Assessing the viability of the soccer stadium proposal

The Minneapolis soccer stadium battle is between two valid viewpoints.

Soccer fans compare Minnesota United FC’s $150 million offer — 100 percent of construction and land acquisition costs — to other local sports grabs. If the Twins had done this for Target Field, the 0.15 percent Hennepin County sales tax would be gone or greatly reduced. If the Vikings had paid in full, Minneapolis wouldn’t be mortgaging its 0.5 percent convention center sales tax through 2045. Would you love those stadiums a lot more under those circumstances?

Foes, including Mayor Betsy Hodges, use a different frame: what if someone built a $150 million skyscraper on the “West Loop” site? It would pay property taxes, like any other privately funded development, not get a multi-million-dollar break “in perpetuity” as Minnesota United has asked. Downtown is so hot that developers aren’t getting tax breaks; why not have confidence this site will some day share our property tax burden?

After calling around City Hall last week, I came away thinking several things:

1.  As MPR’s Curtis Gilbert reported April 24, there is a potential Council majority to do something to help soccer — and perhaps nine votes to overcome a mayoral veto.

2.   Despite this, Minnesota United’s big ask, a permanent property tax exemption guesstimated anywhere from $1.5 million to $6 million per year, is effectively dead at City Hall.

3.   Hennepin County, an infrastructure honeypot, is giving the cold shoulder for now. That seemingly takes Target Field’s Ballpark Authority — which could make the stadium property-tax-free — off the table.

4.  That leaves the state legislature, which so far has turned up its nose, but is open for business until May 18. In Capitol terms, this is really, really, really late in the day.

Let’s flesh out these points.

The “West Loop” site — a triangle roughly bordered by I-94 on the west, the I-394 exit ramp and Target Field on the south, and the 4th Street I-94 ramp running northeast — is 200 acres of underdevelopment. It includes the Garbage Burner and Sharing & Caring Hands, which aren’t going anywhere, and a lot of light industrial use that’s a legacy of highway encirclement.

Whatever gets redeveloped will force infrastructure improvements — to connect the bleakness to vibrant parts of downtown, the North Loop, near-North’s Heritage Park, and even the International Market Square area. Making such connections unites many council urbanists and traditionalists.

City leaders know the public will some day pay these public infrastructure costs; soccer would just speed up the timetable.

The sense I got is that soccer shouldn’t be penalized for infrastructure needed anyway. A $150 million stadium may get taxable redevelopment on the rolls sooner.

But Minneapolis probably can’t pull this off alone. Funds for area infrastructure aren’t in the city’s 2015-19 capital plan. Minnesota United is circulating a document estimating the team would bring in roughly $850,000 a year in city taxes  — $120,000 liquor tax; $615,000 entertainment tax; $120,000 city sales tax — but even if the estimates are accurate, the city’s net gain is less because some of the spending already occurs downtown.

That’s why the county’s ballpark tax is so enticing. Hennepin has prepaid $52.3 million in Target Field debt, and the sales-tax gusher will almost certainly exceed obligations every year. The tax paid for a $2.8 million ballpark connection to the Warehouse District — a possible West Loop model.

At this rate, the ballpark tax could blink off 10 years early, in 2027; adding soccer would delay that. More importantly, the legislature would have to expand the Ballpark Authority’s scope.

Hennepin Commissioner Mike Opat, who once traveled with Minnesota United ownership, now says with businesslike flatness that the county has nothing going on in St. Paul. I don’t think his is a poker face.

So far this session, Gov. Dayton has waxed phlegmatic; the state Senate voted 61-4 to bar any state money for a soccer stadium. The Ballpark Authority is funded with a local-option county tax, so it’s a clever way out — if it wasn’t seemingly dead.

Could the state still empower a public authority? Provide some other way to spend someone else’s money? I don’t know. A couple of legislators I talked to had heard nothing. But they may not be in the small room where such late-session things are hashed out.

Major League Soccer has given Minnesota United until July 1 to make a stadium commitment; we’ll see how squishy that is. But if the state is essential, the deadline moves up to the legislature’s May 18 adjournment.

MLS had made it clear they won’t play at the Vikings stadium; soccer fans wholeheartedly agree. The price may be no franchise if there’s no outdoor pitch.

I’m not a big footie guy, but I think the MLS will be here eventually; it’s a rich market. Do politicians want to gamble on the next deal costing the public less? History indicates otherwise. Opponents would counter that doing nothing will continue to cost nothing.

If Minnesota United strikes out at the state and county, soccer fans can rightly ask how the team’s lobbying failed, especially with a gifted stadium. Right now, the stadium’s biggest obstacle seems less to be public opposition than mutual frustration between politicos and soccer backers.

More than one sympathetic local lawmaker complained that Minnesota United’s plans and path remain too vague. For its part, the soccer side says in the wake of mayoral opposition, they’re having trouble finding someone to negotiate with, at least at the local level.

If it goes aground, opponents will have a rare victory; my quip is that the soccer debate looks what would happen if politicians didn’t care about sports. Still, in footie-speak, these deals have a way of breaking through in extra time. 

David Brauer, a former Journal editor, lives in Kingfield with his wife and two kids. 

(Note: The original version of this column was written before any Hennepin County commissioner responded; it has been updated to incorporate that information.)

 

(An overview of tax estimates circulated by Minnesota United FC)