Funding fumbles for Vikings stadium

Legislators are creating back-up plans to pay the state’s portion of the facility.

Funding fumbles for Vikings stadium

Jessica Lee

State legislators are proposing backup ways to pay for the new Vikings stadium’s hefty price tag after slow success from the state’s electronic pull-tab system.

The idea, backed by Gov. Mark Dayton, is supposed to help pay for the state’s portion of the $975 million project. But projections show that the money isn’t coming in like they anticipated.

Dayton and legislators based their decisions for the electronic pull-tab system on early projections from the Gambling Control Board that said it would generate $35 million annually — recent reports say revenues are anticipated to be significantly less at about $1.7 million a year.

“If we see some problems coming I think the Legislature should address them,” now instead of later, said Rep. Ann Lenczewski, DFL-Bloomington.

Lenczewski proposed a bill, which was heard by a House taxes committee Wednesday, that would implement a sales tax on professional sports gear and special suites at professional sports games — money that would help pay the $348 million the state is supposed to fund for the new stadium.

The current financing plan for the Vikings stadium may face problems, and this bill may fill those impending gaps in funding, Lenczewski said.

Rep. Bob Barrett, R-Lindstrom, announced two different pieces of legislation to help fix the problem Wednesday that would require the state to install slot machines at existing gaming facilities or have the owners of the Vikings football team pay more to offset the state’s missing revenues.

“Because the original funding plan was poorly conceived, the Vikings need to step in and save the day,” Barrett said in a statement.

In a presentation for his bonding bill Monday, Dayton addressed criticisms of the electronic pull-tab plan, and he said last week “it’s slow getting off to a start.”

“Right now, as everyone knows, it’s definitely running behind,” said Michele Kelm-Helgen, chair of the Minnesota Sports Facilities Authority. “It’s been much lower than what was originally anticipated.”

She said, “maybe something different will have to happen,” and legislators will have to provide new backup financing plans.

On the same day as the governor’s comments, a bipartisan panel of legislators met for the first time to discuss the new stadium’s alternative funding options and its construction process.

“I think this is an opportunity for us to look at the total picture,” said Sen. Bobby Joe Champion, DFL-Minneapolis. “This is a starting point to move forward.”

Lenczewski said at Wednesday’s hearing the “sports memorabilia” and luxury suite taxes would be good alternatives to the slow-moving electronic pull-tab system.

Under the bill, clothing, trading cards, photographs, sports equipment and other items that are sold in Minnesota under a license granted by a professional sports franchise would be subject to the proposed tax.

The bill also outlines that skyboxes and other special seats at professional sporting events in the state would face an additional charge.

“I think it’s a responsible thing to step up and now say what our possible backup plans will be,” said Rep. Diane Loeffler, DFL-Minneapolis.

Besides the state’s portion of funding, the new stadium project will get $150 million from the city of Minneapolis and $477 million from the Vikings football team.

City councilmembers have said they’re worried about funding at the city and state levels for the new stadium project.

“My concern has always been if the state funding falls through or falls short, they will come knocking on the door of the city of Minneapolis,” said councilwoman Betsy Hodges.

She said she doesn’t want Minneapolis, or its residents, to pay more for the construction of the football stadium.

Hodges, who represents southwest Minneapolis, said the money being generated for the project is money that the University of Minnesota and its students miss out on.

“What they’re looking for at the state, at the very least raising revenue for the stadium, means it’s not being raised for the University,” Hodges said.

Rep. Tom Hackbarth, R-Cedar, said he will revive a bill this session that would install slot machines and additional electronic gambling games at Minnesota race tracks as a different strategy to bring in state money.

“There’s almost an immediate effect,” he said. “Some of these other things take a while to set up and get done … slot machines could start getting set up now, and they could start seeing revenue almost immediately.”

He said last session his bill was pushed to the wayside and legislators passed the electronic pull-tab legislation instead to pay for the Vikings stadium.

“So that’s the direction they decided to go, and now we’re in trouble,” Hackbarth said.

In order to move further, Hackbarth’s bill would need to be heard in the House Rules and Legislative Administration Committee since the legislative deadline for incoming bills has already passed.

Payments from the state for the stadium, which is set to open in July 2016, won’t actually start until next year, Kelm-Helgen said.

“I think it’s a good thing that this first year is just a reserve year so the money that’s collected goes into a reserve account,” Kelm-Helgen said. “They do have time to see how things progress.”

In the meantime, she said MSFA is evaluating blueprints for the design of the new stadium, which are set to be released in the next few weeks.

“It’s going to have a whole different look to it,” Kelm-Helgen said. “It’s going to have much more glass and light, which will be a very good thing in this neighborhood.”

Legislators have said they would like to have a resolution for the funding problem before they adjourn in May.

“There could be a shortfall, and having something like the memorabilia tax could probably be helpful,” Kelm-Helgen said.