Hennepin County, land owners remain far apart on value of ballpark site
A $48 million difference separates the landowners and Hennepin County on the ballpark land. Depending on who's doing the talking, the landowners are too greedy or the county vastly undervalued the site.
The landowners say the eight acres of land is prime real estate worth $65 million. It's close to ample parking, close to transit, it's zoned for high-density development and it offers great views of downtown, they say. The appraisers believe the land could support a massive mixed-used development complete with 40-story office and residential towers and hotels.
But Hennepin County Commissioner Mike Opat says that appraisal is wrong, for two reasons.
"One it uses the development-cost method which is, what if you put a Shangri-La development in a trench, this is how much money you would make. It's so many hundreds of millions, therefore the land must be worth $65 million. Clearly anyone would spend $65 million to get to a several hundred million dollar development," Opat says.
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The second problem, says Opat, is that one of the appraisals includes research data that was unattributed and taken out of context.
After the legislature passed the stadium funding legislation in 2006, Hines, a large Texas-based developer, made a move to purchase 15 acres of land downtown that included the ballpark site. The parcels make up what Opat calls 'the trench' between the garbage burner and the parking ramps.
Ten and a half of the 15 acres belonged to Landpartners II and Hines agreed to pay them $25 million for it.
Eight of the 10 and a half acres make up the ballpark site, according to Opat.
"We know what the ballpark percentage of that is a little more than 70 percent of that particular parcel. They have a sale price for the whole parcel of about $25 million so if one just does the simple math of roughly 70 percent of $25 million, that's the price."
That amount is about $18 million, just about the size of the county's offer of $17 million.
But LandPartners II partner Rich Pogin says Opat's assessment is way off.
"Well, the court will deal with facts. And politicians deal with spin," Pogin says.
The $25 million is a base price that Hines needed to offer in order to get a seat at the table and control the property, according to Pogin. Under the agreement, a land sale of more than $25 million will trigger a sharing option. So, for example, if the condemnation court determines the fair market price at $45 million, then LandPartners will receive just over three-quarters of $20 million.
It's a complex equation. But Pogin says he thinks the condemnation court will be able to understand.
"The agreement was created to develop the property and for the partnerships to participate over time, in the sale of the property and that's what it does. And I think that will be clear to the court. I think it is already clear," Pogin says.
The county could have avoided the court fight had it agreed to negotiate with him and his partners before the stadium funding legislation passed in 2006, according to Pogin. He says the county boxed itself in when it agreed to abide by a $90 million cap on land acquisition and infrastructure. Pogin says county taxpayers could be on the hook for millions in his team's legal fees if the panel's award is more than 40 percent greater than the county's offer.
"I think people will be stunned to say the least," Pogin says.
Commissioner Mike Opat says he doesn't like the fact that the county is spending so much on lawyers for the condemnation. But he says he'll spend the money to prevent the county from delivering a 'windfall' to the landowners.
The Minnesota Twins have agreed to make an additional contribution to help the county acquire the land and build the necessary bridges and walkways for the stadium. Even with that commitment, Opat says, the county may have to forego building some of the amenities if the county has to pay too much for the land.
Meanwhile the county is expected to begin calling its witnesses later this week. And Opat says previously secret details of the Twins agreement with the county will likely be made public as the case continues.