ST. PAUL -- As Ryan Cos. build out 40 blocks of new housing, office, retail and civic space in St. Paul, 10 percent or more of its $1 billion redevelopment effort could conceivably be financed by taxpayers.
On Friday, March 1, St. Paul’s Housing and Redevelopment Authority revealed that the master developer in charge of the vacant Ford Motor Co. site in Highland Park had asked for $107 million in public subsidy to build housing and commercial space.
That figure would be the equivalent of taking an entire year of general fund property taxes from every property owner in the city.
The HRA routinely releases early notifications about large requests for public assistance in real estate projects, and the details tend to be sparse and preliminary.
Friday’s notice indicates that Minneapolis-based Ryan Cos. plans 3,798 housing units and 525,000 square feet of commercial space at 966 Mississippi River Blvd. S.
The project description is followed by a single line of text: “Amount of Financial Assistance Being Requested: $107,043,205.00.”
The notice gives no further indication of the type of financial assistance being requested, such as the funding source or over what period of time. Ryan Cos. officials have previously said that redevelopment of the 122-acre property could take 10 years or more.
$200 MILLION FOR AFFORDABLE HOUSING
Company officials were not available for interviews Saturday, according to a spokeswoman for Ryan Cos., but executives Mike Ryan and Tony Barranco released a joint statement saying they are requesting “public investment only for public spaces, infrastructure and affordable housing.”
They noted that the master plan crafted by the city calls for 20 percent of the new housing, or 760 units, to be “affordable housing.” That’s an estimated $200 million expense that Ryan plans to contribute $48 million to from property taxes generated at the Ford site.
“Without the public investment, we do not believe this bold master plan, and the important goals within it, can be achieved,” Ryan and Barranco wrote.
St. Paul City Council member Chris Tolbert said he had yet to see the full application for financial assistance but was not entirely taken aback by the request, which will have to come before the city’s Housing and Redevelopment Authority and the city council. It could be amended.
“It kind of starts the process,” said Tolbert, who represents Highland Park and chairs the HRA.
“They’ve said since their first public meeting they will need some sort of public-private partnership,” Tolbert said. “(The Ford site is) a blank slate, and roads are expensive. Infrastructure is expensive. It’s not a surprise. We have to do our due diligence to make sure public dollars go to public uses only.”
It’s also unclear whether the $107 million request represents a maximum or whether all the money being sought is city money, as opposed to assistance from the state, county, Metropolitan Council or even federal assistance.
In 2018, the city’s general fund property tax levy — the sum total of all the money the city collected from property owners for general city operations — was also $107 million.
This year, the city general fund, debt service, St. Paul Public Library and Port Authority levy add up to $156 million.
City officials have long expected to receive a subsidy request for affordable housing and public amenities at the Ford property. They have pre-authorized a maximum more than twice as large as what Ryan is asking for.
In 2016, with the plans for the Ford site hazy and no developer yet assigned, the city council agreed to allow up to $275 million in “tax increment financing” development loans that may be paid back through property taxes.
The TIF figure, however, represented a maximum, and it did not come with a guarantee that TIF financing would be used for the site.
In an October interview, Barranco, vice president of real estate development for Ryan Cos., said concept plans for the Ford site included many public features, including a civic plaza by Cretin Avenue, a seven-block water fixture, partial preservation of existing ballfields and other amenities to benefit the public.
He said public assistance would be requested for those public areas, as well as for ample affordable housing on the site. The city has set a goal that 20 percent of housing units would be priced below market rates.
“We will be seeking public support for the public spaces — the roads, the civic spaces, the central water feature,” Barranco said at the time. “We will not be seeking public support for the private spaces. Also, the project’s affordable housing would need significant support on the public side.”
The city selected Ryan Cos. in June as master developer for the site, where Ford first began rolling out Model Ts in 1925 before closing operations there in December 2011. The land has been cleared of any semblance of auto manufacturing and prepped for residential redevelopment.
Development plans call for single-family homes along Mississippi River Boulevard, with taller buildings and denser, more diverse housing types heading from west to east.
Also planned are 265,000 square feet of “employment” space, such as office and commercial buildings, and 150,000 square feet of retail. Two of the three ballfields on the Ford site would be saved, and streets would be designed as extensions of Highland Village, but with better bike and pedestrian access.