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St. Paul soccer stadium deal to take next step with joint powers agreement

The proposed agreement contains a detail that hadn’t been revealed before: that while the stadium would be privately financed and constructed, it will be eventually owned by the city.

The Met Council owns the site on Snelling Avenue between I-94 and University, the port authority is trying to put the deal together on behalf of the city and the city will likely be the entity that leases the land from Metro Transit.
MinnPost photo by Corey Anderson

Since giving all indications that it prefers St. Paul as the site of a soccer-specific stadium for a new Minnesota franchise, Major League Soccer has been silent about making it official.

That hasn’t stopped the capital city from moving ahead on the details needed to make a Midway-area site available, should the league and the team owners choose to build there. Wednesday, the St. Paul City Council will discuss — and is expected to adopt — a resolution to create what is called a joint powers agreement with other government entities that need to cooperate in the plan.

The port authority board and the Met Council also meet Wednesday to consider the resolution as well.

The agreement between the city, the Port Authority of St. Paul and the Metropolitan Council will “provide a framework for communication and negotiation with respect to the development of the property,” according to the agreement. The Met Council owns the site on Snelling Avenue between I-94 and University, the port authority is trying to put the deal together on behalf of the city and the city will likely be the entity that leases the land from Metro Transit.

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The resolution is sponsored by Council Members Dai Thao and Chris Tolbert. The full council approved a resolution in August — also sponsored by Thao and Tolbert — supporting the stadium project and endorsing the team’s request that it not be subject to property taxes.  

But the proposed agreement contains a detail that hadn’t been in writing before— that while the stadium would be privately financed and constructed, “the soccer stadium will be owned by the city upon construction completion.”

Potential lead owner of the franchise, Bill McGuire, had said the team would build and also own the stadium that he originally proposed be built in Minneapolis, near the farmer’s market. But McGuire said that he was open to having the stadium transferred to a public entity such as the Minnesota Ballpark Authority to qualify it for an exemption from property taxes. St. Paul Mayor Chris Coleman said during a State Fair interview with MPR that he prefers the stadium be city owned.

Eric Durkee, spokesman for the McGuire-owned NASL Minnesota United, said the owners are open to such an arrangement.

“We’ve said for some time now that we would certainly be open to the facility being publicly owned,” Durkee said. “We mentioned it for the Farmer’s Market site in Minneapolis and it’s certainly true for the Midway site. It’s largely a site-neutral fact that we would be open to the stadium being publicly owned.”

Durkee added a broader statement about the planned local government actions: “We are pleased to see a further demonstration of St. Paul’s commitment in helping to ensure the Major League Soccer comes to Minnesota.”

Even if the land is owned by the Met Council and the stadium is owned by the city, the property tax exemption would still need state legislative approval, given that the stadium would be used primarily by a private entity. The legislature would also have to approve the other tax break requested by the team: no state and local sales taxes on construction.

As the deal has been envisioned, a long-term lease would be used to satisfy federal rules governing the sale of land purchased with Federal Transit Administration funds. The FTA usually requires that property continue to be used for transit purposes, and if it is sold the money used to purchase it be repaid. Because the lease payments would be used to support transit, and because there would be transit facilities on the property, the port thinks the federal requirements would be met by the lease. 

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While the city would be the primary lessee, the agreement envisions that it could be sublet to the team during construction only.

It has now been more than 14 weeks since the MLS enforced a July 1 deadline for Minneapolis to get a stadium deal completed, a deadline that even McGuire said a week earlier wasn’t really a deadline. Minneapolis, however, was only given 14 weeks from the official announcement of the franchise award to the announcement the league was looking at other sites.

While the league and team have not made a formal announcement of St. Paul — no Target Field press conference complete with cheering fans, famous players and slickly produced videos — it has stopped talking to Minneapolis officials. And MLS Commissioner Don Garber said in September that the bus barn site “really makes sense to me.” Garber said the league and team are focused on St. Paul and described the conversations that needed to take place were to finalize what he termed “deal points.”

The soccer stadium land deal involving four units of government are one of those points.