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Request for Committee Action

A briefing memo explaining the purpose, background, and impact of the requested action.
Acquisition of 1st Precinct Police Station (RCA-2022-00526)

Finance & Property Services
To Committee(s)
# Committee Name Meeting Date
1 Policy & Government Oversight Committee May 23, 2022
Lead Staff:
Dave Ramstad
Presented By:
Dave Ramstad
Action Item(s)
# File Type Subcategory Item Description
1 Action Contract/Agreement

Authorizing a Purchase Agreement, Parking Lease, Reciprocal Easement and Operating Agreement and related agreements with 1111 Partners, LLC, for the turnkey acquisition of a new 1st Precinct Police Station at 1101 3rd Ave S.

Ward / Neighborhood / Address
# Ward Neighborhood Address
1. Ward 7 Cedar-Isles-Dean 1101 South 3rd Avenue, Minneapolis MN
Background Analysis

Minneapolis Police Precinct 1 currently occupies leased space at 10 N. 4th Street. The lease expires May 8, 2024. Police Department and Property Services staff recently received a proposal from 1111 Partners LLC (Seller) for design, construction and turnkey sale of a new police station as part of a mixed-use redevelopment (tentatively a hotel with access at opposite side of building) of the Century Plaza Building in downtown Minneapolis at 1101 3rd Ave S (part of PID: 27-029-24-14-0070). The property will be subdivided by Common Interest Community (CIC) plat to create separate legal units and the parties will enter into a reciprocal easements and operating agreement (REOA) that defines cross easements for utilities and access, addresses maintenance and insurance issues, and establishes governance for decision making. The proposal also provides for a long-term, market rate lease of 180 below-grade parking spaces in an adjacent ramp.

The purchase price for the approximately 37,000 square foot, two level, self­-contained police station is $11.5M for the building shell improvements and a $4M allowance for buildout. Payments to Seller are structured as a $500,000 deposit upon execution of the Purchase Agreement, an additional deposit of $7.0M upon commencement of construction and the balance of $8.0M at closing on conveyance of the turnkey property to the City.

In addition, the City is budgeting a $1.5M contingency and $2M City internal and consultant costs, for a total estimated acquisition and construction cost of $19M. This represents a savings of $4.6M from the original overall $23.6M Capital Budget for the new 1st Precinct.

Seller shall select an architect reasonably acceptable to the City. City will hire its own architectural & MEP consultants to assist with design document review, approvals and monitoring. A community engagement process will be included. Seller will work jointly with the City to design the major areas of the project for the new police station and the shared commercial condominium systems and amenities, including: building MEP, security, environmental, energy and conveyance systems, parking ramp design and access, and the overall quality parameters of the shared areas of the greater building.

When the Seller’s design development plans have been completed, pricing and an appraisal shall be obtained to confirm feasibility and cost reasonableness. If the City determines that the buildout costs exceed the allowance or the purchase price exceeds the value of the police station property, the City has the right to terminate the purchase agreement. Such termination at the City’s option, however, would result in loss of the City’s initial $500,000 deposit. The buildout improvements for the police station will meet the City's LEED Silver Sustainability Standards and be constructed by Seller in compliance with the City’s prevailing wage, affirmative action, workforce and SUBP subcontracting requirements.

Additional agreements will include a long-term parking lease, a reciprocal easements and operating agreement and one or more rights of entry as further described in the term sheet.

Attachments: Police Precinct 1 Term Sheet

Enterprise Review
  • Approved by the Permanent Review Committee
  • Meets the City’s Equity and Inclusion goals for contracts over $100,000.
  • Meets Small and Underutilized Business Program goals.