A legal tug-of-war over the financially-troubled Capital City Plaza Parking Ramp in downtown St. Paul gained new legs on Monday when the Minnesota Court of Appeals ordered Hennepin County District Court to revisit the case.

The Court of Appeals found that the lower court judge erred when granting an unrequested summary judgment, or a jury-less decision, halting a lawsuit by downtown property owner John Rupp over a possible ramp sale mid-stream.

Whether the transfer of the ramp deed for money constitutes a legal sale remains in question.

The ramp, located at 50 East Fourth St., is owned by the St. Paul Port Authority and the city of St. Paul.

Wells Fargo Bank serves as trustee for the trust, created in the year 2000, related to two types of bonds that were supposed to be paid off with proceeds from parking — tax-exempt revenue bonds and taxable lien parking ramp revenue bonds.

The ramp hasn’t pulled a profit and both sets of bonds are in default. Allied Parking collects parking payments, pays its expenses and sends remaining profits to the trustee, Wells Fargo, which forwards those profits to bondholders twice a year in the form of debt service payments.

“We don’t manage it,” said Port Authority President and CEO Lee Krueger, who added that the ramp has been troubled since its inception during the recession that followed the attacks of Sept. 11, 2001. “We’re excited to get it off our books someday. It doesn’t look good on our balance sheet.”

Rather than foreclose the mortgage and dispose of the facility in a sheriff’s sale, Wells Fargo proposed transferring ownership of the ramp by structuring the transaction as a “deed in lieu of foreclosure.” In 2017, Jet Park, LLC submitted the winning bid for the deed, which bondholders have effectively interpreted as a sale.

A limited liability corporation, CCV-1, that holds cash flow notes issued by the Port Authority fought the decision in Hennepin County District Court, as did appellant WHTW, LLC, which had a right of first refusal to purchase the ramp in the event the Port Authority puts it up for sale.

The plaintiffs noted they would receive no money if the deed is transferred to Jet Park. Rupp, who is affiliated with the plaintiffs, could not be immediately reached for comment on Monday.

The two bondholders lost their case in Hennepin County District Court when a judge issued a summary judgment against them even though the Port Authority and Wells Fargo had not explicitly asked for it. The defendants had, however, asked the court to dismiss the case outright through a different legal mechanism.

In its judgment, the district court found that the deed transfer did not legally constitute a sale.

Referencing both state rules over civil procedure and the ambiguity of whether the bid constituted a sale, the Court of Appeals on Monday reversed that decision and remanded the case back to the district court for a potential jury trial.

“Because the term ‘sale’ in CCV’s note with the Port Authority is susceptible to more than one reasonable interpretation, there are factual issues outstanding,” states the decision. “Therefore, we determine that the district court erred by entering judgment as a matter of law in the Trustee’s favor.” Related Articles St. Paul City Council approves $600,000 charge for downtown improvement district

Frogtown Community Center unveils new artificial turf field, playground and outdoor fun

West Side pedestrian bridge mural debuts 6 p.m. Monday

St. Paul City Council debates halting charter school bond requests for six months

St. Paul City Council relaxes housing density restrictions near transit corridors

The decision goes on to say: “Without Jet Park’s offer in evidence, the record is incomplete and discovery is necessary to develop the facts concerning how Jet Park’s offer to purchase the ramp was solicited, submitted, and accepted.”

The 10-page decision was authored by Judge Denise Reilly and also considered by judges John Rodenberg and Michelle Larkin.