Vikings stadium: First hearing today as we examine team subsidies at the Dome

When newly appointed Metropolitan Sports Facilities Commission Chairman Ted Mondale faces the Senate Committee on Local Government this afternoon, he’s bound to be asked about the collapsed Metrodome roof and his plans for a new Vikings stadium.

There’s also a good chance committee members will wonder about the future of the Sports Facilities Commission itself.

Today, this agency has but one facility to manage — the Dome — with one tenant, although over its life, it has overseen the Met Center, former home to the NHL North Stars, and was active in the public bailout of the NBA Target Center. Its predecessor agency owned and operated Metropolitan Stadium, former home of the Vikings and Twins.

Six of its seven members are appointed by the City of Minneapolis; that’s because the city used its tax base to pay the Dome’s debt when the rest of the region backed out of financial support in the 1980s.

Despite that, the commission often has been the target of Minneapolis-hating lawmakers … because, for some reason, legislators love to bash the state’s biggest city.

In recent years, the Vikings, through a series of impatient owners, have wondered about the commission’s commitment to help them increase their revenues and to get a new facility, too (although history shows the Dome was built for the Vikings and not with the Twins much in mind at all). It should have been former Govs. Jesse Ventura and Tim Pawlenty who mostly drew the wrath of the team, but the commission — the landlord — has been easier to kick around.

Sometimes, for good reason.

An explosive moment
The most explosive event in the relationship between the team and commission — besides the act-of-God Dome collapse last month — came in November 2009.

That’s when the commission, at the urging of longtime, and often volatile, finance commissioner Paul Thatcher, sought to get the Vikings to extend their Dome 30-year-long lease, which expires after this coming season.

The proposal from the commission was to provide some added financial assistance to the team, but if the team didn’t agree to extend the lease — and if it moved to, say, Los Angeles — then it would have to repay all of the assistance it had received over the past decade.

That caused a rift as large as the hole in the Dome’s roof, and triggered an angry letter from Vikings owners Zygi and Mark Wilf, who have become rich guys and NFL team owners mostly on the profits of being developers and landlords themselves.

“We can’t conceive of treating a tenant in such a disrespectful manner if the goal is to retain a valued tenant with a new, long-term lease,” they wrote.

But, as Mondale takes over and the final push to forge a plan for a new stadium begins, data show that since 1999, the commission has opened its coffers to the Vikings. While former owner Red McCombs and the Wilfs have never been satisfied, the agency has fiddled with the Vikings’ lease to make the team a bit more competitive financially.

As absurd as the economics of pro sports are, the reality is that the Metrodome doesn’t provide the team with the sorts of revenue opportunities that other stadiums and competitors — Bears, Packers, Lions, Cowboys — have. The team, by industry standards, has a bad lease.

Concourses are narrow. Concession opportunities limited. Bathroom facilities few. Lucrative club seating unavailable. Suites antiquated. Scoreboards small. Cash. Cash. Cash. The Dome doesn’t have enough cash streams for the team.

Sounds all silly, we know, but that’s the biz.

The Metrodome, even with a healthy roof, is economically obsolete, compared with modern stadiums. The building was designed in the ’70s and opened in the ’80s. Modern American pro stadiums are, generally speaking, disposable hardware for the software that comes in the form of sports franchises.

So, the commission has adjusted.

Since 1999, the Vikings’ Dome rent has been forgiven to them; according to the most recent figures from the Sports Facilities Commission, that has amounted to $39.9 million to the good of the team.

The Vikings’ rent for the luxury suites the team has controlled since 1982 was reduced from about $1.3 million a year to $400,000 annually since 2005, according to commission figures.

Since 2006, the commission has also increased the team’s share of food and beverage take from 10 to 15 percent — still low by industry standards.

Commission boosts Viking revenues
Several other improvements and revenue opportunities — once controlled by the commission — have been turned over to the Vikings revenues — from selling signage in the facility, to selling the “Mall of America Field” naming rights to building a new “Gridiron Club” for special fans to covering increased security costs. Commission documents suggest that all of that advertising inventory means as much as $2.5 million a year to the team; team officials say it’s not that high.

One other budget item that’s worth a gulp: The commission has spent $4.6 million in publicly promoting and paying architects and consultants to develop a new stadium on the Metrodome site. Hasn’t worked so far.

Add it all up, and since 1999, according to internal documents we’ve seen, it could be argued the commission has spent or given perhaps as much as $70 million’ worth of aid to the Vikings.

It must be noted, however, much of that cash in the commission coffers came from Vikings fans and the team’s relatively high rent over the years.

Some of the renovations — such as new scoreboards and the outdoor plaza — also aided for a while the Twins and Gophers when they still played at the Dome. Those teams, too, received rebates on their rents while they were there.

The commission’s $600,000 installation of new turf for the team was considered a safety necessity by the franchise.

Still, most of its investments were above and beyond its lease requirements with the team.

Now, the Wilfs believe these adjustments are what a landlord makes when a tenant is in distress. (We’d like to know if they have made such adjustments at their shopping malls, of course, but we digress.)

On the other hand, for those who are opposed to public subsidies of pro sports teams, the commission’s revenue enhancements to the Vikings could be viewed as overly generous. It has meant, for now, that the commission’s cash reserves are down to a paper-thin $11 million — barely one year’s operating expenses for a tired, but publicly owned 30-year-old building.

(By the way, according to Forbes magazine, the team is worth $774 million in the Dome, or $174 million more than the Wilfs paid in 2005, a 29 percent increase in franchise value, but still among the lowest valuations in the NFL.)

Today in Room 112 of the Capitol, we’re bound to hear commission Chairman Mondale begin to change the verbiage. The term “subsidy” will be packed away. “Strategic investment” will be the new words for how to keep the Vikings in Minnesota.

The commission has made strategic investments along the way in the Dome for the betterment of the public it serves and for the Vikings. But as the legislative session’s first hearing on the Vikings stadium is set to begin, the Metrodome and the agency that owns it seem bound for extinction.

You can also learn about all our free newsletter options.

Comments (7)

  1. Submitted by don carter on 01/26/2011 - 10:47 am.

    How about the taxpayers build it , BUT we get ALL the revenue and we rent it to the Vikqueens for big buck on a long term contract????

  2. Submitted by David Greene on 01/26/2011 - 01:33 pm.

    > because, for some reason, legislators love to bash > the state’s biggest city.

    It’s not that hard to understand. For some legislators, Minneapolis represents everything that is politically useful for them to attack: poor people, people of color, public money for public services, etc.

    The attacks aren’t about Minneapolis, _per_se_. They are about creating an echo chamber so that sound bites tying policy to “welfare queens” and “big government” will resonate with people. There are more people outside Minneapolis than inside it, after all.

    It’s all entirely, entirely, entirely political messaging.

  3. Submitted by James Hamilton on 01/26/2011 - 02:17 pm.

    It will be interesting to see whether the Republican-controlled legislature will buy the Vikings a new home or send them packing. It’s obvious Gov. Dayton’s already on the bus.

  4. Submitted by Brian Simon on 01/26/2011 - 02:36 pm.

    “the Metrodome and the agency that owns it seem bound for extinction.”

    Too much to hope for.

  5. Submitted by Ryan Coleman on 01/26/2011 - 03:50 pm.

    Jay Weiner writes: “[t]he Vikings’ rent for the luxury suites the team has controlled since 1982 was reduced from about $1.3 million a year to $400,000 annually since 2005, according to commission figures.”

    How much of the $900,000 drop is due to the Twins leaving?

  6. Submitted by Tony Spadafora on 01/26/2011 - 05:32 pm.

    If there’s a new Vikings stadium, the commission or authority that runs it should have a Chair appointed by the governor and commissioners who represent the “host” city & county and the state in proportion to the amount of funding each unit of government contributes to project funding.

    Let’s say the state contributes $200 million and Minneapolis and Hennepin county each contribute $100 million. I would suggest a commission with a Chair appointed by the governor, four commissioners appointed by the state House & Senate, two commissioners appointed by the Minneapolis City Council, and two appointed by the Hennepin County Board.

  7. Submitted by Paul Udstrand on 02/04/2011 - 10:19 am.

    There should be no quasi governmental public agency of any kind whose purpose is to increase pro-sports revenue. It’s a blatant conflict of interests. In the normal world property owners like Wilf work to increase their own revenue, not the revenue of the tenant. The idea that a shopping mall or any other property owner would cut their own revenue to enhance a tenants is ludicrous. If wilf wants a better stadium let him build it.

    I don’t know you people act like we have no choice but accept the absurdity these economics. Let the team go, we’re better off without them.

Leave a Reply