I agree with the Mayor that we are in a financial crisis and must refocus our limited funds on core city services.
At the Budget Committee meeting on Monday we received an update that the City’s revenues continue to decline. Property tax revenue is down $9 million, franchise fees are down $3 million, and license and permit fees are down $5 million. In his State of the City address on Tuesday, Mayor Frey spoke to the current downward trend in and the need to make difficult choices in the 2027 budget. I agree with the Mayor that we are in a financial crisis and must refocus our limited funds on core city services. The Mayor’s address was a truthful look into what his priorities will be as we continue to experience a decline in downtown property values. Until those building values start to rise again, every renter and homeowner will have to pay more to make up the difference.
To understand what the City can do to increase building occupancy, thus increasing the value of buildings, I have taken the initiative to start two listening sessions each month with downtown building operators and tenants. Last week with the help of the Downtown Council (DTC) and the Building Owners and Managers Association (BOMA), Council Members Osman, Shaffer, and myself met with tenants at 800 Nicollet to hear firsthand how the City can help with vibrancy issues. It was a very productive session with the over 30 attendees.
This week I attended another listening session with the Mayor at Capella Tower. We spent an hour taking questions and we heard two themes: public safety and high property taxes. Both the Mayor and I are committed to continuing these sessions so we can understand how we can better support the revitalization of the downtown core to lower tax costs for residents. A very big thank you to Sarah Anderson of BOMA and Adam Duininck from the DTC for their help in organizing.
Your neighbor,
Michael
I agree that the City of Minneapolis should be looking at vacant buildings downtown to buy as a need arises. The City proposed buying and building at a cost of $38 million a training and wellness center for police, fire, and other safety departments on a site in the Windom neighborhood which is in the southwest corner of the city adjacent to Richfield. While I could support such a center and apparently it is required by the MN Dept of Human Rights Settlement Agreement with MPD, why are they proposing to put it there and not buy a vacant building downtown which would also be a win for public safety not to mention a central location. Doesn’t make sense….
Without doing a detailed study, I am wondering why no one in this debate about downtown property values has brought up the possibility of the city or a related government agency acquiring ownership of some or all of those properties.
The values are down so the acquisition prices are not high and the buildings might be managed in a way which encouraged the development of small businesses which could lease space and apartment rentals which might act to put downward pressure on rents citywide. The city would gain income from the rentals though losing the property taxes. As I understand it, there are various legal mechanism available for such public acquisition of private property, including eminent domain, but I am not a lawyer and can’t evaluate them in detail. This possibility ought to appeal to democratic socialists, so I’m not sure why they have not brought it up.
Woods Halley
The barrier isn’t just the acquisition cost. We would be talking about buildings with almost no revenue streams and in need of major investment. The cost of insurance, security, and utilities just to keep the building stable adds up quickly. The city would be taking a loss and/or struggle to repurpose them. Just as an example, the people who are going to convert the Grain Exchange Building into 232 apartments have said it will cost them $120 million. That’s over $517,000 per unit. They will get 40 cents back for every dollar they spend in tax credits. But, still, that’s a lot of work. The city doesn’t have the capacity to be a real developer.