What’s in final stadium bill?
by Briana Bierschbach
Published: May 11,2012
Time posted: 2:32 pm
Tags: Alice Hausman, John Kriesel, Julie Rosen, Kurt Zellers, Lester Bagley, Mall of America, online sales tax, Target Center, TIF, Vikings Stadium, Warren Limmer, Xcel Energy Center
The headline-grabbing details hadn’t changed much by the time the bill to construct a new professional football stadium for the Minnesota Vikings passed through both chambers of the Legislature after more than a year of back-and-forth negotiations.
The final price tag for the stadium bill would be $975 million. The new facility would be built in Minneapolis on a site adjacent to the team’s current home in the Metrodome. The state’s share of the cost would be covered by electronic pull tabs and bingo games. Those broad strokes remained intact through months of negotiations.
The rest of the bill went through the wringer.
After weeks of ramped-up committee activity at the Capitol leading to two marathon floor sessions, the bill faced an onslaught of on-the-fly amendments to try to make the deal more palatable to the lawmakers who would have to vote on it on the floor.
Amendments like user fees and a Minneapolis referendum were added to the bill in committee or on the floor and then subsequently removed, while other lawmakers tried to tie the bill to so-called poison pills — like slots in racetracks or “right-to-work” — to try and stop the proposal from its path to the legislative finish line. In the end, the final stadium bill was filled with deal sweeteners and other provisions that helped push it to final passage.
By the dollars
From the start it was clear that a major legislative litmus test for the bill would be how much the team was willing to throw in to get a deal done.
One of the first successful amendments to the bill on the House floor increased the team’s contribution to the project from $427 million to $532 million, thus reducing the state’s share from $398 million to $293 million. The amendment, offered by GOP Rep. Pat Garofalo, passed with 97 votes. The following day, a much more modest version of the amendment was adopted on the Senate floor, reducing the state’s share to $373 million and increasing the team’s to $452 million.
But in the final conference committee report, the team would pay somewhere in the middle — a total of $477 million, or $50 million more than they had repeatedly pledged to contribute throughout the process. The state’s share was cut to $348 million. Minneapolis would front $150 million of the total cost.
Capitol watchers immediately questioned whether the team would swallow the additional costs after promising not to budge on the $427 million figure all session. But those fears were quickly put to bed for stadium advocates early Thursday morning, when chief Vikings lobbyist Lester Bagley addressed members of the stadium conference committee. “Tonight,” he said, “I’m very pleased to announce the Vikings have agreed to terms with Minnesota to build the new stadium.”
In the final bill, the state will get a nearly $58 million cut of annual charitable gambling revenues from electronic games, while charitable gambling organizations will get about $14 million per year. The House version of the bill, created by Rep. John Kriesel, had split the revenues evenly between the two parties.
The final bill also included money generated by sports-themed tipboards, a funding source that many observers believe will be deemed unconstitutional. In the event those funding mechanisms do not raise enough money to cover the state’s share, there are two blink-on provisions — a tax on stadium luxury boxes and a sports-themed lottery game — intended to cover a shortfall. But those two measures would generate only a combined $3.1 million in backup revenue — and possibly even less if the new lottery game merely pulls people from other lottery games instead of creating a new audience.
User fees were a major point of contention in both chambers as members looked for a possible alternative funding mechanism to eliminate the state’s use of expanded gambling. Two amendments to replace gambling with user fees failed in both chambers. In the end, only the blink-on, 10 percent suite fee made it into the bill.
Appropriation bonds will be used to pay the debt service on the project, an aspect that seriously concerns DFL Rep. Alice Hausman. “Every year during the life of that debt, the Legislature will appropriate the debt service for this. And because it is in law, it comes off the top, first. And then you will write the budget for everything else with what is left,” Hausman said. “This is the path we are starting down, and we are doing that at the same time as we encourage many more people in this state to gamble.”
Minneapolis/St. Paul provisions
Old rivalries between Minneapolis and St. Paul surfaced as the Vikings bill worked through committees and onto the floor.
Members of the St. Paul delegation protested a move to allow the city of Minneapolis to extend its hotel, bar and restaurant sales tax to help pay for renovations on the Target Center. Specifically, St. Paul lawmakers wanted money for debt forgiveness on their event center, the St. Paul RiverCentre/Xcel Energy Center, as well as additional funds to start construction of a regional ballpark for the St. Paul Saints.
The dispute took a starring role in the Senate battle over the bill. Knowing that the omission of the Target Center provision would amount to a deal breaker for the Minneapolis City Council — the last body that must vote on the stadium proposal before it can move forward — Senate chief sponsor Julie Rosen amended the final bill to funnel $2.7 million to the city of St. Paul’s general fund over a span of 20 years. The money, totaling $54 million, will be used by the city to pay off RiverCentre debt.
The final bill also waived any requirements under the city of Minneapolis’ charter, both for the construction of the new stadium and relating to the city’s ability to divert sales taxes intended to help pay off debt on the convention center. The referendum was a sticking point for Minneapolis lawmakers and for a contingent of hard-line fiscal conservatives in both chambers. House Speaker Kurt Zellers said he could not vote for the final package because of the absence of a Minneapolis referendum.
Taxes and other provisions
Two major tax proposals were tacked on to the bill by way of Rosen’s delete-all amendment on the Senate floor — one to extend tax increment financing districts at the Mall of America and another to require online retailers like Amazon and eBay to collect online sales taxes. The addition of the two unrelated tax provisions surprised many Capitol watchers, but they were nowhere to be found in the final conference committee report. Among the tax provisions that did prevail: Stadium construction materials will be exempt from taxation, and the stadium will also be exempt from paying property taxes.
Despite a move from GOP Sen. Warren Limmer on the floor to strip five-year exclusive rights for the Vikings to bring major league soccer to the stadium, the provision was included in the final bill. Any such soccer team, however, will no longer be able to use the facility without paying rent, as initially specified.
House members successfully amended the bill to split revenues from naming rights between the team and the public, but in the final bill, the team gets exclusive naming rights. According to one Capitol observer, the team was more inclined to take on a larger share of the total cost of the bill if the Vikings got an exclusive deal on naming rights.
The final bill also lowered the team’s minimum required lease from 40 years to 30 years. Under the final bill, if the Vikings franchise is sold in the first 10 years of that lease, the team owner would be required to pay back 25 percent of the team’s sale price to the state and city. That figure drops to 15 percent in years 11 to 15 of the lease and 10 percent for years 16 to 20. The team can play up to six games outside of the country during the term of the lease.