Council committee approves 30‑year downtown lease with PNH Properties; public commenter cites missing appraisal

The Public Health and Safety Committee on Sept. 16 approved an ordinance (BL2025-1011) authorizing two lease agreements with PNH Properties LLC for use of courtyard space behind downtown buildings at 120 Third Avenue North and 211 Commerce Street. The leases run 30 years and include construction of a downtown fire substation and a public programming commitment by the lessee.

A public commenter, identified as Steve Ryder, told the committee the file lacked a required appraisal. "Metro code of laws 2.24 0.225, appraisal report required for the Metropolitan Council approval," Ryder said, reading the code aloud and noting, "There is no current value in this file." Ryder said Colliers International provided only a market-rent analysis and that an appraisal is necessary to show land value for a transaction involving public property.

Council members debated the public‑land implications. Sponsor Council member Coop (bill sponsor) said the area is a 0.3‑acre courtyard behind an office building and that the space will remain open to the public while PNH Properties will own and operate improvements, including a fire substation. Kevin Roten of the Parks Department said the department owns only a narrow surface interest in the courtyard and does not hold air rights or rights below the space; he said the space was transferred from MDHA in 1998 and that it "has never been used" or permitted. Roten also said Metro will perform an annual review of the lessee's use and that utilities and maintenance will be the lessee's responsibility.

Council member Welsh voiced concern that the lease obligates Metro to no rent while PNH Properties is expected to build what staff estimated as a roughly $2 million fire station for downtown use. "There is actually no rent being paid... it seems like we're kinda getting the short end of the stick there," Welsh said. Legal staff described a friendly amendment by Council member Evan Siegel to the insurance terms: instead of a fixed insurance limit for the lease's long term, the amendment requires the parties to evaluate insurance limits every five years and increase them if necessary. A legal representative summarized the amendment as adding periodic review and escalation for insurance coverage.

Committee members voted to approve the ordinance as amended. The Parks Department and legal staff said the courtyard will remain open to the public and Metro will retain ownership of the surface interest; PNH Properties will manage, maintain and program the space and construct the substation in the garage below. Committee discussion included repeated requests for documentation that Metro followed charter and code requirements for disposition or lease of public property.

Ending: The committee approved BL2025-1011 as amended and recorded concerns about missing appraisal documentation and the financial terms of a long lease where Metro receives no rent. Staff said they would continue annual reviews of the lessee's programming and maintenance obligations.