Not your average stadium debate: St. Paul soccer facility easily clears initial hurdles at Legislature

MinnPost photo by Briana Bierschbach
St. Paul Mayor Chris Coleman and principal owner Bill McGuire, center, spoke to state senators during a committee meeting on Thursday.

It was like most hearings at the Minnesota Capitol: Local officials, union members and business leaders extolled the virtues of the project in question, which they said would bring new economic development and jobs into their community. Legislators asked a few questions but mostly praised the idea. Two people got up to testify against the plan, but legislators asked no follow up questions and dismissed some of their comments. The whole thing was over in under an hour.

The one thing that wasn’t at all usual: all this was for a hearing about tax breaks for a sports stadium. 

The debate over building a stadium in St. Paul’s Midway neighborhood for a Major League Soccer franchise cleared its first hurdles in the Legislature this week: A House committee moved forward with the yet-to-be-constructed facility’s liquor license and a Senate committee “laid over” two tax breaks — on property taxes and construction materials — for inclusion in a broader tax bill, a move that signals legislators generally support the bill and want to keep it alive.

Both hearings were quiet, quick and uncontroversial – a far cry from previous debates about stadiums at the Capitol. It took nearly a decade to pass a deal to construct a new home for the Minnesota Twins, and the entire 2012 session was consumed by negotiations over the $1 billion Vikings stadium, which drew hordes of opponents and supporters to St. Paul, with fans dressed in purple and gold packing critical legislative hearings and floor votes. It’s also different from the conversation over the St. Paul Saints ballpark, which only moved forward after legislators allowed Gov. Mark Dayton’s administration to hand out $50 million in bonding dollars in 2012 to various projects, including $25 million for the ballpark.

But the soccer stadium is a fundamentally different proposal, St. Paul Mayor Chris Coleman told state senators on Thursday. The plan to redevelop an old bus garage site and build a $150 million soccer stadium is being financed by team owners and a group of private investors, unlike all of the other stadiums approved by the Legislature, which required some kind of direct public subsidy. For the Vikings stadium, the state contributed nearly $500 million from the general fund, while the city of Minneapolis put up $150 million.

“The fact of the matter is, this is a deal unlike any other we have seen because the team is paying for all the costs of the construction of the stadium,” Coleman said. They are all privately financed. What we are asking for is the two exemptions. In every other deal that we’ve talked about…they have been, quite frankly, just kind of assumed that property would be tax exempt and there would be a sales tax exemption on materials.”

That’s not to say there aren’t negative feelings over stadiums at the Capitol, where the expression “stadium fatigue” is thrown around a lot, especially by Republican House Speaker Kurt Daudt. Senate Majority Leader Tom Bakk has also expressed hesitation about granting sales tax exemptions on construction materials and equipment. The two proposals still need to make it through more committees in the House and Senate and then pass off both floors before they’re finalized. Legislators brushed off the same proposal last year, when the team still hoped to build the stadium in Minneapolis. 

Bill McGuire, the principal owner of the Minnesota United FC soccer franchise, told senators it would be “very problematic” if the tax breaks aren’t passed this year and could mean “that the franchise would be lost.” That’s because every other cost is being covered privately, he said. “They are small dollars, but they are very meaningful dollars.”

A rendering of the Midway soccer stadium as seen from Interstate 94.
Populous
A rendering of the Midway soccer stadium as seen from Interstate 94.

Former St. Paul City Council candidate and resident Tom Goldstein, who was one of the only people to show up to both hearings to oppose the stadium, said that St. Paul has also committed up to $18.4 million for streets and other infrastructure improvements around the stadium site.

“We just spent $65 million on a Saints ballpark, of which the state contributed $27 million, the city appropriated $11 million for a practice facility for the Minnesota Wild, and now another $18 million in just infrastructure improvements for the soccer stadium,” he said. “That’s close to $100 million overall that’s being spent, while all these other projects are being neglected.”

But for a stadium that wouldn’t start construction for at least three months and still faces a few hurdles in St. Paul, legislators didn’t seem very concerned about the plan in the committees this week. Both bills have bipartisan authors, who expressed confidence that other legislators would support the proposal once they got into the details.

“I just want to understand this: We’re looking at a bill to authorize a liquor license for something that doesn’t exist?” asked Rep. Greg Davids, R-Preston, at the House Commerce and Regulatory Reform Committee on Wednesday, as they discussed moving forward with a liquor license for the facility.

“That’s the beauty of it,” committee chairman Joe Hoppe replied. 

Davids just laughed and nodded and few legislators praised the proposal before it was quietly set aside to discuss later. 

Comments (20)

  1. Submitted by Paul Udstrand on 04/01/2016 - 09:39 am.

    I remind everyone…

    I’ve previously pointed out that these stadium/arena deals are never “good” deals for cities and that observation is met with the fact that the owners are paying for this stadium so what’s a little TIF financing? I remind everyone it’s not over till the fat lady sings and we’ve seen owners “pay” for their own stadiums before only have cities end up with the tab in the end. That’s what happened with the Timber Wolves arena remember? So in addition to forfeiting millions in tax dollars the city ends up buys and owning a costly stadium that’s nothing but a drain on the budget for the rest of eternity.

    • Submitted by Ray J Wallin on 04/01/2016 - 11:54 am.

      But…

      Stadiums ARE good for cities, as they will be, for eternity.

    • Submitted by Kim Couch on 04/01/2016 - 05:51 pm.

      How much money?

      I would like to see some absolute dollar details……….
      Exactly how much money will the state lose on the materials sales tax exemption?
      How much potential property tax revenue will be forgive?
      Those details should be made available.

      • Submitted by Pat Terry on 04/03/2016 - 03:52 am.

        None

        Because the materials would not be purchased unless the stadium is built. And because the site has not generated property taxes for 50 years. Its a terrible site, except for something like this.

  2. Submitted by Paul Udstrand on 04/01/2016 - 09:44 am.

    I guess the question is…

    Is an abandoned stadium really better for the city than an empty lot? That’s the question you have ask your self if you’re going to gamble on a sport franchise.

  3. Submitted by Allan Wilson on 04/01/2016 - 10:19 am.

    Soccer Stadium: Environmental Impact Statement?

    I’ve got a simple question: Will the proposed soccer stadium and development in the Midway be required to submit an EIS? If not, why not?

  4. Submitted by Pat Berg on 04/01/2016 - 10:50 am.

    What’s with that drawing?

    Where are all the buildings and structures in the immediate area?

    And who’s going to pay for all that lovely landscaping on the slopes adjoining 94?

    All it’s missing is all the pretty little people walking around doing pretty little people things.

  5. Submitted by Hiram Foster on 04/01/2016 - 01:18 pm.

    Chelsea v. Milan

    As I understand it, the very first event at Vikings Stadium will be a soccer match. If they can play soccer there, why do we need to go to the trouble and expense of building a new stadium. Vikings Stadium currently has 357 open dates. Surely some of them can be filled with soccer.

    • Submitted by Walt Cygan on 04/01/2016 - 03:17 pm.

      MLS

      I’m not endorsing this; just relating my understanding.

      MLS doesn’t want teams playing in 1) domed stadiums, 2) stadiums that they can’t fill, 3) and on non-grass pitches. Also, football-specific fields can sometimes not be wide enough for a proper-football pitch. I’m not exactly sure of the US Bank dimensions.

      They want a TV shot of filled stands of happy customers. That will drive TV contracts where the real money is made.

      • Submitted by Hiram Foster on 04/01/2016 - 03:40 pm.

        MLS’s positions are understandable. But they aren’t really in the kind of bargaining position that allows them to impose them. They have to decide whether having a soccer team in the Twin Cities is worth some of the compromises they might have to make. In the short term, it doesn’t seem to have been a problem for Chelsea and Milan.

    • Submitted by Scott Kerssen on 04/01/2016 - 06:29 pm.

      The Flaw in Your Plan…

      When MLS expressed desire to expand into the Twin Cities market, two different ownership groups had interest. One was the Wilfs, who hoped to use MLS to full some of those dates in his new stadium. Which is one of the reasons that, in the agreement with the state that they negotiated, that the Wilfs held exclusive rights to establish a MLS soccer team in their stadium for 5 years from completion of the stadium and the hosting of a first event. The other ownership group, headed by Dr. McGuire, had already purchased The Minnesota Stars (who’s name they changed to Minnesota United). McGuire’s interest stemmed from a desire to not have to compete against the Wilfs for customers with a minor league (equivalent to an AAA baseball) team against a major league team. Incidentally, the Wilfs had been approached multiple times, including by Dr. McGuire, to buy or invest in the Minnesota Stars/United. They refused. They also decided on a stadium design that is okay for gridiron football, but lousy for soccer. Taking all factors into account, including the opinions of current Minnesota soccer fans and organizations, MLS decided that the Minnesota United’s plan was the best. So, considering the above, it is very unlikely that The Wilfs would allow United to use the stadium.

      • Submitted by Hiram Foster on 04/02/2016 - 06:03 am.

        Vikings Stadium

        If the stadium is good enough for Chelsea, I think it’s good enough for a local MLS team.

        • Submitted by Pat Terry on 04/03/2016 - 03:50 am.

          Not good enough for Chelsea

          The field in Chelsea’s stadium in London is 73.2 yards wide, which falls in the 72 to 75 yard range of fields in the English Premier League. FIFA, soccer’s international governing body, specifies that fields be 70 to 80 yards wide.

          An NFL field is 53 yards wide. Football fields and soccer fields are not the same shape. Soccer fields are approximately 50 percent wider. You can play an exhibition match in the Vikings stadium. Or at the Target Center. Or in my driveway. But you cannot play a regulation soccer match in any of those places, because they are not big enough. The Vikings stadium is unfit for actual professional soccer.

          The Vikings stadium is also turf, while soccer is played on grass. In fact, they are installing grass over the turf for that exhibition match. A one-time solution, and a poor one at that, but not a long term answer.

          I think what happened is the Wilfs included soccer to get public support, but did not build a stadium that could accommodate soccer. When the MLS came in and saw that, the Vikings were out.

          In any event, the Vikings stadium is absolutely and unequivocally unfit to house a professional soccer team.

          Also, for the record, Chelsea sucks.

  6. Submitted by Richard Rowan on 04/01/2016 - 02:45 pm.

    What are the benefits?

    I understand the intangible benefits to the soccer stadium – having an MLS team and other international soccer matches will appeal to many people. My family and I will be attending games there.

    What I haven’t been able to figure out is if there will be any financial benefit. Since property taxes will be going to pay for the infrastructure and road improvements needed to serve the stadium will there be any left over to pay for other improvements in the city? The state won’t be collecting any sales tax on the construction materials. What does the city (and the state) stand to gain?

  7. Submitted by Scott Kerssen on 04/01/2016 - 05:05 pm.

    These are the benefits…

    First, RK Midway, the owner of the land on the “University/Midway Superblock” not currently owned by the city, plans to develop that land and replace the current stripmall there with housing (apartment/condo, some of them “affordable”), entertainment businesses, retail businesses, office space and other sundry businesses. These businesses and that land will NOT be tax exempt. And the spokesperson for RK MIdway is on record as stating that their plans for development are directly connected to the stadium project going through. They consider the stadium to be a magnet that will draw businesses and consumers. And much of the infrastructure connected to the $18 Million the city is spending is for roads, lighting and various other features that the public will use to access and utilize the other businesses and housing there, even when the stadium is not in use. By the way, property taxes are not where the funding will be coming from. Read this MinnPost article to find out where the money is expected to come from. https://www.minnpost.com/politics-policy/2016/02/st-paul-prepared-commit-18-million-infrastructure-improvements-soccer-stadiu

  8. Submitted by Paul Udstrand on 04/03/2016 - 08:56 pm.

    Empty sites

    A number of people have noted that this site has been empty for a long time. It’s important to remember that vacant sites aren’t always a natural occurrence. These stadium deals and plans are frequently at work in the background for a very long time and these stadium sites don’t magically appear when someone need some land for a stadium. It’s not unusual for sites to accidentally on purpose “sit” unoccupied for years or even decades and then the city acts like the new sport franchise is a godsend of some kind.

    I’m not saying that this is the case here, let me clear, I don’t know. I’m just saying people shouldn’t always assume that a chunk of land was useless until a sports franchise came along. My uncle, MPLS Alderman Zollie Green,was talking about a Twins stadium pretty much where the current stadium sits… back in the 70s. Look at the players behind almost any of these deals and you’ll typically see a list of way-back money guys who’ve been around for a long long time.

  9. Submitted by Edward Davis on 04/03/2016 - 11:13 pm.

    Naming Rights

    It is a pity that these hearings are during the day when most taxpayers are working for a living. I thank Tom Goldstein foregoing his income, attending the meeting and making a presentation. One of the interesting features of this deal is the naming rights are going to the team. Assuming the team gets $4 million per year,

    http://www.sportspromedia.com/news/bmo_extends_stadium_naming_rights_deal_with_mlse

    the stadium costs with interest will be paid off easily in 50 years.

    The city should just build it themselves for a conservative 30 year lease and the naming rights from the team.

    • Submitted by Paul Udstrand on 04/04/2016 - 09:58 am.

      Whaaaaat?

      No team stays in any stadium for 50 years and no team signs a 30 year lease. The sports franchise business model actually requires new, updated publicly financed stadiums and arenas every 10-20 years. Stadiums and arenas never pay for themselves, building them wold be sheer folly for any city.

      • Submitted by Brian Dietz on 05/24/2016 - 11:29 am.

        Long term tenants in stadiums

        The professional sports world – in the US and aboard – has plenty of teams playing in the same stadiums for 50 years. These sports teams have added on new technologies and amenities when appropriate, have kept the community in mind when making changes, and have generally been perceived to be well run organizations. For the stadium and the surrounding development, in whatever shape or form it shows up, to be successful the community and team need to work together, often with the participation of whatever local government is in place. This is what we should be focused on achieving.

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