Minnesota United owner Bill McGuire gave an interview to Minnesota Public Radio yesterday, and what he said was simultaneously not surprising at all (he really wants public tax breaks to help in building a stadium) and incredibly revealing:
Host Tom Weber asked McGuire if he would walk away if he didn’t receive sales and property tax exemptions from government entities this year.
“I can’t answer that. I think it would make it very difficult to build the stadium,” McGuire said.
McGuire followed that by saying, “We are not into threats.”
“Look, we are all people that live in this community,” he said. “We hopefully do good things for this community as part of our lives. We are not into threats. This isn’t a threat.”
“The people that are coming up with this money are making a significant investment into the community for something that, frankly, at this level at the beginning is not economically (profitable),” McGuire said. “It’s a lot of money to bring this here.”
MLS has said a number of its current 20 teams are not individually profitable. McGuire pegged $25 million to $30 million as an optimistic level of annual revenue for a franchise.
“Each one of these things (taxes) that cost money go against that and pretty quickly you run into the problem of financing this on an ongoing basis,” McGuire said. “So you are not asking for people to above and beyond the money that they’ve put in the beginning to write a check every year. That is just one of the elements.”
So put it all together and you get: United possibly could build a stadium without help from the public, but then their investors might lose money. So the only way to guarantee a profit — at least “at the beginning” — is for the city to let them out of paying property taxes.
Again, this isn’t an unusual argument: It’s common for developers of all types to say that without subsidies, they just won’t build anything. But with McGuire declining to even say that, what this comes down to is “We want a new stadium, but it may not make financial sense for us to do it on our own, so how about you taxpayers kick in a bunch of tax breaks and then everyone will be better off? Except you, of course.”
This is the fundamental logical conundrum of all stadium arguments: New buildings are needed for teams to be profitable, but building stadiums isn’t profitable, so subsidies are necessary to produce the profits. It’s really remarkable that fewer people never ask the obvious followup questions — If a new stadium doesn’t make money, why should anyone build one? and Why are you spending $100 million on an MLS franchise anyway if it’s such a terrible deal? — but welcome to 21st-century America.