Former Sears site set for redevelopment

After remaining boarded and vacant for the last ten years, it looks like the Sears building at Chicago and Lake will start moving toward renovation and renewal beginning in July. Ryan Companies will probably spend millions to create the Midtown Exchange, but don't feel too sorry for them. Most of that is your money.

The following figures are all taken from Ryan's Midtown Exchange web site:

For the office and commercial space they'll get $8,629,741 in historic tax credits. For the parking ramp they'll get $9,213,971 in Minneapolis Tax Increment financing payback; an EDI grant for $2,000,000; and Met Transit will kick in $500,000. For the Global Marketplace they get another Historic tax credit for $2,147,856; a new market tax credit of $429,571; another EDI grant of $1,800,000; an OCS/USDA grant of $850,000; $150,000 from the State fund; $636,000 from the Empowerment Zone; and $4,700,000 from foundations. For rental housing the Minnesota Housing Finance Agency will contribute $230,000; Hennepin County will kick in $171,400 and a private foundation will match that with another $171,400. For ownership housing the City will contribute $1,465,000 in tax increment financing; MHFA will contribute $500,000; Hennepin County will give $750,000 and the Met Council will come up with $500,000. For rental housing in the 1928 building they will get another historic tax credit of $6,900,000 and a tax increment kickback of $3,035,000. They are hoping for $3,750,000 from CPED AHTF; $500,000 from Minneapolis NRP; another $3,000,000 from MHFA; another $1,000,000 from the Met Council; another $1,925,000 from private foundations; $450,000 from the Family Housing Fund; and $668,150 from Hennepin County.

That's a total of $44,779,939 they'll get in grants and another $11,293,150 that they expect to get, for a total of $56,073,089.

They're also expecting to borrow $720,000 from State bonds; $1,100,000 from a City gap loan; $1,000,000 from a REDI loan; $10,265,000 in housing revenue bonds; and $330,000 in a Federal Home Loan for a total of $13,415,000.
That's a total of $69,488,089 they expect to get from public sources.

How much are they putting into the pot? For the office and commercial space they'll be contributing $8,910,000, and they will defer their developer fee of $1,750,000. They won't put anything into the garage, but they will put $7,190,600 into the hotel. They don't have to put any of their own up-front money into the Global Marketplace, and most of the housing will be subsidized or financed through government loans.

The hotel probably won't be built until the rest of the project is near completion, and it will be built as a separate standing building, so let's not count that $7,190,600 as part of their development contribution. Also, it is generous of them not to take their $1,750,000 developer's fee until after the building is completed, but it is difficult to see how we could count that as real money going into bricks and mortar next month.

So, the bottom line seems to be, Ryan will be putting $8,910,062 of their own money into a project that will be worth $170,000,000 when it's done. They put in $8,910,062 and we put in $69,488,089.

Momma Ryan sure didn't raise any dummies.

But the great thing is they'll be using our money to make themselves rich building housing we can't afford, and everyone believes they're doing us a big favor.