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How much could a Vikings stadium cut Minneapolis property taxes?

When it comes to a new Vikings stadium in Minneapolis, one of Mayor R.T. Rybak’s big selling points is property tax relief. The gist: Target Center’s subsidy — which now comes in part from the property taxes — would shift to Convention Center sales taxes that would also fund Wilf Field.

Last week, an unimpressed City Council heard Rybak tout his plan, but without specific numbers. Wednesday, Council Member Lisa Goodman received a one-sheet prepared by the consultant with Rybak, Mark Kaplan of 35W Financial. Although it is full of hedges and caveats, Kaplan says a first look turns up $191 million in property tax relief over the 30-year-life of the Vikings stadium — roughly $5 million annually in present value.

That’s not chump change; the city took in around $168 million in property taxes in 2011, and $5 million would work out to about a 3 percent annual spiff.

But the caveats are important. Kaplan prepared his work for the Sports Facilities Commission; Chuck Lutz, deputy director of Minneapolis community development agency CPED, told Goodman, “Please bear in mind that as we get additional financial data from Finance and the Convention Center, the numbers in the overall model, which include potential property tax savings, continue to change.”

One way the model touches $191 million: Kaplan assumes Target Center still exists in 2041, when the unloved building would be 51 years old. Of course, Rybak is touting a $155 million update that would move the Timberwolves to extend their lease past the current 2025 expiration date. For now, owner Glen Taylor hasn’t committed to a specific time frame.

It’s also important to note that following a 2009 law change, the sales tax is a remarkably flexible financial instrument the city can tap for “residential, cultural, commercial, and economic development in both downtown Minneapolis and the Minneapolis neighborhoods” once Convention Center needs are paid for.

Are Minneapolis finances best served by tying that tax up for the next 30 years in sports stadia — or is there “economic development” that could produce more jobs, more tax base, and ultimately more property tax relief? That’s one question Council Members, and citizens, should be asking.

Comments (7)

  1. Submitted by Tony Wagner on 12/15/2011 - 01:52 pm.

    So with the Convention Center taxes going to Target Center, what pays for the Convention Center operation, maintenance, and repairs?

    And what does the new Vikings stadium have to do with any of this? Couldn’t the Convention Center taxes fund even more property tax relief if a Vikings stadium wasn’t built? Or for that matter, if Target Center wasn’t upgraded?

  2. Submitted by Rachel Kahler on 12/15/2011 - 05:31 pm.

    I think the title of this article is like the question the “wise owl” attempts to answer regarding the number of licks it takes to get to the Tootsie Roll center of a Tootsie Pop. We’ll never know because it’ll never happen.

  3. Submitted by Anne Mitchell on 12/16/2011 - 05:26 am.

    Why tax everyone? Just like the Twins stadium where is the elimination of the tax on that? 3 words aint gonna happen. You tax us to death here and then stand around and scratch your heads act like children in session for a people who allegedly want to represent us you are not doing a very good job at all. You need to get your heads out of the sand and let the private entities figure out where the money is coming from that is their business. Your business is to make a climate favorable to grow businesses and let people flourish, got news for you, you are all failures!!!

  4. Submitted by Anne Mitchell on 12/16/2011 - 05:34 am.

    I have a question when anyone goes on public assistance for getting heat or any other kind of financial aid they have to prove just how destitute they are and the state has to take your last buck before they can help you, how come the Vikings owner can own $19,000,000.00 properties and Dayton is going it is his money. But yet wants us to foot the majority of the stadium? Maybe after being flat out lied too about the Twins Field that the tax is only a temp tax. Well here in MN the temp taxes are never ended. I don’t think you politicians are truly capable of anything you promise. We are providing welfare for a multi million dollar corporation and the Ford Plant closes which provides employment for thousands but you want to choke everyone for the precious vikings which hold the record for being number 1 in the league for the most arrests and violence. All the NFL does is get wanna b gang members off the street and on the field. I am not impressed by the handling of any of the sports facilities in Hennepinn County.

  5. Submitted by Paul Udstrand on 12/16/2011 - 08:24 am.

    If you want to shift the tax burden off of home owners this way you need to build a stadium to do it. At any rate, this is clearly a shell game that will probably not work out as expected. The arena was supposed to be a cash cow for the city and it turned into a $2 million a year liability.

  6. Submitted by David Brauer on 12/17/2011 - 12:15 pm.

    Tony – The Convention Center tax may be big enough to fulfill several needs, though Rybak has all but admitted maintenance and marketing will take a hit if funds are diverted to a Vikings stadium (and secondarily, Target Center).

    You are hitting on a key point I’m investigating: can the city get property tax relief and even an improved Target Center WITHOUT the stadium?

    Paul – some of us were saying Target Center would not be a cash cow from the beginning. 😉 It is a classic case of a local entity overpaying for benefits that are far more generalized (i.e., sales/income taxes more realized by the state).

  7. Submitted by Howard Miller on 12/24/2011 - 02:11 pm.

    I trust the reporting, but I don’t believe the numbers that political and Viking leaders are dishing up to the public through reporters. I don’t believe for a second that putting the Vikings in Minneapolis in a brand new stadium will some how fatten the public purse. If there was such a fine rate of return building stadiums for pro sports teams, the private sector types wouldn’t offer the public the “opportunity” to kick in more money. If football team owners had to pay for their own facilities, maybe they wouldn’t pay mediocre players millions a year to lose badly, and reward themselves with profits even in terrible performance years.

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