TRANSCRIPT: Ted Mondale

Question: So let’s start by talking about what this might have been without some intervention or without taking a different course?

Mondale: Well, I would say it isn’t intervention. This project was going forward two large big-box developments with some multi-family on the side, without connections to walking, without civic uses, without thought about how it fits into the whole community. And I think the City of Minnetonka said, "We’d like to do better." And they contacted us. We helped pay for some planning grants to help them plan and think about what they can do. And we gave them some grant money for some of the connections, some of the sidewalks and the transit hub facility. And so basically what this was going to be was what you see most of the places around the Twin Cities region, a totally auto-oriented, large-box development. And also on some of the extra land there was going to be some multi-family housing that was separate and disconnected from any of the other uses. So basically all the parcels looked at separately. And a very not-thoughtful use of the property — or standard, if you will. And I think what the city said is I think we can do better. How do we get some help to do better?

Question: And the result is?

Mondale: The result is a totally different project. You have the big-box. You have the large retail outlets, which generate a lot of the tax base. You have some retail amenities like the deli. You have a community center. You have a restored wetland. You have an array of housing choices from very low income to high market rate, above market rate, senior housing with links to a transit facility, a day care facility, a church nearby, and put into a place where you can walk around the community so it’s really integrated. So it’s a completely different choice and a choice that the city and the developers made and one that has proven to be very, very successful.

Question: Talk about the low-income segment. In other words in most areas of Minnetonka there’s not a lot of room for low-income people, is there? Just by the nature of the market?

Mondale: Right, the question is if you’re building market rate, which would be what a developer can make money on the development of housing for people in a community like Minnetonka or pretty much anywhere now, unless there’s a public subsidy into it, it’s not going to be affordable for most of the people in most of the jobs. I mean we’re not talking about just people who might sweep bathrooms up in the middle of the night in office buildings. We’re talking about teachers. We’re talking about bank tellers. We’re talking about firemen, etc. So there are a number of units here that have public subsidies, deep public subsidies where families that make $12-15,000 a year, maybe a single mom that’s had a couple of things happen to her can live here in a nice place, near where they work, be able to get to places by transit, be able to walk to work and, frankly, be involved in one of the best K-12 education systems in the state — the Hopkins School District - with probably the best elementary school where their kids can go to.

Question: And so that avoids the situation that we have been moving toward as a society, does it not in terms of we’ll put all the poor people in the central city and they will try to survive in that school system?

Mondale: Right, the great mistake of the - quote - urban renewal of the 60’s and 70’s was to build high, high rises where everybody in them were very low income. And let’s keep them altogether and segregated, if you will. The result of that experiment is a disaster. It’s crime. It’s urban blight. It’s being in a place you don’t want to live in. It’s what you don’t want to do. What we’ve found to be very, very successful is we call it inclusionary housing. And that is allow people with lower incomes, maybe because of where they are in life or something, the mistake they might have made, or the job that they have chosen to take, live in a unit that looks and is as nice as the other units. And live in a community where there are different kinds of people in different areas. And that’s proven to be very, very successful.

Question: I asked a conventional developer to come over and look at this site and give me their appraisal. Let me throw a few points at you in terms of what they said. One is they just were uncomfortable with just the high density. I mean, those units over there are really very much side-by-side units without a lot of space around them. And people do like space. Some people overlook the pond and stuff but a lot of people really don’t. Is that — how do you feel about that?

Mondale: Well, what we’re not trying — what we are trying to accomplish is not state our values and try and impose them on local communities. What we’re trying to do is have local communities have resources and expertise to plan better for their future. And allow people - the developers, citizens - choices that they wouldn’t otherwise have. So if you’re a teacher you could probably find a place to live on your side of Minneapolis or someplace else. Or you could choose to live here. And you’ve got a community space. You’ve got retail. You’ve got transit to get to your job. We’re really not trying to tell developers what to do. We’re trying to work with cities and developers and try and bring about options that would be A: implementable. We’re not looking at creating some kind of Utopia in our mind and saying, "This is it or only it." But we feel that we can work with developers and we can work with cities and build things that people like. And this is an example of a development that people really like, that live here. And it’s not for everyone. No development is for everyone.

Question: The other comment that they made was that they didn’t like the way that the senior housing looks out on the loading dock of the commercial. They just felt that was endemic to this type of mixed use is that oftentimes you don’t have the ideal fit of one part to another. What’s your thought about that?

Mondale: Well, if you’re going to build housing near retail, you know, you’re going to see the retail. You’re also going to have access to the retail. And you’re also going to be able to do things because of the tax base of the retail in developing on a 50-acre lot or 100 acre lot that you wouldn’t do on a single parcel lot. A lot of what we do in the development world, in the finance world as far as financing these projects is a lot like the problems we’re having in government. And that is, everyone has their own special way. If you go to a bank and say, "I want to put a development like this together." You’ve got to go find the person, a developer that does low income, you got to find a developer that does high market rate, you have to find a developer that does commercial and you have to find a developer that does retail. So when a lot of people look at these kinds of developments they find that this isn’t what I do, so therefore I don’t like it. And so it makes it more complex. It makes it more difficult. And our job is really working with cities to help them figure out what they want and what their citizens want. And have the citizens - as opposed to the developers - driving the process. And if we can make it work, yes the developer has to make a profit, and we can design developments and communities that people want more. And they’re driving it rather than the developer saying, "Hey, I’ve been developing the same way for the last 20 years, and this is good and that is bad." It’s really a flip in who’s making the decision. And we feel our role is to help the city help the citizens put things in place that they would want that they wouldn’t normally get.

Question: Isn’t it sort of a conundrum that today’s style of retail really is this huge, gigantic colossus, which doesn’t quite as comfortably fit into a residential area as the old main street did?

Mondale: Well, I think one of the reasons why we have these large, segregated development patterns was because most of where the commercial and industrial was, was really incompatible with residential. A lot of it was manufacturing. It was loud, thumping noises. It was belching smokestacks. And a lot of the commercial today and industrial today is software companies and office jobs, which are much more compatible with retail and much more compatible with residential. So I would say that — to your question — I think that things change. One of the things, the mistakes, I think, of urban planners and just having planners do the work as opposed to having the developer and the city and citizens involved is the fact is that Home Depot is popular. And big-box developments, Galvan’s here is popular. I buy bats here. The last time we were out I went to buy my baseball bats here because I know I can’t get a good deal on them. So one of the things we can’t do and one of the things I think we did in the past was ignore market realities. We have to take into account that big-box development has to fit into these kinds of developments. And you can do it. And you can’t get caught into the position that some academics do and some — I call them Utopians — do. That says gosh, if we could just get rid of Wal-Mart and we can just get rid of Costco and we can just get rid of Galvan’s and Home Depot then everything would be fine. Well that’s great but it’s not really relevant to the task at hand. We’re trying to deal with reality, we’re trying to deal with development on the ground today. And perhaps those decisions might be best left to the legislature, the academics. We’re trying to do the best we can with what we have. And we’re showing real success.

Question: Do you have any estimate of how much public money is into this project at all?

Mondale: Well, I know we have $750,000. There’s a transit hub. So, I don’t know - with the city I don’t know the exact number. But I do know of probably a couple million. And then you have the affordable housing that’s put in there so there’s some consistent money going forward. Yeah, there’s some public money into this. But you have to keep this all in context. There’s a lot of public money into (highway) 394, billions of dollars. There’s a lot of public money into the sewers that hook up. So to say — the big fallacy in this argument is to somehow say the next the development down the street, down 394 that’s hooked up next to the highway, that we hooked up with our sewers and we build a billion-dollar road with and the housing is million dollar housing that has a mortgage deduction. Somehow that wasn’t subsidized? I mean we probably have less subsidy into this given the units we have than the traditional development.

Question: You talked about the Honeywell site in St. Louis Park as being in a way the opposite side of the coin of this. And that’s what this could have been in effect, isn’t that right?

Mondale: Right, I think the St. Louis Park is a great example of what you get if you follow the market versus what you can get if you roll up your sleeves and you ask citizens and you get creative. On the east side of St. Louis Park was probably the greatest opportunity in the Twin Cities region to build something very interesting, that fit into the neighborhood, that could have a strong retail component, could have a mix of uses, could create walkable neighborhoods with a park. And instead, the mantra of the developers was, "You’ve gotta follow the market, you’ve gotta follow the market, you’ve gotta follow the market." Now there’s nothing but very large old-style big-box development, which really brings the highway into our community. And you know what? The houses around the development are turning rental — not a bad thing, but it’s not where people want to live. And we like the business, we like the tax base, but we think we could have fit those businesses in to something that was more compatible, that was scaled in a way that people would like it and use it. And on the other side of St. Louis Park, on Excelsior Blvd., we took a different tack. And we went out and hired planners. We brought developers in. We went out and said, "Okay, public what do you want?" And back with that was very, very different. Expanding out the park, access to kids to the park, linkages for senior citizens from the park up to Byerly’s and Target and to the Park Nicollet Medical Center. And really designing a big part of our downtown around what people would want rather than what - quote - the market is delivering. And is it more difficult? Yes. Is it more time consuming? Yes. Is it more expensive? Yes. But in the end, you’re going to get a project that is going to enhance property values, that is going to enhance the image of the city. As opposed to the alternative what you get on the other way. So it’s like anything else, if you work harder, if you work smarter, if you listen to what people have to say, in the end you will do a better job. In the end you will do better - make a better development if the public is involved.

Question: So it looks like the Park and Ride is doing very well?

Mondale: Yeah, when we build a Park and Ride it’s full the next day because it’s an amenity that people want. What you really have here is, if you look at the cars here, these are cars that would be on the roadway, that would need parking in downtown. A lot of the ridership we get here are people that drop folks off or quite frankly walk from the different housing that we have in the area. Get dropped off here. Walk to their job. So when you’re thinking about bad congestion, or you’re thinking about how to alleviate congestion, this is clearly one of the ways to do that. It’s mixing use, making sure that transit and walking is a part of the development. And it makes a real impact.

Question: Can you estimate over a 10-15 year period what kind of expansion you’ve had in this type of facility?

Mondale: I think on almost all of the major roadways, we’ve build transit hubs. And we are expanding them. Two of the key ones is 394 West where we are today and 35W from Dakota County into Minneapolis. We carry 2000, 3000 people and the equivalent of, really a lane or 2 lanes of traffic on these thoroughfares. So we have transit hubs all along. And we’re building new ones all throughout the region and enhancing the ones that we have. So it’s critical. And as fast as we can find the parking space, build the parking spaces or build the hubs, and provide the services, those busses are full. And when you’re the road and you’re angry about not getting on the main highway and you see a bus go by, think of 40 to 60 less cars that aren’t ahead of you when you’re sitting there. So it makes a tremendous impact. Again, when you have a quality service going to a place where people are trying to get to, it probably means an extra lane to a lane and a half of traffic.

Question: And then talk about what, if all these people who were housed here, were on single family homes with yards. Where would they go? And how much space would they occupy?

Mondale: Well, we had probably 70,000 people in the last 10 years, more people in what we call developed areas, areas where you had roads and infrastructure. So, a number of projects like this throughout the region allowed us to absorb those 70,000 people within the infrastructure we have. Most of it was redevelopment. And most of it was projects kind of like this, maybe not on the scale where you had the roads built and the sewer down and the public utilities down that you could absorb that growth. The alternative would be, if we weren’t successful with projects like this, is really to have built another city about the size of Rochester or St. Cloud, where I’m not quite sure. But if you think about the commute patterns of a city the size of St. Cloud that aren’t on the roadways because of this kind of growth that we’ve gotten over 10 years, and think about it from a visual standpoint, projects like this are incredibly important for our regional stability and for issues like congestion and growth.

Question: What has happened to bus ridership in, say, the last 5 years?

Mondale: We’ve had we believe the second highest increase in bus ridership in the nation. We’ve increased overall about 24% increase in the number of rides. We have 138 million rides this year. Two years ago we had 125 million. Our complaint now is overcrowded buses. And so I think we’ve proven that if we can put a better quality of service on the road, and it’s convenient for people to get from one place to another, they’re going to ride transit here. 46% of the people that work in downtown Minneapolis get there by bus. That’s a pretty staggering figure. And that’s 52% of the office space in the whole entire metropolitan area.

Question: But aren’t people also being forced into the bus because of the congestion?

Mondale: Well, nobody gets forced to be on a bus. Transit, unlike a lot of government services, is a service people choose. 80% of our riders, we believe, that commute to work regularly also have a car. So they have a choice. And so if they can save money on parking, if they can say get to work at about the same amount of time or sometimes faster than they would be driving, then it’s a great choice. We have one of the highest commute costs in the nation here; close to I think $8,000 a year for the average commuter for their transportation costs. So instead of having a 2-car family, you have a 1-car family, you might save $7,000 a year. And it might not sound like much to many, but if your in a household income of $30,000 a year, $40,000 a year, $70,000 a year and you can add another $7,000 or $8,000 in after tax dollars to your family’s…

(traffic noise)

People choose to ride transit because it makes sense for them. 80% of our riders have cars that they could use. And they choose to ride transit, probably about 250,000 trips a day — that’s a lot of cars. But why they do that is because it’s more convenient for them. And it means a real bottom line in their household income. It costs probably about $8,000 a year to commute per automobile that you have. So if you think about most people’s incomes - $30,000 to, say, $70,000 a year are the average household incomes. To reduce your after tax spending by $5, $6, $7,000 a year, that’s not a trivial fact. That’s a difference between paying your bills, or maybe going on a vacation, or in some instances staying in your house and making work pay.