MINNEAPOLIS-A $62-million subsidy for a new Target store Downtown has provided grist for controversy that led to an incumbent mayor losing her party’s endorsement in her bid for re-election, according to a front page story in the Sunday edition of the Minneapolis-based Star Tribune newspaper. The newspaper reports that the new store being built on Nicollet Mall between Ninth and 10th Streets will cost about $160 for each resident of Minneapolis.

The total cost of the 185,000-sf store and adjacent parking ramp is $164.5 million; the developer is Minneapolis-based Ryan Development. Most of the subsidy is providedthrough tax increment financing.

Minneapolis Mayor Sharon Sayles-Belton blames the heavy subsidy, which rose steadily in estimates starting with $16 million in 1996, for her inability to land the Democratic endorsement in her bid to be re-elected mayor this fall.

“The left wing of the DFL is saying, ‘We’re not happy with Target. We’re not happy with Target. We’re not happy with the progress you’ve made on affordable housing. We’re not going to give you the endorsement’,” Sayles-Belton said after the convention, according to the story. None of the candidates won endorsement.

Sayles-Belton and several Minneapolis city council members who voted for the deal say that such subsidies are necessary in order for cities to compete with the suburbs for development.

Opponent R. T. Rybak says he favors having a Target discount store Downtown, but opposes the project as he saw the public costs rise.

The same development also prompted a bitter – and ultimately unsuccessful — lawsuit from Opus Corp., who felt slighted when its bid to develop the same block with a Wal-Mart store and asking for no public subsidies was rejected by city officials. RebeccaYanisch, then the head of the Minneapolis Community Development Agency, a key player in putting together the development, told the Star Tribune this bid was largely intended as a “spoiler” to thwart a rival.

Yanisch is now head of the Minnesota Department of Trade and Economic Development in the administration of Gov. Jesse Ventura.

Minnesota cities over the past quarter-century have given more than $4 billion in similar public assistance to commercial developments as part of revitalization efforts, according to the story.

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