In the 1987 classic, "Running Man," game show host Damon Killian asks his audience "Who do you love?" The question is rhetorical, but Killian, played by Richard Dawson, feeds off and needs the energy of the response to survive.
Much like Dawson's character in Running Man, Minnesota's Governor, Minneapolis' Mayor, and at least seven members of the Minneapolis City Council have more of a need to be loved than to be honest. That need has resulted in a Vikings' stadium deal so potentially one-sided in its debt obligations and revenue rights that hardly a worse deal could be imagined.
The dishonesty of this deal is multi-fold. The City of Minneapolis, for example, will pay closer to $700 million than $150 million; the State will pay closer to $1.2 billion than $350 million; and the Vikings' "extra" $50 million commitment almost certainly will be returned to the Vikings in the form of a more favorable lease agreement and receipt of more generous revenue streams.
The honesty of this deal is that, though it will undoubtedly create some jobs, even more jobs would have been created, and created locally and for a longer period of time, had the State and City of Minneapolis simply given every family of four the $24,000 that the stadium will cost them to service the debt on the stadium.
That's easy math--too easy. That's why, until recently, none in the local media and nobody in either the Mayor's or the Governor's office spoke about the math, preferring, instead, to note the aforementioned job creation.
Two weeks ago, the local media made a point of highlighting the Vikings' willingness to chip in an extra $50 million towards the cost of the stadium construction. The Governor and Mayor of Minneapolis touted this "commitment" as yet another reason, in addition to job creation and a nebulous community interest, for building the stadium. Nobody among the popular media painted anything but a far rosier scenario.
Now that the State and Minneapolis City Council have signed off on the Vikings' stadium deal, questioning the wisdom of the bill has become de rigueur. WCCO, KSTP, FOX, and KARE have all run features pointing to the high cost of the stadium to the public. So, too, have the locals on KFAN. All, of course, with the wisdom of knowing that there is little that can be done at this point. The theory, apparently, is that all can point back to their reporting and state that they identified the pitfalls of this relationship before the stadium was even built. Unfortunately, they cannot say the same of their commitment to the truth when the truth actually meant something.
There is, however, one thing, albeit a long-shot, that still can be done to keep this deal from costing residents of Minneapolis and Minnesota a healthy chunk of their future earnings. With the stadium deal nearly in place, all that remains is for the Mayor of Minneapolis and the Governor to form a five-person Commission to negotiate the details. Those negotiations will determine, inter alia, the lease agreement and the revenue rights. The stadium legislation permits the Commission to cede any and all meaningful revenue streams to the Vikings. It also gives the Commission full power to negotiate a lease agreement.
If the Commission treats this as yet another necessary step in the negotiating process, there is some hope that the Vikings not only will receive a new stadium, but also that the residents of Minnesota and Minneapolis will not be left with all debt and no revenue. If the Commission operates in the coddling fashion that the Metropolitan Sports Facilities Commission handled the Vikings the past few seasons or in the manner that the State Legislature, Governor, and a majority of the Minneapolis City Council dealt with the team, this will go down as the single most fiscally irresponsible piece of legislation in Minnesota and Minneapolis history.
Up Next: The Silence of Ted Mondale. Plus, Who owns Whom?
Much like Dawson's character in Running Man, Minnesota's Governor, Minneapolis' Mayor, and at least seven members of the Minneapolis City Council have more of a need to be loved than to be honest. That need has resulted in a Vikings' stadium deal so potentially one-sided in its debt obligations and revenue rights that hardly a worse deal could be imagined.
The dishonesty of this deal is multi-fold. The City of Minneapolis, for example, will pay closer to $700 million than $150 million; the State will pay closer to $1.2 billion than $350 million; and the Vikings' "extra" $50 million commitment almost certainly will be returned to the Vikings in the form of a more favorable lease agreement and receipt of more generous revenue streams.
The honesty of this deal is that, though it will undoubtedly create some jobs, even more jobs would have been created, and created locally and for a longer period of time, had the State and City of Minneapolis simply given every family of four the $24,000 that the stadium will cost them to service the debt on the stadium.
That's easy math--too easy. That's why, until recently, none in the local media and nobody in either the Mayor's or the Governor's office spoke about the math, preferring, instead, to note the aforementioned job creation.
Two weeks ago, the local media made a point of highlighting the Vikings' willingness to chip in an extra $50 million towards the cost of the stadium construction. The Governor and Mayor of Minneapolis touted this "commitment" as yet another reason, in addition to job creation and a nebulous community interest, for building the stadium. Nobody among the popular media painted anything but a far rosier scenario.
Now that the State and Minneapolis City Council have signed off on the Vikings' stadium deal, questioning the wisdom of the bill has become de rigueur. WCCO, KSTP, FOX, and KARE have all run features pointing to the high cost of the stadium to the public. So, too, have the locals on KFAN. All, of course, with the wisdom of knowing that there is little that can be done at this point. The theory, apparently, is that all can point back to their reporting and state that they identified the pitfalls of this relationship before the stadium was even built. Unfortunately, they cannot say the same of their commitment to the truth when the truth actually meant something.
There is, however, one thing, albeit a long-shot, that still can be done to keep this deal from costing residents of Minneapolis and Minnesota a healthy chunk of their future earnings. With the stadium deal nearly in place, all that remains is for the Mayor of Minneapolis and the Governor to form a five-person Commission to negotiate the details. Those negotiations will determine, inter alia, the lease agreement and the revenue rights. The stadium legislation permits the Commission to cede any and all meaningful revenue streams to the Vikings. It also gives the Commission full power to negotiate a lease agreement.
If the Commission treats this as yet another necessary step in the negotiating process, there is some hope that the Vikings not only will receive a new stadium, but also that the residents of Minnesota and Minneapolis will not be left with all debt and no revenue. If the Commission operates in the coddling fashion that the Metropolitan Sports Facilities Commission handled the Vikings the past few seasons or in the manner that the State Legislature, Governor, and a majority of the Minneapolis City Council dealt with the team, this will go down as the single most fiscally irresponsible piece of legislation in Minnesota and Minneapolis history.
Up Next: The Silence of Ted Mondale. Plus, Who owns Whom?
3 comments:
I don't dispute the numbers but I do dispute the source of the revenue. Doesn't the city's contribution consist of sales tax that is already being collected? I have a family of 4 in Minneapolis and I doubt very much that we will be spending $24,000 in the small percentage of sales tax collected over the next 30 years to pay for the stadium. In fact since the deal gets Target Center off the City's responsibility, my tax burden will go down.
I'm not saying a better deal couldn't be negotiated or that the Vikings won't come out smelling like a rose with this deal, I just don't think City residents are going to see any negative impact on their bottom line due to this deal.
What am I missing?
I don't dispute the numbers but I do dispute the source of the revenue. Doesn't the city's contribution consist of sales tax that is already being collected? I have a family of 4 in Minneapolis and I doubt very much that we will be spending $24,000 in the small percentage of sales tax collected over the next 30 years to pay for the stadium. In fact since the deal gets Target Center off the City's responsibility, my tax burden will go down.
I'm not saying a better deal couldn't be negotiated or that the Vikings won't come out smelling like a rose with this deal, I just don't think City residents are going to see any negative impact on their bottom line due to this deal.
What am I missing?
Free,
You noted what you are missing. Just because the tax is currently collected does not mean that you are not paying for it. Had the tax not transferred to pay off the debt on the new stadium, it would have been retired--thereby saving you any payment. Now, it will live on--perhaps in perpetuity, but at least until the debt on the new stadium is retired. As for the Target Center, while it is true that the debt is no longer on Minneapolis' books, it is still on Minnesota's books--and at a much higher cost that includes refurbishing the arena. Those living in Minneapolis will, of course, share in paying off this debt--in addition to their exclusively held portion of the stadium debt. And we will all share in paying off the other pork in the legislation--such as the $3 million in annual payments to Ramsey County to put towards improvements at existing sports facilities and/or to build new facilities and the money included in the legislation to pay the salary of the Vikings' stadium representative (no term specified). This estimate could be off, of course, if there are cost overruns--another tab that the residents of Minneapolis will pick up.
More disappointing, however, is that it appears that there will be little if any off-set of this per capita debt. The legislation authorizes the Commission to cede to the team virtually all revenue streams. Given how this process has played out so far, it is difficult to envision a Commission that will do anything but cede the maximum to the team, thereby keeping none of the revenue streams for the municipality and State--that is in stark contrast to how the Metrodome streams were managed (at least until the debt was paid off).
A final thought--Minneapolis is investing nearly $200 million ($600 million plus after accounting for interest on the debt) of its own money (as property taxes continue to rise and the City looks for revenue streams to support non-revenue streams) in a venture for which, at best, it will receive 10-12 (assuming playoffs) weekends of "tourism" in the City area. With the limited return, it no doubt would be a far better investment in the City to simply dole out the $200 million today to the residents of Minneapolis and let them spend it as they will, retiring the Convention Center tax.
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