January 31, 2005
Pawlenty and Sid
A few days ago I got a comment from Jim in St. Paul saying that Pawlenty had just talked to Sid Hartman on the radio about stadiums and he wondered if anyone caught the conversation. Being a stadium news junkie, this royally ticked me off since I would have loved to have heard this conversation myself. Luckily, Sid usually puts this kind of information in his column the next day, and this time was no exception.
On Saturday Sid wrote a great column on his conversation with Pawlenty, and here are some of the highlights. First of all, Pawlenty talked with Reggie Fowler and it sounds like they discussed both his attempt to buy the Vikings and if he did purchase them his chances of getting a new stadium. It doesn't look like Pawlenty had anything to say about those chances specifically, although it has been reported that Fowler would try to use a lot of private financing to get the job done.
Secondly, Pawlenty said he has recently spoken with Paul Tagliabue about the chances of the Vikings moving any time soon:
"Tagliabue told me there wasn't any imminent danger of the Vikings leaving but that sooner or later they will have to get a new stadium to compete," Pawlenty said.
For anyone that has been paying attention this shouldn't be a surprise. Tagliabue has consistently said that no team has ever broken a lease in NFL history. Between that and the "Rozelle letter" the Vikings are here until 2011. However, as Kevin Seifert noted yesterday, Red could easily hold onto the team until then and still make a tidy profit. But I digress.
What I found most interesting about T-Paw's conversation with Sid, though, was what Pawlenty said about Glen Taylor's plan for a stadium if (and when) he purchases the team:
Pawlenty also has visited with Timberwolves owner Glen Taylor and said Taylor would look at possibly remodeling the Metrodome if he bought the team. Taylor, in my opinion, has a much better chance to get a stadium than the Fowler group.
As much as I would love to have a new state of the art Viking's stadium, I think this is actually the more likely scenario. If Taylor can be convinced that a renovated Dome will put the team at least in the middle of NFL revenue, I don't know why he wouldn't go this route. It is cheaper, and it has a much better chance of passing through the state legislature with some kind of state support. Of course, Taylor still has to buy the team first. Like Curt in Grand Forks, I will continue to pray for that to happen and happen soon.
Concerning the Twins, Pawlenty said that Hennepin County is interested in backing a stadium plan, that both Sviggum and Johnson "would like to see something happen," and that if the casino bill passes he's got a little money tucked in there to help build a stadium. Nothing new there.
However, Sid also reported:
Twins officials have visited with some Indian tribes to talk about the casinos being involved in the building of a new baseball stadium, but nothing has been decided.
This I find very interesting. What if nothing, again, got done in the legislature towards a new Twins stadium? Would the Twins finally decide to look more closely at private financing? Does the Twins' discussions with "some Indian tribes" signal that there is a possibility of a partnership between the tribes and the Twins that doesn't involve the state? Wouldn't that be something. Has anyone heard anything else about this rumor?
Finally, we aren't a month into this year's stadium season and I'm already depressed about this whole mess. The battle lines have already been drawn and we've already got people sqwaking about Pawlenty potentially using gambling money (gambling money!!!) to help pay for stadium(s). This is too much for me. I am once again stunned by the ignorance of people in our state. The second they hear the word stadium they immediately say "No! No! No!" without even considering the merits of the plan, the impact of having the Twins and the Vikings in our state, or the joy it brings many of their fellow Minnesotans.
Many people are still fixiated by the idea that the Twins and Vikings are asking for a handout and the people of Minnesota will be expected to foot the entire bill. We have moved far, far beyond that. If you look at the current stadium debate and landscape, these are some of the plans that are being discussed:
- A ticket tax for fans of the teams who attend the games. Anyone got a problem with this?
- A stadium taxing district that will tax local businesses around a stadium who benefit from it. Do any anti-stadium people have a problem with this?
- The Ventura/Sausen plan, the only stadium bill that passed, that calls for a large upfront payment from the Twins that the state will invest and use the profits from to help pay off the bonds that built the stadium. Does anyone have a problem with this?
- Pawlenty's tax increment financing (TIF) plan which calls for any extra tax money generated by a stadium to be used to pay off the stadium. The state still gets everything it would if the Metrodome was still in use. Everything extra would go towards paying off the stadium. As Pawlenty says, if not for the stadium there wouldn't even be any money. Now, do any stadium nay-sayers have a problem with this?
- Using casino revenues, and a very small portion of those revenues, to help pay for a stadium. To me, this is just a no brainer. If you want to pay for a stadium then gamble. If you don't, then don't gamble. How about that? Does anyone have a problem with that?
- A Twins and Vikings memorabilia tax, as Kenneth Zapp recently suggested, again. Anyone dead set against that happening?
- And of course a large investement from the teams. I'm not even going to ask if anyone has a problem with that.
So, once again, does anyone who considers themselves anti-stadium have a problem with any of these plans? Because these are the kinds of plans that are being discussed right now. Used in combination, I would think these plans could actually build a stadium. Maybe even two. Now, what I need from anti-stadium people, and I'm begging for this, stop just saying "No!" and start looking at what is actually on the table. Take a look at the plan and decide, maybe, that you can live with what the plan offers. Then, instead of writing your legislators with a blanket stadium=no letter, write them and say, "This plan is something I can live with. Let's put this through and move on with our lives." If anti-stadium people in this state would actually educate themselves a little more about this issue, they might find that they don't have a problem with what is being suggested. And if that would happen we might be able to do something we can all agree would be wonderful: never talk about stadiums again.
Posted by snackeru at January 31, 2005 8:10 AM | Stadiums
"So, once again, does anyone who considers themselves anti-stadium have a problem with any of these plans?"
Well, as the resident 'anti-stadium' guy (I prefer to think of myself as pro-smart-stadium), I'll give you my thoughts:
1. Ticket tax
Not a bad idea, though it won't bring in a ton of money - a tax that nets $1 per ticket (roughly 5% tax on a $20 ticket) would bring in less than $1 million per season, though there's some room for 'upward movement' with a Twins stadium, since they don't average anywhere near a sell-out for each home game.
I don't see the teams or Pawlenty agreeing to this in the end, though - the teams will argue that a large ticket tax will force them to lower ticket prices to remain 'competitive', and Pawlenty has a lethal allergy to seeing his name and the word 'tax' in the same sentence. (Maybe call it an 'entertainment recipient fee'?)
2. Taxing district
As long as the district is limited to stuff like restaurants and hotels, I have no problem with this. As an example, there are a number of places that gain traffic and revenue when there's a Wolves game at the Target Center, but the Block E movie theater probably isn't one of them - I'd have to see rock-solid numbers proving otherwise before I'd accept putting a tax on businesses that would seem to be harmed by the stadium.
I imagine business owners wouldn't care for this, especially in and around a new Vikings stadium. They'll end up paying higher taxes 365 days a year in order to get increased stadium-related traffic a minimum of 10 days per year? On the other hand, new stadium construction would imply new restaurant, nightclub, and hotel construction, so that should already be considred a 'risk factor' in the builder's decision to go forward - in other words, it's not like they weren't warned.
3. Upfront payments from teams
I'd love to see this, if the teams are actually making a payment. Remember that the wheels came off the Ventura plan when it was revealed that Carl considered his 'payment' nothing more than a zero-interest loan to the state.
4. TIF financing
I've come to the conclusion that TIF is a bad idea for stadiums for two reasons, both of which reflect back to the original reason TIF was created.
The original point of TIF was to encourage development in economically disadvantaged areas - it's easier and cheaper for a developer to go build out in the 'burbs than to renovate or rebuild an existing structure in the city. TIF helps equalize that equation by using tax monies generated by the new construction to help pay down the cost. Of course, once the costs are paid, taxes go to the city/county/whatever, which benefits the public as well as the developers.
Some may consider the Metrodome aesthetically blighted, but it's paid off and still making money (the MSFC has been giving rent rebates to their tenants becuase they're running higher-than-expected surplusses in their maintenance budgets), so it doesn't qualify as a financial 'blight' that needs to be removed in the first place. And of course an Anoka county Vikings stadium would be built out where nothing else exists, which is exactly the advantageous position that TIF is supposed to equalize, not a situation where TIF is supposed to be used to give the developers an even sweeter deal. And the benefit to the city of TIF is that they wait to gain general tax revenue in the future in order to get the development done now, except that by the time the TIF is paid off, we'll be talking about blowing up that stadium and starting over again, probably with another round of TIF, which again defeats the purpose of TIF, at least from the municipality perspective.
TIF is a great tool for long-term community improvement and investment. It can even work as a strategy for historical preservation. But for stadiums, I'm not convinced TIF is in the public's best interest.
5. Casino revenues
Two small problems. First, legalized gambling in the state was originally approved under the assumption that revenues would be primarily used for more 'socially responaible' purposes - like the DNR funding that comes out of lottery proceeds, for instance. To say that now we should tap that money for stadiums smacks of a 'bait and switch', and sets a bad precedent - why not set up a pull-tab booth in the school lunchroom?
Second problem - there are probably a number of folks who gamble as entertainment who'd rather not see a stadium built. To turn the example on its head, what if Hennepin County decided to solve their funding problems for HCMC by increasing the county land use taxes on the Metrodome? If you don't want to pay for affordable health care, then don't go to Vikings games. Simple, right?
Personally, I wouldn't mind seeing existing casino revenues used in support of a stadium plan. I think the game of casino/racino chicken that Pawlenty and Dick Day are playing isn't healthy or good for the state or its relationship with its Native American tribes, but that's a different issue.
6. Memorabilia tax
Sounds like a no-brainer, but might be challenging to actually implement. For instance, would there be a tax on the autographs given out at card shows at the Thunderbird? How would they be collected? How do you enforce them? In addition, a memorabilia tax might end up being a double-whammy for places like Dome Sport Souvenirs that both benefit from the Dome's presence (and thus would pay under #2 above) and sell memorabiliia (and would pay under this point, too).
A memorabilia tax would probably be more trouble to administer than it was really worth, IMO.
7. Team investment
Yes. Absolutely. No problem with that.
In fact, if the teams decide that sitting around waiting isn't the answer and that they'd rather just underwrite the entire cost themselves, that would be ideal.
Posted by: David Wintheiser at January 31, 2005 11:54 AM
Somehow I knew you would respond David. Of course, I always appreciate you taking the time to write a well thought out comment. However, I do have some comments to your comment:
1. Ticket tax -- So true. This is not the financial windfall that some people think it is. This idea would have to be tied to another one or two ideas to be feasible.
2. Taxing district -- Yes, businesses may not like it, but you are right in saying that they would be warned ahead of time. Nobody would force them to build around a stadium. I suppose restaurants and bars in the warehouse district may be a bit peeved at suddenly being taxed for a new Twins stadium in their area (or St. Paul restaurants), but I would wager that most of the owners of these establishments are willing to deal with it to get all that extra business.
3. Upfront payments -- No, I don't remember that Pohlad considered his donation to be a loan. I do remember that Jerry Bell had a fit with the original $160 million expected donation, and that is why they talked it down to $120 million. I also remember the wheels coming off because St. Paul legislators were more interested in sticking it to their Minneapolis counterparts than actually doing what was best for the people of Minnesota. Are you thinking about the circa '97 bill?
4. TIF -- I really can't believe you are nit-picking over this one. For one thing TIF financing built 4 stadiums in Pennsylvania. It can work. However, I will agree that it is not the best solution for a Vikings stadium. Again, I feel that sooner or later the Metrodome will be renovated for a new owner. When I talk about TIF, I guess I am focusing on the Twins. You state:
"And the benefit to the city of TIF is that they wait to gain general tax revenue in the future in order to get the development done now, except that by the time the TIF is paid off, we'll be talking about blowing up that stadium and starting over again, probably with another round of TIF, which again defeats the purpose of TIF, at least from the municipality perspective."
I guess I would use the same argument Pawlenty uses. Without the stadium, without the team in the community, there is no money period. So, would you rather have something or nothing? Both Rybak and Kelly are picking something.
5. Casino revenue -- You might be surprised with how much we agree on the whole idea of gambling being used for anything. I don't like the idea of expanding gambling at all, especially when we're talking about balancing the state budget with gambling proceeds. However, your bait-and-switch argument is pretty weak as is your argument that some people who gamble still might not want their money to go towards a stadium. I seriously doubt that people who already gamble care what happens to the money they lose. What they care about is hitting the jackpot pure and simple.
I'm intrigued by your idea to use existing casino revenue to fund a stadium (given your bait-and-switch argument). However, it appears that Pawlenty is pretty determined to expand gambling no matter what. If that is the case, to me it makes sense to use some of that money for a stadium. People will still have a choice, although now that choice seemingly will be tied to funding my childrens' education (grrrr).
6. Memorabilia tax -- Yes and no. We tax all sorts of stuff on a case by case basis. For example, I seem to remember Jesse raising a bit of a ruckus over a tax on haircuts and hair care products (?). I'm sure you can tell me if I'm wrong. Anyway, in order for something like this to work, the tax would have to be pretty broad, as in a tax on all sports memorabilia, which was why the legislature nixed it in the first place. I still think the idea has merit, but it would have to be done simply which, as you say, may not be possible.
7. Team investment -- Worst idea ever. Just kidding! I actually think if Pohald would bump his "donation" back up to $160 million it would be a done deal. I've heard rumblings and rumors that he finally seems to understand this himself.
David, it doesn't sound like to me that you would be overly upset if any of these plans used together finally resulted in a new Twins or Vikings stadium. That is my point. I think their are a lot of plans out there that would work and that we could all live with. Instead of always focusing on the negative, I think we should all be working together to finally solve the problem. It may not be perfect for everyone, but after 10 years I think everyone wants to move on.
Posted by: Shane at January 31, 2005 12:54 PM
You asked me awhile ago for my ideal plan to build a Twins (and/or Vikings stadium). In my utopia the legistlature would approve a 1/10th of a percent increase (.1 of a penny on every dollar spent) in the sales tax for the 7 county metro area. St. Paul tried this in '99 at 1/2 of a percent(.5 of a penny on every dollar spent). All the decision makers I know that I have talked to since then prefer this method over the 3% bar and restaurant tax, but the well has already been poisened in '99. And of course the whole using general funds money agrument would raise its ugly head. I believe this is the method Denver used to get Coors Field built. They paid it off early plus used the tax for the arts after. I talked to my Rep, Michael Paymar after the news report on bars shutting down on W. 7th in St. Paul due to no Wild games. He said he does not hold out much hope for a bill this session due the "budget situation". I asked what was the excuse 3 and 4 years ago. I got nothing but backpeddling.
Posted by: Jim in St. Paul at January 31, 2005 2:13 PM
For any new stadium bill, there will be a referendum required, plain and simple. No MN rep is going to go out on a limb when they do not have to. That is the main problem with the situation, the state reps don't want it known that they want to tax people.
Posted by: Cheesehead Craig at January 31, 2005 3:31 PM
The only reason there would be a referendum is if there was a city or county-wide tax included in the bill. I am of the opinion that a plan can be formulated that does not include a tax that needs a referendum. It might take a little more from Pohlad and it might take a little more from the state but I think if we continue to focus on general taxes on the public this thing is dead in the water.
That doesn't mean I don't agree with Jim in St. Paul, though. A 7 county tax would pay for this thing quickly and simply. However, we are so far beyond that as a possibility it will never be considered again, in my opinion.
Posted by: Shane at January 31, 2005 4:48 PM
Point 3) You're probably right. I'm probably confusing the '97 discussion with the Ventura plan.
Point 4) Yes, TIF got four stadiums built in Pennsylvania. But the jury is still out on whether or not the state actually got its money's worth. (Not to mention that the current NFL and MLB champions both play in privately-funded facilities - though part of that may change this coming weekend.)
I also see the Pawlenty argument as a false dichotomy - it's akin to saying, well would you rather have a Hummer or no car at all? I'd argue it would be better to have no car than have one that you can't afford, but regardless, we have a stadium/car already, one that's still functional and whose only problem is that a lot of people seem to enjoy grumbling about how ugly and uncomfortable it is.
Point 5) I point out the 'bait and switch' argument because it's been used before and will likely be used again by stadium opponents. If you're not sure how to deal with that charge, you're going to have a hard time justifying casino revenues in a stadium plan.
Existing revenues means working with the tribes or carving out some piece of the existing lottery puzzle. Opening a casino in downtown Minneapolis to fund a ballpark seems like folly to me - I'd rather be a classy Omaha than a cut-rate Las Vegas.
Point 6) Yes, we do tax a lot of specific things. That's part of why there's such an anti-tax fever in this state right now, because of the perception that we'll tax anything and everything for any old reason. This is a non-starter in the current political environment, no matter how you slice it.
I do think we agree on a lot more than we disagree about, but one of the things we disagree about is pretty fundamental - you seem to want a stadium built, even if it's a bad deal for the state and us taxpayers. I'd rather call the teams' bluff - the situation in Washington DC is illustrating how cities and states are starting to realize how much power they really have in these sorts of negotiations - and work out something that makes sense for everybody.
Posted by: David Wintheiser at January 31, 2005 5:32 PM
Dave, I find it humorous(?) that you would cite the Washington D.C. example as an illustration of how cities are realizing they have power in these kinds of negotiations. I would take the Washington D.C. deal in a heartbeat while I believe you would still find fault with it. And that is the difference between us. I think we have called their bluff many, many times already, and because of that some very thoughtful and creative plans have come forward. You continue to nit-pick, whereas I want to find a deal. At some point we've got to come together.
We definitely agree on one thing:
"Opening a casino in downtown Minneapolis to fund a ballpark seems like folly to me - I'd rather be a classy Omaha than a cut-rate Las Vegas."
Couldn't agree more. There are many other alternatives to that. Besides Pawlenty wouldn't put a casino in downtown Minneapolis to build a stadium. He would build one to balance the state budget. That is really dumb if you ask me.
Posted by: Shane at January 31, 2005 6:23 PM
Just a thought but...How about vanity license plates for cars? Twins fans plates to help finance a Twins stadium and Vikings one for a Viking stadium. Or would everyone just have Gopher plates?
I mean, I dunno. I live in Florida. The actual number of vanity plates available for cars just blows my mind. They must have well over a hundred.
Every major sports team, every college team, special interest groups, veteran of war plates, memorial plates, etc. I mean, we have black bear plates. Do we have black bears in Florida? I've never seen one! The fishing ones I can understand but Hump Back Whales? I don't think those ever come here, do they?
Anyway...just a thought. The whole program works something like this. Regular plates cost like $25. Vanity plates cost $45 with the extra money going to whatever fund is earmarked for that particular plate. Renewals cost extra as well - usually like an additional $10.
Posted by: Dianna at January 31, 2005 8:48 PM
Vanity license plates are certainly an option, however, they do not really bring in a whole lot of money compared to the overall cost. But I seem to remember the Packers using this method (and commemorative bricks, etc.) to help fund the renovation of Lambeau. The idea definitely has merit, it just has to be a part of a larger solution.
Posted by: Shane at February 1, 2005 9:45 AM
Just get a damned stadium already would ya?
Geez. I want one but what the hell do you guys do with your time? Get it done and go away!!!
Posted by: dan popp at March 24, 2006 4:10 PM