Item Coversheet

Board Action Request
19-0190


Item Description:
Neg Lease Agmt LS00000003 with Simon Property Group for approximately 57,700 rentable square feet for a regional library at the Southdale Center
Resolution:

BE IT RESOLVED, that the County Administrator be authorized to negotiate Lease Agreement LS00000003 with Simon Property Group, or affiliated entity, for rental space at the Southdale Center for the Hennepin County Library – Southdale, in the amount of $562,600 first year base rent plus operating costs, utilities and property taxes; that following review and approval of the County Attorney’s office, the Chair of the Board be authorized to sign the agreement on behalf of the County and that Controller be authorized to distribute funds as directed.

Background:

Built in 1972, the Hennepin County Library – Southdale has served residents of Edina, Bloomington, Richfield and Minneapolis for almost five decades with its extensive collection, meeting spaces and community responsive programming.

As a result of a 2015 board briefing, in which the cost to renovate the Southdale Regional Center (which included the library, district courts, and a service center) was determined to be too high to proceed, the following occurred:

 

  • Service center relocated to the Southdale Center in 2016
  • Court functions relocated to the Government Center and Brookdale and Ridgedale Regional Centers in 2019,
  • Construction of a new library was introduced in the 2018 Capital budget at $49,900,000.

 

In 2016, Resolution 16-0366 approved a Cooperative Agreement with the Edina Housing and Redevelopment Authority (HRA) to provide community engagement and certain planning services for the redevelopment of the current library site. Understanding that the library alone would not fully utilize a 7.75 acre site, the meetings focused on options for the real estate including complementary uses to the library. The HRA held four public meetings attended by over 150 residents and held 13 focus groups with residents, Hennepin County, Richfield, and Edina staff. Engagements were advertised in several ways including postcards to Richfield and Edina residents, social media, televised invitations, and posters.

 

In 2018, a separate engagement process was held to discuss future programming within the library. Southdale Library patrons shared feedback about priorities for a new library and site. Patron-identified priorities for a new library include spaces for both focused and collaborative work, technology to bridge the digital divide, a variety of seating options with access to power sources, ample library materials, and early learning spaces for school readiness. In this engagement, patrons were also asked how they currently use the library. Checking out materials, picking up holds and using materials in the library all ranked highly, as did attending library programs or using space to study and work. 

 

While the current site offers redevelopment options, the county has continued to explore other site options nearby. In Fall 2018, a major retailer closed its doors leaving a vacant anchor space at the Southdale Center, located approximately two blocks from the current library site. After the successful relocation/development of the Hennepin County Service Center from the Southdale Library to the mall, the county considered the possibility of relocating the library there as well. 

 

Long term, Simon Property Group, the mall developer, envisions returning part of the mall to its original purpose: “[When originally designed] the mall was meant to be a town center-type facility in the suburbs. The original plan called for a town hall, police department, and library, but these were never put in place” (Business Insider). Recent investments in the mall align with this vision, bringing live/work space, a state-of-the-art fitness center, and soccer fields to the mall. 

 

The current proposal is for Simon to demolish the former Herberger’s building and construct a new building for the library. County staff will collaborate with Simon on the exterior of the building and the county would facilitate the design of the interior spaces to reflect library programming needs and recommendations from the community and library staff. 

 

Building the library at the Southdale Center location allows for almost seamless library services. In contrast, building on the existing site would result in the closure of the library for at least 12-18 months. Construction will start in the new building at the Southdale Center in 2020 with potential completion in early 2022. 

 

Staff proposes to enter into a lease with Simon with the following business terms:

 

  • Premises – approximately 57,700 sf of new space to be built as part of a redevelopment of the site formerly occupied Herberger’s;
  • Term – initial term of twenty years (subject to negotiated terminations rights on the part of the County) with two ten-year extension options;
  • Base rent – $9.75/sf. Rent is fixed for the first five years of the Term with escalations of five percent in years 6, 11, 16 of the Term and every five year in extension periods;
  • Additional rent – County will be responsible for the utilities, prorate share of centralized heating and cooling charges and property taxes;

 

Other elements that are important to both library staff and patrons will also be reflected in the lease:

 

  • Access to upper level amenity/green space;
  • Bike and pedestrian access to the adjoining community;
  • Reserved parking stalls;
  • Curbside drop off and book drop;
  • Access to the mall interior.

 

Community conversations were on hold while county staff determined if the Southdale Center is a viable option for the library. The county will now hold two open houses in May/June 2019 to share the results of the library programming meetings and to present the Southdale Center site renderings.

 

Impacts/Outcome: Leasing space for the Southdale Library at the Southdale Center allows the library to maintain valued core services, access to physical materials, story times and homework help, in a secure and welcoming space, while offering a new and unique opportunity to deepen community connection and provide innovative and inclusive programs and services. The colocation with other amenities will create a more dynamic and convenient experience for patrons, and may attract additional residents, who do not currently use the library. Southdale Center is accessible by public transit and is a bus route connector in the area.