January 25, 2005
Good news, bad news
By now, we've all heard the good news about Reggie Fowler. I'm still a little skeptical that he will be able to pull this off, but he's got 60 days to prove it thanks to the exclusivity agreement. Truthfully, I sincerely want Fowler to buy the Vikings. I think he's got a passion for the game and the team, and I think he is committed to building a winner. But most importantly, it looks like Fowler is putting together a plan to build a stadium. According to a recent Shooter column:
Fowler's investment group plans to build a stadium privately and develop real estate around it.
Wouldn't that be something if Fowler could privately finance a stadium? It is certainly not unheard of (the Patriots stadium in Foxboro was largely financed privately), and I am certainly willing and excited to see if Fowler can pull it off.
However, as we've seen before with both Pohlad and McCombs, it is usually the billionaire keeping quiet in the shadows that eventually ends up with the team.
And speaking of stadiums, now for some bad news. I don't know how many of you caught this, but the No Stadium Coalition is regrouping and met last night. It will again be headed by Krinkie and Sen. Marty, and it will, again, most likely be a thorn in the side of any stadium supporter. And to make matters worse, Krinkie is also now the chair of the powerful House Taxes Committee. Yikes. Things are looking worse and worse for the Twins.
"Everybody around the State Capitol pretty much agrees that nothing is going to happen with stadiums until after the 2006 gubernatorial election," Rich Pogin, chief financial officer of Investment Management, owner of the so-called Rapid Park site, said Monday.
Did anyone tell Sviggum this? Didn't he boldly predict a Twins stadium bill would pass this session? Let's hope this doesn't deter him. The article goes on to state:
Yet [Pawlenty's] administration effectively killed a baseball bill last year that was acceptable to Senate leaders and was passed by the Republican-run House tax committee. It would have financed a $531 million, retractable-roof baseball stadium without tapping income or property taxes. The plan also met the guidelines of Pawlenty's own 2003 stadium commission.
But the powerful House tax committee killed the bill's chances when it voted down a different financing plan supported by Pawlenty that would have tapped into incremental taxes paid by pro athletes. Some experts doubted that proposal had enough financial muscle to have secured long-term bonds.
These paragraphs are a little confusing, but essentially the House Taxes Committee didn't trust Pawlenty's TIF plan (even though a plan like it funded three stadiums in Pennsylvania) and they changed the bill. The House Ways and Means committee got it next, altered it some more (including adding a soon to expire liquor tax) and the bill died as a result. Sigh. This is probably why a bill will never pass. No one can come to any agreement on how to get it done.
Neal St. Anthony continues to write specifically about the Pogin-Lambrecht plan:
I love the paid-for Metrodome. But the Pogin-Lambrecht plan was the right one and could have been sold fairly to the taxpayers if Pawlenty really had wanted to lead on this one.
Morevover, the ballpark would have been only one piece of a big, privately financed residential-commercial community on what is now parking lots.
The baseball stadium would have been largely financed over 30 years by the Pohlad-Twins contribution, continuation of a 6 percent car rental tax in Hennepin County and the airport that is now used to promote big events, and retention of 1 percent of a 2.5 percent state tax on alcohol that expires this year and that alone would retire $232 million in bonds. Most of the rest of the funding would come from parking revenue from adjacent municipal ramps.
It was a good plan, but those taxes on alcohol and car rentals were really controversial. Were they new taxes? Why not shift them to something more important, like education? I doubt they will ever be used for a stadium. In fact, they most likely will just expire and not be used for anything.
Again, I ask you, is anyone upset we built the Metrodome? The Xcel Energy Center? Old Met Stadium? All of these places were built with public money and Minnesotans and the entire upper Midwest were better off for them. And what about the Mall of America?
Never forget, the Mall of America wouldn't have happened without $130 million-plus in public access roads and other work funded by local and state government.
We can get something like this done if we just put away our collective myopic view on how much money the owners have and start focusing on how having MLB baseball in our state benefits all of us.
And that stadium also could serve as a home for amateur sports, a Near North Side parking garage and other public purposes. The Twinsville proposal took no taxes from public school kids, the environment or transportation. It remains a credible, shared-source approach that preserves a statewide asset and puts it in the middle of what will be a tax-generating expansion of the city's flowering sports-and-entertainment district and at the hub of its transit-and-parking district.
Sounds good. Let's hope something gets done so we can put this all behind us. The only person who reads this that will probably be happy, besides David, is Jim in St. Paul who probably sees this as a chance for St. Paul to take the lead in the stadium sweepstakes. What do you think, Jim?
Posted by snackeru at January 25, 2005 8:05 AM | Stadiums
You may not want to bring the Mall of America into this argument. The Mall does more for the MN economy and populous than any stadium or sports team. I see your point that it was built by public funding, but it's not exactly and apples to apples argument.
Posted by: Cheesehead Craig at January 25, 2005 9:26 AM
Yes and no. I don't argue that the MOA is a cash cow, but there was a battle to build it, and a lot of people were against it. It included "free money" for the developers, as David likes to call it. And I say again, is anyone upset that it was built? I argue the same thing would happen with a Twins stadium. After a few years we would say, "Why did we ever fight this?"
Posted by: Shane at January 25, 2005 10:12 AM
Just like we didn't say "Why did we build the Metrodome?" after the 87 and 91 World Series, the 1991 Super Bowl, and a couple of Final Fours. Rarely has "free money" brought so much back to the community!!
Curt in Grand Forks
Posted by: Curt Hanson at January 25, 2005 11:39 AM
Amen to that, Curt, amen to that. There will be no regret if we build these stadiums. None! Ecnomists estimate that one Final Four alone brought $60 million into the Twin Cities area. If memory serves correct, that was about how much it cost to build the Dome.
Posted by: Shane at January 25, 2005 12:16 PM
I will say this about the Dome, it has 1 purpose, just like the Vet: To implode.
Posted by: Cheesehead Craig at January 25, 2005 12:44 PM
Ha! That really brought a smile to my face, Craig. Hilarious.
Posted by: Shane at January 25, 2005 12:48 PM
Well, I am happy that we'll get a few more years of use out of a building that's bought, paid for, and actually generates revenue and income, sure. I'm also happy that it seems like we'll get fewer ill-aimed darts at the state legislature and a few more aimed at the governor, where they more accurately belong. (I mean, really, which do you find more obnoxious: a self-proclaimed sports fan who nevertheless decries abusive stadium deals, or a politician who promises anything and everything on the issue and then works behind the scenes to torpedo the issue while shoving the blame elsewhere so as not to ruin his political aspirations?)
As for the Mall, I'd be absolutely thrilled if stadium backers came up with a financing plan like the one they used to build the Mall of America. For the record, here's what it looked like:
"Initial construction was financed with $150 million of public bonds, divided into $25.5 million for the site, $51.5 million for the construction of the parking lots and $80 million for infrastructure. The rest of the $625 million construction financing came from two Japanese banks, Mitsubishi and Mitsui, each contributing $200 million. Although the economy was heading into a recession, the mall's investment potential was attractive enough to draw the New York-based pension fund Teachers Insurance Annuity Association. They purchased a 55% stake in the Mall of America."
(From a master's thesis at http://www.translucency.com/frede/moa.html)
The public paid less than 20% of the development costs for the MoA, and well more than half of what was spent was spent on land improvements and infrastructure like roads, water and power, and the sorts of things that are rightly public expenses. There were no tax levies, general or otherwise. And the construction of the MoA didn't render other malls, like Southdale, obsolete.
Oh, and by the way? Southdale is now over 50 years old. If it had been a ballpark, we'd have been clamoring to 'implode' it since 1976.
(Another fascinating read re: MoA and such - http://www.newyorker.com/fact/content/?040315fa_fact1)
Posted by: David Wintheiser at January 25, 2005 1:33 PM
David, I will also take the deal that built the MOA. But then again, I'd take any plan that built a new Twins stadium.
And yes, I find Pawlenty much more annoying than you. Debate is what makes the world go around. I just take comfort knowing that I am right and you are wrong. There, I feel better just typing that out. ;)
Posted by: Shane at January 25, 2005 1:53 PM
Heh - fair enough.
Want to meet up at the Xcel for the Wild...oh, right. Sorry.
Posted by: David Wintheiser at January 25, 2005 4:01 PM
St. Paul will take any advantage it can get in the Twins ballpark sweepstake. The only problem is, is this may be the last session at the Capital that St. Paul may be in it. We are electing a new Mayor this November and from what I am sensing, Chris Coleman, the former City Councilman, is gaining momentum. Randy Kelly has ruffled a few too many feathers in his term. Although Coleman represented the downtown area as a councilmen and was considered a ballpark backer, I have heard quotes from him where has he said at some point we have to realize the costs of a ballpark outweigh the potential benefits. Not what I want my Mayor to be saying. Next time you update your voter's guide put Coleman down as an "Against". Also does St. Paul really want a mayor who is Nick Coleman's brother and Laura Billing's brother in law? (Yeah, Nick dropped his long time wife to take up with the younger liberal columnist across the river).
Posted by: Jim in St. Paul at January 25, 2005 4:15 PM