State of play: How Bill McGuire and MLS are likely to get everything they ever wanted in a soccer stadium

MinnPost photo by Peter Callaghan
Major League Soccer Commissioner Don Garber, left, and Minnesota United owner Bill McGuire holding a Minnesota United banner during a press conference in March.

Nobody wanted a soccer stadium war. That’s what they kept saying, anyway.

After considering at least one site in St. Paul, the owners of what will be the 24th team in Major League Soccer chose Minneapolis as the site for a proposed soccer-specific stadium. Minneapolis assumed it was the only candidate and reacted with skepticism, opposing anything that could be defined as taxpayer assistance.

Even when an alleged deadline on July 1 passed and St. Paul tried to get into consideration, Mayor Chris Coleman repeatedly said it wasn’t a St. Paul vs. Minneapolis contest — that he would not allow his city to be used as a foil in a bidding war.

And now that Hennepin County has taken over for a reluctant city of Minneapolis as the lead for a stadium on the west side of the river, its political leaders say they won’t engage in a bidding war.

So how is it that nearly five months after a raucous public announcement heralding the awarding of the franchise, there’s a soccer stadium war (or at least a sibling rivalry)?

The team’s lead owner, Bill McGuire, met separately with political leadership in both cities last week. Sometime during the next couple of months, or sooner, he and fellow owners will have the luxury of choosing the best deal offer.

“It’s in the owner’s court now,” Hennepin County Commissioner Peter McLaughlin said. “They have to decide what they want to do.”

St. Paul United? 

Last week it appeared that St. Paul was the leading contender to host the stadium and the team.

Mayor Chris Coleman had just said yes to everything the team wants in a new stadium. McGuire has said he and the other owners are willing to buy the land and build a soccer-specific stadium on it without government assistance. It would be the first stadium in the region to go up without a direct taxpayer subsidy. But they have asked for two tax breaks: they don’t want to pay property taxes on the stadium or sales taxes on construction materials.

Coleman said the first one is easy: the former Metro Transit bus barn site on Snelling Avenue just off I-94 has been untaxed for decades. Keeping it that way won’t cost the government. The sales tax break would have to be approved by the legislature, but would be part of an overall plan that Coleman described as a “very simple ask.”

The former Metro Transit bus barn site
MinnPost photo by Corey Anderson
The former Metro Transit bus barn site on Snelling Avenue just off I-94 has been untaxed for decades.

If MLS thinks a stadium on that site meets its desires for an urban-core location and if McGuire agrees, they need only conclude that their initial desire to build in Minneapolis is mostly dashed and agree with Coleman that the St. Paul site is the only viable option.

What happened to Minneapolis?

Minneapolis is technically still in the picture, but only because Hennepin County has taken over the lead in pursuing a stadium there.  While many on the city council are supportive of placing the stadium next to the Minneapolis Farmers Market, Mayor Betsy Hodges has spoken out against both tax breaks. More recently, however, she has agreed to serve on a closed-door work group with council members and top city staff.

Yet their self-imposed deadline for even a preliminary report isn’t until September, with a final response due in December. That does not fit well with a timeline described by McGuire during a WCCO-TV interview last Sunday, saying he wants “to resolve something” by the end of summer. Does that mean a final deal complete with legislative approval by then? No, he said, just “an agreement that we are able, ready and willing to move ahead.”

That’s why Hennepin County, led by McLaughlin and Commissioner Michael Opat, is important to the process. They are not bound by the city council work group or its timeline. In fact, their plan would not require approval from the Minneapolis council, though McLaughlin described the relationship with the city on the issue as good.

Here is how McLaughlin described the county’s proposal to a North Loop business and community group two weeks ago: The team would buy the land and build a stadium on it, then donate it to the Minnesota Ballpark Authority, which also owns Target Field. As a publicly owned facility, it would be exempt from property taxes. Like Target Field, the authority would own the stadium but the team would operate it.

Minneapolis Farmers Market
Minnesota United
While many on the city council are supportive of placing the stadium next to the Minneapolis Farmers Market, Mayor Betsy Hodges has spoken out against both tax breaks.

The county and team would take a plan to the state Legislature that would include the sales tax exemption plus permission to use a small part of the current 0.15 percent county sales tax being used to pay off Target Field construction bonds. The so-called Twins Tax is on track to pay off those bonds in 23 years instead of 30. The county plan is to use one year of proceeds to pay for infrastructure improvements around the new stadium. Those improvements would also serve the farmers market and other development in the area west of Target Field.

But it is the Twins Tax that raised concerns by team owners, McLaughlin said. They worried that it might have trouble passing the Legislature. Pinning the plan to such a vote was problematic, McLaughlin said. But the commissioner who was also a leader in forging the deal that built Target Field said he thinks it would be acceptable because the stadium taxes would still be rescinded early, by six years instead of seven. And some of the proceeds would enhance an ongoing program helping build youth sports facilities and libraries.

“We’re not talking about increasing the tax,” he said. “We’re not talking about borrowing money. We wouldn’t put these payments ahead of the current bond holders. I’ve been mystified at the reluctance to even talk about the Target Field tax.”

Opat did not return calls seeking comment on his proposal.

St. Paul brings the love

Coleman has no such obstacles. The site he is proposing is already on a well-established street grid. The Green Line runs to the north of the site on University Avenue and the region’s first bus rapid transit line is set to start operating next year just west of the site on Snelling Avenue. And while he thinks the Legislature would have to be involved, the only matter for lawmakers to approve for a St. Paul stadium would be the sales tax on construction, not the more-controversial partial repurposing of a tax that taxpayers were promised would end when Target Field was paid off.

Coleman also is giving the owners something they haven’t asked for but clearly expected when they won the franchise and said they would pay for land and construction: a little love.

Coleman wants the team in his city, and thinks that a stadium could jump start development in a part of town that has proved challenging. And he often cites estimates about the growth of the sport and its appeal to millennials and immigrant communities as well as suburban soccer moms, dads and kids.

Standing next to deputy MLS commissioner Mark Abbott last week at the city’s new baseball stadium, Coleman was asked how badly he wants the stadium in St. Paul.

“I got to sit out here last night on a beautiful August night as the Saints broke their single-season attendance record and watched those crowds pour out into this neighborhood, get on the light rail line afterwards, and just create a vitality that is shocking and wonderful to see,” he said. “We need to have that same type of investment in the Midway area, so I am very excited and very hopeful that we can get this project done.”

After guiding Abbott and McGuire on a tour of the city and the stadium site (as well as a stop at the new Surly brewery just over the Minneapolis border) Coleman’s enthusiasm hadn’t changed. Coleman said he knew only two things for sure: “If they want to move forward, we can get a stadium built and if they do that it will be successful.”

Metro Transit used the bus barn site for staging during construction of the Green Line and has been gradually looking at selling it, recently asking for proposals to help develop a marketing plan. While putting out a request for bids from prospective purchasers is the agency’s “default position,” it is not required, said spokesman Howie Padilla. And while a sale would need approval from the Met Council and the Federal Transit Administration (it was purchased with federal funds), Padilla said council staff does not think that would be an impediment.

The St. Paul site is not new to the owners. McGuire looked at the site in 2013, well before he was in line for an MLS franchise, for a stadium for his lower-level Minnesota United team. As with the farmers market site, McGuire saw it as part of a broader development project that would include mixed use on surrounding parcels.

Since then, he has brought in additional partners into the team’s ownership group, including the Pohlads, who own not only the Minnesota Twins but development company United Property.

It’s urban. Is it urban enough? 

The St. Paul site does not fit the full description of what MLS says it favors these days — intimate soccer-specific stadiums with grass playing surfaces located near active downtowns.

Here’s what MLS Commissioner Don Garber said in March after the franchise award was announced and the Minneapolis location touted: “At the end of the day, we wanted a plan for an outdoor stadium, and that’s what Bill and his partners are very focused on providing. We’ve seen their original plans and they are very, very exciting. It is a perfectly situated stadium in downtown that has driven success of Major League Soccer.”

But while MLS now has 15 soccer-specific stadiums, many of the fields pointed to as being urban, hip and walkable — Seattle, Portland and Vancouver — are football stadiums with artificial turf. New York FC is playing in Yankee Stadium while a stadium deal is worked out. Most of the league’s stadiums are suburban, or at least not downtown. Perhaps only a new stadium in Houston and a planned stadium in Orlando currently fit the bill for what the MLS says it wants.

St. Paul would actually be closer to the ideal than the majority of stadiums.

Now what? 

Hennepin County is waiting to see which direction the owners take while Coleman said he expects to meet with McGuire and other team officials in the next week, meetings at which he will “solidify the work and the timeline for what needs to be done and when it needs to be done.” Earlier last week, he said he thinks he can convince his city council, the Legislature and the governor to approve the deal based on economics. The surrounding properties would produce more revenue after being redeveloped than the governments would lose on the stadium site, he said.

Abbott chose not to comment on whether waiting until March to approach the Legislature would satisfy the league, but Coleman said he didn’t think the timeline was a problem if the city and the team have an agreement soon.

Each time Coleman talks about the soccer stadium, however, someone raises the Patsy Factor. That is: isn’t the league and the team just using St. Paul to cajole Minneapolis to get in the game? Didn’t that happen with the Twins stadium? And the Vikings stadium?

Each time, Coleman says he won’t let St. Paul get played: “I am absolutely 100 percent certain of one thing, and that’s that we’re not being used as a foil,” Coleman said. “I’ve been very, very clear. I have no interest in being a pawn or a bargaining chip against a better deal over in Minneapolis. That’s not what’s happening here. I’m very confident of that.”

Patsies by definition are usually sure they aren’t being taken advantage of. But Coleman had just walked out of a closed-door meeting with Abbott and McGuire. His emphatic statement that negotiations were real and that St. Paul has a strong chance could have been his way of indicating that he knows something about the relationship between himself and MLS that few others do.

McGuire and team president Nick Rogers said through a spokesman that they had no comment about the stadium talks.

Comments (24)

  1. Submitted by Michael Bowler on 08/18/2015 - 12:53 pm.

    Soccer Stadium

    I do not understand how Mayor Hodges and Minneapolis elite can be opposed to a soccer stadium: diversity, economic growth, privately financed stadium construction, supporters that largely would be part of Hodges’s base voters. Conversely, I marvel at the enlightened leadership of Mayor Coleman, and hope that McGuire, the Pohlads, Taylor, and Carlson will go along with a St. Paul location. Minneapolis and Hodges need to understand how foolish they look now!

    And I even favored the Vikings and Gophers being forced to play in a constantly renovated Memorial Stadium at the University of Minnesota and pro basketball and hockey in the same arena! Mayor Hodges and Minneapolis are so far off the mark, it almost appears to be discrimination against soccer that will come back to hurt them. I hope this gets resolved quickly so we don’t lose an MLS franchise!

    • Submitted by Max Hammer on 08/18/2015 - 08:33 pm.

      Agreed

      I too am mystified at the mayor’s stance on this. Once you get beyond the rhetoric — “no subsidies for millionaires!” — and look and the actual proposal, it’s truly a no-brainer for Minneapolis. And it’s not even about the soccer; it’s the proposal itself.

      Not only does the city get $100+ million of private investment in an undesirable and underdeveloped part of downtown, but it also benefits by getting more use out of the big-event infrastructure already in place. Are we really supposed to believe that some developer is going to build apartments or office buildings in the armpit wedged between the A ramp and the I-94 viaduct?

      • Submitted by Brad James on 08/19/2015 - 10:08 am.

        How does the city benefit? A $100 million project helps the city by expanding the tax base, without property taxes it becomes a burden. The city will have to allocate more resources to serve this site and not be compensated. The city has just committed hundreds of millions to the east side of downtown to revitalize with a splashy sports stadium. They want to see something from that before tilting at another windmill.

        • Submitted by Mark Kulda on 08/19/2015 - 01:17 pm.

          There are going to be benefits

          The city’s entertainment district (which levies a significantly higher sales tax on food and drink) would be extended to the stadium and the city would enjoy a windfall of extra sales taxes on all food and drink sold at the stadium, in addition to being able to levy higher property taxes for all the surrounding new developments that would go with the site. For a very small amount of foregone revenue (no sales tax on construction materials and a freeze on property tax), there would be a large gain.

          • Submitted by RB Holbrook on 08/19/2015 - 03:56 pm.

            Numbers?

            Do you have any projected numbers to go with your claims? How big would this “windfall of extra sales taxes on all food and drink sold at the stadium” be? Another $100 would be “extra,” but would it be worth it? Would this windfall be new sales taxes, or just sales taxes that would already have been collected somewhere else?

            What about “all the surrounding new developments that would go with the site?” Is any planned? Already in the works? Is there any historical justification for assuming that such development will happen (I’m old enough to remember the promises about how the Metrodome was going to revitalize that part of Minneapolis)?

            • Submitted by Max Hammer on 08/19/2015 - 09:54 pm.

              The numbers

              According to the team, the stadium would generate $850,000 a year in city taxes: $120,000 liquor tax; $615,000 entertainment tax; $120,000 city sales tax.

              Even assuming that’s an optimistic outlook, it’s considerably more than the city’s share of the local tax.

              • Submitted by RB Holbrook on 08/20/2015 - 10:06 am.

                That’s It?

                I’m underwhelmed. The combined taxes would be less than $1 million per year, according to the team. What are the taxes on the property now? And what would the taxes be if there were some other development?

                I did a little number-crunching myself, based on what is happening with existing teams. Right now, the MLS regular season runs from March to October, during which time a team will play 17 home games. Assuming that the season would still run that long (outdoor soccer in March in Minnesota? Okay . . .), that’s a little more than 2.1 home games per month, or a little more than two times each month when fans will be coming to a game. The average attendance at an MLS game in 2014 was 19,148 (bear in mind that the League in 2014 was more heavily concentrated in larger markets than Minneapolis-St. Paul, and also in markets where the demographics may have been more “soccer friendly”). A Minnesota team may generate higher attendance initially, due to the curiosity factor.

                The team’s figures seem more than a little optimistic, based on those numbers. It also looks like any hoped-for development in the area is unlikely to happen.

                • Submitted by Max Hammer on 08/20/2015 - 03:03 pm.

                  The city currently collects roughly $80,000 in property tax from the proposed stadium site.

                  The city also owns the adjacent ABC ramps, which would get added value from a new stadium.

                  I’m not really sure what you are trying to prove in the “number crunching” exercise. You actually didn’t crunch any numbers. You stated the league’s average attendance and the average home games per month.

                  If you’re simply opposed to any soccer stadium — and it seems you are — then just say so. But dealing with the real-world factors rather than anti-stadium rhetoric, the only way in which this soccer stadium is a “bad deal” for the city is if it prevents a bigger, more profitable development from being built later. There’s been no evidence to suggest that’s likely.

                  • Submitted by RB Holbrook on 08/21/2015 - 09:03 am.

                    Okay

                    I am opposed to any soccer stadium in Minneapolis. I am opposed to any additional stadium being built with any type of contribution or forbearance from either the city or Hennepin County. I am not convinced that there is any economic or other benefit from yet another stadium. The fact that the people of the city had a Vikings stadium shoved down our throats despite our opposition makes me less inclined to overlook the fact that any benefits are marginal, at best.

                    • Submitted by Max Hammer on 08/21/2015 - 11:00 am.

                      So what you’re saying is that you’re biased against any sports stadium. And a lot of people are. But if you could look at the factors objectively, you’d find that the similarities between the two plans go barely beyond the type of building.

                      The public provided $500 million to build a Vikings stadium because our politicians decided that the Vikings’ presence in Minnesota is in the public interest. The Minnesota United stadium proposal is seeking run-of-the-mill incentives that private property developers routinely get when building in unappealing areas. There’s no direct subsidy involved.

                      It’s not a radical concept for the government to help developers in blighted areas. Surly, for example, received hundreds of thousands of public dollars for site cleanup. Nobody complained about that, because it was a no brainer: a small public investment ensured that Surly could complete a game-changing redevelopment of underused industrial land. The only difference here is that the proposal involves about a sports team, and people like you are instinctively against sports teams regardless of the actual details.

                    • Submitted by RB Holbrook on 08/24/2015 - 09:18 am.

                      Call it Fatigue

                      And the wariness born of experience.

                      There are a lot of “people like me” in Minneapolis. I suspect that, if you took a poll, we would be the majority.

  2. Submitted by brian hanf on 08/18/2015 - 01:10 pm.

    Hennepin County

    >Hennepin County has taken over the lead in pursuing a stadium there.

    I’m 99% sure Hennepin County has been the only group MNUFC has talked to seriously about the stadium in MPLS this whole time. The team hadn’t even talked to the Mayor before they announced it. So there is that.

  3. Submitted by Elsa Mack on 08/18/2015 - 01:47 pm.

    Opposition to stadium

    It is not the Minneapolis “elite” that opposes the construction of a new stadium. The fact is that it’s the majority of Minneapolis residents who oppose the construction of new sports facilities on our dime. This is very clear from the passage of the referendum limiting city spending on sports facilities without a citywide vote, and the fact that stadium proponents have never once tried to have such a vote, but rather to avoid it at all costs. Stadium proponents know quite well they could never get a majority of Minneapolis voters to support their expensive and unnecessary projects.

    So Hodges does not look at all foolish to me. If St. Paul residents want a soccer stadium then more power to them, but Minneapolis has enough stadiums already.

    • Submitted by Matt Haas on 08/19/2015 - 06:11 am.

      Lets fix that

      Its the residents of SW Mpls, NE Mpls, maybe a few in SE, and Kenwood who don’t want a stadium plan. The rest don’t care, or don’t have the the time to care. Either way, quit pretending to speak for a monolithic population when you are only speaking for yourself.

      • Submitted by Steve Titterud on 08/19/2015 - 07:07 am.

        WHO is pretending to speak for others here ??

        Amazing !!

      • Submitted by RB Holbrook on 08/19/2015 - 02:15 pm.

        All Those Opposed

        I don’t live in any of the neighborhoods you listed, but everyone I have talked to is firmly opposed to yet another stadium. Our long-term City Council Member, Sandy Colvin-Roy, did not run for re-election because her pro-Vikings stadium vote engendered such opposition.

        In any event, the proponents of any stadium deal should be the ones coming forward to make their case. It shouldn’t be a matter of “Let’s do this because most people don’t care, or don’t have the the time to care.”

      • Submitted by Bill Kahn on 08/23/2015 - 07:56 am.

        It is the people who vote who oppose stadiums, but I can agree there should be many more voters from every section or neighborhood in the city than there are. Arguing that a small group of sports boosters, rich folks, and their lackeys in guvmint know better what voters and non-voters in a city want or need, is Citizens United thinking.

        A leading DFL candidate in the 2013 Minneapolis mayoral race at the time said in a debate he thought a stadium referendum could pass, but they never, never try this; it is always an end run through state government (what the Hennepin County effort essentially is whether the referendum applies or not).

    • Submitted by Mark Kulda on 08/19/2015 - 01:41 pm.

      How would the stadium be built on your ‘dime’

      If the owners are going to build it with $150-million of their own money and they ask to only pay the current property tax, then how is that building it on the taxpayer’s dime?

      If the stadium is not built, there won’t be any construction material sales tax gain and the property tax will stay at the current rate.

      If the stadium is built according to the proposal, there will be no sales tax paid for construction materials and the property tax stays at the current rate.

      So the outcome seems to be the same for both. With one big exception, if the stadium is built the city will gain potentially $1-million or more per year in sales tax on food and drink and it would be able to levy higher property tax on the surrounding developments that will appreciate in value upon the stadium’s completion.

      So why would the city not want to do this? It can’t be for financial reasons, because the city clearly will profit from this.

  4. Submitted by Bruce Pomerantz on 08/18/2015 - 06:51 pm.

    About that property tax exemption

    IF Mayor Coleman does not want end up a patsy should the stadium go up in St. Paul, then any agreement needs to include the stipulation that when (not “if”) McGuire and the Pohlads sell the team and stadium, the new owners will begin paying property taxes.

  5. Submitted by DENNIS SCHMINKE on 08/18/2015 - 09:56 pm.

    For heaven’s sake…WHY are we doing this.

    I HOPE they do not come to the state legislature for help on this (like EVERY OTHER sports stadium/arena does!)

    (Fat chance we will dodge THAT bullet.)

  6. Submitted by Tate Ferguson on 08/19/2015 - 08:01 am.

    After the Minnesota soccer stadium is built…

    …what will the next stadium be?

    You know it’s coming, a few years down the road. By now, sports team owners know which American municipalities have the least sales resistance.

  7. Submitted by Shaina Brassard on 08/19/2015 - 12:23 pm.

    Minneapolis Farmers Market pays rent- stadium should pay taxes

    Just an FYI, the Central Minnesota Vegetable Growers Association, which runs the Minneapolis Farmers Market, pays around $80,000 a year in rent to the city of Minneapolis. Shocked? I was when I first learned that too. Our city loves to tout that it is the most healthy, in part because of farmers markets, yet it does not support any of the 30+ markets that create hundreds of jobs, hundreds of thousands of dollars in income and tons of healthy local food to citizens, financially at all.

    I’m sick of sports stadiums getting $millions in tax breaks and exemptions, or to use our tax dollars to build them, while services that citizens actually NEED- like food, good schools in every neighborhood, public transportation- can’t get the support they need.

    If a new soccer stadium doesn’t want to pay property taxes, I’ll come on board if the Minneapolis Farmers Market doesn’t have to pay rent (and can pass on savings to small farmers via reduced stall fees), and every farmers market in the city gets up to $20,000 a year for administration.

  8. Submitted by Bill Kahn on 08/23/2015 - 08:13 am.

    It is a not so large metropolitan area we have. One downtown is not very far from another. Every place in the Twin Cities Metro should have the privilege of getting screwed by professional sports, not just Minneapolis.

    Minneapolis picked the wrong parasite in the Vikings and their owners. I’d have preferred MLS over the others, but if we don’t get more parasites in Mpls, we can use ‘Twins Tax’ and other tax revenue for public purposes (imagine that).

    Let St. Paul try to reap the supposed benefits of professional sports stadiums.

Leave a Reply