New Vikings stadium expected to attract downtown development, leasing activity
Now that plans for the new $975 million, 65,000-seat Minnesota Vikings stadium are well underway – in fact, fans can get a preview of the stadium’s highly anticipated schematic designs on May 13 – downtown Minneapolis leaders and the real estate community are gearing up for some exciting, potential development on the east side of downtown.
The future multi-purpose stadium, which will be built on the current site of the aging Metrodome, has prompted city officials and developers to seriously start planning how underutilized surface parking lots and antiquated buildings around the new stadium could be redeveloped into housing, office, hotels and restaurants. Also, there’s talk of how the new stadium’s parking facilities could be integrated into new residential, office and hotel development. The Minnesota Sports Facilities Authority (MSFA) expects the new stadium to open in 2016.
The new stadium could do for the east side of downtown what the Twins’ Target Field did for the North Loop district, which is now a booming area for residential and office redevelopment, says Nils Snyder, a broker at Colliers International | Minneapolis-St. Paul. “There’s a lot more focus on the east side of town right now because of the stadium,” he says.
Minneapolis city leaders are intent on getting the new stadium designed right. Dallas-based HKS Inc. was awarded the bid to design the facility. The firm designed stadiums for the Dallas Cowboys and Indianapolis Colts.
Many agree that the Metrodome never really anchored the area or became a catalyst for development. This time around the city’s community leaders as well as MSFA officials say they want the stadium’s architecture to encourage and support street-level commercial activity and housing.
In addition to the new stadium, downtown Minneapolis has another $1 billion in new development approved, including thousands of new housing units. This demand for housing is being driven by Generation Y flocking to live downtown and baby-boomers, who are downsizing their households.
Also key is the new stadium will be located near the Hiawatha and Central Corridor light rail lines, which will be attractive to Vikings fans and downtown office workers and residents. It could be the “perfect storm” to encourage new development.
What could happen?
“It depends on how they design it,” says Brian Woolsey, managing director and principal for the Minneapolis office of Cassidy Turley. “I think the stadium could spur more development, if in some of the renderings we’ve seen, it’s very open and you can see into it. If they create some green space where people could walk their dogs. I think if they do it that way and it becomes more of a park setting, it should spur development… Now, there’s no green grass. No place to go… There’s a green committee thinking about how it will fit into the landscape of the greater community. I think that’s just so smart because now it’s an attraction for everyday kind of use. .. That could be an investment that could spur some kind of additional growth.”
Jon Dahl, senior vice president at Jones Lang LaSalle’s Minneapolis office, agrees. “I think the city this time is very dedicated to creating a more comprehensive development of that area, and I think that will include office, retail and hotels and will probably be done right this time,” he says.
He says they will master-plan the area a little bit better by creating a greenway, incorporating the light rail -- “kind of the whole nine yards.”
Areas designated for development
There are several zones that could see development/redevelopment resulting from the new stadium, reported The Twin Cities Business Journal in a September 2012 article titled “New Vikes home may spur development.”
One area is near the Minneapolis Armory, located two blocks west of the Metrodome. There has been discussion of renovating the huge armory facility into an event center concept. Also key in that district is the Star Tribune owns five city blocks that it’s looking to sell. It includes its headquarters as well as several blocks of surface parking. The newspaper hired Minneapolis-based Nelson, Tietz & Hoye to represent them in the sale of these properties.
It was reported that Minneapolis-based Ryan Cos. US Inc. is pursuing the acquisition of four of these blocks for potential redevelopment. The Star Tribune reported in December 2012 that Ryan and the Star Tribune “agreed to an exclusive negotiation period to work out a development deal for the newspaper's downtown property.”
The Twin Cities Business Journal also reported in December 2012 that Ryan is pursuing the ’s site for a possible large office development for Wells Fargo, and if a deal moves forward, Wells Fargo would consolidate hundreds of employees to the site from its other locations. The site could also include some residential development or retail, restaurant and entertainment to accommodate the stadium crowd.
Rick Collins, vice president of development for Ryan, would not comment for this article.
If the Wells Fargo development moves forward, local brokers agree it would be a big boon for downtown.
“That would completely fill up that area,” Dahl says. He also says that many existing property owners in the area will eventually benefit from the new stadium and potential projects like Wells Fargo.
“I can tell you if you’re a property owner in that area, at the very least, you’re thinking that your property is worth a lot more now,” he says. “And it will be, but it’s going to take three years for the stadium to be built. I thing that’s going to spur a lot more interest in the area, kind of like Target Field did in the North Loop.”
Snyder agrees: “The new Vikings stadium on the east side could potentially have some of that same impact (as Target Field had in the North Loop), especially with Wells Fargo looking at that area for a large corporate campus on the current Star Tribune site. The site has also been discussed for a residential redevelopment opportunity as well.”
More development zones
Another development zone is Elliot Park – to the south and southwest of the stadium -- where there are a number of sites that could be redeveloped, including the 247,000-square-foot 1010 Metrodome Square, which is currently vacant. Also in the Elliot Park neighborhood is the Hennepin County Medical Center (HCMC), which is planning a major expansion.
In addition, the West Bank/University of Minnesota area has development potential and the hope is that the stadium will help connect downtown with the West Bank and University.
“I think it’s really interesting because you have the light rail coming in, and I think there’s an opportunity to develop a better connection with the University of Minnesota,” Woolsey says. “Even though it’s just across the river—it’s across the river so there’s this disconnect between downtown commerce and the University of Minnesota.”
Stadium helping create interest from suburban office tenants
Dahl says he’s seeing more suburban office tenants looking downtown. “I think the stadium might spur more of the idea of the suburban tenants coming downtown because of the mass transit, the work/live situation, the entertainment, kind of the whole vibe of downtown,” he says.
For example, his firm recently moved Jacobs Marketing’s headquarters downtown from Plymouth.
“We looked at our prospect report two weeks ago,” Dahl says, “and we have at least six legitimate suburban users that are looking to move downtown. The largest one that has been reported is Larkin Hoffman in Bloomington.”
He says larger users coming into the urban core from the suburbs is a national trend.
“Chicago is a great example of that where a lot of groups like Motorola Mobility came downtown from the suburbs,” he says. “I feel that could be turning our direction. The mass transit is a key piece to that as well as the entertainment and sports. Then the last piece is retail. The retail downtown has historically struggled since Mall of America was built, but with the residential coming in – I think there are 1,000 units under construction right now – that will support more retail and help the vibrancy downtown.”
Posted at: 9:59 am on May 2nd, 2013