As Southwest light rail vote nears, documents reveal perilous negotiations

The Southwest light rail deal that goes before the Minneapolis City Council Friday morning was reached following two months of closed-door talks that came close to unraveling.

The high stakes negotiations were a make-or-break moment for the proposed line connecting Minneapolis to Eden Prairie. Documents obtained by MPR News through an open records request show the deal came together only after the Metropolitan Council threatened to cut off negotiations.

On June 25, two weeks before the deal was announced, Met Council Chair Sue Haigh sent a letter to Minneapolis Mayor Betsy Hodges. The message: take it or leave it.

"It is time to bring these discussions to their conclusion," she wrote. If Minneapolis failed to accept a deal later that week, she said the Met Council would pull out of the mediation process it had been going through with the city since early May.

The letter followed a pair of unproductive negotiating sessions, said Met Council member Adam Duininck. "I think there were two in a row where it seemed like we weren't making very much progress, and it wasn't certain to us how much of a sense of urgency the city felt and how quickly they were going to act," he said.

Sticking points included the city's request for the Met Council to include a new Minneapolis streetcar system in future transit funding plans. Haigh considered streetcars "outside the scope" of the project. She also questioned the city's proposal for a $50 million loan fund to help minority residents start businesses along the line, arguing the development of such a program would need to involve other cities. And she balked at a proposal to compensate about 15 homeowners whose property values could be harmed by changes to a nearby freight line.

The letter appeared to make a difference, says Duininck. In notes from a meeting just two days later, Metropolitan Council lawyer Don Mueting wrote that negotiators were "close to a solution to allow the city to get to yes."

The broad strokes of the final deal are similar to what Haigh proposed in her letter: The city would get $30 million worth of improvements to its part of the line. But even after the "final" offer the city did win additional concessions, including stronger and more detailed commitments related to the section of the project between Cedar Lake and Lake of the Isles.

Mayor Betsy Hodges said it was important for the city to get those promises in writing. "Not writing things down is why Southwest is in such a mess," she said.

While Hodges supports the deal, she's never been a cheerleader for it. Minneapolis wanted the freight trains that run along part of the proposed line moved, but the railroad blocked that option. That placed the city on a collision course with the Met Council, endangering the entire project.

For Hodges, the negotiations were about making the best of a bad situation. "I do believe this is the most responsible path forward for the city and for the region, but that said, this plan is not a cause for celebration," she said. "This is not a victory."

The documents show the city scored some wins in its negotiations, but it didn't get everything it wanted. Even so, that the Minneapolis City Council's Transportation Committee is recommending a yes vote on Southwest Light Rail.