CHICAGO — Minneapolis Mayor R.T. Rybak and Council President Barbara Johnson unveiled a proposal Monday to partially fund a new $895 million Minnesota Vikings football stadium and renovations to the Timberwolves basketball arena by raising the city’s sales tax and expanding other taxes.
The proposal puts the cost of a new multipurpose stadium for the National Football League’s Vikings at $895 million. Minneapolis would contribute $195 million while the team would be expected to pick up $400 million of the cost and the state $300 million.
The plan calls for the new stadium to be built on the site of the Vikings current home, the Hubert H. Humphrey Metrodome. The Metrodome is owned and operated by the Metropolitan Sports Commission. “This is the only realistic, sustainable, affordable plan that will keep the Vikings in Minnesota,” Rybak said.
Under the plan, which Rybak said could create 9,000 construction jobs, the city also would provide $100 million towards renovations of the city-owned Target Center while the team would finance $50 million of upgrades designed to keep the facility competitive for at least 20 years.
The proposal also calls for the restructuring of existing Target Center debt, shifting the burden of repayment off property tax rolls, which in turn would provide $50 million in property relief over 10 years, officials said.
“This plan ensures the financial future of the Convention Center and the Target Center, both of which are powerful economic engines for the entire state, and uses Minneapolis’ economic power to help finance a new, sensible stadium for the Vikings and Minnesota,” Johnson said.
The Metropolitan Council would issue the bonds needed to finance the package. The debt would be repaid with revenues from a series of taxes, including a 0.15% citywide sales tax which is equal to 15 cents on $100. It’s the same levy imposed in Hennepin County to help fund a new Minnesota Twins ballpark and it’s expected to raise $8.5 million annually. Minneapolis currently imposes a half-cent sales tax dedicated to convention center debt repayment.
The other revenue sources come from an admission tax on stadium events; increased game-day parking fees; taxes that are currently dedicated to paying convention center bonds after the bonds mature in 2020; and the expansion of an existing downtown city restaurant and liquor tax.
A new Minnesota Stadium Authority would replace the Metropolitan Sports Commission as owner of the Vikings stadium and it would also own and operate the Target Center and the convention center. Several local bodies, including the City Council, would have to approve portions of the plan and state approval is needed.
Several state lawmakers last month introduced legislation paving the way for a Vikings stadium funding package. The state legislation, which has not yet passed, relies on up to $300 million of state support through a series of user fees that could include a sports memorabilia tax, a Vikings lottery game, the sale of naming rights, a sales tax on luxury boxes, and a tax on football players’ income. The taxes could raise about $30 million annually beginning in 2013 to repay bonds.
The host city or county would need to cover one-third of the project and bid for the project. It would receive authority to levy hospitality taxes and a sales tax of up to 0.5% without a referendum to raise revenues to repay bonds. The taxes would sunset after the bonds are retired. The bill also allows the Metropolitan Council agency to sell the locally supported bonds.
Hennepin County, which includes Minneapolis, has said it won’t compete for as a host sponsor leaving Minneapolis and Ramsey County to vie for the project. Ramsey County is working on a proposal for a stadium in the suburb of Arden Hills.
While Gov. Mark Dayton and lawmakers from both parties have expressed support for a Vikings package, only two weeks remain in the spring legislative session and little agreement has been reached over to deal with a $5 billion budget deficit.
