St. Paul Port Authority OKs purchase of 3M land: The board decided it's worth paying 3M to keep the buildings' utilities running while a historic study is done, which will allow for federal cleanup money, rather than risking another developer picking up the 11-acre parcel.

May 27, 2009 (Star Tribune - McClatchy-Tribune Information Services via COMTEX) -- MMM | Quote | Chart | News | PowerRating -- The St. Paul Port Authority voted 5-1 to approve a purchase agreement Tuesday for the remaining 11 acres of the former 3M Co. headquarters on the East Side.

The agreement, dated March 5, calls for the Port Authority to pay $1.7 million for the land. An amendment to the agreement, also approved Tuesday, gives the agency until Dec. 15 to close the deal.

However, the Port Authority would need to pay between $300,000 and about $2 million to 3M to keep the utilities on if it waits until December.

The reason for the extension is to allow a federal historic preservation analysis, called Section 106, to determine whether any of the eight remaining buildings is worth preserving. The area is eligible to be a historic district, and the study must be done if the Port Authority wants federal cleanup money.

A citizen advisory committee has been discussing options for the land and reuse of the buildings.

But the land is more valuable than the buildings, said Bill Morin, director of real estate and development for the Port Authority. It would cost more to reuse them, and the Port Authority would prefer demolition, he said.

The Port Authority's due diligence period expires June 10, and it could walk away and keep its $170,000 earnest money deposit before then. After that, 3M gets to keep the earnest money and the holding costs. Morin said the holding costs could be much lower if the Port Authority can get the Fire Marshal to approve securing the buildings and shutting off the utilities.

The Port Authority purchased 45 acres surrounding the parcel last year and issued $16 million in bonds to buy it and pay for some cleanup and redevelopment costs.

Commissioner Kathy Lantry, also the St. Paul City Council president, cast the sole no vote Tuesday, saying it didn't make sense to pay money for the holding costs.

Other commissioners didn't want to risk losing control of the parcel.

Only a few workers remain in the buildings. "We look forward to completing the transaction at the earliest possible date," said 3M spokesman Stephen Sanchez.

The Port Authority buys and cleans industrial land with the goal of selling it for $1 to companies that promise to bring in high-paying jobs and significant tax revenue. The agency estimates the 3M site will bring more than 1,000 new jobs and an increase in real estate taxes of $1 million annually.

No developers have signed on yet, Morin said, but discussions are happening.

Jane Prince and Carol Carey, who both sit on the advisory committee, attended the meeting Tuesday and weren't happy with what they heard. It seems that despite citizen advisory comment, they said, the Port Authority is going to raze the buildings anyway.

"It kind of feels like the sham process we were afraid it might be," Prince said.

Chris Havens --612-673-4148

To see more of the Star Tribune, or to subscribe to the newspaper, go to
http://www.startribune.com/. Copyright (c) 2009, Star Tribune, Minneapolis
Distributed by McClatchy-Tribune Information Services. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index