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‘Uncommitted’ Council Member John Quincy sees lot to like in comprehensive stadium plan

Council Member John QuincyCouncil Member
John Quincy

He’s on some lists as a possible “yes” vote for the stadium because he hasn’t yet publicly said “no.” And he has some interesting ideas about the possibility of a referendum.

Minneapolis City Council Member John Quincy represents Ward 11, on the middle of the city’s southern border.

The first-termer, who chairs the Rules Committee, is another in our series of interviews on council members’ views about the city’s proposed Vikings stadium plan.

MinnPost: Basically, what do you think about the stadium proposal?

John Quincy: Which stadium proposal? The city’s funding of it? The financing package? The overall proposal?

That’s the interesting thing, and I think it’s reflecting a lot on what’s happening at the Minneapolis City Council level. We don’t know what the proposal is. There’s nothing for us to vote on, so we’re really waiting for a complete package that we can understand and evaluate, and that’s going to come from the Legislature.

But we’re all hearing, of course, here’s the Minneapolis financing package as presented by the Mayor [R.T. Rybak] and Council President [Barbara] Johnson, and we aren’t really parties to those conversations.

I think a lot of people are still open to hearing more and having specific issues raised and answered.  But it’s hard to get answers to questions that haven’t been asked.

We’re kind of busy doing the rest of the city’s business. If you think about it, we’ve only had two presentations to the Committee of the Whole where we’ve had an opportunity to talk about something.

We’ve only had individual briefings with a couple of folks involved. Chuck Lutz, who is on the Metropolitan Sports Facilities Commission and is interim director of the city’s Community Planning and Economic Development Department, so we’ve had an opportunity to meet with them directly and Mark Kaplan, a consultant. But those are individual meetings.  They’re not part of a greater conversation.

We’ve seen spreadsheets, and they have caused questions, and those come back to us individually, but they’re not coming back in the form of another meeting. We haven’t even talked about it amongst ourselves. At least I haven’t.

MP: Some of your colleagues have said they have philosophical objections to the public funding of sports facilities. Is that part of your thinking?

JQ: It was originally. I came into this job, and previous to that, saying philosophically I’m opposed to the public financing of stadiums.

What that really means is, not using public funds to build stadiums. What that really means is being opposed to providing subsidies to private companies. I think philosophically that makes sense to a lot of people here.

The Vikings are privately owned, and it’s for their benefit and their need, and they would be the beneficiary of a new facility. Why do we have to — we being the overall state, not just the City of Minneapolis — why do we have to help pay for that?

That’s the philosophical hang-up I had when I started thinking about it, but it’s something I turned over when I looked at the larger picture.

I looked at every other NFL sports team that I’ve heard of, and there was always some sort of public financing involved in the stadium. Which leads us, I think, to the next level of thinking.

If public financing is part of any package, why would that public funding benefit the City of Minneapolis? That’s when you start saying, “Oh well, there’s a reason we would do that, a reason we should do that.”

Those are all things that are the next level. Once you get over the absolute hurdle of never-a-dime kind of rule, then you say, “What’s in this for us? How do we become the beneficiary?”

MP: So what’s in it for us?

JQ: I think we have to recognize it’s a jobs plan, and is it appropriate for public financing for a jobs plan?  I would say yes. Especially in this economic climate. It’s called a stimulus, and that seems appropriate even if these are short-term construction-only jobs.

Then you have to say, once that’s built, do we have an opportunity for more job creation or retention? Sustainability is one of our city goals, and does this help us meet our city goals? And is there economic vitality? That’s one of our city goals. Jobs and economic vitality.

We’re talking about all the restaurants, the hotels, all those ancillary businesses that benefit, retail in the downtown area and the city as a whole and the state as a whole. We have to think of our place as an economic engine for the state and then it makes sense that there is a local partnership.

MP: Some of your colleagues say they will not support a stadium proposal unless there is a referendum. Even among those who think referendums are not the best form of government.  Where are you on that issue?

JQ: I don’t know if a referendum is actually necessary legally. The question is not the philosophical need to have everybody go out and buy into it on a majority basis citywide, because I think it’s the job of people who are elected to make those kinds of decisions.

But we have said in the Charter that we’re supposed to have a referendum on a professional sports facility costing in excess of $10 million.

The city makes decisions all the time on subsidy investments, the Guthrie Theater, MacPhail, the Walker. We do that all the time. This is our job. The confusion for me is that I don’t see Minneapolis public funds going into this financing package.

It’s an existing hospitality tax that’s state-imposed. So we’re not spending Minneapolis money.

Legally, is that true? I don’t know. That’s just a personal rationalization. That’s one of the things that we’re still exploring.

A state sales tax is a state sales tax. What we get out of that state sales tax, does that meet the $10 million threshold? I don’t know.

These taxes are specifically allocated to the Convention Center.  So what we’re really asking the state to do in the mayor’s proposal is to re-allocate those from just the Convention Center to this local partnership (the Convention Center, Target Center and the Vikings Stadium).

So if we’re just asking for a diversion of an existing state sales tax, how does that meet the threshold of a city public financing limit that has to be maintained in the Charter?

MP: Have you consulted an attorney about this?

JQ: No. If you get lawyers involved, you can appear to be sneaky. We’re not trying to get around public opinion on this. That’s why the mayor says the referendum on this is re-electing him.

I think a lot of voters in Minneapolis, and this is pure conjecture, and they elected us to make decisions. That’s the job they elected us to do. Voting on every topic by referendum is how California does it, and that’s not a good policy.

Aren’t you going to ask me what my position is on the stadium proposal?

MP: You said you didn’t have anything to vote on.  So what is your position on the stadium proposal?

JQ: “I’m supportive of the mayor’s position only because it addresses the reduction of property taxes, and it builds on the logical site and the job creation. It is the people’s stadium.

There are lots of other financing packages, but then we get back to the Legislature. We could be doing a statewide sales tax increase. We could be focused on memorabilia and liquor taxes statewide. We could force it all on the Vikings ownership. We could do all kinds of things that don’t split it up three ways with a local partnership requirement.

MP: How important is moving the Target Center off the city budget and paying for it with money from the hospitality tax?

JQ: It is absolutely fundamental and important to me. It came up a lot when I was out talking to the caucuses.

The Target Center is a city-owned asset. We have an obligation to maintain, improve and make it the destination it is. That being the case, it is also out biggest source of debt in one building.

The Target Center debt has been a drag on our property tax base to the tune of $5 million a year.  If the Target Center is part of the package -- and it would have to be to make it worthwhile from my perspective -- it relieves us of a $5 million-a-year debt.

That frees up capital for other purposes and provides property tax relief, so suddenly it starts to make sense. So now we have job creation, job retention and growth, economic vitality, reduced debt and property tax relief.

Now we’re always going to be arguing about the amounts and what happens if it doesn’t come into the numbers that have been proposed. And are we on the hook if it doesn’t pan out like it projected?  Are the base assumptions accurate?

MP: But you don’t want to create another Target Center problem for Minneapolis?

JQ: Target Center is an inherited problem. I’ve got to believe that when that decision was made, the City Council at the time did it with the best of intentions.

There’s a risk with every big decision, and that’s where we get to the next level. As an elected official, we’re really charged with making good decisions but not always decisions on the short term.

We have to have a long-term vision. I think that’s what makes everybody nervous about doing this.

Politically, I don’t think my colleagues on the council, certainly not me, think of it in terms of how is it affecting me. Is it going to change my career? I think we’re really much more concerned about what it’s going to do for future generations.

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Comments (9)

Give credit for thinking it through

Good for Quincy for recognizing the complexities. This is a tough, multidimensional problem. A stadium would be good, but not under just any circumstances. Public subsidies to private businesses are bad, but not under all circumstances. Sometimes the public spends money that creates more economic activity, but not necessarily bringing the money directly to government coffers.

The one thing that drives me nuts is using the phrase "people's stadium" without explaining it, as if the meaning is obvious. The Dome is a busy place even without the Vikings, between college baseball, high school tournaments, rollerdome, and roughly 300 days of events. It's not just 10 Vikings games and otherwise it's dark, yet that's what many people think is going on. The Vikings bring in the money to pay for it, but there are a lot of public uses, which justifies the public paying part of the cost. I don't see why the new stadium wouldn't have as many public uses, and the proposed plaza would be a public park and event site itself. Why aren't stadium proponents, like the mayor and governor, explaining this?

300 days of events

In the Metrodome. That's good. The bigger question is whether there will be 300 days of events that can't be held at the Metrodome, Target Center, Convention Center, Excel Energy Center, or the multitude of other, smaller venues? We already have a "people's stadium." Several, in fact. Justifying as a "people's stadium" is like buying your spouse something they don't need because YOU want it. It's a selfish waste of money.

The dome wouldn't be there

Remember this stadium would replace the dome, so including the dome in your list doesn't make sense. So yes, there are 300 days of events that can't be held at those other venues, and they're mostly public organizations.

Jobs plan?

The other thing that needs explaining is calling the new stadium a "jobs plan". Building a new stadium preserves some very part-time jobs (game-day employees) and the Vikings administration jobs. It creates the temporary construction jobs. If the public investment is around $700 billion, I don't think your primary rationale should be jobs. It seems that $700 billion invested in a lot of other ways would create more, well-paying, permanent jobs.

Doesn't someone, somewhere have a reasonable analysis of what the long term economic impact of a new stadium is for the host community/region? Also, how does the Vikings plan compare to other recently constructed stadia in terms of public vs. private money?

My admittedly gut reaction is that we would be paying $200-400 billion over the actual economic benefit, essentially for "quality-of-life" benefits. If that is true, then no thanks. I don't have the expertise to do a proper analysis, but it sure would be helpful if someone would do it. If the benefits are actually larger than I think they are, stadium supporters would have a great argument that is currently lacking.

Stadium annalysis

You decide how "reasonable" it is of course by I did just such an analysis last year, It can be found on my blog: http://pudstrand.fatcow.com/blog/?m=201104

Basically I conclude that once these stadium subsidies get into the hundreds of millions of dollar range they are almost impossible to justify economically. In fact, one can begin to argue that they're actually doing damage at this point. This deal would deliver the largest public subsidy in MN history to an NFL franchise.

Again with the jobs?

This guy gets my vote for most confused council person yet.

More on jobs

Maybe some basic information might helpful.

The way economists get their heads around construction jobs is by calculating FTEs or full time equivalents. You look at the total length of time it took to build the projects and calculate the number of hours. Then you divide the total number of hours by 40 and arrive a figure for the number of full time job equivalents you created. When you do this with stadiums comparable to the proposed Vikings stadium you come up with around 800.

Economists generally recommend spending no more than around $40,000 per FTE in terms of economic stimulus, the Vikings stadium proposal spends almost a million dollars per FTE. Why $40,000? Once you start spending more than $40,000 per FTE it indicates that you're losing your multiplier effect. High cost per FTE ratios tell you that instead of creating long term jobs, your creating many short term jobs, and that doesn't stimulate the economy. People don't go out and spend if they know their job is short term and temporary. The longer term the employment, the more like people are to spend, buy new cars, tv's, go bowling etc.

All construction jobs are temporary and stadium construction jobs aren't inherently better than construction jobs building something else. In terms of public spending on construction jobs you have to consider the utility of the final project. In this case the result is not public infrastructure of any kind, it's stadium for a privately own sports franchise. Infrastructure jobs give you a better FTE ratio because infrastructure never ends, there always more to build, re-build, and repair. You can only build so many stadiums. If you put an additional $40 million a year into infrastructure, you'd create more long term work and produce more stimulus than you do with stadiums. There's no shortage of infrastructure projects on the books in MN, it's not like we ran out of work have nothing better to do than build stadiums.

Sell the Target centre

If we are having to pay five million a year for the Target center, we do not need to restructure the debt, we need to find a buyer and relieve the burden. This is still a democracy let the people speak, what are you afraid of John?

Where is the long-term benefit?

The City of Minneapolis has a poor record of planning for the future: the fire and police pensions, the Convention Center, Target Center, Block E, and the list goes on. Diversion of tax money from any source to a private venture requires better analysis and better negotiating than this stadium deal produced largely by rural Republicans and legislators who do not live in Minneapolis. What is the tax-expenditure cost of no real estate taxes for 30 years on a billion dollar stadium? How will the City and the State enforce their lease terms if the owner of the team decides to file Chapter 11 in the future? Do we remember all those jobs promised by Northwest Airlines?

If the City needs to spend tax money, it should go to transportation, education, or to industry that will stay here for the long haul. (Remember how the Metrodome was going to insure that the Vikings stayed here?) The truth is that manufacturing jobs have a long-term value far in excess of the permanent jobs associated with a sports facility, if the City wants to subsidize private business.

The stadium decision was a political decision driven by political, rather than economic, calculations. The politicians come and the politicians go, but the public that lives and works and spends money in Minneapolis gets to pay the price, whether through property taxes, income taxes, sales taxes, fees, and even (for Minneapolis, Saint Paul, and Duluth) through their home fire and casualty insurance.