Tensions over downtown land test Ryan Companies-Minneapolis relationship

Two construction workers move materials.
Two construction workers move materials behind a fence of the Downtown East project site.
Bridget Bennett / MPR News

Ryan Companies and the city of Minneapolis have partnered for decades on big, city-subsidized projects. But even beautiful partnerships get tested.

The Minneapolis City Council is set to vote Friday on a deal that's strained its relations with Ryan, one of the state's largest real estate developers.

It involves a strip of city-owned land near the new Minnesota Vikings stadium that sits next to Downtown East, the massive $400 million office and park development led by Ryan that will span five city blocks and includes $65 million in city financing.

The city chose Ryan earlier this year to build an apartment and Radisson hotel tower on the tract. But when Radisson backed out, Ryan cut the price it was willing to pay for the property from $5.6 million to $3 million, at most.

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Last week, the Vikings stepped in with their own proposal, offering $4.6 million for the parcel and urging the city to re-open the bidding process. That generated a heated hearing last week in front of the city's community development committee.

More: Vikings challenge developer for chance to build tower

"I do think that there's some of this: 'Well, we don't like or trust the Vikings — because we're the city,' going on. And there's a lot of this: 'We love Ryan. They've done so many great projects for us,' going on. And I think that taints people's point of view," said City Council Member Lisa Goodman as she urged her colleagues to evaluate the project objectively.

Downtown East under construction.
Downtown East, a mixed-use development project by Ryan Companies.
Bridget Bennett / MPR News

"I think we have a relationship with this city that goes back for decades," Ryan CEO Pat Ryan told the panel. "We have never gotten to this point in a project where we have not ultimately executed."

Ryan's grandfather James Henry Ryan founded the company in 1938. It started as a lumber yard in Hibbing, Minnesota. Today it's headquartered in Minneapolis, and has satellite offices in eight other states. Ryan has almost 900 employees nationwide and more than $1 billion in annual revenue. The company's marketing materials emphasize honesty and integrity.

Past city-subsidized Ryan developments include the downtown Target store, the Midtown Exchange building and Grain Belt Brewhouse.

Whatever political influence Ryan has in Minneapolis appears to be earned, not bought. Ryan executives contributed $900 total to Minneapolis politicians last year in a key election when the mayor and all city council members were on the ballot.

Ryan has a track record of delivering on promises, but the company doesn't get special treatment, City Council President Barbara Johnson said.

"We are as tough on Ryan as we would be with any other developer," said Chuck Lutz, who oversees economic development for the city.

"We have a long track record of dealing with them," he added. "We know their work, and we know that they've done good projects, but that does not give them a leg up in terms of getting projects from the city or in terms of any of our negotiations."