First buildings to come down in preparation for soccer stadium

By JANE MCCLURE

Part of Midway Center is now under the control of Minnesota United FC lead owner Bill McGuire. A master lease agreement, signed just days before an Aug. 20 project deadline, allows for the demolition of Rainbow Foods (photo right) and other businesses to the east. That, in turn, allows for construction of the new $200 million Allianz Field stadium to move forward.

The master lease affects 15.6 acres of the property bounded by St. Anthony, Snelling and University avenues and Pascal St. McGuire and RD Management, one of the New York-based entities that own the shopping center property, reached the agreement.

The new master lease means that the St. Paul Port Authority, which worked for several months with the shopping center owners on a similar agreement, now steps away from that aspect of redevelopment.

The Port had worked for months on a master lease with the potential to purchase the property. Since March those talks had included Milwaukee developer Irgens to redevelop the entire shopping center with Minnesota United. But that package was never finalized.

Port Authority President Lee Krueger confirmed the new master lease. “What this means is Bill McGuire struck his own deal.”

Minnesota United, RD Management and most business owners and managers aren’t commenting about the new master lease, not returning calls and declining comment when questions are asked at individual stores. Rainbow Foods, Home Choice rental center, Pearle Vision, Midway Pro Bowl and Walgreens appear to be the affected businesses. Home Choice has already moved out and is telling customers to visit their Roseville store.

Minnesota United issued a statement after the master lease news, saying, “We are continuing to work with the landowner as part of moving the stadium project forward.”

Midway Pro Bowl co-owners Scott Koecheler and Alan Loth have been the most vocal about their lease termination, confirming that they have been given 90 days to move out.

Koecheler and Loth announced that while they intend to pursue all legal options, and will offer open bowling and single-day events for the time being, they won’t schedule leagues for 2017-2018. They’ve asked bowlers with equipment in lockers to come and pick up their things.

“It has been a pleasure to be part of the community,” they said in a statement posted on social media. “It’s very difficult to go out like this.” They have owned Midway Pro Bowl since 1983. The business opened in 1960. One challenge they face is how to remove everything within 90 days.

The August 20 deadline called for the soccer stadium developers to have site control of the property they needed for that aspect of the project. Heavy construction began on the stadium earlier this summer, but without site control, Minnesota United and lead contractor Mortenson Construction couldn’t pull permits for the northernmost two acres they need to complete the stadium itself. Those permits can now be issued by the city.

McGuire can now choose whichever developer or developers he’ll work with to redevelop the property he controls under the master lease. That property includes the western part of the shopping center and parking. It doesn’t include land in the northeast corner of the site and along Snelling that was split off a few years ago. Those properties include the Big Top Liquor building and the former American Bank. Nor does it include the easternmost part of Midway Center, where businesses can continue to operate.

When work on a master lease began earlier this year, Port Authority and Minnesota United officials emphasized the complexity of the deal. Midway Center is split into different parcels with different ownership structures and different mortgage issues.

Existing Midway Center leases, and how those are structured for termination, are another factor. Port Authority documents released earlier this year indicate that the shopping center was bringing in out $2.3 million per year.

How to respond to the change in the master lease is an issue for a Union Park District Council (UPDC) and Hamline-Midway Coalition task force. UPDC Executive Director Julie Reiter said the group has been focusing on community benefits and what those mean when the stadium opens. Scrutiny of small business impacts, assisted by a Macalester College class, starts this fall.

“There are questions about what happens to the businesses and if any can stay in the Center or have to close,” Reiter said. Members of the UPDC land use committee agreed that they’ll have to watch issues play out.

Kruger said that no matter who holds the master lease, it means that the stadium construction can proceed toward a 2019 opening and that seeing the project move ahead is what is most important. “That’s what’s positive here,” he said.