CHICAGO - Lawyers for Minnesota's Management and Budget office and a group of citizens challenging the state's $468 million bond issue for a new Vikings football stadium laid out their cases for why the Minnesota Supreme Court should settle the matter in briefs filed Thursday.
Both sides agree that the state's high court has jurisdiction to decide the dispute -- filed by the citizens in the form of a writ of prohibition -- although for different reasons.
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 inserted by the state in the event it wanted to undertake what's known as a validation process.
MMB opted not to validate the bonds after going through that process ahead of its first-ever use of an appropriation pledge on its tobacco refunding bonds in late 2012. Its filing Thursday argues the court is the rightful venue for review because it holds sway over such writ requests.
At the same time, the state argued that the petitioners' writ directed at blocking MMB Commissioner Jim Schowalter's issuance of the bonds does not meet the legal requirements of a writ because Schowalter is simply exercising the authority granted to him under the stadium legislation.
The citizens defended in their filing their right to pursue the action through a writ.
"The state of Minnesota and its taxpayers have a vested interest in the state's creditworthiness and the compliance of public officials with the law" and legally have the right to "restrain a public official from the unlawful use of public funds," they argue.
Minnesota pulled from the market the pricing scheduled for Jan. 14 due to the challenge filed just a few days earlier. Bond proceeds were to fund what the state government and Minneapolis agreed to pay toward the $975 million stadium. The state is covering up to $350 million of the borrowing and the city will repay up to $150 million under the 2012 legislation approved by lawmakers and signed by Gov. Mark Dayton.
The Minnesota Supreme Court had set a late Thursday deadline for both sides to submit a memorandum of law on jurisdictional and other issues.
The group of citizens believes 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 violates state law.
Lawyers for the state budget office, which is being represented by Kutak Rock LLP, argue that the legislation does not impose any local taxes but simply authorizes the city to do so. The state also argues the court should dismiss the action because the plaintiffs waited until just before the bond pricing to maximize its "destructive" impact given that the legislation was approved in 2012.
The litigation places "a material cloud over the bond sale by creating doubt regarding the issuance of the bonds, such that they are not reasonably marketable," state filings read.
The 65,000-seat stadium is being built adjacent to the team's current home, the 31-year-old Hubert H. Humphrey Metrodome. Officials with the public stadium authority overseeing the project have warned without the bond sale a scheduled 2016 opening could be delayed.
