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Vikings finally land at the Capitol

Charley Shaw//March 2, 2012

Vikings finally land at the Capitol

Charley Shaw//March 2, 2012

(Left to right) Gov. Mark Dayton, Sen. Julie Rosen, Vikings owner Zygi Wilf and Mayor R.T. Rybak of Minneapolis announced their support of a $975 million stadium plan at a news conference last week. (Staff photo: Peter Bartz-Gallagher)

But whether they’ll conquer the Legislature remains very much in doubt

For all the fanfare that attended Thursday’s announcement of an agreement among the main players in the Vikings stadium saga, the plan as presented begged as many critical questions as it answered.

All along, the fate of the stadium drive has hinged on three make-or-break facets:

• The team, Gov. Mark Dayton and the city of Minneapolis have answered the site question by rolling out a proposal to build a new stadium next to the team’s current Metrodome home.

• The money question has been pinned down with respect to the three players’ financial commitment, though exactly how the state would sell bonds based on revenue from e-pulltabs — and whether general fund dollars can really be kept out of the equation, as promised — remain problematic.

• Finally, no one knows whether the plan has enough yes votes in the state Legislature or the Minneapolis City Council.

The $975 million stadium package would include $398 million from the state, $150 million from the city and $427 million from the Vikings franchise. If all went according to plan, the facility would open in 2016. It would be owned by a stadium authority, which would receive revenue from non-football events such as rock concerts, while the Vikings would receive all the revenue from pro football-related events and from naming rights.(The stadium’s footprint includes one city block owned by the Star Tribune, the leading booster of the deal in local media.)

The agreement represents progress insofar as Vikings owners Zygi and Mark Wilf stood with lawmakers to announce an accord on a site that’s not in Arden Hills, where they had strongly preferred to go.

Apart from the Wilfs and Dayton, a loyal and influential cast of legislators is leading the stadium push. But there are scores of skeptical legislators on both sides of the aisle. And perhaps more significantly, House Republican leaders have spent months telegraphing their reluctance to take up a stadium bill in 2012.
To further complicate matters, the Vikings push comes in the immediate aftermath of redistricting and in the midst of endorsing conventions for legislative seats. That fact likewise appears to augur for inaction, especially since the prospect of losing the team to another city is negligible for the foreseeable future. (The NFL’s deadline for applying to relocate passed on Feb. 15.)

But Sen. Julie Rosen, R-Fairmont, the chief stadium author in the Senate, said waiting until next year is risky because a new Legislature will be seated in 2013, and its main preoccupation will be passing a two-year state budget.

“There’s always something,” Rosen said. “If it’s not endorsing conventions, it’s going to be a budget deficit or a budget surplus or an election. … We’ll just have to stand up and say: ‘OK, are we taking the vote? Let’s go.’”

A legal end-around on city financing

Compared with the previous stadium proposal in Ramsey County, the Minneapolis share is much smaller ($150 million versus $350 million) and the state share larger ($398 million versus $300 million). The local share shrank due in large part to tax politics: As recently as 2007, state lawmakers agreed to exempt Hennepin County from holding a referendum on increasing the sales tax to finance a new ballpark for the Minnesota Twins. But late last year, Dayton and legislative leaders announced that none of the four legislative caucuses would back any scheme to circumvent a local tax referendum.

The current proposal doesn’t involve a Hennepin County sales tax increase. But it does involve sidestepping a Minneapolis city charter requirement that any sports facility deal worth more than $10 million be submitted to a public referendum.

In order for the city to chip in $150 million, the state would encumber a portion of the taxes that are generated from the Minneapolis Convention Center. That money would be added to e-pulltab revenue to back the public portion of the appropriation bonds. In a legalistic sense, therefore, the state would be the entity spending the dollars that represent the city share — or so goes the proponents’ argument.
But the Minneapolis City Council has to agree to the change in state law that would be required to accomplish this feat of redefinition. Rep. Morrie Lanning, R-Moorhead, said state lawmakers need a letter signed by a majority of City Council members agreeing to the deal. They will also need a final vote from the City Council when all is said and done.

“We’re not going to force it on them,” Lanning said. “They have to voluntarily say: We’re for the deal.”
To sweeten the deal for Minneapolis, a controversial proposal to enable $135 million in funding for a Target Center renovation is still on the table. And though it will travel in a separate bill from the stadium proposal, Minneapolis Mayor R.T. Rybak made it clear that the stadium package has no chance of passing the City Council if the Target Center renovation is not also approved by the Legislature. According to Metropolitan Sports Facilities Commission Chairman Ted Mondale, legislative approval would involve granting the city a sales tax exemption for construction materials and an exemption from the city charter.

Such a move by the Legislature would probably scuttle stadium support from St. Paul legislators, who object to spending state dollars to make Target Center a more formidable competitor to the Xcel Energy Center, unless St. Paul received financial considerations from the state as well.

House leadership still tepid

GOP legislative leaders, especially in the House, appear to be taking a slow approach to the stadium by emphasizing a process that involves numerous committee vettings. The bill, which is expected to be introduced on Monday or Tuesday, will likely go before both chambers’ Commerce, State Government Operations and Transportation committees en route to the House and Senate Taxes committees and finally House Ways and Means and Senate Finance.

The strategy of House Republican leaders so far has been to tamp down the Vikings stadium issue by emphasizing the obstacles and doubts it presents. The Dayton administration’s effort to jump-start stadium proceedings last fall ground to a halt when House Speaker Kurt Zellers, R-Maple Grove, immediately declined the governor’s call for a pre-Thanksgiving special session to vote on a Vikings bill.

Zellers now says he’s waiting to hear the reaction of Minneapolis City Council members. But he made it clear that he won’t expend a lot of effort or political capital moving a stadium bill forward.

“It’s up to the advocates to pass it,” he told Capitol Report late Thursday. “I’m not going to be an advocate pushing for the stadium or against the stadium. I want to make sure that not only they have a fair day here but also that the people of Minnesota get a good deal.”

Minneapolis legislators, charitable gambling interests chilly

The terms of the agreement drew immediate criticism from Minneapolis legislators as well as backers of the state’s charitable gambling industry. DFL Sen. Scott Dibble said negotiators need to assess more closely the team’s potential commitment. He also said he’s concerned that the Twin Cities’ major arenas are being pitted against each other by the Target Center renovation pitch.

“I’m waiting for the details,” Dibble said. “But I’m going to be fairly skeptical.”

As for charitable gambling, King Wilson, the executive director of the Allied Charities of Minnesota, joined the stadium effort last year under the assumption that allowing e-pulltabs would involve tax relief for local charities and stadium funding. Wilson said some of the financial assumptions suggest that the agreement won’t involve the kind of tax relief for charities that was originally pledged.

“I’m hoping we’ll be pleasantly surprised,” Wilson said. “If that’s the case, it will change our tune. If there’s no tax relief, it won’t be economically viable.”

Financing could prove controversial

At a more technical level, there are concerns around the Capitol about the wisdom of using appropriation bonds to finance the state contribution. Issuing the bonds would require only a simple majority vote in the Legislature, not the 60 percent supermajority required for general obligation bonds, and the bonds would also afford some political cover since they are ostensibly backed by a source that does not represent a general fund tax increase.

But as Mondale acknowledged after Thursday’s news conference, the bonds would be backed by “the full faith and credit of the state of Minnesota” — meaning that general fund dollars are indeed implicated if electronic pulltab receipts prove insufficient.

(In theory, the state could sell revenue bonds guaranteed only by pulltab proceeds, but that would involve prohibitively high interest costs given the risks that investors see in gambling revenues.)

Given that lawmakers are unwilling to spend general fund money on a stadium, House Taxes Committee Chairman Greg Davids said legislators will have to be thoroughly convinced of the fiscal soundness of e-pulltab revenue estimates. “The only red flag I’d have right now,” he said, “is do e-pulltabs generate what they’re saying it generates?”

If the e-pulltab projections wilt under scrutiny, it’s unclear where legislators might turn. But Lanning insisted Thursday that adding slot machines to the state’s two horse-racing tracks is off the table.

“We’ve made it very clear that racino is not going to be our choice for a stadium bill,” he said. “There still may end up being a vote on racino, but it won’t be in connection with my bill. If somebody tries to amend our bill with that, we will reject it.”

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