure that those concerns are addressed in the final legal documents.
Following are the City's seven principal concerns as described in the March 21, 2011, letter and
a description of whether and how these concerns are addressed in the Terms.
City Concern 4 : New TCAAP Development roust support its own infrastructure costs.
Letter of March 211,2011: The City has affirmed that any TCAAP development must pay for
itself. The City will not support any development project that requires infrastructure costs to be
paid by existing Arden Hills residents or businesses. Any development must be supported by
regional transportation improvements that limit traffic increases on City roads. The City will
work with Ramsey County to determine specific transportation and infrastructure needs.
The Terms: The County will provide conduit funding for off-site transportation infrastructure
improvements and issue bonds for a period not to exceed twenty years. MnDOT shall be
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obligated to pay the annual debt service payments on the bonds. The Terms budget$58.4
million for on-site infrastructure, $12.4 million for off-site infrastructure (exclusive of regional
transportation improvements), and $87.1 million for parking.
Staff Comment: MnDOT has resisted paying debt service for off-site improvements. Because
on-site infrastructure improvements are not detailed by line item, it is unknown what specifically
is and is not included as on-site infrastructure. The Terms divide all development costs between
the County, Team, and State. No financial contribution from the City of Arden Hills is
contemplated.
Citv Concern #2: The site must be addressed as a whole.
Letter of March 21,2011: Any stadium development on TCAAP must include a remediation
and land use plan that addresses the entire site, including funding mechanisms. The City will not
support a stadium project that does not include a plan to remediate and develop the balance of
the property. The City supports developing the balance of the property with compatible land
uses.
The Terms: The TCAAP site (430 acres)will be acquired from the U.S. Army by the County.
The Team will immediately acquire from the County 170 acres (the"Private Land") that are not
needed for stadium-related development. The Team shall retain development rights for eight
years after the stadium opening. If the Team has not commenced private development or -
provided the County with a reasonably acceptable development plan within eight years, the
County shall have the option to purchase the Private Land from the Team at the current fair
market value. The environmental conditions of the entire TCAAP site will be remediated in
accordance with the requirements of the U.S. Army. Should the proposed development of the
Private Land require that the land be remediated to a higher standard, the Team shall pay for any
additional costs associated with such remediation.
Staff Comment: The March 21, 2011, letter was written prior to the Terms, and so the letter
does not address differences in the City approval processes for the stadium and the Private Land.
It is the City's position that the Private Land must go through the standard City approval process.
If the County chooses to repurchase the land after eight years, it is required to pay the then-
current market value as determined by an appraisal. The 2023 (2015 stadium opening plus eight
years)market value will be affected by the proximity of the stadium development. The County
would likely need to pay significantly more to purchase the land from the Team in 2023 than the
Team will pay to acquire the land from the County in 2011 or 2012. If the market value of the
land is high, it becomes unlikely that the County could repurchase the Private Land in order to
promote private development. The Team has no penalty for failing to develop the Private Land
within eight years other than the risk that the County could repurchase the Private Land.
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The Terms do not address the timeline for the remediation of the Private Land, but divides the
costs for remediation between the County and the Team.
City Concern #3: Development must generate adequate local government revenue to
support services to the site.
Letter of March 21, 2011: If a significant portion of the site is tax-exempt, it becomes unlikely
that development on the balance of the site will generate sufficient revenue to support services. _
The City desires that the balance of the site be developed concurrent with the stadium so that
revenue is available to provide services. PILOT or other payments for police, fire, public works
and other City services may be necessary to cover capital and operational costs of service for
Vikings games and other events.
The Terms: The Team shall be responsible for any and all costs incurred for municipal services
(e.g. police/security, traffic control, fire prevention, emergency medical, street cleaning/trash
removal and other similar services)provided for events held by the Team. Sponsors of civic,
non-commercial events/uses shall be responsible for any and all incremental costs incurred for
municipal services provided for its events.
Staff Comment: The Terms do not address costs incurred on days with neither Team nor civic
events. The Terms address operational costs of public services, but does not address capital
costs. Because the Team has at least eight years after the opening of the stadium to commence
private development on the Private Land, it may be several years before tax revenue is generated -
by the Private Land to support municipal services. -
Citv Concerti 44. The City of Arden Hills must retain local governawnt authority
including land use; approvals, plan reviciv, permitting, and building inspections.
Letter of March 21, 2011: The City requires all land use applicants to pay a land use
application fee and deposit funds into an escrow account to cover City costs for plan review,
engineering, legal, and consultant costs. Stadium lighting and signage are of particular concern
to the City and surrounding land uses. Park dedication will be required. Project review and
approval by the Rice Creek Watershed District will also be required.
The Terms: The County and Team entered into the Terms recognizing that the City is another
important party to the Stadium initiative and ancillary real estate development. The Parties will
work cooperatively with the City in the development and construction of the Stadium and
ancillary real estate development.
Staff Comment: The Terms do not address the City's land use approval authority for the
stadium or the Private Land. The Terms describe the design process, but does not mention the
City's role in design or approval. The Terms do not address City costs and fees,park dedication,
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or Rice Creek Watershed District review. Staff anticipates that issues regarding lighting, trails,
landscaping, utilities, drainage, etc., will be addressed in subsequent documents, but this should
be clarified with County staff.
Staff understands that the size of the Private Land has been determined to be 170 acres. The
exact location of the Private Land, however, has not been determined. The location of private
development may, in fact, be unknown until specific uses and input from secondary developers
and market studies determine the ideal location relative to the stadium. Given the unknowns
(i.e., what are the uses, where will they be located, how will they interact with the stadium
development), it will be challenging to identify and address all City concerns.
City Concern 95: Stadium development must be beneficial to the Cite of Arden Hills.
Letter of March 21, 2011: Stadium development must provide a significant increase in jobs
and tax base. Stadium development must enable remediation and productive development of the
entire TCAAP site. Stadium development must further the City's community and economic
development goals, both on the TCAAP site and elsewhere in the City.
The Terms: The development of the Private Land is an important element of the redevelopment
and revitalization efforts for the broader TCAAP site. The Stadium project is intended to act as
the catalyst for the redevelopment and revitalization of the site. According to M.A. Mortenson
Company, the Stadium will generate approximately 4.2 million hours of work or 673 full-time -
jobs for three years. Once the stadium is completed in 2015, the operation will support -
approximately 3,400 ongoing full and part-time jobs.
Staff Comment: The Terms address the remediation and redevelopment of the entire site and
provides a plan to bring the entire site back into productive use.
City Concern 46: A tore-terns reuse and redevelopment plan for the stadium site roust be
established prior to its develo inent.
Letter of March 21, 2011: Given the stadium life cycle of thirty to forty years, secure funding
set-asides must be created to guarantee that the site can be remediated to commercial and
residential levels and redeveloped in the event that the site is no longer used for a stadium.
The Terms: The Terms do not include any statements on this issue.
Staff Comment: The Terms do not address plans for the site after the expiration of the proposed
30-year lease with the Team.
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Cite Concern 97: The City of Arden Dills supports legislation that enables a stadium
project to move forward.
Letter of March 21, 2011: Legislation should address the City's concerns listed above and
allow for special local taxing authority to ensure a funding mechanism for the City's financial,
community, and economic development goals. The City also desires a seat on the commission
that owns and manages the stadium property to ensure that on-going City needs are addressed.
The Terms: The Terms state that one of the five members of the Stadium Authority will be
appointed by the City.
Staff Comment: The Terms do not provide a funding mechanism for the City's financial,
community, and economic development goals. As drafted, the City receives no revenue from the
Stadium development other than property taxes from redevelopment on the Private Land,
The County is working on revisions to House Pile 1441, the stadium legislation that was
introduced in April 2011, to align proposed legislation with the Terms.
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