[raw shortcodes=1]
St. Paul’s interest in hosting a Major League Soccer stadium came not after Minneapolis missed an alleged July 1 deadline for securing a deal — but at least two and a half months earlier.
In an April 15 email to Mayor Chris Coleman — three weeks after MLS had officially awarded an expansion team to Minnesota — city economic development director Jonathan Sage-Martinson wrote that he been approached by a council member and a developer about hosting the team. Since Coleman had met in early 2013 with then-prospective team owner Bill McGuire, Sage-Martinson wondered if Coleman was still interested?
“The message I have them [sic] was ‘hell yeah,’” Coleman responded. “They don’t seem interested in us— just not that into us. Thought we could integrate them into new Midway/bus barn site.”
That email, released as part of the city’s response to a Data Practices Act request filed by MinnPost, set in motion an examination of the stadium issue by top St. Paul officials in preparation for a May 18 meeting between Coleman and McGuire.
The staff work included the arranging of a specific “offering package,” with the tax breaks McGuire had been requesting; a powerpoint presentation on the benefits of the bus barn site; and a review of legislation drafted by McGuire’s lobbyists to secure the state’s approval.
All this began less than a month after MLS officials came to the Twin Cities not only to announce that they were awarding a franchise to McGuire and his partners — but to endorse a plan to locate the stadium in Minneapolis, near the Farmers Market. And it came just a day after McGuire had unveiled his plans to seek sales and property tax exemptions as part of his proposal to build a privately-financed stadium in Minneapolis.
And it happened well before Coleman pronounced, through a spokeswoman, that he “is not interested in interfering with conversations currently underway in Minneapolis.” That statement came on May 27, a week and a half after he and his senior staffers met with McGuire. Coleman Communications Director Tonya Tennessen later confirmed that a meeting was held but that it was informal and “very broad ranging.”
Senior staff also diminished the significance of the meeting before it was held. Council Member Dave Thune wrote Sage-Martinson and Deputy Mayor Kristin Beckmann saying he’d been asked by Star-Tribune columnist Jon Tevlin about rumors that the team was talking to St. Paul.
“Councilmember,” replied Beckman on April 27, “you could tell John [sic] that the Mayor has not offered Bill McGuire anything other than a conversation.” Beckmann noted in another e-mail that she had given John Stiles, chief of staff to Minneapolis Mayor Betsy Hodges, a heads up about the meeting.
Three days before the Coleman-McGuire meeting, however, a staff memo laid out a “Possible assistance package for a new soccer stadium,” according to a memo from St. Paul business development and finance director Martin Schieckel to Sage-Martinson. The city could lead land assembly for the project since it had been working with public and private owners of land between I-94 and University Avenue at Snelling Avenue.
St. Paul could also provide tax increment financing for public infrastructure and parking, something that would require state legislation. It could lead efforts to rezone the site, support sales tax exemption for construction and property tax exemption, the memo stated. Those are the two requests McGuire made of the state and Minneapolis that have been rejected by Hodges, though she has since agreed to work with a task force of city staff and council members to consider the proposal.
Undated but released in sequence with the May 15 “draft offering package” was a 7-page powerpoint presentation on “University and Snelling” that contained details about the bus barn site and the adjacent RK Midway shopping center. It outlines the traffic on the Green Line and area roads and freeways as well as parking availability.
It also showed three schematics as to how a stadium could fit on the site, the Census demographics of the people within a 20-minute drive and those along the Green Line.
In an interview, Coleman’s communications director said the powerpoint was used in the meeting with McGuire but that the offer of help was not presented to him.
A thank-you e-mail from McGuire to Coleman sent shortly after the meeting contained plans McGuire’s group had produced in 2013 for how a 24,000-seat stadium would sit on the bus barn site.
A June 5 email to Beckmann from McGuire with the subject “Stadium discussion” included McGuire informing her of his request for information from the private owners of RK Midway. He also told her he had signed a nondisclosure agreement with them “but urgency seems to be lacking on their end.” He also congratulated Beckmann on the recent opening of the new CHS Field for the Saints.
Replied Beckmann: “That Thursday night was a great testament to the big things people can accomplish when there is a vision and determination to get it done!” She also warned McGuire that the city was hearing rumors of another private developer with interest in developing a project on the same site.
On July 9, when Coleman first went public with his aggressive attempt to win the stadium, he said he had waited until a July 1 deadline for action in Minneapolis — a deadline now insisted on by MLS, but one that wasn’t spelled out clearly when the announcement was made in March. Even McGuire said just weeks before that July 1 should not be considered a hard deadline.
“Given the passing of the deadline and the urgency of getting something done to get Major League Soccer in Minnesota really underscores the need to move forward quickly,” Coleman said during a press conference that day. He said his moving ahead was partly due to comments made earlier in the month by MLS Deputy Commissioner Mark Abbott that the league was interested in talking to St. Paul.
“This is really spurred specifically with the conversation I had with the deputy commissioner yesterday as well as the clear indication from him that the window of opportunity is closing pretty quickly.”
The documents also show how extensive discussions were between McGuire and the city in early 2013 — two years before the McGuire group was awarded the franchise. McGuire detailed a soccer stadium that would be oversized for the team he then owned, the lower-level Minnesota United. He also asked the city if it would be interested in leasing office space in related commercial development and whether it might complete the Ayd Mill road connection to and over I-94.
McGuire also asked then-economic development director Cecile Bedor about other sites, including one near Xcel Center that he considered too small and the Sears site closer to the Capitol.
McGuire met with Coleman and senior staff on March 13, 2013, to talk about a stadium for St. Paul.
[/raw]
DocumentCloud Document(s):
[documentcloud url=”https://www.documentcloud.org/documents/2167885-4615-001.html”]
No. More. Stadiums.
Understandable, But Unhelpful
Look, I understand this sentiment but it’s terribly unhelpful. A simple glance at the past is enough to tell you that we (the collective “we”) always cave in for reasons that are not even remotely rational.
A more enlightened approach is to simply demand a better deal — one in which whoever pays for the stadium also reaps tangible and commensurate benefits. That is not impossible, but our leaders tend not to be very good negotiators in these circumstances. They tend to be fearful, which is a terribly weak place to start such big discussions.
As it happens, this particular stadium is unlikely to cost a municipality anything in up front dollars, and Mayor Hodges (and the Governor) made a foolish decision in turning down the deal as originally proposed. It was far and away the most beneficial deal offered in the past 20 years by any team owner, and it was blown off for the simple reason that she (like you, and many others) is tired of dealing with stadium issues. But that’s a TERRIBLE reason to turn something down when the deal is a good one.
Beyond that, the longer these things get delayed, the more they cost. Target Field cost over half a billion dollars. It COULD have cost half of that if the deal been sealed when first proposed nine years earlier. Even figuring inflation, that’s a massive cost increase just due to political delays.
So, don’t just say “No.” Instead, say, “Let’s make a deal.” Then push hard. That’s the only way we’re ever going to get out of the stadium spiral that we’ve gotten ourselves into.
If I don’t have a cigarette this morning…
…then I’ll be grouchy all day AND I’ll smoke an entire pack tonight.
Quitting smoking is hard.
EDITED TO ADD: I was grouchy myself when I wrote the above this morning (even though I’m not a smoker). Sorry about that, Rick! I stand by the substance of the analogy, however. In 2013, I went out of my shell to volunteer for Betsy Hodges and Lisa Bender’s campaigns, in no small part because they showed leadership and promise for positive change. I submit that they are fulfilling that promise when they say No to a new major-league sports subsidy and the can-of-worms it would open. Thanks for reading.
Excellent investigative piece, Peter
Really good job. Far and away the best coverage on the topic so far of any media outlet.
Thank you for making the effort.
Other Developer
This is a great article. The most fascinating thing to me is that Beckmann told McGuire that there’s another private developer interested in the site. Presumably this developer wants to take advantage to the site’s central location and proximity to both LRT and (soon to be) BRT. I can also presume that this developer is working on a concept that would get daily or almost daily use, such as offices or housing (or both). St. Paul’s residents must ask themselves if they want to prop up a stadium which would host 17 MLS games each year, or they’d rather reap the rewards of the Green Line investment in letting a private developer do their thing and build a privately-financed, year-round boon to the neighborhood.
I know which way I’d lean.
St. Paul
Most people who actually live in St. Paul understand how absurd the idea of housing or offices going into that site is. I guarantee that the other developer is a big box store looking for its own set of tax breaks. The reason Coleman is all over this is because he understands the choice isn’t between the stadium and a “privately financed year-round boon.”. Its between a stadium and a Home Depot, or even more likely, a lot that’s still vacant 10 years from now.
Private Developer?
What’s this about a private developer also having designs on this property? One of the rationales we’ve heard about having the soccer stadium at that site is that “it hasn’t produced any property tax revenue for decades anyway”. But that would no longer hold true if a private developer has plans (assuming such development would pay property taxes).
And we’ve also been told about the LRT spurring new projects along it’s route, a so close to the 94/Snelling interchange, why wouldn’t a private developer come up with a decent plan?
Three things
…I find interesting.
First, that Saint Paul’s mayor is apparently a flat-out liar. The correspondence says something entirely different from his public statements about trying to attract a soccer team.
Second, I enjoyed the way Saint Paul turned the tables on the team owners. Instead of the sports franchise owners threatening to take the team elsewhere, as they did with Minneapolis, Saint Paul gently suggested that someone else, a private developer, may be interested in the soccer team’s preferred site. If that possibility were to fall into place, presumably the soccer team would have to use some other, lesser, site.
Third, yet another article, by Joe Kimball in today’s MinnPost, points to yet another study showing rather conclusively that public financing of sports stadiums is generally foolish in both short and long term. Minneapolis has been suckered by several teams, most recently the Vikings, and since I wasn’t here when the deal was made, and am not at all a hockey fan, I’m left wondering about the terms of the deal whereby the Wild plays in the “X” in Saint Paul. My guess is that the owners of that team, too, probably negotiated terms favorable to themselves.
A good idea
The area is fairly resistant to development due to access, income levels of neighborhood, etc.
Hodges was a fool to act like she did, this is a much better deal than the Vikings and it attracts younger fans, who will fuel a restaurant and bar business boom, more upscale and less problems,
Do it and let the city keep parking revenue, fair offset for taxes. This stadium is aimed at same demographic as CHS was, and it has been very successful.
Do some summer concerts there and you have a great success.
Not The Way It’s Done
Let the city keep the parking revenue? Are you joking? That’s never the way it’s done anymore. The taxpayers pick up expense side of the equation, but the revenue side all goes to the team owners. So much for worrying about socialism.
And the canard about “spin off” development (restaurants & such) is also a joke. The owners want all of that inside the arena/stadium, so they get to keep the cash. All that ever did was to move money around from one establishment to another anyway; there’s never been any new net spending. We all think it’s great that the Twins stadium can host a wedding reception in November, but I wonder about how other venues like the taxpayer subsidized competition from the Twins & Saints stadiums. Surly Zigmunt will getting a slice of that pie as well.
Profits are private, but losses are socialized. It doesn’t have to be this way.
You are not considering this specific proposal
Instead of basing your opposition of this project based on the past mistakes of other projects, you should probably consider this specific proposal more closely.
You are failing to consider what this specific ask was. This would be a very beneficial project for Minneapolis. The team wants to not pay state sales tax on construction materials (about $2-3 million dollars), which has been granted to each of the other stadiums. The team also wants to pay the current property tax on the proposed site and not a windfall the city would enjoy by reassessing the value at a much higher rate. So the city is not out any money on this deal at all.
But because the city’s entertainment district would be extended to the site, the sales taxes on food and beverage jumps to a much higher rate of well over 10%. This means that in exchange for keeping the property tax rate current, the city would enjoy a big spike in sales tax receipts on food and drinks sold in the stadium AND the city would get to reassess any surrounding properties that are improved because of the stadium and will make higher property taxes because of it.
The state would enjoy about $900,000 in sales taxes on the sale of tickets to 17 regular season games, a few preseason games, maybe some post season games and some friendly matches, plus whatever other events they book there. Plus there is the income tax generated by the staff and player salaries. The state’s sales tax offset would be ‘paid back’ probably within the first two years and the city’s economic profit would begin immediately.
So while the it is certainly understandable that many people don’t like the previous wealthy owners of other teams getting huge benefits at the cost of taxpayers, if you consider this specific proposal, it is very clear because the ask is so small in comparison, this plan would be very financially beneficial to the city.
Enlightened?
Maybe I’m not that enlightened, but when I bought my house in Minneapolis, it didn’t occur to me that it was a great deal for the city because they didn’t pay for my house. Apparently, an enlightened approach would be to have every other property owner in the city cover my property taxes. And, if the city laughed at such a request, I should explain to them they’re not good negotiators.
I’d expect someone from St. Paul to know enough about their zoning code to know that big box wouldn’t be an option here.
Nonsense
Home Depot and Lowe’s both looked at the site.
http://www.monitorsaintpaul.com/bus-barn-site-has-rich-history-in-the-midway/
Not sure what you think the zoning issue is, but there is a Target, Wal-Mart and Rainbow Foods within a couple of blocks. If the city is behind the project, it also wouldn’t take much to re-zone the site if neccessary.
Site zoning
The site is zoned T4, as is almost all the area bounded by Snelling, University, Lexington, and the interstate. That area includes the existing Walmart, Super Target, etc.
However, new developments within 1/4 mile radius of a light rail station that have lots exceeding 25,000 ft2 need a FAR (floor area to lot area ratio) of 1.0 or greater. In this case, the reference point is the intersection of University and Snelling. From there to Pascal or St. Anthony (the eastern and southern borders of the area in question) is basically 1/4 mile, so a little more than 3/4 of the lot (π/4) falls under this requirement. Most, but not all, of the old bus barn site appears to be within that area. The code states that for lots that are partly within the light rail station area (like the bus barn site), the minimum FAR is prorated based upon how much of the lot is within the area.
What all that means is that it is unlikely that normal, one-floor big box retail could be built there without a variance, as parking usually drops those kinds of properties to 0.3-0.5. The interest of Home Depot and other big box retailers in the site predates the new zoning requirements for T4 light rail station areas.
Not really sure how a commercial sports field would fit the zoning, but cities tend to disregard things like that when it comes to helping billionaires rent seek.
Sources:
“Snelling Station Area Transit Oriented Development Opportunity”
http://www.stpaul.gov/DocumentCenter/View/70724
St. Paul Zoning Districts
http://www.stpaul.gov/DocumentCenter/Home/View/74749
St. Paul Legislative Code, Title VIII, Sec. 60.213. – L.
“Light rail station area. The area within a one-quarter-mile radius from the centerpoint of a light rail transit station platform. For split platform stations, this is measured from the centerpoint between the two (2) platforms.”
https://www.municode.com/library/mn/st._paul/codes/code_of_ordinances?nodeId=PTIILECO_TITVIIIZOCO_CH60ZOCOENPRDEZODIMAGE_ARTII60.200.GEDE_S60.213L
St. Paul Legislative Code, Title VIII, Sec. 66.331 (d)
“1.0-3.0 FAR in light rail station areas for lots more than twenty-five thousand (25,000) square feet in area, with no maximum FAR in T4. The floor area of structured parking above or below space used for principal uses, up to an amount equal to the floor area of the principal uses, may be counted toward meeting the minimum FAR. For lots more than twenty-five thousand (25,000) square feet partly in a light rail station area, minimum FAR shall be prorated upon the percentage of the lot in a light rail station area.”
https://www.municode.com/library/mn/st._paul/codes/code_of_ordinances?nodeId=PTIILECO_TITVIIIZOCO_CH66ZOCOONDIUSDEDIST_ARTIII66.300.TRNEDI_DIV366.330.TRNEDIDEDIST_S66.331DEDISTTA