CHICAGO — The Minnesota Vikings-backed proposal to build a $1.1 billion publicly subsidized stadium in Ramsey County relies on an overly ambitious schedule, leaves the county on the hook for potential cost overruns, and could impair its ability to finance other public projects, according to a state-commissioned report.
Two public agencies — the Metropolitan Council and the Metropolitan Sports Facilities Commission — released their findings in a 184-page “Stadium Proposal Risk Analysis” this week.
The report was commissioned by Minnesota Gov. Mark Dayton in August after Ramsey County and the Vikings unveiled their proposal for a new stadium at a 2,400-acre site in the suburb of Arden Hills that was the former home of an ammunition plant.
The plan anticipates the stadium would be ready for the National Football League’s 2015 season. The team currently plays at the Hubert H. Humphrey Metrodome in Minneapolis, which is owned by the sports commission and located in Hennepin County. It has long sought a modern and more profitable publicly subsidized home, as the Minnesota Twins and the University of Minnesota Gophers succeeded in doing in recent years.
The plan relies on a $407 million contribution from the Vikings, $300 million from the state, $350 million from Ramsey County, $15 million from the commission, and has a $39 million unfunded cost gap.
The price tag includes $100 million in transportation improvements.
Ramsey County, which includes St. Paul, would issue $350 million of tax-exempt revenue bonds to cover its share.
The county would repay the debt with a new 0.5% sales tax, 50 cents per $100, and a $20 excise tax on vehicle sales collected in the county. The analysis concluded that the taxes would generate sufficient revenue based on current market conditions to repay the bond issue.
“Our report does not make a judgment about whether the stadium proposal should move forward. Rather, it lays out in a transparent manner the risks and potential mitigation measures that could impact this project from both a cost and schedule perspective,” said Susan Haigh, chairwoman of the Metropolitan Council, a regional planning agency.
“What should be taken away from this assessment is that the needed land transfer, remediation, environmental reviews, and permits are not likely to happen in the time frame that the proposal lays out,” commission chairman Ted Mondale added in a statement. “The proposal’s schedule is too aggressive and the cost of remediation too uncertain.”
The report warns that site remediation costs could run as high as $70 million, compared to the proposal’s estimate of $30 million.
With regulatory approval needed and uncertainties over existing contamination, the cleanup could be delayed beyond its “aggressive” construction schedule, adding to the costs of the project.
Under its agreement with the team, the county would be responsible for funding certain cost overruns. If the project suffered a one-year delay and came in at a high-range estimate of $1.23 billion, the county’s costs would rise by $50 million, according to the report.
The proposed sales tax hike would put St. Paul’s sales tax rate at the highest level in the seven-county metropolitan area. While the report does not comment on whether that would affect consumer spending habits, it does warn it could “compromise other public interests by limiting the county’s and region’s ability to finance other local or regional projects.”
The team contested some of the findings as overly pessimistic and said it believes the report ultimately shows that its site, the financing and overall plan is a viable one, according to published reports.
In a statement, Dayton praised the report’s assessment and said it provided key information that’s needed to settle on a stadium plan. The governor plans in the coming days to meet with lawmakers, local leaders and team officials to discuss it but says he remains open to an alternative site proposed in Minneapolis.
“The Minnesota Legislature must decide whether or not to authorize the project and, if so, where to locate it, and how to finance both the state and local shares,” Dayton said.
Minneapolis has proposed a plan to redevelop the current Metrodome site with a $895 million stadium. That plan would require the Vikings to play elsewhere for several years during construction and is opposed by the team.
The plan relies on a city contribution of $195 million, while the team would be expected to pick up $400 million and the state $300 million. The city’s share would be repaid with revenues from a series of taxes, including a 0.15% citywide sales tax equal to 15 cents on $100.
The Ramsey County Charter Commission this week voted against putting the question of public funding on a referendum. An analysis by the Metro Council and the commission is available at www.metrocouncil.org/stadiumprop/index.htm.