Minneapolis puts $1 billion, tax-filled, politically volatile stadium plan on Vikings table

Timberwolves owner Glen Taylor and City Council President Barbara Johnson endorse the MInneapolis plan.
MinnPost photo by Jay Weiner
Timberwolves owner Glen Taylor and City Council President Barbara Johnson endorse the MInneapolis plan.

It’s complicated. It’s rife with political danger. It tiptoes into a larger, creative but complex “global solution” for sports and public gathering facilities in the state.

Despite all that, Mayor R.T. Rybak and City Council President Barbara Johnson pushed Minneapolis smack dab into the middle of the increasingly up-tempo Vikings stadium dance Monday afternoon.

Rybak said that his city’s $1 billion plan to help finance a new domed or fixed-roof Vikings stadium and refurbish the 21-year-old Target Center is “a game changer … Our governor [Mark Dayton] has called for a ‘people’s stadium.’ We believe this is a people’s solution.”

The mayor used to write for the newspaper whose building sits in the shadow of the economically obsolete Metrodome. So His Honor can turn a phrase with the best of us.

But only time will tell if the Minneapolis plan — filled with a cocktail of local taxes — changes how, or if, the Vikings get a new stadium.

Also, the people of Minneapolis soon will let Rybak and Johnson’s City Council know if this plan is, in truth, a people’s solution. Early returns on neighborhood web bulletin boards were — let’s just say — less than enthusiastic. There were complaints about increased taxes, about not shopping in Minneapolis and about watching Rybak “dance to the Vikings tune.”

A group called NoVikingTax.com already has scheduled a training session on how to stop a stadium tax. (It’s set for 3 p.m. Sunday at the Minneapolis Central Library.)

Still, the plan is serious, has downtown business and construction union backing and seems to have stopped (at least temporarily) the Vikings in their inexorable tracks to what they hoped — and, apparently, still hope — is a frillier, big-honking, far more expensive marriage with Ramsey County Commissioners Tony Bennett and Rafael Ortega and their colleagues. The result would be a stadium and related development in Arden Hills, price unknown, and costs of roads very unknown for now.

An important final calculation by the Minnesota Department of Transportation on exactly how much road work could cost around the Arden Hills site is expected any day now. That could be the straw that breaks the suburb’s back.

A sketch of the proposed stadium that Minneapolis unveiled on Monday.
Ellerbe Becket
A sketch of the proposed stadium that Minneapolis unveiled on Monday.

Adding it all up
No spreadsheets were distributed at Rybak and Johnson’s news conference today, so we will assume this all adds up and is, as the mayor said, “realistic, sustainable and affordable.”

But the framework of the city’s Vikings plan is this, and watch out below for moving parts:

• A new $895 million football stadium on the Metrodome site, but preserving as much as 30 percent of stadium foundation and other innards of the facility. (By the way, we’re hearing a stadium plan that the city worked on is actually cheaper than that, so there may be some room to reduce that price, Vikings willing).

• Of that $895 million, $400 million would come from the team and private dollars, or nearly 45 percent, $300 million from the state of Minnesota, and $195 million (or 22 percent) from the city.

• An additional $95 million of city funds would go to renovate the city-owned 21-year-old Target Center arena, home to the NBA Timberwolves, WNBA Lynx and many concerts and family shows.

The expectation is that Wolves owner Glen Taylor and AEG Facilities, the arena’s management firm, will kick in another $60 million to keep with an earlier $155 million Target Center renovation plan, although that’s not been negotiated yet.

Add it all up — $895 million for Vikes, $155 million or so for Target Center — and it’s real money: $1,050,000,000. Or a billion and change.

Rybak argues it’s a two-fer — preserving two major multipurpose facilities in the state’s  largest (and showcase) city — for less than the price of one Vikings stadium in Arden Hills.

Plus, as has always been the case with recycling the Dome site, it has roads, buses and light rail feeding into it. It has hotels nearby. And restaurants within walking distance.

And then there’s the other side of the ledger. Somebody’s gotta pay for it.

The taxes that are needed
Rybak and Johnson are proposing:

• A city-wide hike in sales tax or 0.15 percent, or 15 cents on $100 dollars. That’s in addition to the 0.15 percent sales tax city residents and shoppers pay for the Twins’ Target Field. That Twins tax is Hennepin County-wide. This Vikings/Target Center tax would be only in the city.

• Expanding citywide the restaurant and liquor taxes that are now only collected downtown.

• Using taxes now collected to pay down Minneapolis Convention Center debt after 2020 when the convention center is paid off. Those tax proceeds — 3 percent entertainment, lodging, restaurant and a half-cent sales tax — would shift over to funding the stadium and arena after 2020. (Johnson and Rybak said there would still be enough to maintain the Convention Center in those later years, but expansion might be difficult.)

• And ticket taxes and parking taxes on Vikings game days.

Mayor R.T. Rybak
MinnPost/Jay Weiner
Mayor R.T. Rybak

Rybak’s justification for these increased sales taxes and user fees is that they will help to take Target Center, which is now subsidized by city property taxes, off that payment stream. He said it will reduce property taxes in the city over the next 10 years by $50 million.

The Vikings haven’t committed to this plan.

In a statement issued soon after the news conference, the team said: “The Vikings want to thank the City of Minneapolis for bringing forward a proposal to replace the Metrodome. Team officials first saw a broad outline of this plan late last week. The Vikings were not involved in developing the specifics of this proposal and have not agreed to any of the financing elements. While we have concerns about provisions within the City’s proposal, the team will examine it in further detail and respond accordingly.”

On the 45 percent Vikings’ stake in a stadium, Rybak said it was his understanding that the team is poised to kick in that much.

But, in an interview, Lester Bagley, Vikings public affairs and stadium development vice president, said, “That’s not true,” about the $400 million investment.

Besides, he noted that if the Dome is the site for a new stadium, the team would have to play at the University of Minnesota’s TCF Bank Stadium for three seasons. With an annual shortfall of about $13 million from the Dome to TCF, Bagley said the team would suffer nearly $40 million in revenue reduction while at the U stadium.

Late Monday night, Rybak’s spokesman John Stiles said the mayor “misspoke” and that, in fact, the team hasn’t vowed to kick in 45 percent of a stadium project.

In an email, Stiles wrote: “Mayor Rybak understands that the Vikings haven’t committed to fund a share of any plan. The fact remains that the plan that he and Council President Johnson put forward today is the first concrete plan with actual numbers after a decade of trying to keep the Vikings in Minnesota.”  

Politics in the way
We can all do the math a bit later. It’s the politics that will be especially dicey. In 1997, Minneapolis city voters overwhelmingly approved a city charter change that read:

“Neither the City, nor any governmental body whose territorial jurisdiction is coextensive with or falls wholly within the City, may finance any professional sports facility in an amount greater than $10 million unless the voters in an otherwise scheduled election (and not an election held only for that purpose) so authorize. For this [section’s] purposes, ‘finance’ includes applying existing realty, infrastructure, overhead, or other resources, and forgoing taxes or any other revenue, as well as spending money directly, issuing bonds, or otherwise incurring debt.”

Calling it a “difficult situation,” Rybak bluntly said that the Legislature can, essentially, override that charter amendment, that he will seek such a lifting of the $10 million cap, and that he will explain why to the citizens of Minneapolis.

“This will not be put to a vote,” Rybak said of the Vikings plan. “We’re coming to the Legislature to ask them to allow us to move forward.” He said he will tell Minneapolis taxpayers, “We are going to ask you for more in sales tax but in return we are going to lower your burden on property taxes.”

Call it courage or chutzpah, but the mayor has a few nasty neighborhood meetings to attend before this is all over.

For a couple of legislative sessions, Rybak and Johnson had fended off stadium sponsors seeking some of the Convention Center taxes, which produce a surplus over the facility’s annual debt service.

Johnson said Monday that she had been “warned” by Sen. Julie Rosen, R-Fairmont, that the state might take away those taxes for city use — that they were “at risk.”

That’s why Rybak said, in recent weeks, the city decided to “play offense and not defense” on the Vikings stadium effort. This stadium plan is a way to keep city taxes paying for facilities that benefit the city.

Other features
A few neat wrinkles to the vision: Rybak calls the stadium plan an “urban football field” and proclaimed “this is going to do for football what we think Camden Yards did for baseball.” Baltimore’s Camden Yards drove a renaissance in retro ballparks. Could a newfangled Dome reinvent football stadiums?

The “global solution” that Rybak has talked about —merging the operations of all the region’s facilities — peeks its nose out a bit in this framework. It’s more of a hemispheric solution, funding football, basketball and the convention center with the same taxes in Minneapolis only.

But it’s a start, and some Timberwolves executives have reached out to Minnesota Wild representatives in hopes of one day combining efforts and, perhaps, funding.

As for combining a Block E casino plan with this stadium/arena plan, Rybak and Johnson said that wasn’t in their vision … but who knows? Target Center is a short dice throw from Block E.

Digestion is needed for all this, and there likely would be votes in the Legislature and in City Hall if this proceeds. Johnson’s council will face a couple of votes on this, we’d bet, if the Vikings opt for it, and the state passes it, and lawsuits are dodged and lots of other unforeseen stuff happens.

“We’re working it,” Johnson said of council votes. “I’m talking to my colleagues and reiterating what the mayor said, ‘You can either play defense or you can play offense.’ We’ve played defense a long time. At this point, we need to play some offense to keep what we have.”

MinnPost’s Jay Weiner has covered sports facilities issues in the Twin Cities since 1993 and the demise of Met Center and public buyout of Target Center. He is the author of “Stadium Games: Fifty Years of Big League Greed and Bush League Boondoggles,” University of Minnesota Press, 2000.

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Comments (16)

  1. Submitted by David Greene on 05/09/2011 - 07:39 pm.

    This is probably the best solution to a non-existent problem, but since we’re going to solve it anyway. we should do it in the city. It’s far, far better than the enormous cost of doing it in Arden Hills.

  2. Submitted by William Jewell on 05/09/2011 - 08:11 pm.

    After reading the story with all the details it sounds like a long shot and Mr. Taylor on the radio at 6:30 was more passive and I guess it would be nice if he just bought the team and brought ownership back to Minnesota, it would feel like you’re putting the money back into your own state. Vikings at $400 Million for a fixed-up stadium that still looks like the Metrodome.

  3. Submitted by Joe Musich on 05/09/2011 - 09:07 pm.

    And how will this plan bring middle class survival to the City of Lakes? As a city school teacher even going to the new food restaurants requires a groupon. Did the Mayor notice my tax bill ? And play offense ? ya maybe for a pyrrhic victory. And furthermore neither team seems to be a winner.

  4. Submitted by Kevin Judd on 05/09/2011 - 11:03 pm.

    If Rybak gets the Legislature to override the charter in order to avoid a referendum, he will be violating both the spirit and the letter of the law. It was written specifically to stop this kind of nonsense.

  5. Submitted by Paul Udstrand on 05/10/2011 - 08:08 am.

    Unless the city is planning to the Vikings sufficient rent for using the stadium MPLS will lose money on the deal. If the only revenue they can plan to collect is going to be parking and sales tax they’ll loose money at a rate of two or three to one. If you look at the analysis provided to the Met. Sports Facilities Commission (as part of a campaign to promote a new stadium) you see that MPLS has put about $85 million into pro-sports subsidies in the last 20 years and gotten $22 million back. St. Paul has put a little over $6 million in and got $1.7 million back. The more they put the worse it gets.

    They need to get Vikings stadiums off the brain and start thinking about rehabing the dome site and building some kind of true community based center of some kind without the Vikings.

  6. Submitted by Justin Crum on 05/10/2011 - 08:56 am.

    Seems like the anti-stadium group could have found a better place to meet. You know, like one that hasn’t been helped in large part by the Twins Stadium tax?

  7. Submitted by Tony Wagner on 05/10/2011 - 09:18 am.

    Rybak: “We are going to ask you for more in sales tax but in return we are going to lower your burden on property taxes.”

    How is it going to lower property taxes? Oh yeah, it’s going to create new sales taxes to support Target Center, which was a sports facility that proved incapable of supporting itself and thus became the city’s obligation through property taxes. (Not exactly something you want to bring up when proposing another sports facility, R.T.)

    Also, while implementing more sales taxes does not immediately affect property taxes, it effectively reduces the future tax revenue of the city to use for other purposes. So if (or more likely, when) the city needs more revenue in the future, it will be less able to raise sales taxes again, and more likely to raise property taxes instead.

    I’m a pro sports fan and Minneapolis resident, but I am perfectly willing to risking losing these teams if the alternative is another dismal financing package such as this. I recognize the public component to these teams and facilities, and am willing to entertain some public contribution, but I also recognize the dominant private business component, and that recent public funding of such teams and facilities is driven more by extortion than economic realities.

  8. Submitted by Shannon Drury on 05/10/2011 - 09:23 am.

    I voted for Rybak because he was a grassroots alternative to Sayles-Belton, who sold south Minneapolis out to the airlines. What ever happened to THAT guy?

  9. Submitted by Tony Wagner on 05/10/2011 - 09:40 am.

    Justin Crum: “Seems like the anti-stadium group could have found a better place to meet. You know, like one that hasn’t been helped in large part by the Twins Stadium tax?”

    An interesting observation, but not really accurate. The Central Library was built and was operating 44 hours per week without help from the Twins stadium tax. Now, it has added Sunday and Monday hours — 22% of its open hours. I’m not sure that extra staffing meets the “in large part” threshold, and I’m guessing that most other affected libraries receive even less from this tax.

    Moreover, it was quite obviously the library funding that was added to the Twins stadium proposal to make it more palatable, not the other way around. Had people (both elected and otherwise) chosen to spend their political capital differently, the library could have received a similarly modest funding increase without necessitating the construction of a stadium.

  10. Submitted by David Thompson on 05/10/2011 - 11:58 am.

    Why not expand TCF Bank stadium to accomodate 60,000 fans? Spending $800,000,000 on a new stadium that will be used 10 times a year is INSANE.

  11. Submitted by Bernice Vetsch on 05/10/2011 - 05:00 pm.

    “By the way, we’re hearing a stadium plan that the city worked on is actually cheaper than that, so there may be some room to reduce the price, VIKINGS WILLING.”

    Vikings willing??? The Vikings will decide how much the taxpayers contribute?

    Do the Vikings plan to pay any rent, or will they plead poverty as they have for the past nine or more years at the Dome?

  12. Submitted by Hiram Foster on 05/11/2011 - 05:46 am.

    “Why not expand TCF Bank stadium to accomodate 60,000 fans? Spending $800,000,000 on a new stadium that will be used 10 times a year is INSANE.”

    To accommodate an NFL team, the Gopher Stadium would have to be rebuilt. And the Gophers want to use their stadium. This is an issue that was determined, for better or worse, when we made the decision to build a college style stadium for the Gophers. I thought it was silly then, after all, the Gophers are the one team in town that can’t leave, but for political reasons that were only persuasive politicians, it was easier to build a Gopher Stadium so Gopher Stadium got built.

    The Wilfs want a new stadium. No other solution is acceptable to them. So if we want to do a deal with them, if we want to keep the Vikings here, a new stadium must be built. There just is no other realistic scenario.

  13. Submitted by Paul Udstrand on 05/11/2011 - 09:25 am.

    Hiram, what do you mean “we” white man? We know that almost 79% of us don’t want to keep the Vikings here if it means building them a new stadium with public money.

  14. Submitted by Hiram Foster on 05/11/2011 - 10:44 am.

    “We know that almost 79% of us don’t want to keep the Vikings here if it means building them a new stadium with public money.”

    We as a community, I suppose. I tend to be skeptical of poll results in areas like this. In general what polls show is that people want something, but they don’t want to pay for it. But the simple and indisputable fact is that Hennepin County made probably the worst stadium deal ever, yet every single commissioner who voted for it was re-elected in campaigns where the stadium barely registered as an issue. And for whatever little it’s worth, I hear tell that folks are happy with the truly lousy Twins deal that was made on their behalf.

  15. Submitted by Carol Flynn on 05/11/2011 - 12:21 pm.

    #8, Dear Shannon,
    How is that Rybak airplane noise reduction going in South Mpls.?

  16. Submitted by Mike Naas on 05/11/2011 - 05:44 pm.

    Football is entertainment. There are many business segments that government should not be involved in. Entertainment is one of those areas. The argument that this or that is good for Minnesota is irreverent. All legal businesses are “good for Minnesota.” Giving handouts to selected businesses is government run-a-muck and is corruption. Government should not be involved in giving free money to any free enterprise in the entertainment business. Our elected officials should be forced to justify every spending initiative with Minnesota Constitutional justification. Building stadiums for entertainment cannot be justified. State loans to business, that must be paid back with the threat of liquidation of assets, might be a possibility, that would also compete against banks unfairly. Government should stay out of business completely, especially the entertainment. Every elected official that supports tax money gifts such as to stadiums do not understand the role of government and will spend our State into insolvency. They need to be voted out of office in favor of a someone who will practice frugal policy restraint within State constitutional authority. A recent poll reported in this paper that 60% of voters favor telling the Vikings NO to any funding. These voters understand these principles, but do our public officials understand?

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