Heavy Hitter

The governor and the developer: A love story

There's a rule in major league baseball against fraternizing with members of the opposing team, but it's seldom enforced. The same winking attitude may govern the deal-making that goes on when it comes to building stadiums. Last May, for instance, a local news piece raised questions about the relationship between Hennepin County Commissioner Mark Stenglein and real estate developer Bruce Lambrecht.

A few weeks after Stenglein voted to approve a sales tax earmarked for a new $478 million Twins stadium--on land where Lambrecht's investment company is the managing entity--the Star Tribune reported that Lambrecht had hosted a fundraiser and played an influential role in Stenglein's unsuccessful 2001 campaign for mayor. The paper also revealed that a Stenglein aide took a three-month leave of absence from his county job to work as a lobbyist for Lambrecht.

Yet over the last three years, another politician has also been a beneficiary of Lambrecht's largesse as a political donor: Tim Pawlenty. And during that time, Pawlenty has changed his position on at least two key issues that are of enormous potential benefit to the value of Lambrecht's property. Also during this period, the governor has hired both Lambrecht's wife and former Lambrecht lobbyist Brian McClung to work in his office at the Capitol.

Jane Sherman

In January 2002, about four months after Pawlenty announced he was running for governor, Lambrecht contributed $500 to the campaign. In early June, less than two weeks before Pawlenty engaged in a bruising battle with Brian Sullivan for the Republican endorsement at the party's state convention, Lambrecht wrote another $500 check. A month after the convention, on July 17, Lambrecht and his wife, Jeanne Braun, threw a fundraiser for the Pawlenty campaign. According to documents on file at the state's Campaign Finance & Public Disclosure Board, Braun made an in-kind donation of $650.83, described as "Food for Fundraiser." She and Lambrecht also each ponied up another $250 that day. In all, Lambrecht and Braun contributed more than $2,000 to help elect Pawlenty in 2002.

On the day Pawlenty was sworn into office in January 2003, Braun was officially hired as a personal assistant to the governor at an annual salary that would reach $35,000. She held the job until May 26 of this year--three days before the conflicts of interest between Stenglein and Lambrecht hit the front page of the Strib.

Meanwhile, Lambrecht has been a generous and steady contributor to the Republican Party of Minnesota, giving six donations totaling $4,500 in 2003 and 2004. The couple also gave a total of $1,000 to Pawlenty's campaign in 2003. One might think that Lambrecht was contributing to the party and the governor to promote a philosophy of limited government. After all, in 1996, Lambrecht cofounded an antitax group called Citizens for Fiscal Responsibility, and he later made three $500 contributions to the Freedom Club of America, another antitax outfit. Here's the surprise: Even before Pawlenty's spring proposal to raise the cigarette tax (the soon-infamous "health impact fee"), the governor had reversed himself on two positions he took as a state legislator, each time flip-flopping in a manner that would allow massive amounts of new government spending. And in both matters, Bruce Lambrecht was likely to be one of the primary beneficiaries of the government spending Pawlenty now endorses.

The first issue: public funding for a new Twins stadium in downtown Minneapolis. Apparently putting financial profit before political philosophy, Lambrecht has lobbied hard over the past two years for government involvement in a stadium plan that would put a ballpark on and near his real estate holdings. The very concept of "Twinsville"--in which a stadium would be surrounded by housing and related commercial development--is partly Lambrecht's baby.

Pawlenty steadfastly opposed public funding for stadiums as a state senator and gubernatorial candidate, but he effectively reversed that position with regard to the Twins stadium campaign. Suddenly, he was instructing his then-chief of staff Dan McElroy to receive and review stadium proposals in the hope of getting at least one and perhaps as many as three ballparks built. When all the grand stadium schemes fell through during the "do-nothing" 2004 session, Pawlenty hired Stenglein's old aide and Lambrecht's lobbyist at Twinsville, McClung, to be his press secretary at $70,000 a year.

Before the 2005 session, Pawlenty demanded more citizen veto power on major government spending decisions. Yet a few months later he announced that he would not insist on upholding the existing state law that requires a public referendum on the $478 million stadium deal between Twins management and Hennepin County taxpayers.

As negotiations over a Twins stadium continued in April and May, the Minneapolis-St. Paul Business Journal reported that the stadium site was owned by a group of local investors led by Lambrecht and his partner, Rich Pogin. Their 2004 agreement to sell the land to the city of Minneapolis for $12.95 million had expired, and presumably the asking price would be higher. The article noted that, in addition to selling the site at a premium, Pogin and Lambrecht expected to retain control of about 500,000 square feet of land directly to the east and west of the site. Lambrecht and his partner further opined that there would be an additional $500 million in new development surrounding the ballpark. This would make for a pretty stellar payday: The Star Tribune has reported that the initial cost of assembling the parcel controlled by Lambrecht and Pogin was $3 million, and that the partners have put another $12 million into it.

The second Pawlenty surprise: the Northstar commuter rail line, which would connect rural Big Lake with a terminal in Minneapolis not far from Lambrecht's property.

As a state senator, Pawlenty led the fight against the commuter rail line. He began to soften his stance during his 2002 run for governor. Even so, many did not expect the governor to include Northstar in his bonding bill request for 2004. When Northstar was defeated in the Republican House, Pawlenty unilaterally allocated $2.5 million from a Met Council transit fund to leverage $10 million in federal monies for Northstar, prompting complaints from right-wing Republicans that he was executing an "end-run" around the will of the Legislature. At Pawlenty's behest, state bonding for Northstar was passed in 2005, money that was vital in ensuring that plans for the commuter line will go forward. Asked about his financial and personal relationship with the governor, Lambrecht responds that he is just one of 150 investors in the downtown parcel. Pawlenty's position on stadium funding, he asserts, is too ambiguous to imply favoritism.

As for Northstar, "It is absurd to suggest that the governor changed his position on transit because of me," Lambrecht says. "To do that, you would have to ignore the success of light rail, the overwhelming public support for transit among Minnesotans, and the national support of the Republican Party and the president for mass transit."

Whatever Pawlenty's motivation, it's hard to argue that his position switch on Northstar has dramatically enhanced the value of Lambrecht's property downtown. In June, the Houston-based Hines Interests--which ranks as the largest private landlord in downtown Minneapolis--took over management of the downtown parcel for an ambitious housing project that doesn't require a stadium. Indeed, as Hines VP of operations Bill Chopp told the Strib, "The site's primary focus is as a transit-oriented destination. The stadium is number two." Even absent the ballpark, Hines claimed it will build up to 3,000 housing units worth $800 million at and around the site. And, according to the Strib, Lambrecht's group will continue to hold an ownership stake in the project.

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