Nicollet Island: Cash cow or public park?

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The Nicollet Island Pavilion appears to be a cash cow for the Minneapolis Park and Recreation Board and for a private catering company, but is it the park and open space promised to the public when it was bought with public funds in the 1980s?

The Park Board bought most of Nicollet Island—including the building that is now the Pavilion—with money from the Metropolitan Council. That money came with strings: The Park Board needed to devote the land exclusively to “regional recreational open space for public use.” If the Park Board wanted to lease out land, say to a catering company, it needed prior Met Council approval.

Today, Mintáhoe Hospitality Group has exclusive catering rights at the Nicollet Island Pavilion, under a deal first cut in 2002. However, its lease with the Minneapolis Park and Recreation Board contract could run afoul of the decades-old restrictive land use covenant that is only now being reviewed.

Critics of the deal have pushed public officials to investigate. Among the complaints, they have noted that Mintáhoe moved its corporate headquarters into the Pavilion, making it a private space. They got the Metropolitan Council’s attention and it is reviewing agreements old and new.

The Pavilion’s promise

Don Siggelkow, the Park Board’s General Manager of Administration is quick to list the Pavilion’s positives: Private investment has upgraded the once-industrial building and improved services. It is the most lucrative Park Board contract, raising $400,000 a year.

“We do things to try to generate income for the Park Board and serve the public,” he said. “We think this is a great example of doing that.”

The Pavilion used to be the Durkee Atwood Co., which made industrial belts, power transmission drives and weather stripping, according to old Star Tribune articles. (At the time the Park Board bought the building, Durkee was at odds with Island residents, who opposed its planned expansion.)

An April 29, 1988 Barbara Flanagan column predicted a wonderful reuse, saying the building could become “the most popular eating spot in downtown Minneapolis.” Park Board Secretary Harvey Feldman told her at the time that it would be open to the public about 70 percent of the time. During the other 30 percent, it would be rented for private parties, including wedding receptions.

Siggelkow said the Park Board hasn’t changed the Pavilion’s use since it opened. It was always an event center, even when the Park Board ran it. The outside patio area overlooking the river still is open to the public, he said.

Mintáhoe has invested approximately $1 million to upgrade the space. It added air conditioning, carpeting and tile and upgraded the bathrooms, kitchen, windows and boiler. (The Park Board paid for roof and the parking lot improvements.)

According to the Park Board website: “The 9,300 square-foot pavilion is equipped with state of the art sound, light, projection and wireless Internet systems. Inside, Nicollet Island Pavilion can seat 660 guests in a reception or meeting-style format, and as many as 1,500 for free-flow events. The expansive outdoor space allows as many as 10,000 to enjoy this venue. …Please contact one of Mintáhoe’s professional event consultants to learn how Mintáhoe can make you look great, and your next event unforgettable!”

The contract reserves the Pavilion for eight Park Board events, including New Year’s Eve, New Year’s Day and July 4. The Park Board and Mintáhoe amended their contract in 2004. The changes included extending the term from 10 years to 22 years.

State an interested bystander

Minnesota Department of Finance staff has also raised questions about the Mintáhoe contract.

Tax-exempt, state general obligation bonds paid for the Nicollet Island property, and it appeared that Finance had statutory powers to review contracts with for-profit entities such as the catering deal. The state asked the Park Board to fill out the appropriate paperwork. The Park Board did, and Finance found some of the responses lacking and asked for more details.

In the middle of this shuffling of documents, the state decided it didn’t have any power to review the Mintáhoe contract. Kathy Kardell, assistant commissioner of Treasury, said the Nicollet Island land purchases predate the department’s oversight authority, which wasn’t created until 1995.

The Finance Department is still interested, however, and supports the Met Council’s review. “Clearly from our perspective, there is a private use problem there,” Kardell said. The Park Board “should have taken that agreement to the Met Council and they didn’t.”

Dear Park Board

On August 7, Thomas Weaver, regional administrator for the Met Council, sent a letter to the Park Board saying his staff could find no documentation in its files that shows the Park Board requested or received Council approval, “to convey any interest in the pavilion property or to use the pavilion building and surrounding land for any purpose other than regional recreation open space purposes.”

The letter was addressed to Siggelkow, who said on September 9 that Park Board attorneys were still working on a response.

In a March 7, 2008 communication to the Minnesota Finance Department, the Park Board stated the following: “Unlike most other ‘use’ agreements, the Park Board’s catering agreement with Mintáhoe does not give Mintáhoe the use of the Facility. Instead, the public has the use of the Park Board’s Facility. Mintáhoe does schedule the bookings for the facility and does provide the catering service.”

One Nicollet Island resident, Edna Brazaitis, disagrees with that statement, saying that the Park Board effectively gave Mintáhoe control of the building and surrounding spaces. She is one of several critics of the deal who have done detailed research and pushed other units of government to investigate.

In an August 28, 2007 letter to the Department of Finance, Brazaitis said the Bicentennial Amphitheater next to the Pavilion used to have concerts and performances such as Shakespeare in the Park. They stopped after Mintáhoe took control, she said.

Shane Stenzel, Park Board manager of special services, explained why. He said there are still free concerts at the amphitheater three to four times a year, but groups cannot lease it. Other public events at the amphitheater clashed with some of the Pavilion’s events, he said. Parking is limited. Further, people in neighboring highrises complained about concert noise, he said.

Pavilion events, such as outdoor weddings, still use the amphitheater space, Stenzel said. He said groups looking for a nearby performance space could use the nearby Father Hennepin Bandstand next to the Stone Arch Bridge instead.

Braizitis’s letter also takes exception with Mintáhoe’s expanded use of Park Board space, a claim the Park Board doesn’t dispute.

Braizitis said Mintáhoe requested a building permit at the Pavilion to add office space in 2006. She has photos of signage stating that the Pavilion is Mintáhoe ’s corporate headquarters. That meant the business was running not only the Pavilion operation out of the Pavilion location, but its family of businesses as well, she said.

(Mintáhoe ’s website lists its businesses as Apples Catering, Perfect Host Catering & Special Events, Mintáhoe Beverage Services and catersource Magazine, Conference and Tradeshow.)

Since Mintáhoe pays the Park Board based on a percentage of catering sales, not a flat lease, the Park Board was not getting paid anything for the corporate headquarters, Braiztis said.

Sigglekow said Mintáhoe needs operations and sales staff on site at the Pavilion—but using the Pavilion as a corporate headquarters was not part of the agreement.

The Park Board gave Mintáhoe notice that it needed to move its headquarters off site, Siggelow said. The notice was given three months ago, when the Park Board discovered that Mintáhoe had moved more people to the Pavilion than it knew.

As of September 18, Mintáhoe ’s website still listed the Nicollet Island Pavilion as the corporate office. Mintahoe did not return phone calls for comment regarding issues raised in this article.

Scott Russell is a journalist. He wrote for the Southwest Journal and Skyway News (now the Downtown Journal) in Minneapolis from 1999-2005. He also wrote for The Capital Times, a Madison Wisconsin daily, from 1993-1999.