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‘People’s Stadium’ deal gets done

Published (5/25/2012)
By Mike Cook
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Rep. Morrie Lanning and Gov. Mark Dayton shake hands at a May 14 bill signing ceremony. Lanning is the House sponsor of the law that provides funding for a new stadium to house the Minnesota Vikings and potentially a pro soccer team. (Photo by Andrew VonBank)In a few years, the Metrodome will likely be replaced by a purple palace.

The dream of Minnesota Vikings’ owners and fans were realized when a funding plan to replace the domed facility received legislative approval, and the autograph of Gov. Mark Dayton.

“This is a great day for Minnesota, a great day for the Vikings’ fans throughout the entire country,” team owner Zygi Wilf said May 14 after Dayton signed a law that will help build a new home for the NFL team.

Team officials say the 30-year-old Metrodome is antiquated and does not provide the needed revenue to remain competitive, nor provide a proper fan experience.

Sponsored by Rep. Morrie Lanning (R-Moorhead) and Sen. Julie Rosen (R-Fairmont), the law calls for a $975 million, 65,000-seat roofed state-owned “People’s Stadium” to be built primarily on the Metrodome site on the eastern edge of downtown Minneapolis. The team will cover $477 million of construction costs; the state $348 million; and Minneapolis $150 million. The team could make the roof retractable at its expense, an idea that Wilf is strongly considering.

Although signed off on by the state, the project still needs final approval from the Minneapolis City Council. That vote is expected to occur May 25.

“This facility is not just for a professional football team; it’s for the whole state of Minnesota for all kinds of events and activities that we’ve had the benefit of with the Metrodome,” Lanning said.

The plan is to break ground next year, with the Vikings playing in the new facility in 2016. As currently envisioned, the team will play in the Metrodome through the 2014 season and then at the University of Minnesota’s TCF Bank Stadium for a season, while the current stadium is razed and the new facility completed.

The team contribution is $50 million higher than Vikings’ officials consistently said the team was willing to contribute; however, it is $55 million less than the contribution request passed by the House.

“We’ve agreed to contribute up front $477 million, which remains the third-largest private contribution in NFL history. We’ve agreed to contribute $13 million annually in operating costs, which is now 54 percent of the life-cycle costs of the project,” Lester Bagley, the team’s vice president of public affairs and stadium development said in announcing the team’s approval of the deal May 10. “The Wilfs have stepped up and made a huge commitment to Minnesota and a huge commitment to Minnesota Viking fans. They’ve made a commitment to secure this franchise and to stabilize this franchise for the future generations in Minnesota.”

“We’re very, very pleased that the Minnesota Vikings and State of Minnesota have come to an agreement. We look forward to a long lifetime association,” Lanning responded.

Not everyone was as excited.

“This will be a disservice to the state for many years to come,” Rep. Tina Liebling (DFL-Rochester) said a couple of hours later on the House floor. “I think the state got rolled.”

State-issued bonds for the project will be funded from expanded electronic pull tabs and bingo. Sports-themed tipboards will be legalized; however, they are not tied to the law’s financial structure. Instead, the lawful gambling organizations will be allowed to keep all the revenue from those games for lawful purposes and charitable contributions.

Vikings stadium supporters and opponents stand side-by-side outside the House Chamber May 7. The House passed its version of the stadium bill that day. The final bill was passed three days later. (Photo by Paul Battaglia) Supporters note that charities would get tax relief and more gambling proceeds under the law, while the state also would get more revenue. Minneapolis would kick in its $150 million by extending until 2047 and redirecting sales taxes used to pay off construction bonds for the city’s convention center to the stadium once the convention center bonds are paid off in 2020. The sales tax money comes from hospitality taxes collected from hotels, bars and restaurants.

It is anticipated that the state would get $58 million per year in expanded gambling revenues. The charities would get $14 million, although it is not as much tax relief as they sought.

In case the gambling revenue does not cover the state share, the bill contains two blink-on taxes: a sports-themed lottery game that is expected to produce at least $2.1 million per year and a 10 percent admission tax on luxury seats that is estimated to bring in $1 million annually.

Nonetheless, some members voting against the plan did so because they oppose any increase in gambling. Others said the state is overestimating how much money the expanded gambling will raise.

A supporter of user-funded financing, Rep. Glenn Gruenhagen (R-Glencoe) said increased gambling is a regressive tax, especially on lower-income people. “We’re robbing the poor to subsidize the rich.”

Among arguments expressed by opponents is that the state should not be spending hundreds of millions of dollars to build a stadium for a billionaire, the team is not going to move if a deal were not completed this year and that the state has more important issues.

“If we’re going to raise money or taxes of any sort, why doesn’t it go to education or health care or the other things that have been cut or that we owe money to,” Rep. Mindy Greiling (DFL-Roseville) said during the initial House passage of the bill. “I don’t understand the priority tonight of voting for a stadium that a lot of people will not even be able to afford tickets to go to.”

Supporters countered that the facility would be home to just 10 Vikings’ games a year, and possibly one or two in the postseason, leaving the other 350 or so days available for other events, including high school and amateur sports, and community festivals. They also spoke about the estimated 13,000 construction jobs — approximately 4 million hours — that will be needed to build the facility.

As the sun rises on the Capitol May 10, superfan Larry Spooner is asleep on the ground at the back of the van that had been the headquarters for fans from the “Vikings World Order.” Spooner has advocated for a new stadium for more than a decade. (Photo by Paul Battaglia) “It’s a fantastic opportunity in this down time for us to put a bunch of tradespeople to work,” said Rep. Denny McNamara (R-Hastings). “Our trades are suffering; they need the work. We can build this building at a reasonable price today. It’s the right thing to do.”

In the days before the legislation was debated by the House and Senate, lawmakers were flooded with phone calls and e-mails from supporters. Hundreds of purple-clad fans also showed up at the Capitol to show their support.

“The passion of the fans carried us over the top,” Wilf said.

A portion of the city sales tax money would also be reallocated to potentially rehabilitate the Target Center in Minneapolis. Lanning said that without that provision, the city would not support the stadium deal. To help on its side of the Mississippi River, the City of St. Paul will receive $2.7 million for 20 years beginning in Fiscal Year 2014 “for the operating or capital costs of new or existing sports facilities.” City officials first plan to pay off the estimated $35.5 million in outstanding bonds for the RiverCentre debt, and not on a new ballpark for the St. Paul Saints.

For fans of the European football — or soccer, as it’s known on this side of the Atlantic Ocean — the law gives the Vikings an exclusive five-year agreement to bring in a professional team, a provision previously eliminated by the Senate. However, any such team will have to pay rent, unlike an earlier version of the legislation.

Other parts of the law include:

• a newly created Minnesota Sports Facilities Authority will oversee stadium operations;

• a 30-year lease for the Vikings;

• the team gets stadium naming-rights revenue;

• requiring the team to contribute 25 percent of a sale price to pay down remaining debt service if the team is sold within the first 10 years, declining to 15 percent in years 11-15 and 10 percent for years 16-20;

• the stadium must be operated in a first-class manner “consistent with other comparable” National Football League stadiums;

• construction cost overruns are the responsibility of the builder, and operating cost overruns would be the responsibility of a newly formed public stadium authority;

• materials and supplies used to build the facility will be exempt from sales taxes;

• requiring the stadium authority “to contract with an employment assistance firm, preferably minority-owned, or owned by a disabled individual or a woman, to create an employment program to recruit, hire, and retain minorities for the stadium facility”; and

• requiring the Human Services Department to report annually to the Legislature, beginning in February 2014, “on the percentage of gambling revenues that come from gamblers identified as problem gamblers.”

“We promise you that we will work together to build a first-class facility, one that we can all be proud of for generations to come,” Team President Mark Wilf said at the bill signing ceremony.

HF2958*/ SF2469/CH299

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