Stadium wars: Here comes Minneapolis

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Critical report on Arden Hills site feeds talk of a renewed Minneapolis/Hennepin County push

Since Gov. Mark Dayton’s administration unveiled its analysis of the risks associated with the proposed Minnesota Vikings stadium site in Arden Hills on Wednesday, opinion has varied as to whether it dealt a fatal blow to the Ramsey County/Vikings plan. But there is no question that the report’s caveats — up to two years in delays and $100 million-plus in cost overruns — came as welcome news to Minneapolis business interests that are said to be readying a push to keep the Vikings there.

Metropolitan Council Chairwoman Susan Haigh and Metropolitan Sports Facilities Commission (MSFC) Chairman Ted Mondale fielded a barrage of questions from reporters about whether their agencies’ report, which Dayton had requested in August, would kill the Arden Hills plan and advance the cause of Minneapolis and Hennepin County.

Mondale diplomatically replied that the report provides a foundation for an Arden Hills bill to be created at the Legislature. But shortly after those words were spoken, Dayton underscored the issue with a news release in which he specifically mentioned Minneapolis in responding to the risk analysis of the Arden Hills site.

“I am willing to support a stadium in either Arden Hills or Minneapolis,” Dayton wrote, “as long as the project’s financing, including any contingencies, is clearly defined and agreed upon by the representatives of the affected parties.”

The report highlights a daunting array of contingencies at the Arden Hills site. It predicts the costs of cleaning the polluted property, a former Army munitions plant that is currently the state’s largest Superfund site, will be higher than specified under the terms of the deal between the team and the county. It further projects that a stadium will take at least a year longer to build, at a $46 million annual inflationary cost increase, than the dealmakers from Ramsey County and the Vikings have claimed.

While the findings included some reductions in estimated costs, their cumulative effect is to suggest the deal’s backers will have to come up with more money in order to get Dayton to sign a stadium bill.

The Arden Hills deal, which was announced in May, involves three parties: Ramsey County, the Vikings and the state. The burden of shouldering the increased costs will fall to the county and the team, Mondale said, because the state won’t increase its $300 million share of the project’s cost.

Minneapolis rumors

The report is highly detailed and doesn’t refer to the recent efforts to build a stadium in Minneapolis. But elected officials and lobbyists at the Capitol had been speculating for weeks that the report would aid an administration that has close ties to Minneapolis and prefers to see a stadium built there, said one DFL Capitol insider.

“I suspect the governor heavily favors the Minneapolis site,” the source said. “And I think most of the administration people working on this, the Sports Facilities Commission and everybody else, thinks the Minneapolis site makes the most sense. I wouldn’t be surprised in the least if the study was commissioned to prove that point.”

The report lays out a potentially difficult financial situation for Ramsey County. It notes that although the Arden Hills plan estimates the cost of site cleanup at $30 million, the actual cost could run as high as $70 million. (Under the agreement, Ramsey County is responsible for 66 percent of the overruns on infrastructure costs to prepare the site for construction; the Vikings are on the hook for cost overruns related to building the stadium.)

The increased soil remediation costs could add more than $50 million to the county’s tab, boosting its overall responsibility past $400 million. And the report suggests that the county’s proposed 0.5 percent sales tax increase would be insufficient to handle the added expense.

Ramsey County Commissioner Tony Bennett, who has been one of the lead political figures in the Arden Hills push, assailed the report.

“Every time Ramsey County and the Vikings meet the requirements set by the governor,” Bennett said, “another hurdle is created, the latest being the Met Council study that largely replicates analytical work that has already been done. This project seems to be suffering a death by a thousand paper cuts. Further delays will result in additional costs. Time is running out.”
Mondale denied that the report rules out Arden Hills.

“It’s just the opposite,” Mondale said. “This is an attempt to try and put a bill together that we can pass at the Arden Hills site.” When asked if Minneapolis would be a better location from the standpoint of cost and logistics, Mondale replied: “We’re working on and studying the Arden Hills site.”

While team owners believe they can keep the project on the 2015 completion schedule and keep costs contained, the report offers numerous reminders that the timetable for cleaning the contaminated site and improving its infrastructure lies beyond their control in many respects owing to the involvement of the Minnesota Pollution Control Agency, along with other state and federal agencies.

That conclusion leaves the state at odds with the Arden Hills plan’s sponsors over the degree to which such risks can be mitigated. At a Wednesday news conference, Haigh amplified the report’s argument that no insurance carrier would cover unforeseen environmental cleanup costs given the magnitude of the financial exposure involved.

The Vikings and Ramsey County have countered by claiming that they could reach a deal with a contractor for a “fixed-price remediation contract” that would in effect make the cleanup contractor the insurer against cost overruns. Vikings President Mark Wilf said in a letter to Haigh and Mondale after the report was released that they have “identified a contractor who may be willing to take the responsibility to clean and demolish the site within the time frames and costs identified at the low-end cost.”

Wilf likely to resist a Hennepin County plan

The difficulties with the Arden Hills site have emboldened Minneapolis and Hennepin County interests, which had appeared to opt out of the stadium wars after the Arden Hills plan emerged.

Minneapolis insiders note that the city’s political leadership appeared to stay on the sidelines as the team and Ramsey County built their case last spring. In May, Mayor R.T. Rybak and City Council President Barbara Johnson announced a $1 billion proposal to build a new stadium on the site of the Metrodome and refurbish Target Center. But the deal between Ramsey County and the Vikings was announced the following day, and that seemed to deflate any further talk about Minneapolis.

One former Hennepin County commissioner and local political observer told Capitol Report that an informal collaboration among local CEOs last summer ultimately resurrected the Minneapolis stadium pursuit.

“In big public works projects in Minnesota,” the source said, “you always look for the point at which the business community is engaged. They had not been engaged in the past year and a half until about four months ago.”

The push by business succeeded in getting city and Hennepin County officials to do further work on stadium options.
Among the options is a stadium on the so-called Farmers Market site near Target Field on the western side of downtown. Developer Bruce Lambrecht and architect Dave Albersman have spent a lot of time drumming up support for the location, which is close to transit lines and parking ramps.

In recent days another stadium site, near the Basilica of St. Mary, has also generated significant buzz. Minneapolis commercial real estate observers have said the backers of the basilica site, which some call the Bryn Mawr site, are so far unknown.

Rybak and Johnson continue to prefer a new stadium on the Metrodome site, which, as the former county commissioner noted, is already publicly owned. But Hennepin County Board Chairman Mike Opat, who played the lead role in getting Target Field legislation passed for the Minnesota Twins in 2006, doesn’t share Rybak and Johnson’s taste for the Dome site. Capitol Report’s sister publication Finance & Commerce reported his blunt assessment on Thursday: “I don’t support the Metrodome. I’m not willing to do work on the Metrodome.”

While downtown Minneapolis is serviced by light rail lines and has nonpolluted land to offer, it lacks the sort of potential for suburban development that Vikings team owner Zygi Wilf, a real estate developer, would have at the Arden Hills location, where about 170 acres of the 430-acre parcel are earmarked for residential and commercial development.

Minneapolis backers see the opportunity for Wilf to develop land around a downtown stadium. Whether Wilf will be interested is another matter.

“That’s where it becomes problematic,” said one Minneapolis-based political operative. “People say Zygi is a suburban developer and more suited [to building] an entertainment complex with convention [facilities] and a golf course, and it’s all self-contained and it’s suburban or exurban.

“But there’s development potential in Minneapolis, too, if he has the capacity to do an urban plan.”