Sunday, June 24, 2012

Appointments to Stadium Authority Will Determine Public's True Stadium Liability

Last week, Minnesota Governor Mark Dayton and Minneapolis Mayor R.T. Rybak made their respective appointments to the newly formed Minnesota Sports Facilities Authority (MSFA).  This week, Dayton provided his long-time friend, Ted Mondale, a third $100,000+ appointment, making Mondale the CEO of the MSFA.

Dayton's continuing willingness to appoint family friends to well-paying posts notwithstanding, the most disconcerting issue pertaining to the formation of the MSFA has been the coverage of the event in the local media with virtually all of the local outlets suggesting that the MSFA's primary function will be to "turn the lights on," with a handful of outlets acknowledging a role for the MSFA in ensuring against cost overruns.

Though budget is a significant concern in the construction of a nearly $1 billion project--even if such a concern is not reflected in the overall composition of the MSFA--the far greater story, the story that has remained uncovered, is that the MSFA essentially will determine whether the public receives any meaningful return on its substantial investment.

Under the terms of the stadium legislation, the MSFA is charged with negotiating a stadium lease with the Vikings and, equally as, if not more significant, is provided the authority to negotiate who receives which portions of which stadium revenue streams.  If the public hopes to recover its investment on the stadium, it must receive a meaningful percentage of these revenue streams.  Whether this band of MSFA members has the fortitude and desire to seek such a return is a far more pressing concern than who will turn on the lights at the new facility.

Thursday, June 07, 2012

Vikings Already Cashing in on New Stadium

It should come as no surprise to anyone who followed the saga that was the legislation and land negotiation for the Minnesota Twins cathedral, that the Vikings' new stadium will be located on property for which no land-purchase agreement currently is in place.  Even the infamous words of those associated with that prior boondoggle pledging "never again," should only be read to have meant "never again should we build yet another new stadium for the Twins in Minneapolis without first having in place a land-purchase agreement."

Those associated with the seemingly never-ending hood-winking of the public trust in the building of the Vikings' stadium now have made public that the land upon which the stadium will be--must be--built is owned by many parties eager to sell.  Alas, none of those parties yet have a deal with those holding the checkbook (i.e., those managing the public trust).  That means that, much like the Twins' deal, the Vikings' stadium deal will require land purchases based not on an arm's-length negotiated value, but, instead, on a ransom deal.

If you are not yet throwing up, you either are immune to such orchestrations or you need a bit more of a nudge.

If you are in the latter camp, it might suffice to know that one of the parties that stands to gain the most on the land-for-stadium deal is the StarTribune--a publication that has not hidden its support for the new stadium built on or near the current stadium location.  That's not particularly revealing as it has been known for some time that the Strib was looking to liquidate land assets around the Metrodome to off-set internal hemorrhaging; that does not, however, make it any less insidious.

There are also suggestions of yet more backdoor schemings in support of more public money for a project not currently necessary, but which could become necessary as a consequence of the stadium deal.  If the stadium site makes use of the current Hennepin County morgue and forensics building located near the current stadium--a vision of the present stadium proposal--a new morgue and forensics building will need to be built.  That, of course, will require significant additional tax dollars for land purchase, construction, and rental of other facilities in the interim--dollars that likely will far exceed the public dollars spent on the favorite whipping boys of those clamoring for public dollars for a Vikings' stadium--the Guthrie Theater and the Schubert.

Far more galling, however, is that those with the checkbook must write a check to another of the landowners in the heart of the new stadium plot.  That landowner--as even fiction would find too ridiculous to offer--is none other than the Minnesota Vikings.  Sensible negotiations would have required that the Vikings concede their land as part of the deal to build them a stadium that would immediately double the value of the team.  Such negotiations never took place, however, leaving the Vikings in position already to recoup a good chunk of that additional $50 million that most by now should understand the team only theoretically committed to the stadium venture.

When asked to assess the value of the Vikings' land in proposed land-purchase area, the ever talkative Lester Bagley offered a "no comment."  Barfing yet?

Up Next:  Five Wise Men.