Michaud, Cornejo, Mannillo: Don’t fund projects, legislators, unless we know how ongoing bills will be paid

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The Minnesota Legislature funds many projects requested by cities and counties in its bonding bill. These funds pay for the bricks-and-mortar portion of projects that cities and counties can’t finance very easily with property-tax dollars coming from their tax base.

The difficult job for the Legislature is selecting the projects to fund, since the requests greatly exceed the money available. To help legislators make a decision, we propose an additional criterion to be required for selection: That the city or county identify the source of funding for the on-going staffing, operations and maintenance of the proposed project.

Many taxpayers don’t realize that the majority of costs over the life of a facility are those, the on-going costs, not the initial capital or construction costs.

A good case in point are the 11 bonding requests that the City of St Paul submitted for consideration. Many of these requests — to rehabilitate several existing bridges, libraries and recreational facilities — make sense because the funds will be used to maintain existing public assets.

However, requests to fund the proposed Mississippi River Learning Center, the Mississippi River Balcony, and a Multi-sport Athletic Facility — to the tune of $83 million – will create new capital facilities that will require increases in future property tax to pay for ongoing operations and maintenance.  These requests are from a city that just last year levied a new 1-percent sales tax to help pay for the maintenance costs of roads and recreation facilities because it lacked the property tax capacity to do so.

How does this make good financial sense? Is this responsible financial management?

The legislators making these decisions about capital funding requests should be asking city leaders where the money is going to come from to staff, operate and maintain these massive new facilities. St. Paul is already hard-pressed to pay for the cost of operating and maintaining its roads, bridges and recreation facilities.

Having approved the city’s 1 percent sales tax in its 2023 session, legislators should require St. Paul to adopt a resolution estimating the increase in property taxes (or alternative funding) that will be needed, over 20 years, to cover the projected costs of new staff, operations and maintenance for each new project proposal.

This will ensure that legislators are considering the property tax burden being projected onto city taxpayers when they fund these new projects.

Carl Michaud, St. Paul, is a former public works director for Hennepin County. Dan Cornejo, St. Paul, is a former director of Planning and Economic Development for the City of Saint Paul. John Mannillo is a St. Paul real estate developer and current chair of the civic group Saint Paul STRONG.

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Downtown developers, advocates weigh in on Madison Equities selling St. Paul properties

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Scott Burns credits Madison Equities with inspiring him to break into the downtown St. Paul real estate market, but only as models for how not to run historic office space.

“Nothing but good can come from them exiting our market,” said Burns, a technology entrepreneur and venture capitalist who has long bemoaned the real estate company’s lack of tender loving care for some of the city’s most iconic downtown buildings.

The neon sign atop the 1st National Bank Building in downtown St. Paul.

Madison Equities, previously led by the late Jim Crockarell, has advertised 10 commercial properties for sale en masse, including six downtown office buildings and two parking ramps — a total of more than 1.6 million square feet of commercial space. If a buyer comes along willing to scoop up all 10 sites, Burns said he hopes they’ll invest in better upkeep and maybe position the properties for resale in a more organized fashion.

“Sometimes the first bounce isn’t the most important,” said Burns, a general partner at Mairs and Power Venture Capital who in 2017 became a minority shareholder in a former Ecolab office tower, the Osborn370 building on Wabasha Street. “This could happen in a couple moves. It wouldn’t surprise me if somebody bought the entire thing and better organized themselves to sell it in pieces. It is unprecedented to have that many properties on the market.”

Properties for sale

Among the Madison Equities holdings are the iconic First National Bank Building, U.S. Bank Center, Alliance Center and the Park Square Court building, all of which were once major draws for law firms, banks and other private sector tenants.

Now, some are roughly half full, and Park Square Court sits empty. Not included in the offering, made public this week by the brokerage CBRE, were the company’s downtown residential properties like the 7th Place Apartments or the Lowry Apartments at Fourth and Wabasha streets.

Even as some Madison Equities properties have dwindled in tenancy, Osborn370 has drawn a cross-section of start-ups, nonprofits and mid-tier companies since Burns and other owners came onboard in 2017.

In other words, Burns said, it can be done. Burns said he has no interest in adding further to his own real estate portfolio, but he still sees hope for a brighter future, especially if public sector partners and economic development agencies like the St. Paul Port Authority, Greater MSP and the St. Paul Downtown Alliance help market the properties to a responsible owner.

St. Paul City Council Member Rebecca Noecker also thought the sale will boost the city’s core.

“The stars are aligning in a very positive way for downtown,” said Noecker, who has been bullish on the possible redevelopment of Central Station. She said downtown improvements have increasingly drawn energy from public-private partnerships, and she hoped for a buyer who would capitalize on that spirit.

Another view

John Mannillo, a longtime downtown developer, is less optimistic.

He suspects few buyers would probably want to own all 10 properties, even for their resale value, unless they’re sold at hugely discounted prices. And that would have potential consequences for the city’s tax base, where office values have already taken a hit.

“When you buy it, you’re buying carrying costs,” Mannillo said. “Why someone would want to do that, I’m not sure, unless they get such a deal. And what does that do to our valuations everywhere else downtown?”

A major revaluation downtown could have ripple effects across the city. As office buildings lose value, it raises the possibility that homeowners will have to contribute more in property taxes to make up the difference.

Like Burns, Mannillo is of the opinion that Madison Equities has done downtown few favors.

“Here we are with all these properties he made no improvements on,” Mannillo said. “If they split it up and sold each building, they have a better chance of making more money. … They’re less than half occupied, and some of those buildings are vacant. Despite what some people think, you can’t just buy an old building and turn it into residential. It’s cheaper to (demolish) and rebuild than it is to try to retrofit into residential. We’ve got a problem now in downtown that is not an easy problem to solve.”

City Hall studying housing conversions

A spokesperson for Greater MSP on Wednesday declined to comment on the real estate offering.

Nicolle Goodman, director of St. Paul Planning and Economic Development, said the city is exploring how to repurpose more “underutilized” downtown office buildings into housing, and the Madison Equities offering could become part of that effort.

“This provides us an exciting opportunity to move forward our ‘all-in’ housing approach and downtown investment strategy,” Goodman said. “We look forward to collaborating with CBRE to pitch St. Paul a great place to invest. The recently released Downtown Investment Strategy recommended the creation of an acquisition fund to repurpose underutilized office buildings downtown. If and what the public sector’s role might be in the creation of such an effort is yet to be determined.”

The city recently released a request for proposals to develop the land around the Green Line’s Central Station stop, “which is in very close proximity to many of the buildings being marketed in this portfolio,” Goodman noted. “We could see a significant transformation of this area of our downtown in the coming years. We will continue to work closely with our public partners and the private sector in these efforts.”

Burns noted that some out-of-state investor-owners in Grand Avenue real estate have allowed their spaces to remain vacant long after national retail chains pulled out.

“Look at the Grand Avenue situation. The type of owner you get matters a lot,” he said. “I hope we get a really active owner. That’s what those buildings need.”

Still, 10 properties is quite a lot.

“I’ve been thinking about it all day,” Burns added. “What a crazy portfolio. I hope it works.”

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Minnesota college students use encampments, protests to pressure universities on Israel, Gaza

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Theology student June Gromis entered Hamline University’s Old Main administrative building around 1 p.m. last Friday on a mission to shut it down.

Gromis and five other student protesters occupied the functional center of the oldest university in Minnesota — the building that houses the university president’s and provost’s offices — through Saturday evening, only agreeing to leave once officials promised to open talks about the school’s ties to Israel, in light of the military strikes that have claimed the lives of upwards of 34,000 Palestinians in Gaza.

“Our demands have not been met, but they entertained the possibility of bringing issues to the relevant university committee,” said Gromis on Tuesday, after his first overnight stay in a student encampment composed of six tents assembled just outside Old Main’s front doors, on the lawn near the corner of Snelling and Hewitt avenues in St. Paul. “To me, it’s really an issue of morality. We do not want our money, whether it’s our tax dollars or (tuition), to perpetuate the murder of civilians, and war crimes.”

Palestinian flags and protest signs block the entrance to Old Main at Hamline University in St. Paul on Tuesday, April 30, 2024. (John Autey / Pioneer Press)

The students’ demands include getting the university to publicly disclose how much money Hamline has invested in Israeli companies and American military contractors that do business with Israel, and then ultimately divesting from them. They’ve also called for Hamline to recognize a “social responsibility committee” to monitor such investments and serve as a student voice to the administration.

Similar scenes have played out at campuses across the country over the last week, sometimes far more dramatically, with violence erupting late Tuesday night between pro-Palestinian demonstrators and counter-protesters on the University of California-Los Angeles campus. Also Tuesday, New York City police officers swarmed through a Columbia University building in riot gear to clear out demonstrators who have been occupying the site across multiple nights.

50 tents on mall of University of Minnesota

At the University of Minnesota, dozens of students in the past week have moved into some 50 tents along the Northrop Auditorium mall green on the school’s East Bank campus in Minneapolis, at times linking arms to refuse police dispersal orders that tend to come late at night.

The U has kept 13 buildings along the mall closed this week, including Coffman Union, the Weisman Art Museum and Murphy Hall, forcing some classes to relocate or go online during the final exams of the semester. Nine U of M students were arrested April 23 as the encampments first emerged.

Donia Ab, a Palestinian student at the U majoring in psychology, said the cause for her was deeply personal. She said she lost 12 members of her extended family, including a cousin and her cousin’s four daughters, to Israeli military strikes.

“We had family members who were on a rooftop that got bombed,” said Ab on Tuesday, standing in front of tables set up with snacks for protesters, while a dancer carrying a large Palestinian flag on a pole performed to music. “We are here for Palestine. We are here to demand that the University of Minnesota divest from Israel.”

Donia Ab, a student at the University of Minnesota, talks about family members who have died during Israel’s offensive in Gaza at a protest encampment on Northrop Mall of the university in Minneapolis on Tuesday, April 30, 2024. (John Autey / Pioneer Press)

At the U, student protesters have demanded that administrators publicly acknowledge that the Israeli-Hamas war has caused pain and hardship for Palestinians and others on campus, a freeze on study abroad programs in Israel and divestment from Israeli companies and military contractors that do business with Israel. Ab, a member of Students for Justice in Palestine, said interim university president Jeffrey Ettinger met with student groups in October but has refused subsequent invitations to in-person conversations.

A reporter’s efforts to reach spokespersons for the University of Minnesota were not immediately successful on Wednesday.

At Hamline, communications director Jeff Papas said university board chair Ellen Waters and acting president Kathleen Murray met with student protesters on Monday and “we will continue to meet with students on areas where we feel we can work toward positive outcomes.”

He said Hamline’s investment advisors have reported that 0.1% of the school’s holdings are with companies based in Israel.

Jewish voices, college administrators respond

Across the country, administrators also are under pressure from pro-Israeli donors, students and alumni to stay clear of the topic.

The bombardments of Gaza have followed the events of Oct. 7, when some 1,200 Israelis and foreigners were killed by Hamas and other pro-Palestinian militants in the worst attack on Israeli soil since the nation’s founding in 1948. More than 240 people were taken hostage. Hamas has been designated as a terrorist organization by the U.S., Canada and the European Union.

Some Jewish students quoted in the national press said they have felt uncomfortable on their campuses, or pointed out protest chants that had turned explicitly violent and anti-Semitic.

Rabbi Yitzi Steiner, who is active with the U of M Chabad House and the Rohr Center for Jewish Student Life on campus, said he planned to lead a handful of Jewish students in prayer outside the encampments on Wednesday afternoon, “to show the Jewish students they shouldn’t be afraid, that this is their campus like anybody else’s. I am not declaring the encampment an anti-Semitic encampment … but Jews are not going to go away.”

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Steiner said the mood has been peaceful overall, but he felt one chant in particular the other day — “From the river to the sea, Palestine will be free” — was clearly intended to antagonize.

“They’re talking about from the Jordan River to the Mediterranean sea, Palestine will rule,” he said. “What that is referring to is the entire state of Israel.”

Still, some Jewish groups have called for an end to the siege on Gaza.

On April 23, as the encampment formed at the U of M mall, the pro-Palestinian advocacy group Jewish Voice for Peace hosted a Passover seder on the mall, which was attended by some 200 students, faculty and staff.

“To me, the only way to honor Passover this year is by joining my community in organizing for the end to this genocide and a future where Palestinians can be free,” said Imogen Page, a graduate student in the School of Social Work, in a written statement at the time.

Macalester College

Some colleges appear to have at least partially defused tension on campus through quick acknowledgement of the strong feelings on all sides.

On March 6, after “Mac for Palestine” protesters occupied a floor of Markim Hall at Macalester College in St. Paul, president Suzanne Rivera issued a statement saying the college believes “in the importance of free expression, and we support students who express themselves through non-violent demonstrations. … Students who protest peacefully will not be punished by the college for doing so; employees who state their support for student protesters will not be punished for doing so.”

Rivera promised at the time to meet with student protesters after returning from representing the college in Asia. In April, she announced the formation of a social responsibility committee composed of students, faculty, staff and alumni to examine questions raised about the college’s investments and relationships to universities in Israel.

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“The work of that committee is underway and a report will be produced this summer,” said Macalester spokesperson Joe Linstroth, in an email Wednesday.

In an opinion column published in Inside Higher Ed in February, Rivera said that college presidents were under unprecedented and undue pressure to take sides on global conflicts, a carry-over from the increased visibility of college leaders on social media during the pandemic and the riots and protests that followed the murder of George Floyd in Minneapolis in May 2020.

Accustomed to seeing top administrators communicate online, sometimes daily, students, parents and alumni have expected more of the same during the Israel-Hamas war.

“We are viewed as cowards if we stay silent and criticized for supporting the ‘wrong side’ or being too neutral if we speak up,” wrote Rivera.

Twins center fielder Byron Buxton leaves game early with knee soreness

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CHICAGO — Byron Buxton took off for second base three times during Trevor Larnach’s second-inning at-bat. The last time, his run turned into a jog and he was thrown out easily at second base. That jog then turned into a ginger walk to the dugout, where the Twins center fielder was met by a team trainer and manager Rocco Baldelli.

The Twins soon announced that Buxton had left the game with soreness in his right knee, the same knee that he has had surgically repaired in each of the past two offseasons.

Buxton, through a team spokesperson, declined to comment, but Baldelli said the Twins planned to have him get imaging exam done on the knee to gather more information. The team was scheduled to fly back to the Twin Cities after Wednesday afternoon’s game.

“He’s been playing a good amount up until this point,” Baldelli said. “We just played 13 (games) in a row. We’re going to take advantage of that off day (Thursday), get some rest, asses where we’re at physically and we’ll probably know more on Friday.”

The Twins open a three-game series against Boston at Target Field on Friday evening.

Buxton was limited to designated hitter all of last season, but landed on the injured list in early August with a hamstring strain. As he attempted to come back, his knee flared up, forcing him to miss the end of the season and much of the playoffs. He underwent offseason knee surgery for the second time in his career and reported to spring training feeling much better.

Before Wednesday, he had played in 28 of the team’s 30 games before, mostly as the center fielder but with a few games as the DH sprinkled in.

“He was his normal self this morning, so it was something that came up during the game, I would say,” Baldelli said. “Besides that, though, he’s been good. He’s gotten all his work in and he’s been ready to play.”

The Twins would go on to win their 10th straight game on Wednesday — a 10-5 win over the Chicago White Sox  — without Buxton. And although the Twins didn’t yet have much information on Buxton’s condition, catcher Ryan Jeffers found one positive sign to hang on to.

“He had some uplifting words and he was seemingly in good spirits,” Jeffers said.