Twists and turns aside, stadium deal not yet dead

by Brad Unangst

Despite news that Minnesota Vikings owner Red McCombs has removed his initial offer to contribute $100 million to the construction of the Gophers-Vikings football stadium, University and Vikings officials say the deal is far from dead.

University officials said they were surprised by McCombs’ decision. University General Counsel Mark Rotenberg, who manages the institution’s negotiating team, said the Vikings have not contacted him regarding McCombs’ rescinded offer.

Recent news reports have indicated the University is growing weary of trying to reach an agreement on the operation and management of the stadium in a memorandum of understanding.

Vikings officials – disappointed that the University is airing those issues in the media – said McCombs’ action is not an indication that the National Football League club is ending its partnership with the institution.

Vikings stadium consultant Lester Bagley said while there are still issues to be worked out in completing the memorandum, the state legislation that required both organizations to reach the agreement does not require the Vikings to identify their contribution to the project.

“The level of contribution is an issue between Red McCombs and the Legislature/governor. It’s not an issue between the Vikings and the University,” Bagley said.

University Chief Financial Officer Richard Pfutzenreuter said that establishing financial specifics with the Vikings was “a no-brainer” to the University.

“(The Vikings’ contribution) would be nice to know in a concrete manner in the (memorandum),” Pfutzenreuter said.

The University Board of Regents has said the institution does not want to be left holding the bag when it comes to paying for a stadium.

Officials from both sides said they will meet this week and reaching an agreement is in the University and Vikings’ best interest.

The University has set a Nov. 27 deadline for completing the memorandum in time for the regents’ December meeting. The Legislature is expecting to see the memorandum and a stadium predesign plan in mid-December.

If an agreement is not reached, the Legislature would most likely decide who would control the stadium – if they approve funding for a stadium at all.

McCombs’ financial contribution was established last spring when a $500 million stadium was being discussed with the state. Under an NFL stadium funding program, additional money – $51.5 million based on McCombs’ contribution – would be added to the pot if construction plans are approved by March 2003.

McCombs’ announcement comes days after the regents learned the University submitted a memorandum of understanding proposal to the Vikings that better addresses the institution’s financial concerns, Rotenberg said.

The University wants to limit its financial risks associated with the stadium by retaining control of its operation and of future construction of University buildings surrounding the stadium. The University also wants protection from maintenance and renovation costs that exceed a set amount. The proposal included using a percentage of the naming rights to establish an account to pay for those costs.

To make up for a lack of revenue from nongame day events – which University officials say is necessary given the stadium’s estimated costs – the proposal recommends using a ticket tax to create an account similar to one being used at the Metrodome.

But the Vikings are concerned that any deal that mimics their lease with the Metropolitan Sports Facilities Commission, which operates the Metrodome, would not be acceptable.

Control over stadium operations and revenue streams are related, and the Vikings want to make sure they are getting what they need from a new stadium, Bagley said.

“The Vikings are not going to put themselves into another similar situation, exchanging the sports commission for the University of Minnesota,” Bagley said.

Rotenberg said the University is pressing for control of the stadium in part to appease neighboring communities who are concerned about an NFL-sized stadium on campus.

As negotiations continue, both sides will need to find middle ground on those issues, including building costs.

“We need to know what our financial risk is for the University in the deal,” Pfutzenreuter said. “What is our exposure?”

The University’s go at a memorandum came on the heels of a Vikings proposal that was rejected in October.

The Vikings proposal requested a lease termination clause every five years and game-day revenue of 17,000 parking spots. It failed to provide the University with rent payments for use of the facility.

“We should be able to work these operational issues out,” Bagley said.

With the deadline looming, Rotenberg said he is growing more concerned about getting the memorandum done.

“If we don’t make progress very quickly now, time will just run out,” he said.

Brad Unangst welcomes comments at [email protected]