CHICAGO — With time running out on the current legislative session, a group of Minnesota lawmakers yesterday unveiled a proposal for a new stadium for the Minnesota Vikings that relies on public funding supported by a series of new taxes to cover about two-thirds of the nearly $800 million price tag.
The plan received a cold reception from Gov. Tim Pawlenty, who opposes any tax increases to fund the stadium. The governor’s office released a statement that said: “We remain opposed to any stadium plan that includes tax increases, including the hotel tax, jersey tax, and rental car tax in one of the plans unveiled today … The governor continues to believe the team needs a local partner to be successful in their effort.”
Under the proposal, the National Football League team would contribute $264 million to pay for the facility. The public piece of the funding would likely be raised through borrowing, but no additional details — including who would serve as the issuer or the site of the new stadium — were released. The team would be required to sign a 40-year lease.
The proposed bonds would be repaid from new taxes on hotel rooms, auto rentals, the sale of commemorative jerseys and some other products, and a sports-related lottery game. The 7% tax on jerseys is projected to raise $17 million annually, the 1.5% hotel tax in the seven-county metropolitan region around the Twin Cities would raise $8 million, and the car rental tax and the lottery game would raise $5.5 million each. Some lawmakers want instead to rely on the lottery and taxes that support borrowing done for the Minneapolis Convention Center once that debt is retired. The city opposes that move.
The team, — which is working with RBC Capital Markets as its investment banker, called the proposal a good start to negotiations, but stopped short of endorsing it. The team is concerned about the size of its contribution and the term of the lease, according to published reports.
With just two weeks remaining before the Legislature’s required adjournment, Pawlenty wants lawmakers instead to focus on eliminating a $1 billion budget shortfall and adopting education reforms that could help the state better compete for federal funds.
The bill’s backers said the renewed push for a stadium package was driven by the need to ensure the Vikings remain in Minnesota after the team’s lease at the Hubert H. Humphrey Metrodome in downtown Minneapolis ends in 2011. Backers also pushed the timing because of low interest rates and for the jobs stadium construction would create. Any legislation could also face a tougher time next year, when lawmakers will be focused on passing a new biennial budget.
The proposal is the latest effort to win public funding for a new facility for the Vikings. Late last year, the Metropolitan Sports Facilities Commission announced a proposal with a price tag of $870 million to reconfigure the now debt-free Metrodome to suit the team.
The Vikings in 2007 proposed a $954 million climate-controlled, 65,000-seat stadium with a retractable roof to be built as part of a larger redevelopment project in the area around the Metrodome. In 2006, the nearby city of Blaine had partnered with the Vikings in a $675 million stadium plan that relied on state assistance, but it failed to generate sufficient legislative support. There continues to be only limited legislative support for a public funding component.
“There is no plan which the Vikings, the Legislature, and governor have coalesced around,” said state debt manager Kathy Kardell.
The Vikings have long shared the Metrodome with Major League Baseball’s Minnesota Twins and the University of Minnesota Gophers, but the Twins, who partnered with Hennepin County, and the Gophers previously won public funding packages and both teams now have new homes. The university’s stadium relies on a state subsidy and the Twin’s Target Field relies on a county-wide sales tax.