By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
By Jesse Marx
By Maggie LaMaack
By Jake Rossen
In 1997 St. Paul issued $11.3 million in bonds to expand the World Trade Center parking ramp to a 1,200-car capacity. The project was undertaken at the behest of Principal Financial Group, owners of the World Trade Center. At the time, Principal was pledging to invest $42 million in the World Trade Center and Town Hall, with plans that included a 14-screen movie theater and restaurants. After the parking ramp renovation was completed, the rights to operate it were turned over to Principal Financial for 20 years. Since the city remained the deed holder, however, the company could operate the ramp without paying property taxes. Principal Financial then sold the World Trade Center and left town, never delivering on its promise to build an entertainment complex. The company continues to operate, and generate revenue from, the city-built parking ramp.
In 2000 St. Paul spent $3 million to purchase and develop an 8.5-acre vacant railroad property beneath the Lafayette Bridge to provide Conseco Finance with 1,000 parking spaces. In return the company promised to move an additional 600 employees to St. Paul, bringing its total downtown work force to 2,000. The next year, before the lot was even completed, the company reversed course, announcing that it was laying off 2,000 workers, including 400 in St. Paul. Despite this, city officials continued to proclaim that the parking lot was a good deal. The lot is not currently being used and the city is now trying to sell the land to developers. "St. Paul is left with a undeveloped, polluted site," summarizes Carrie Thomas, policy director for the JOBS NOW Coalition.
In 1997 St. Paul lured Lawson Software from Minneapolis with the promise of a brand-new $101 million, 13-story downtown office building. Three years later the city sold the office tower to developer David Frauenshuh, who held a 25-year lease on the property, for just $53.5 million. The city retained ownership of the parking ramp and retail space, both of which have struggled to generate revenue. In recent months Lawson's financial outlook has darkened considerably. The company'stock price has plummeted to less than $4 per share and 345 employees have been laid off this year. The St. Paul Companies, which agreed to rent three of the office tower's 13 floors, has also struggled financially. Because of layoffs, the insurance company never even moved into Lawson Commons. According to spokesman Pat Hirigoyen, two of the three floors are currently subleased.
In 1997 Norm Coleman announced that Minnesota Mutual (now Minnesota Life) would nearly double the size of its headquarters in downtown St. Paul, a $90 million investment. What's more, the company promised to do so at almost no public expense. As details of the deal emerged, however, it became clear that the cost to St. Paul taxpayers would not only be substantial, but impossible to calculate. To purchase and prepare the site for construction, St. Paul borrowed $15 million from Minnesota Mutual, then turned around and sold the piece of property to Minnesota Mutual for one dollar. To pay back the loan, the city is obligated to fork over property taxes generated by the new building, plus interest, until 2026. In the end, according to an analysis of the deal done by the Pioneer Press, the loan plus additional building expenses could cost taxpayers $39 million.