CHICAGO - The Minnesota Supreme Court refused to block the state's sale of $468 million of general fund appropriation-backed bonds to help pay for the new $975 million Minnesota Vikings stadium.
The petitioners went directly to the state's high court due to language in the stadium legislation saying the high court shall determine all questions of law and fact regarding the bonds. The language was included in case the state wanted to undertake a validation process for the bonds.
Minnesota Management and Budget opted against going through the validation process since the high court had previously validated its use of the appropriation pledge ahead of the 2012 sale of tobacco refunding bonds.
In briefs ordered by the Minnesota Supreme Court last week, lawyers for MMB and the petitioners agreed the state's high court should settle the matter, although for differing reasons.
The court disagreed, saying the proper venue is at the district court level because the challenge is based on legal arguments over taxation.
"Petitioners argue that they have no adequate legal remedy for the alleged constitutional violation because the commissioner intends to proceed with the sale and issuance of the appropriation bonds without using the statutory validation proceeding," the court order read. "But the district courts have jurisdiction over constitutional challenges to matters involving taxation."
The high court found that the group does not lack the adequate remedy at law sufficient for it to take the case. The order noted that "petitioners filed an action in district court and they have a matter pending in the Minnesota Court of Appeals."
A Hennepin County Circuit Court judge last year dismissed the arguments laid out by the group - similar to those posed in its writ - but the group has appealed. The appellate court said Tuesday the group did not file a proper type of appeal and the time frame to do so has expired, according to published reports.
The public authority overseeing the project had warned it would run out of cash this month without bond proceeds in hand and that a 2016 opening was in jeopardy.
"We appreciate the Supreme Court's quick and decisive ruling in the Stadium case" MMB Commissioner Jim Schowalter said in a statement. "In combination with the Court of Appeals ruling, the path to permanent financing of the stadium is more clear. As a result, MMB and the state's financial team are turning to selling the necessary bonds to keep the stadium project on track and allow the Stadium Authority to make timely payments on construction and land acquisition agreements."
MMB has not yet set a new date for the bonds sale, according to MMB spokesman John Pollard.
Gov. Mark Dayton, who championed the stadium legislation in 2012, thanked the court for its fast action.
"Although I felt it [the challenge] had no merit, I was extremely concerned that this lawsuit would delay the financing of the stadium, and the progress of the $400 million development adjacent to it. Today's decision clears the way for thousands of Minnesotans to get to work on these two important projects. I again thank the Supreme Court for its swift action on this matter," his statement said.
The bond proceeds will cover the state's up to $350 million share of the stadium costs and Minneapolis' up to $150 million contribution, under the 2012 funding package signed by Dayton.
The petition specifically challenged the legality of the city financing scheme that allows Minneapolis to repay its share beginning in 2021 by redirecting a portion of its existing 0.5% convention sales taxes and hospitality taxes. The petition argued the arrangement violates state constitutional language that says "the power of taxation shall never be surrendered, suspended or contracted away."
MMB countered that the legislation did not impose a tax but simply allowed the city to do so for the stadium financing package.
The 65,000-seat stadium is being built adjacent to the team's current home, the 31-year-old Hubert H. Humphrey Metrodome.
The state carries general obligation ratings in the high-double-A category from all three rating agencies and appropriation-backed ratings of AA from Fitch and Standard & Poor's.
RBC Capital Markets is bookrunner on the deal with JPMorgan and Wells Fargo Securities as co-senior managers. Public Financial Management Inc. is financial advisor and Kutak Rock is bond counsel.
