State’s infrastructure debate includes Target Center and the X, too

What’s the difference among (a) old soldiers (b) Jesse Ventura (c) suntans and (d) Target Center finances?

Aw, go ahead, guess.

Answer: Target Center finances uniquely never fade away.

Problems with the downtown Minneapolis arena stick to us like a low-grade skin rash and you-know-what to the bottom of our sneakers.

It was with wonderment and a neck tick that I sat through Monday afternoon yet another Target Center finance hearing at yet another Legislative session at our still-beautiful Capitol.

Even before they threw out the first official gavel today, there was a hearing of the Senate Economic Development Budget Division in Room 107, a space where so many previous Target Center (and other stadium and arena) proposals have gone to be sold, bought or, in many cases, to die.

There will be lots of talk about “infrastructure” at the Legislature this session. Mostly, it’s about bridges falling down and roads falling apart. It’s even about sewage pipes needing repairs and zoos upgrades, as the city of Duluth sought Monday . . . before Minneapolis city officials took to the witness table and chatted up their Target Center proposal.

Minneapolis City Council President Barb Johnson and City Finance Officer Pat Born explained to the committee, chaired by Sen. David Tomassoni, DFL-Chisholm, that the city owes $62 million on its Target Center mortgage.

The city wants the state to pay off that mortgage.

OK, calm down.

Arenas serve true public purpose
Like it or not, arenas and stadiums are public infrastructure, too. We can argue about how they should be paid for and supported. But once they’re up and functioning, they become assets . . . and liabilities. Maintenance and remaining state-of-the-art are important.

Throw convention centers in that basket of public assembly facilities that are also “public infrastructure,” gathering places for citizens and tourists alike that make cities and states vibrant and livable places. (Do not utter the words “economic impact” in my presence.)

What we have with Target Center is, in many ways, a building on the edge. Without too much ancient history, Marv Wolfenson and Harvey Ratner, North Minneapolis up-from-bootstrap entrepreneurs and Timberwolves owners, privately planned and built Target Center in the late 1980s. Various public officials then urged “Marv-and-Harv” to seek public financial assistance. After all, these arenas cost a bundle, and most cities subsidize them. And this was a big bite out of Marv-and-Harv’s apple.

Proudly, Marv-and-Harv said no. “We can make it on our own,” they chortled.

The Marv-and-Harv team changes its mind
They were seriously wrong. And five years later, they, along with a gaggle of lobbyists, were at the Capitol – probably in this very same Room 107 — seeking a handout. One bad thing turned to another, and, before it was over, the city of Minneapolis – alone – stepped up to the proverbial plate and saved Target Center. Parking fees, an entertainment tax and direct subsidies from the city’s dwindling coffers have been paying down the arena’s debt and funding operations ever since. Oh, the state has kicked in $750,000 annually as part of a deal to bring some low-margin events into the building.

But a couple of not-so-funny things happened between the early 1990s and today.

First of all, arena construction and amenities changed. High-end seats, so-called “club seats” that generate millions of dollars in revenues for teams and buildings, have been invented.  Target Center had none. Wide concourses have been developed to better sell hot dogs, popcorn, sushi and, for all we know, fois gras to hungry basketball fans. Target Center’s concourses have the charm of a bus terminal in Syracuse.

Then, of course, something even more dramatic occurred in 2000. The NHL returned to town, a new arena – Xcel Energy Center – was built in St. Paul and the state kicked in $65 million for that edifice. Never in the history of American sports has one market this size had two major-league arenas 10 miles apart competing for the same concerts, family shows and luxury suite sales.

“The competition has been harsh on Target Center,” said Council President Johnson.

And, so, there I sat in our Capitol and heard the city of Minneapolis ask for $62 million. If the state delivers, rather than pay down $6 million in debt per year, the city could use its own money to improve the facility – a roof, new concessions areas, various upgrades . . . who knows what else?

As Born said, in many places, a 17-year-old NBA arena is “subject to being replaced and renewed . . . No longer can Minneapolis itself support the needs of the building . . . It needs wider support.”

As has been written here and elsewhere, most revenues generated by sports and entertainment facilities accrue to the state as sales and income taxes.

But that’s neither here nor there in an environment of state budget deficits and falling bridges. What’s clear is that as the Legislature moves forward this session, Target Center’s future has to be examined. The state has a role.

As Born so sweetly put it, Target Center had become “a bit of a dowager.”

Wait, that’s not the end of this infrastructure heads-up.

St. Paul to seek help, too
This morning, St. Paul’s chief lobbyist Wendy Underwood told MinnPost that the city of St. Paul will also be seeking legislative aid for both Xcel Energy Center and the RiverCentre convention center.

In the next week or so, the city of St. Paul – that marvelous city where I live and gladly pay my property taxes – will be seeking forgiveness of about $41 million from the original state loan for Xcel Energy Center. That came straight out of the general fund.

Thus, the city simply wants that erased, as if a lesson on a chalk board. Poof.

Also, on the convention center front, the city wants the state bonding bill to help pay down $43 million in RiverCentre debt.

These big honking buildings are expensive pieces of infrastructure. Their needs don’t fade way. 

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Comments (3)

  1. Submitted by John Olson on 02/12/2008 - 05:13 pm.

    I’m with Jeff on this one up to the point of forcing a merger of the two together. If it makes business sense to do that, fine, be my guest. But don’t force it on them.

    With that said, both cities took on a part of the fiduciary responsibility for these facilities when they went ahead with these two projects. If they can get the Legislature to essentially pay off their mortgages in one fell swoop, why can’t they do the same for me or my neighbors?

    The math is overly simplified here, but it comes down to this: declining tax revenues, higher property taxes, a sour economy (if not an outright recession), skyrocketing foreclosures, crumbling roads and bridges, school districts that want more money….and so on.

    Now is not the time for those of us supporting a floundering economy to be asked–or forced–to pay for one or both facilities when there are two others being built for the U of M and the Twins with the Vikings on deck.

    It’s not in my budget.

  2. Submitted by Jeff Urbanek on 02/12/2008 - 02:17 pm.

    You talk about the needs of these buildings as if they were human. How about the needs of our schoolchildren? They are increasingly crammed into inadequate facilities, some without air-conditioning. Bridges are falling down. Health care is inadequate. Vouchers and HSAs will NOT solve these problems.

    First things first. You don’t buy season tickets to the opera before you pay the rent or mortgage. You don’t buy a big screen tv if you can’t afford the groceries. Let’s get our priorities straight.

    Maybe the Excel energy center and Target center should look into merging operations. Why suddenly do we need to support individual arenas for basketball, hockey, and football, as well as for college sports? I suppose we will have to soon build A stadium for the Arena football league too.

  3. Submitted by Spadafora Spadafora on 02/13/2008 - 01:07 pm.

    Jay, You wrote… “As has been written here and elsewhere, most revenues generated by sports and entertainment facilities accrue to the state as sales and income taxes.”

    That’s the argument to justify state funding of a new Vikings stadium?

    Why didn’t that argument apply to the Twins stadium?

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