There’s a new twist in the saga of a planned Major League Soccer stadium in St. Paul’s Midway.

The St. Paul Port Authority hopes to partner with a private developer to become lead tenant — and eventually, possibly part-owner — of the adjoining Midway Shopping Center at Snelling and University avenues.

For city leaders and many neighborhood residents, redevelopment of the shopping center has long been the ultimate goal. A new stadium is seen as a way to draw future tenants, investors and developers. So far, both projects appear delayed by sensitive real estate negotiations. The Port Authority’s involvement could help speed things along.

“This is an interesting deal, and it’s complicated,” said Lee Krueger, president of the St. Paul Port Authority and CEO of its real estate subsidiary, Capital City Properties.

The Port Authority’s five-member credit committee on Tuesday will review a master lease agreement that would make the Port Authority a major player within the 15-acre shopping center. Under the arrangement, the strip mall would remain owned by the New York real estate firm of RK Midway and its principal, Rick Birdoff — at least for now. The seven-member Port Authority is expected to vote on the master lease agreement Jan. 24.

The master lease agreement is the first of three major parts to the deal.

By sometime in February, Krueger hopes to be able to announce a development partner that would join the Port Authority. The joint venture will then have the option to buy the shopping center and hopefully jump-starting its redevelopment. The city’s long-term master plan calls for new housing, hotels, offices, restaurants and retail, and possibly even a movie theater, among other amenities.

OBJECTIONS FORESEEABLE

The Port Authority has participated in joint venture arrangements before, and is currently part of a partnership redeveloping the vacant Macy’s building in downtown St. Paul. Still, objections to the Midway deal are likely.

Among outstanding issues, Port Authority officials have yet to lock in a private partner to help them redevelop the shopping center.

“The expectation is we’ll bring in a partner,” Krueger said. “We’re basically going to be the conduit to get (the shopping center) from Birdoff — from RK Midway — to a different developer. At the end of the day, we will not be the developer. That’s our expectation.”

Adding to complications, RK Midway owns three neighboring parcels, including land occupied by Big Top Liquors and the former Associated Bank building. Those three parcels are not included in the proposed leasing arrangement and will remain under the control of RK Midway as possible future development opportunities.

The length of the Port Authority’s proposed 52-year master lease agreement coincides with the agreement between Minnesota United, the city of St. Paul and Metro Transit for the future soccer stadium.

WILL RAINBOW RELOCATE?

Minnesota United plans to build a privately funded, $150 million soccer stadium spanning more than 20,000 seats on what was once a Metro Transit bus garage. The stadium site extends into the shopping center, where a Rainbow Foods grocery now stands. The grocer is owned by Eden Prairie-based SuperValu, which maintains an active lease and has shown no interest in shuttering the location.

As a result, stadium construction — once expected to begin last May or June — has been stalled.

Xcel Energy crews have done some initial utility relocation, and Mortenson Construction officials last month said they hope to begin stadium construction in the spring. Minnesota United will play in TCF Bank Stadium at the University of Minnesota for at least 2017 and 2018. In addition, the team is still seeking property tax relief through the Legislature.

“Obviously, Rainbow has to be addressed,” Krueger said. “And I have not been the one leading that discussion. I can’t say specifically what the deal is on the table with Rainbow, if there even is one.”

If the arrangement between the Port Authority, a yet-to-be-named developer and RK Midway moves forward, it’s unclear how quickly existing tenants at the shopping center will see changes. Their leases will remain in effect, and Birdoff will still retain major control of the strip mall during a four-month due diligence period.

Proponents of the $150 million stadium project note that its construction will be privately funded by Minnesota United and team partners, and whatever partnership leads the shopping center redevelopment will also bring in private investment.

“The bottom line is this is a good deal for St. Paul,” said City Council Member Dai Thao, who sits on the Port Authority board and represents the Midway. “The city isn’t paying for anything. We’re building the momentum for the soccer stadium, and the Midway.”