CHICAGO— Minneapolis priced $60 million of taxable general obligation bonds Feb. 12 to cover its contribution to a $400 million development project on land adjacent to the new Minnesota Vikings stadium.
Wells Fargo Securities served as lead manager on the deal. US Bank and Piper Jaffray rounded out the syndicate.
Northland Securities advised the city on the sale. Proceeds will finance a portion of the cost for building a new parking ramp, land acquisition and other costs tied to the Downtown East development, said Mike Abeln, the city's director of capital and debt management.
The project also calls for new housing, offices, retail shops, and parkland.
Developer Ryan Cos. purchased four blocks from Star Tribune Media Co. this week to pave the way for the project. The Minnesota Sports Facilities Authority, which is managing construction of the $975 million Vikings stadium, purchased one block for a parking ramp that would be used both by the stadium and tenants of the development.
The new stadium and development project are being built adjacent to the existing Vikings home, the Hubert H. Humphrey Metrodome, which is being demolished. Wells Fargo & Co. will own two of the office buildings to house 5,000 of its employees.
"It's a very exciting, new development in area of the city ripe for development," Abeln said. The booming development in other areas of downtown has eluded the area around the Metrodome.
The city opted to sell taxable securities due to the involvement of private companies and private payments that could run afoul of tax-exempt rules. The city intends to retire the 30-year bonds with developer payments and parking fees but its full faith and credit pledge backs the bonds, Abeln said.
The city had eyed a pricing either Wednesday or Thursday. With solid indications on the pricing scale and concerns over the storms hitting the East Coast and Southeast, Wells Fargo moved on a Wednesday pricing.
Officials plan a groundbreaking in May and hope to complete work in 2016. The timing had been in question after a trio of citizens filed a lawsuit challenging the legality of the city's financing and ownership of a park that's part of the project. They dropped their complaint last month when a Hennepin County judge ordered them to post a $10 million bond to pursue the case. The three oppose the city's issuance of GOs to purchase the land without an independent appraisal.
Ahead of the city's sale, rating agencies affirmed the city's high-grade ratings on $732 million of GOs. Fitch Ratings and Standard & Poor's affirmed its AAA ratings and stable outlook. Moody's Investors Service affirmed its Aa1 rating and stable outlook.