Update On The Sale Of The 201 Building
NOT YET A DONE DEAL
Park Watch has been following the Park Board's efforts to dispose of the 201 Building and the seven acres of land since the summer of 2007 when the Request for Proposals for the 201 Building was circulated by the brokers for the Park Board. The most recent Park Watch post on this subject was on October 15, 2008.
The 201 Building, also known as the failed skateboard park at Ft. Snelling, is the large, vacant building one passes on the way to the airport on Highway 55. It was purchased in 2000 with the intention of leasing it to the Wild Hockey team. But when the deal that was being negotiated by General Manager Don Siggelkow fell through, the Park Board was left with an empty building. During the entire eight years that the Park Board owned the building, it has never been occupied or earned any income for the Park Board. But while the building remained vacant, the Park Board was paying out annual interest on the bonds which had been sold to support the purchase. The 201 Building has the distinction of being a costly "enterprise" disaster. (Enterprise projects are supposed to earn money for the Park Board--not rack up expenses.)
With the signing of the purchase agreement with the Boy Scouts of America (BSA) in October of 2007, progress was made in unloading this white elephant. On November 26, 2008, the Park Board closed on the first half of its sale of the 201 Building and land to the Boy Scouts. The sale price for this parcel--the east parcel--was $2,000,000 and included the building. After the $80,000 brokers' fee and miscellaneous closing costs were deducted, the Park Board netted $1,910,425 on the sale.
The second half of the 201 property remains unsold. The Boy Scouts still have an option to purchase the second half of the 201 property--the west parcel--for $2,250,000. If this sale materializes, the Park Board will net approximately $2,160,000 after the $90,000 brokers' fee is deducted. This figure added to the $1,910,425 for the east parcel totals $4,070,425.
But, if the Boy Scouts are unable to exercise their option to purchase the second parcel, then the Park Board will have been successful in unloading only one-half of this white elephant and will still be stuck with the unsold parcel.
At a Park Board meeting in August of 2006, it was estimated that at the time, the 201 Building had so far cost the Park Board $3,075,000. It is important to note that this figure, which included the $945,000 settlement figure for the lawsuits against the MPRB, did not take into account the accrued bond interest of approximately $575,611 or escalating legal fees paid to Brian Rice's law firm. In reviewing the 201 Building's legal fees (acquired through the MDGPA) from June of 2004 to December 31, 2008, the total for this period was approximately $271,226. With the addition of the $170,000 for brokers' fees, the 201 Building's total costs are approximately $4,091,800. And this $4,091,800 figure does not take into account the countless hours of staff time spent on this project over the eight years of its existence.
To be made whole again from this failed project, the Park Board needs to sell both parcels and recapture the entire $4,091,800 that this project is costing the Park Board and taxpayers.
Thus far, the only parties benefitting financially from this fiasco are the brokers and the attorneys.
Arlene Fried
Co-founder of Park Watch www.mplsparkwatch.org