The disconnect became obvious almost immediately after Major League Soccer gave official status to a well-circulated rumor last spring: that the Twin Cities would be awarded the 24th franchise in the top American soccer league.
What was seen by the primary owner of the new team as something akin to philanthropy — privately financing a new stadium (save some tax breaks on construction materials and property taxes) — was viewed by many critics as another bad business deal: regular citizens subsidizing a billionaire team owner.
It perhaps wasn’t a surprise then that the gap over those two views of the attempt to put an MLS franchise in Minneapolis remained a substantial gulf — or that the league would eventually determine that the best place to put the team would be in St. Paul, not Minneapolis.
Commissioner Don Garber all but said as much on Monday, after an unpublicized tour of the site and a hastily convened media availability with St. Paul Mayor Chris Coleman, all of it followed by a meeting with Gov. Mark Dayton.
“It seems like it really makes sense to me,” Garber said of what is expected to be the eventual site of a stadium for Minnesota United: the former bus barn on Snelling and I-94. And while he didn’t make a formal announcement with regard to an agreement, he said the league and team are focused exclusively on St. Paul and are at the stage of finalizing what he termed “deal points.”
It was an anticlimactic end to the latest Twin Cities stadium drama. The new team could start play in 2017 or 2018, perhaps in a temporary facility before the new soccer-specific facility is finished.
But Garber left no doubt where the team would eventually play: St. Paul.
It was far different event from the splashy announcement on March 25 that an MLS team had been awarded to Minnesota — the culmination of a campaign by former UnitedHealthcare CEO Bill McGuire to preserve professional soccer in his adopted hometown. What had started as his willingness to buy a lower-level team that was on the verge of collapse, in 2012, had become a successful effort against other cities (and a rival local bidder) to have a team in the continent’s top league.
To McGuire, it seemed like an extension of the community-minded work he’d been doing since leaving UnitedHealth under a dark cloud in 2006, endeavors that have included big donations to the Guthrie Theater and the creation of Gold Medal Park. After the March announcement at Target Field — an event that was more pep rally than press conference — McGuire answered questions from reporters: about the politics, the logistics and the redevelopment potential of a proposed site in downtown Minneapolis for a soccer-specific stadium.
At the end of the event, though, McGuire interjected an answer to a question that hadn’t actually been asked: He and his partners had won something important, he said, not just for themselves but for the region — and he wanted people to know that.
“The focus here,” he said before pausing and starting again. “This is a big deal for our community. Lots of important, vibrant cities in America wanted this franchise. It is a great victory for our community to be viewed as the place to go and for us to bring this here. That’s our first step. That’s our victory right now.”
Stung by opposition
But rather than being lauded for his “victory,” McGuire was criticized by those who saw the new franchise not as some sort of collective achievement but as a crass business proposition by some of state’s wealthiest people (McGuire’s ownership group also includes the Pohlads, Wendy Nelson and Glen Taylor). And it was a familiar one at that: private sports team owners seeking tax subsidies to make themselves even wealthier.
Given the recent history of stadium deals in the region, that reaction should have been expected. Yet McGuire seemed stunned — and stung — by it. That the critique came from — and was even being led by — Minneapolis Mayor Betsy Hodges made it worse.
Hodges did not attend the MLS announcement, though several City Council members took part. Since rumors had first surfaced about the possibility of the city landing an MLS team, she had been saying that she opposed any public resources for a soccer-specific stadium. Instead, she favored a team using the new Vikings Stadium, which would have required the franchise to be awarded to the Wilf family, who had exclusive rights to play soccer there.
She was not alone in articulating opposition to any public subsidies, and was joined by the leaders of both parties in the Legislature and many on the city council. Whoever coined the term “stadium fatigue” was well-rewarded with its constant use. Would-be supporters were cautious, waiting to see what the public reaction would be.
Three weeks after the big announcement, McGuire and his co-owners thought they had news that would quell the opposition. Unlike all other team owners, McGuire and his partners would pay for the land and the construction themselves and wanted only two tax breaks from government. One would exempt construction from sales taxes. The other would have the stadium be exempt from property taxes. Both such tax breaks were given to the other team owners in the region.
‘The ability of these owners to pay their own way is obvious’
Some politicians who had been expecting a larger ask of sharing construction costs — one similar to those requested by and granted to the owners of the Vikings, Twins, Wild, Timberwolves and even the St. Paul Saints — were relieved at the relatively modest request.
Hodges, however, posted a response on her private blog that ratcheted up her opposition. She wrote that she is a soccer fan, having watched the old Minnesota Strikers during their days in the Major Indoor Soccer League. But she also said that even tax-breaks equate to a subsidy, and therefore she was “disappointed” that the owners’ pledge to pay all costs wasn’t realized.
She made no fans among hardcore soccer supporters by saying the new team could play in U.S. Bank Stadium or TCF Bank Stadium (both use artificial turf and have playing field dimensions considered too small for a proper soccer configuration). She also argued that the soccer stadium would compete for concerts with the city-owned Target Center.
And then she played the corporate welfare card. “The McGuire group has failed to demonstrate any need whatsoever for a public subsidy,” she wrote. “Even if they choose to build a third soccer stadium, the ability of these owners to pay their own way is obvious.”
Yes, they were all rich, the owners acknowledged. But MLS teams don’t make money, at least not yet. The tax forgiveness would be the difference between breaking even and losing money on annual operations, the owners said. And they wanted the public to have some skin in the game.
Some economic analysts wonder if MLS will ever be viable, if there will ever be enough revenue in the sport to pay for the skilled players needed to bring the league close to the quality of top leagues in Europe or even Mexico. A Forbes analysis valued MLS teams on a range from $105 million to $245 million. That means the investment by McGuire and his partners to create the team and build the stadium would be considerably more than even the best-off franchise, the Seattle Sounders, is currently worth.
In comparison, the same magazine estimated the worth of the Vikings at $1.15 billion (20th of 32 NFL teams), the Twins at $895 million (18th of 30 MLB teams), and the Wild $370 million (17th of 30 NHL teams).
Two cities, opposite reactions
A private meeting was held between the mayor and the ownership group that occurred after Hodges published her blog post. It was meant to clear the air. Instead, it only heightened tensions, according to people familiar with it. Those who met with McGuire through the spring and early summer described him as discouraged and frustrated with politicians in general, but Hodges in particular.
A rare glimpse into the thinking of United’s owners — who have taken the art of not commenting to new levels — came in May, when team president Nick Rogers fielded questions at the Powderhorn Park Community Center from some soccer fans who opposed any tax breaks.
He conceded that perhaps it wouldn’t be possible to build in the city. “Minneapolis might say to us, ‘We don’t want you here.’” he said. “And we’ll have to assess our options and figure out where is there a community that wants us.”
Hodges was not the only politician opposed to the the stadium deal, though opposition softened along the way. And even she acquiesced to some pro-stadium council members by convening a work group that would meet in private to consider the deal and its consequences. That initial meeting came only two weeks before an arbitrary MLS deadline of July 1, and the work group appeared unrushed, giving itself an end-of-year target to report to the full council.
Meanwhile, in St. Paul, Coleman had been saying publicly that he wouldn’t interfere with negotiations between the McGuire group and Minneapolis. Privately, though, he had been laying the foundation to land the team, even meeting with McGuire and exchanging information about a possible stadium site where the Metro Transit bus barn once stood.
When the artificial July 1 deadline was artificially enforced by the league, Coleman took those private efforts public.
Meeting the team’s demands was relatively easy. The bus barn property on Snelling and I-94 was already off the property tax rolls. And the forgiveness of sales tax on construction purchases was a legislative issue that Coleman considered a relatively easy request.
But Coleman came to McGuire with something else, too. Something that wasn’t part of the team’s request but that McGuire seemed to crave: love.
Coleman publicly echoed McGuire that the MLS team was valuable; that it would benefit the region; and that it would provide economic benefits that would far outweigh the loss of any tax revenue.
McGuire wanted the team to be wanted, and Coleman wanted the team. Badly.
By the time Minneapolis reacted to Coleman’s push, it was too late. Hennepin County Commissioners Mike Opat and Peter McLaughlin, who had been instrumental in getting Target Field built, met with McGuire after he and MLS officials had already met with Coleman and toured the bus barn site.
The commissioners said they would figure out the tax breaks and even offered to carry the political burden of getting state permission to use unneeded Twins stadium taxes for infrastructure. But McGuire was unenthusiastic, McLaughlin said, worried that the Twins Tax was too heavy a lift and didn’t want to wait until spring to find out if it would work.
When the McGuire group let lapse an option to buy the land near the farmers market, they signaled their decision. Not only would they not be building in Minneapolis, but a group that includes one of the region’s top developers didn’t even want property in one of its targeted areas, property it had helped make more valuable.
St Paul was the winner of a competition that everyone denied was a competition.
Not about dollars and cents
Some Minneapolis council members who had previously whispered their concerns about the mayor’s position began saying it out loud. Hodges herself tried to position the St. Paul victory as a victory for the region, not a defeat for Minneapolis.
Yet in a way, she might have gotten the best of both worlds; she pleased her base by saying no to sports billionaires — without creating too many enemies among soccer fans, given that the team could be playing its first game just months after the 2017 election. Her relations with the business community, however, have taken a hit.
In the end, the conclusion of MLS’ Twin Cities stadium saga wasn’t about dollars and cents. It wasn’t even about the owners’ preference, since they clearly preferred the Minneapolis site over the bus barn.
It wasn’t business at all, as it turned out. It was personal. To McGuire — and to Coleman. It was about the public embrace one of them needed, and that the other provided.