Tim Leiweke means business. And, make no mistake, he’s big in the biz … from conceiving and building a $2.5 billion entertainment complex in downtown Los Angeles to constructing and managing arenas in Berlin, London and Beijing, to operating the NHL’s Los Angeles Kings to luring soccer icon David Beckham to the United States.
The guy has a tendency to get his way.
So, Minneapolis residents and, perhaps, Hennepin County and state lawmakers, pay attention. You St. Paul folks, who have your own arena to worry about, listen up.
Leiweke, the energetic CEO and president of AEG, the nation’s most powerful facilities management firm, breezed into Minneapolis Tuesday and jump-started an effort to renovate 18-year-old and tired Target Center.
AEG has been managing Target Center for the past 18 months after a series of arena managers — including the Timberwolves themselves — struggled to make it work financially. AEG was hired by the city of Minneapolis, which owns the building, to devise ways to make the building more competitive with St. Paul’s newer and more modern Xcel Energy Center.
Leiweke, 51, met with Finance Director Patrick Born, Mayor R.T. Rybak and Timberwolves execs. He declared that he has a vision to refurbish the Target Center and to turn the deficit-laden building into a profitable enterprise.
“Somewhere between zero and $100 million,” Leiweke said, adding, “It’s a fraction of what a new arena would cost.”
“Tim is certainly one of the most positive people, next to R.T. Rybak, on the planet,” said Born, who oversees the arena’s finances for the city. “Tim is a very can-do person.”
He’s going to have to be off the charts on this initiative, in this economy, in this state in which stadium and arena wars are never ending and never pleasant.
Exactly how Leiweke plans to spiff up Target Center and pay for said spiff is unclear, although renovating the worn concourses is a must, and so is upgrading its inefficient concessions stands. Changing the ambiance in the common areas could boost food and beverage sales and the operation’s bottom line.
Maybe, as at Xcel and other more modern sports venues, the concourses can be redesigned to open up so customers can see the game while they’re buying a hot dog. That could get expensive.
Surely, the outside of the arena needs a makeover. As it faces the new Twins ballpark to the north, lucrative ad signage on the arena could generate new revenue.
There has been talk of a new green roof for the facility to reduce energy costs.
There’s some readjusted tax increment financing money from projects citywide that the Legislature approved earlier this year; that will help to pay down Target Center debt and could free up some other city funds for arena capital improvements.
“AEG was hired by us to help rebrand the building, refresh the building and give us specific ideas,” said Born. “What Tim is doing is exactly what we want him to do. But we don’t yet have the means to match whatever vision Tim and his folks are going to give us.”
Seven years ago, a $30 million renovation was recommended by former Target Center executive director Dana Warg. In today’s dollars, that looks more like $40 million.
Already, the city of Minneapolis has put in $14 million over the past five years or so, replacing seats, installing a new scoreboard and improving the lighting and sound system.
The city asked AEG to produce a plan that will make the building competitive for another 20 years, Born said.
To do that, “I don’t know if it’s $30 million or $50 million or some other number,” Born said, adding, “It’s hard to imagine that the city itself will be able to come up with that much revenue from the building or somewhere else.”
So, what’s that leave?
AEG, the Wolves and “other governmental partners,” Born said. Hennepin County? It’s got its hands full with the new Twins ballpark. The Legislature? That body is awaiting a Vikings plan in 2009 and beyond with a $1 billion to $2 billion deficit sure to be dangling around its neck.
But Leiweke warned: “One thing this city can’t do is do this piecemeal. Do the acoustics, do a green roof, do this, do that. The problem with that is you spend more money on piecemeal than you do on one project at one time. Let’s do the heavy lifting now and figure out a long-term solution one time that will save a lot of money for taxpayers than short-term solutions.”
Eighteen months ago, AEG became the arena manager. In its deal with the city, AEG, which manages about 50 arenas, stadiums and convention centers worldwide, including its flagship Staples Center in Los Angeles, agreed to invest $2 million in arena renovations by May 2009.
AEG hasn’t tossed in a dime yet, but, through more bookings and efficiencies, it’s reduced the structural deficit trend of Target Center, according to city finance officer Born. The arrangement with AEG is that the first $1.75 million annual shortfall on the arena’s operations is covered by the city. This fiscal year, Born said, that operational deficit is likely to reach only $1.4 million, saving the city some dough. And increased attendance generates increased collection of a 3 percent Minneapolis-only entertainment tax.
Leiweke is figuring out the best use for his conglomerate’s $2 million “skin in the game.”
“The city has a choice here,” Leiweke told MinnPost in an interview Tuesday in a Target Center conference room. “The choice is either you put some amount of money into this building to renovate it and upgrade it. Or you build a new arena. The good news is I think there is a solution here that is a fraction of the cost of a new arena.”
It’s easy to shake one’s head over all this. We just barely survived the decade-long debate over a Twins ballpark, ending with a $522.5 million stadium and an increased Hennepin County sales tax.
We just lived through a shorter debate on a Gophers stadium, ending with a $288.5 million stadium on campus. The Vikings are seeking some way — any way — to get the Legislature’s attention for their new facility, with a cost in that $1 billion range.
Now, Target Center? Again? Didn’t the city just bail it out for $80-plus million after builders and former Timberwolves owners Marv Wolfenson and Harvey Ratner nearly went bankrupt?
Well, no. Time flies, but that was 13 years ago now. In the interim, the shimmering “X” came on line in St. Paul.
Planning for Target Center began more than 20 years ago, a lifetime in sports architecture. Target Center is now among the oldest arenas in the NBA. The NBA expanded into four markets in the late 1980s — Miami, Charlotte, Orlando and the Twin Cities.
Miami and Charlotte have new arenas already and Orlando’s is under construction.
Still, this year Target Center is running neck and neck with Xcel Energy Center on concert ticket sales, according to Pollstar, the national service that tracks such things. In Pollstar’s most recent ticket sales standings, Xcel was the nation’s 19th busiest concert arena and Target was 24th.
Here’s the scary fact: If you combined the ticket sales of the two local arenas and made believe the sales occurred in just one venue, that total would jettison it to the sixth busiest in the United States and 12th in the world.
This, despite the Twin Cities ranking only as the 16th largest metro market by the U.S. Census Bureau.
This is among the most competitive — nay, cluttered — markets in the nation and at a time of national recession. Won’t a new and improved Target Center whack the Xcel Energy Center, another publicly financed arena?
“I’m all for Xcel Energy Center succeeding,” said Leiweke, whose AEG Live books and promotes shows in St. Paul. “A decision was made a long time ago to have two buildings in the marketplace, so get on with your life. Our life is not ‘Let’s kill ’em.’ Our life is not even ‘Let’s beat ’em.’ Our life is ‘Let’s make sure both cities have buildings that are very good.’ … The important thing here is to have two relevant buildings.”
Who is this guy?
If any big foot with an office in L.A. and responsibilities in Shanghai understands the Twin Cities entertainment and sports marketplace, it is Leiweke. His path to sports mogul-dom took a great leap forward when he helped open and market Target Center in its infancy two decades ago, working for Marv and Harv. Leiweke was a fresh-faced 30-something then, establishing a new paradigm for corporate sponsorship sales and naming rights.
His career arc has zoomed beyond Minnesota since then, moving to Denver and then joining the empire of Philip Anschutz … Anschutz is the “A” in AEG, or Anschutz Entertainment Group.
Leiweke was recently selected the 23rd most influential person (right behind Anschutz and ahead of New England Patriots owner Robert Kraft) in the sports industry by Business Week. Sports Business Journal, the trade publication, selected Leiweke as its executive of the year in 2008. (By the way, Tim’s younger brother, Tod, was the Wild’s first CEO before moving to Seattle in 2003 to run the sports properties of Microsoft co-founder Paul Allen.)
But, through it all, Leiweke has kept a tiny piece of his heart for Target Center. He was in the middle of getting Target to lend its name to the arena back in 1990.
Guess who was working as a marketing consultant to the wholesale chain then?
A former Star Tribune reporter named R.T. Rybak.
Rybak spokesman Jeremy Hanson told MinnPost in an email that Leiweke and Rybak on Tuesday discussed the improved performance of Target Center under AEG, but no specific renovation plans.
Hanson added: “Mayor Rybak has confidence in AEG’s efforts to manage and bring business to Target Center and he looks forward to working with them on a vision for future needed renovations.”
Exactly how Target Center gets modern, gets fancier, gets profitable remains to be seen. But Leiweke said Tuesday there’s going to be a plan by year’s end.
With 17 years left on AEG’s management contract with the city, Leiweke said: “When we jumped into this, we knew it was a marathon, not a sprint.”
No matter how far away the finish line, Leiweke isn’t real good at taking no for an answer.
Jay Weiner writes about off-the-field sports issues, such as sports business and sports and public policy. He can be reached at jweiner [at] minnpost [dot] com.