CHICAGO — In a narrow vote, Minneapolis City Council members gave preliminary approval to a plan to use existing sales and hospitality taxes to fund the city’s $150 million share of a new $975 million stadium for the Minnesota Vikings.
The 7-to-6 split in favor of the legislation by a committee of the whole of the council was expected based on a previous stadium-related vote. The legislation faces a final vote at a City Council meeting Friday where the same tally is expected.
Council supporters, led by Mayor R.T. Rybak, said the package provides the best means for keeping the National Football League team in Minnesota, while providing support for other projects and creating 7,500 of much-needed jobs.
“The Vikings, if this goes forward, will have a new home. The Timberwolves and the Lynx [basketball teams] will have a better home, maybe pro soccer will have a better home… It will also mean that the homes in Minneapolis will have a little bit less of a property tax burden,” Rybak said of the various projects that are in line to receive possible funding from surplus tax revenues.
The 65,000-seat stadium would be built adjacent to the site of the Vikings’ home since 1982, the Hubert H. Humphrey Metrodome in Minneapolis. It would open in time for the 2016 NFL season and be available to host other public sporting and entertainment events. The team would sign a 30-year lease and retain naming rights with the builder responsible for cost overruns. The stadium will be operated by a new public authority with five members, including two appointed by the city and three by the state.
The bill authorizes the issuance of up to $498 million of state appropriation bonds. The state would repay its share of the costs for the project with new revenue from expanded gambling, including electronic pull-tab gaming and bingo.
The state borrowing would cover both the city and state share of the stadium costs, with Minneapolis making annual payments to Minnesota beginning in 2021 and continuing through 2046, totaling $150 million.
The city would tap taxes enacted under 1986 legislation that go to pay down its convention center debt, which will be retired in 2020. They include a citywide sales tax, downtown liquor and restaurant taxes, and a hotel tax. The state legislation extends the liquor, lodging and restaurant taxes through 2046.
The stadium would use about one-quarter of the tax revenues expected to be generated in the coming decades, with the city free to use the remaining funds to upgrade its convention center and the city-owned Target Center arena that is home to the Minnesota Timberwolves.
Council critics of the plan challenged both the city and state estimates but Minneapolis officials countered that even modest growth would provide sufficient revenues. “Two-percent growth in the tax revenue provides sufficient revenue to fully invest in the convention center,” the city’s chief financial officer, Kevin Carpenter, said in testimony earlier in the week. The city also contends that entertainment taxes imposed on stadium events would generate $1.5 million to $2 million annually for the general fund.
City Council opponents also questioned whether there weren’t more affordable ways to produce jobs. Some oppose any use of public dollars to subsidize a professional sports facility, while others labeled the package too generous.
Council member Gary Schiff, who voted against the resolution, said the project was receiving too great a subsidy. “We did not negotiate a good deal,” he said.
Critics also argued that the legislation violated the spirit of a 1997 voter-approved charter amendment that requires a public vote to use more than $10 million in city resources to finance a professional sports facility.
City attorney Susan Segal produced an opinion supporting Minneapolis’ ability to approve the deal without a vote based on the direct flow of the tax revenues to the state, which will keep an amount sufficient to cover the city payment. It will send the surplus back for city use. Because of the direct flow to the state, those “resources” in the form of tax revenues are not available to the city so they don’t trigger the charter amendment. Segal also contends that technically Minnesota is providing the funds to the team, not the city.
The Vikings had long pressed for public funding for a new stadium, warning that only with a new, more profitable venue could it remain competitive and remain in Minnesota. In recent years its former Metrodome co-tenants — the Minnesota Twins baseball team and University of Minnesota Gophers football team — won public financial help for their new venues.
