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Funding questions quickly sideline Vikings stadium bill

Rybak, Rosen, Johnson
MinnPost photo by James Nord
Minneapolis Mayor RT Rybak, left, testifies on the Vikings stadium, with Sen. Julie Rosen, middle, and Minneapolis Council President Barbara Johnson.

As planned, the bill proposing a new Vikings stadium in downtown Minneapolis received its first hearing today before the Senate Local Government and Elections Committee.

But then the plan changed.

The measure was supposed to receive an up-or-down vote within a two-hour deadline, but that didn't happen.

As questions arose about funding, the chair, Sen. Ray Vandeveer, accepted a motion to put the bill over for consideration at another time. When would that be? He didn't say.

Sen. Julie Rosen, the proposal's main sponsor, pointed out that the proposed stadium bill met several widely accepted ground rules: that there could be no new taxes, that no money would come from the state's general fund and that the team would pay for a sizable chunk of the project.

Rosen at times was flanked by Ted Mondale, who as head of the Metropolitan Sports Facilities Commission helped negotiate the deal, and Myron Frans, Minnesota’s revenue commissioner.

Mondale noted that the state, after fronting its $398 million share, would actually reap a $140 million return from taxes on players' ginormous salaries and on sales taxes assessed in the stadium. However, assuming the Vikings don't leave town, the state presumably would collect those taxes with or without a new stadium.

Vikings spokesman Lester Bagley made the case for the proposal partly by grousing that the Metrodome is the smallest stadium in the NFL, that the team's revenues are at the bottom, and that the league has been subsidizing the team.

The Vikings' $427 million contribution would be the largest in the NFL, and the annual $8.5 million rent it would be paying would be the highest — all this, he noted, despite the Vikings bringing millions of dollars to the Twin Cities in hotel and restaurant trade that has yielded some $200 million in taxes.

"We've been patient. It's been 10 years. Let the full Legislature vote," he said in conclusion.

Also appearing among the stadium proponents was a contingent from Minneapolis, Mayor R.T. Rybak, Council President Barbara Johnson and City Attorney Susan Segal.

Senators tried but failed to grapple with the murky financial arrangement that would divert money from an extension of a sales tax to contribute $150 million to the stadium project — and pay off debt on the convention center.

It's hard to blame them for having a hard time understanding possibly the almost unintelligible section of the bill.

Tom Goldstein, a private citizen from St. Paul, testified in opposition, claiming that the Vikings were ripping off the public because the bill gives the Vikings naming rights for the stadium, parking fees, hefty fees for boxes and suites and TV revenues, pretty much nullifying their contribution.

"The state would pay all the expenses, and the Vikings would get all the profits," he said.

 If the business community wanted the stadium so badly, he suggested, let them contribute. "If they contributed, that would be like a tax," countered Sen. Rosen.

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But, of course, under the plan, funding for the stadium would come from taxes — on new charitable gambling via electronic pull-tabs and bingo.

Two men speaking in opposition, complained that video gambling is "more addictive than crack."  In effect, the state would be encouraging people to gamble just to raise money for the stadium.

The sufficiency of the funding, rather than its source, seemed more important to legislators.

Sen. Benjamin Kruse asked what would happen if revenues weren't enough to meet the state's bond payments. "Money would have to come out of the general fund, right?"

Frans insisted that there would be enough, and Rosen told legislators that they should trust the projections but then finally admitted that "we're looking at that." The solution, she said, might be some sort of backup user fee.

Another issue that bothered a couple of legislators: The bill, instead of creating a special authority to build and operate the stadium, should establish a sports facilities commission that would oversee all of the sports facilities — Xcel Energy Center in St. Paul, Target Field, Target Center, the Metrodome and the new stadium — to coordinate their activities so they don't wind up cannibalizing each other's businesses.

Sen. Roger Reinert proposed an amendment to the bill that would do just that but set it aside after Rosen vowed to work with him to incorporate his idea in the bill.

And that's where it all ended, with no vote and no action. Doubt hung in the air.

"We all still have questions," said one legislator as she departed for another meeting.

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Comments (14)

vikings stadium

This is so easy, any overruns/shortages will be covered by the Vikings. If Wilf can't plan ahead enough to have a place to play he can accept whatever scraps we give him.

Shot in the dark projections

The projections about the uptake of video pulltabs (now expanded to video bingo/pulltabs in the bill) are just hooey. It's an absolutely new product that's never been exposed to the market, right up there with the electric car and New Coke. They're rolling the dice on a $1 billion decision based on "research," while no one is allowed to see the studies or talk to the researchers. The return on gizmo-gambling is all just speculation, especially in light of the market being absolutely saturated with gambling opportunities already.

gambling and pulltabs

My understanding is that the gambling market is just about exhausted--that is, that most of the people who want to gamble are already doing so, and few others are going to be dragged into this voluntary taxation.
I'm sure this will never provide enough money.

first post

Some remarkably clear writing on the issue Ms. Harris.
We need leadership that works for us instead of the Vikings. An alternative news source like the Post is a good start.

Politicians should first

Politicians should first refrain from using schools to finance the state budget. Second they should address the long term structural deficit that looms over our state. While they are working on the structural deficit, our elected officials could also do the meaningful tax reform they've been talking about for they past ten years.

Go Vikings.. ;^)

Plausibility

Sometimes the line between plausibility and absurdity matters. The Vikings package doesn't actually have to work. Once the contracts are signed, It will be too late to turn back, and a real financing package can be put into place. But the financing package we are using to persuade ourselves that a Vikings Stadium will magically shimmer into place without cost to anyone, can't be totally ridiculous. Such a package really needs to be something less than laughable.

Not our problem

Th "league has been subsidizing the team." Sounds like a business problem that the business needs to solve. If every business got a subsidy every time they had a department that wasn't pulling its own weight, we'd be surrounded by failed businesses and empty pockets. Of course, it does happen--see the bank bailout--but I would hope we learned our lesson.

Also, thank you Sen. Kruse, for asking an important question in front of your colleagues.

Public funding is a bad idea but...

If this were anything other than welfare programs for the Ziggy, someone would have already suggested implementing the pull tabs first and running it for a year to see how much money actually comes in. That way you would know for sure how much money your going to get instead of gambling that it will be enough. Stadium deals as products of a corrupted political system are inherently irrational, so not only are they bad idea, they're bad ideas within bad ideas.

Vikings Stadium

Another clear story Ms. Harris...kudos to you!

Let's revisit Minnesota’s Native American gaming community and learn if they still want an equity stake in the stadium and be done with it. There are far bigger issues Minnesota politicians should decide than which portion of the general public will pay for a sports stadium where corporate big shots are the only people who can afford the best seats.

This is a gem: "If the

This is a gem: "If the business community wanted the stadium so badly, he suggested, let them contribute. "If they contributed, that would be like a tax," countered Sen. Rosen."

A tax! How awful! And on Job-creators no less! Businesses are smart-- why pay for something you want, when you can just have it handed to you in the name of "civic pride"? The biggest short-coming that dome-haters like to trot out is lack of luxury suites-- which of course are mostly filled by businesses, who get to write off the expense as a necessary part of doing business. So basically Sen. Rosen wants to ensure they keep their tax break, and wants to do it on the backs of gamblers and by extending Minneapolis taxes (which somehow is not as bad as creating a new tax).

If it wasn't for the fact that we're probably going to be taken to the cleaners by Mr Wilf and co. in the next year or two, this would be terribly funny...

NFL Subsidies?

So in what way does the NFL subsidize the Vikings? Do they mean the 120 million each team receives from the TV package? Have the Vikings and the NFL open up their books and prove their case.

So in what way does the NFL

So in what way does the NFL subsidize the Vikings?

As a low revenue team, the Vikings are a net winner when they play higher income teams. Increasingly, those high income teams who have made huge investments in stadiums, are resentful of the disparity which is going to get worse over time. Essentially, the feel the Vikings aren't pulling their load. What can happen down the road is that the Vikings share of overall NFL revenues will be reduced, and that would pretty much force the team to move.

"Do they mean the 120 million each team receives from the TV package?"

Mainly, yes. As I understand it, the teams now share the revenue equally. But if the Vikings don't bring in their share of revenue themselves, the possibility exists that their share of TV revenues will be reduced.

forward this

I wonder if the gung-ho legislators, governor, and city mayors read this. Maybe someone should forward it to them.
Oh, wait, I'll bet that's not possible, given the website restrictions. Maybe print out copies and mail them to all key players.

impact

I doubt if many legislators read the comments section. I suspect hardly anyone does. I never assume anyone read anything I write. As much as anything, I write comments as a way of organizing my own thoughts, and to some extent toss out idea for public scrutiny.