Council approves parameters for 100 and Fifth redevelopment: Scheels store, parking ramp and event stadium move forward

The Blaine City Council on Aug. 11 voted to approve tax-abatement and parameters resolutions tied to the 100 and Fifth Redevelopment District, authorizing the city to pursue temporary tax-abatement bonds and establishing conditions that must be met before any bond sale.

Eric Thorvig, interim city manager and community development director, presented the four related agenda items and said he would cover items 8.1, 8.2, 10.1 and 10.2 together because they relate to the same redevelopment project. He described a proposed Scheels retail store, a structured public parking ramp and an event stadium as the principal pieces of the plan.

The developer and retailer plan to build a roughly 220,000-square-foot Scheels store in the east portion of the 100 and Fifth Redevelopment District, which Thorvig said would represent roughly a $150,000,000 investment including the building and inventory. To meet parking demand, the plan calls for a parking ramp of about 750 stalls adjacent to a proposed hotel; Thorvig said the ramp would be available for general public use, not only for the retailer.

Thorvig said Shields/Scheels would request a city financing package in the neighborhood of $50,000,000 to support infrastructure, construction and real estate for the retail and parking project. He described an overall financing package for the retail and ramp that would not exceed about $83,900,000, including principal and interest on bonds. The city would initially use temporary tax-abatement bonds; Thorvig explained that if a district sales-tax authority is later approved, the bonds would convert to sales-tax revenue bonds.

"If and when a sales tax authority is approved, the bond type would convert from a tax abatement bond to a sales tax revenue bond," Thorvig said, describing the conversion as removing the abatement liability from the city and making the debt repayment dependent on district sales tax revenue rather than the abatement structure.

Thorvig said the administration has discussed a proposed state bill that would grant the city a special sales tax within the 100 and Fifth district — the vehicle to repay the bonds — and that staff has briefed the city’s state delegation. The draft language discussed in staff workshops would create a district sales tax on food, beverage, admissions and lodging; Thorvig said the retail partner negotiated a lower retail rate and would be comfortable with a 1.5% sales-tax rate on taxable items in the store (apparel was noted as exempt from sales tax under Minnesota law).

Thorvig described several protections and conditions the city will require before any bond sale, including: executed purchase and financing agreements evidencing the developer’s commitments; a $10,000,000 escrow from the retailer to serve as construction surety; evidence the developer has adequate financing for the remainder of the project; zoning and construction approvals; and a ground-lease structure under which the developer will ground-lease the parking ramp to the city while tenants and landlords in the district pay maintenance fees. Thorvig said the parameters resolution would form an implementation committee (city manager, finance director, community development director and legal counsel) to verify that the conditions are met before any sale.

Thorvig also reviewed an amended parameters resolution for the event stadium. The council adopted an earlier parameters resolution in September 2024; the new resolution resets the anticipated bond sale to 2026 and reflects cost increases and design additions since last fall. The stadium budget described by Thorvig totals roughly $71,000,000, with about $63,000,000 proposed to be financed through bonds and roughly $8,000,000 in private equity from the stadium ownership group.

Thorvig said the stadium ownership group and the developer have committed to pay the debt service for the stadium through lease payments, and the financial pro forma reviewed by city consultants (Baker Tilly and staff) shows projected revenues sufficient to cover lease payments. Thorvig said that in the event of a revenue shortfall in future years the projections show two possible backstops: a capital reserve the stadium would build and excess cash flow held by the ownership group.

The revised stadium parameters also add funding for a pedestrian overpass across 100 and Fifth Avenue, which Thorvig and council members described as important for safe pedestrian circulation across the busy corridor. Council member Robertson specifically praised the inclusion of the overpass and the funding safeguards in the updated resolution.

Council held public hearings on both the retail/parking abatement (item 8.1) and the stadium abatement (item 8.2). No members of the public spoke during either hearing. Council then approved the four motions on the agenda by voice vote: adoption of the retail/parking property tax-abatement resolution (8.1), adoption of the stadium property tax-abatement resolution (8.2), and approval of the two parameters resolutions (10.1 and 10.2). Council member Robertson made each motion; seconders were Fleming (8.1), Newland (8.2), Mesolia (10.1) and Fleming (10.2). Mayor Sanders called the votes and the motions carried with aye votes and no recorded opposition.

Thorvig said the city expects the retailer to begin preconstruction work in late 2026, with a planned store opening on May 1, 2028, if the schedule holds. He also said it is likely parts of both the retail project and the stadium would be under construction before any bonds are sold, since the parameters resolutions require sufficient evidence the projects are proceeding before the city issues bonds.

Council did not take action to sell bonds at the meeting; the approved parameters resolutions set the conditions and timeline the city will use to determine whether to proceed with bond sales in 2026. The draft sales-tax authorization discussed by staff would require separate legislative action at the state level before a district sales tax could be implemented.

Votes at a glance: Item 8.1 — Adopt property tax abatement resolution for retail and parking project in 100 and Fifth Redevelopment District (moved Robertson; second Fleming). Outcome: approved (voice vote). Item 8.2 — Adopt property tax abatement resolution for stadium project in 100 and Fifth Redevelopment District (moved Robertson; second Newland). Outcome: approved (voice vote). Item 10.1 — Adopt parameters resolution for retail and parking bond issuance (moved Robertson; second Mesolia). Outcome: approved (voice vote). Item 10.2 — Adopt parameters resolution for stadium bond issuance (moved Robertson; second Fleming). Outcome: approved (voice vote).

The council’s approvals authorize staff to continue finalizing agreements, require the developer and stadium group to provide evidence of financing and contractual commitments, and establish a committee to verify the parameters are met before any bond issuance. If the city’s proposed district sales-tax language is enacted by the state in a future legislative session, the temporary tax-abatement bonds described in the resolutions could convert to sales-tax revenue bonds for repayment.

Council adjourned the special meeting and proceeded to an Economic Development Authority session following these actions.