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

Nobody wanted another stadium war — to have one city played off against another yet again. But five months after Minnesota was awarded an MLS franchise, that’s exactly what we’ve got. 

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

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.

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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.