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Stadium debate kicks off

Published (4/6/2012)
By Mike Cook
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King Wilson executive director of Allied Charities, shows members of the House Commerce and Regulatory Reform Committee an example of tip board numbers during discussion of a bill that help would provide funding for a new stadium to house the Minnesota Vikings. (Photo by Andrew VonBank)An audible was called in the debate for a stadium to house the Minnesota Vikings. Supporters are betting that the change is a winning game plan.

However, the backup funding plan has received a less-than-enthusiastic welcome from many legislators and the governor.

Nonetheless, the bill has begun to barrel its way toward the goal line.

Sponsored by Rep. Morrie Lanning (R-Moorhead), HF2810 calls for a

$975 million fixed-roof stadium to be built on the Metrodome site. The team would cover $427 million of construction costs; the state $398 million; and Minneapolis $150 million. The team has played in the downtown Minneapolis stadium since 1982, but team officials say the facility is antiquated and does not provide the needed revenue to remain competitive, nor does it offer a top-notch fan experience.

Without much discussion, the House Commerce and Regulatory Reform Committee approved the bill on a split-voice vote April 2 and sent it to the House Rules and Legislative Administration Committee for referral to the House Government Operations and Elections Committee. A number of other committee stops would be necessary before the bill could potentially reach the House floor. A companion, SF2391, sponsored by Sen. Julie Rosen (R-Fairmont), awaits action by the Senate Local Government and Elections Committee.

Rep. Terry Morrow (DFL-St. Peter), co-sponsor of the bill, said time is of the essence. “I do believe the team will leave if something is not done.” He also noted that more than $800 million in income tax over 30 years from players, staff and visiting players would disappear if the Vikings left.

Lanning said Minnesota would lose business from out-of-state visitors who make up 40 percent of game attendees.

He stressed that no statewide income or sales tax increases would be used for stadium funding. However, increased gambling revenue from electronic pull tabs, electronic bingo and sports tip boards could be part of the solution a win-win in the eyes of supporters.

Under the bill, charities would receive more money from the games and pay lower taxes on their proceeds. The state also would get more revenue, which would be used to fund its share of the stadium.

It is estimated that $88 million in new annual tax revenue would be generated by tip boards, electronic pull tab and electronic bingo games. The first $72 million would be split between charities’ tax relief and the state to pay off stadium bonds. Tip boards are expected to generate $16 million annually for the state.

Lanning said $42 million per year will be needed to pay debt service on the bonds. If the numbers come in as projected, the excess $10 million would be put in reserve in case revenues down the road do not meet projections.

Gov. Mark Dayton initially offered charities $10 million in tax relief, a number the charities said was not enough.

Dayton has expressed concern that the sports-themed tip boards may not be legal under federal law, something that could not be refuted with certainty by supporters. Under federal law, gambling on sports is illegal except in states that were grandfathered in, such as Nevada and New Jersey.

King Wilson, executive director of Allied Charities, said the proposed tip boards would be legal because they would be strictly based on numbers, and not dependent on a specific team’s score. For example, he said a player with 1 and 6 on their board would win no matter which team won, say, 21-16 or 26-21.

The bill contains four back-up proposals in case, as some Legislators predict, electronic gambling devices do not meet revenue estimates:

• a 10 percent tax on stadium luxury boxes and suites;

• a sports-themed lottery game;

• redirecting excess Hennepin County taxes that now go towards Target Field; or

• a 10 percent admissions tax.

Lanning said these “blink-on, blink-offs” could raise a combined $7 million to $10 million annually toward debt service.

Rep. Jenifer Loon (R-Eden Prairie) wondered why the admission tax was low on the list, when game attendees would be the most enthusiastic about the plan.

“The Vikings don’t particularly like the admissions tax idea,” Lanning said.

Rep. Sheldon Johnson (DFL-St. Paul) questioned if things like stadium naming rights and potential personal seat licenses would be counted toward the team contribution. Team officials said they would.

“If this is the people’s stadium, shouldn’t the people get that revenue?” Johnson said.

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