Mayoral candidate Stephanie Woodruff slammed the way city officials brokered the Vikings stadium deal at a news conference today on the Lowry Avenue Bridge — suggesting residents were fed misleading information about the city’s sales and entertainment taxes tapped to help pay for the project.
Woodruff, a DFLer endorsed by the Independence Party and vice chair of the city’s Audit Committee, also criticized the process for lacking transparency, public input and violating the spirit of the City Charter. The City Council narrowly approved the Vikings stadium deal in May 2012 after Mayor R.T. Rybak, Gov. Mark Dayton and the team struck a deal to keep the stadium in Minneapolis.
City leaders signed off on a plan that redirects a variety of sales taxes to finance the city’s $150 million contribution toward the stadium. The State of Minnesota’s subsidy is $348 million and the Vikings have pledged to pay $477 million toward the $975 million project.
“The people of Minneapolis were lead to believe that the Vikings stadium deal would lower their taxes. The truth was otherwise. The truth was that by dedicating $675 million dollars in future revenues to the Vikings stadium, they guaranteed further pressure on property taxes for decades,” she said. “They were led to believe that the city’s 0.5 percent sales tax was set to expire. The truth was otherwise. You can look it up. There was no expiration date for the city’s sales tax.”
The $675 million figure includes the city’s $150 million subsidy for construction of the Vikings’ new home, $189 million for ongoing operating costs and improvements, and $336 million in future interest payments, Woodruff said.
Meanwhile, Mayor R.T. Rybak has argued the city lacked control of those sales taxes until passage of the stadium legislation. The revenues from sales and hospitality taxes now controlled by the city are also growing twice as fast as estimated, he noted in his August budget address.
Rybak also credits the stadium legislation with saving the city $5 million annually in Target Center property tax relief because it allows the city to refinance the entertainment complex and proceed with renovations.
Woodruff was joined by her campaign manager Paul Ostrow, who served on the City Council from 1998 to 2009, at the news conference. Ostrow has also been critical of the city’s handling of the Vikings deal.
Woodruff referenced a change to state law in 2009 that gave the city authority to use extra revenues generated from taxes supporting the Convention Center to fund capital projects anywhere in the city. State Rep. Diane Loeffler (DFL-60A) authored the amendment.
She said the city should have seized that opportunity to use that money for neighborhood improvements on the city’s North Side to address the “gaping inequalities in our city.”
“Minneapolis neighborhoods and our most poverty stricken communities were sold down the river. It is unconscionable,” she said. “We have not invested in our most prized asset, our children. And we have failed to invest in our greatest natural resource, our riverfront.”
Rybak’s spokesman John Stiles said the stadium legislation accomplished three things that the 2009 amendment referenced by Woodruff did not. It removed a “very real threat” that the state could “at any moment take control” of the city’s sales and hospitality taxes.
“Thanks to the stadium legislation, Minneapolis now has explicit control over all four of those taxes for the first time, through 2046,” he said.
Secondly, the legislation clarified which of the Convention Center taxes could be used for economic development, and now allows all four taxes — sales, lodging, restaurant and liquor — to be used for economic development.
Third, the legislation allows revenue from the taxes to go toward more uses than just the Convention Center.
“Under the Loeffler amendment, the sales tax had to be used first to meet the obligations of the Convention Center, and as a result, there was no excess for economic-development purposes,” Stiles said. “Under the stadium legislation, however, the city can use the excess from the sales taxes toward a broader and clearer range of economic- and neighborhood-development purposes.”
Woodruff characterized Stiles’ statements as the same “misinformation included in the 2012 public relations campaign in favor of city financing of both the Vikings stadium and the Target Center renovation.”
“There was never a ‘very real threat’ to the city’s sales tax,” she said. “There has never been an expiration date for the tax. It was always understood that there will be ongoing needs at the Convention Center that required the sales tax to continue.”
Woodruff said she would have different priorities if elected and often says she’ll put “people over projects.”
She said she would put an end to “back room” deals at City Hall and implement a checkbook level transparency of city spending, noting the U.S. Public Interest Research Group gave the city a D- for financial transparency.
“I’ll put an end to the financial gimmicks and game playing and truly invite the public into the process,” she said.
Many other mayoral candidates have also been outspoken critics of the Vikings stadium deal — particularly Dan Cohen who has pledged to do what he can to thwart it if elected.
The Vikings and supporters of the project argue that it will bolster the local economy by creating 13,000 jobs, including 7,500 construction jobs.