Minnesota United said to be zeroing in on St. Paul, still mum on how stadium would be paid for

Minnesota United and MLS are “close” to choosing St. Paul as the site of a new soccer stadium, according to “sources with knowledge of the situation” cited by the Minneapolis Star Tribune:

Actually, I’m not going to bother blockquoting anything from the story, because that’s really all it says. (Other than that “an announcement could come this week,” which is irrefutably unspecific.) The article doesn’t even indicate whether this would mean MLS and United announcing that St. Paul is the preferred site, or actually announcing a tentative deal with the city for a stadium there, which are obviously two very different things. The St. Paul Pioneer Press did notice that Mayor Chris Coleman gave his own vague comment yesterday:

“We’re working it. Nothing to announce today,” Coleman said in a live interview on WCCO Radio.

So what would this deal that may or may not be in the process of being negotiated look like? We know that United owner Bill McGuire would be seeking a property tax break on the part of the stadium land that’s city owned, and that both the St. Paul city council and Gov. Mark Dayton are open to that idea (though it would require approval from the state legislature as well). There’s also been talk about a sales tax break and/or tax increment financing to kick back property taxes from surrounding parcels, but nothing really specific. And who would pay for the cost of acquiring the rest of the stadium land? Would United pay any rent for using the city land? What about operations and maintenance costs? Hello, anyone?

In other words, there’s no friggin’ way to know whether any St. Paul stadium deal would be good, bad, or middling for St. Paul taxpayers. This articles is part of a long tradition of news stories focusing on “Where will they put the stadium?” without answering the far more important question of “Who will pay for the stadium and how?” — but you’ve got to figure that McGuire and the MLS are not displeased with this bit of misdirection. “Sources with knowledge of the situation,” hmmmm?

 


8 comments on “Minnesota United said to be zeroing in on St. Paul, still mum on how stadium would be paid for

  1. As someone with my own sources close to the situation I can tell you slightly more than that article. I think they are pretty close, I have no idea what MLS disposition is, pretty good location for it though, traffic there is kind of a mess, but that’s par for the course in the heart of a metro area. I would expect a TIF deapitemy hatred of that and the city staff’s similar dislike.

    I wish they could just make a cash subsidy, a line item in the city budget is so much more honest and clear than a TIF. The stadium will surely increase the burden on the things property taxes pay for.

  2. Neil, you continue to comment on this without knowing, and maybe ignoring, the facts.

    St. Paul doesn’t own the property where the stadium is proposed to be built. It is owned by the Metro Council. That is well-known locally and has been addressed in the local news here repeatedly. It is stated in the news article that you seem to have read and quoted from, i.e., St. Paul Mayor Chris Coleman’s no-comment comment. Read here: http://www.twincities.com/sports/ci_28751107/soccer-stadium-likely-headed-st-paul-reports-say

    The site has been property tax exempt for at least 50 years. Thus, putting a stadium there that doesn’t pay property taxes has zero effect on St. Paul, Metro-wide, or Minnesota tax revenue.

    In fact, if the land is still owned by the Metro Council if the MLS stadium is built there, and that is the apparent plan, stadium users (not just the MLS team) would pay rent to the Met Council to use it. That turns the land into a public revenue producing source. The word from the Metro Council is that they would use that revenue to fund transit-related programs/development.

  3. “The site has been property tax exempt for at least 50 years. Thus, putting a stadium there that doesn’t pay property taxes has zero effect on St. Paul, Metro-wide, or Minnesota tax revenue.”

    Yeah, no, that’s not actually true. If you take a developable piece of government-owned land and give it to a developer and don’t make them pay normal taxes on it, that’s a rather large opportunity cost.

    (If you disagree, here’s an analogy: You’re not making any money off your guest bedroom currently. Therefore, I should get to live in it rent-free! It doesn’t cost you anything!)

    As for the Met Council getting rent on the site, the Strib article made it sound like it would be the city, not the team, paying rent. (The Pioneer Press said the city, via its Port Authority, would be *buying* the land, which would be different yet again.) If there’s rent being paid to either the Met Council or the city from United, that’s a plus, obviously, but no one has said squat about that, which is why I said we need more information to know whether this is good, bad, or middling.

  4. Addendum to my post above on tax revenue for St. Paul:

    The MLS stadium would actually increase tax revenue for St. Paul and other public entities because there would be increased revenue of other kinds of taxes, e.g., sales, for tickets, concessions, products, worker’s paychecks, vendor services, and more at the stadium or generate by the stadium.

    The generic “stadiums provide no economic benefit” conclusion is a generalization. In this particular case, the MLS stadium for the proposed Midway location could increase tax and perhaps other, e.g., rent, public revenue.

  5. “The generic ‘stadiums provide no economic benefit’ conclusion is a generalization. In this particular case, the MLS stadium for the proposed Midway location could increase tax and perhaps other, e.g., rent, public revenue.”

    St Paulite: Source for your conclusion? Because the “generic ‘stadiums provide no economic benefit’ conclusion” is one that’s actually held true for pretty much every city/team that researchers have studied. (“Pretty much” because some have managed to work their way up to “no economic benefit that we can measure.”)

  6. Also a St. Paulite here, and one who works in economic/community development.

    “The MLS stadium would actually increase tax revenue for St. Paul”

    Probably. But that is mainly because it s capturing spending from other parts of the metro. It might conceivably cannibalize some Twins revenue, and that would hurt Minneapolis a bit and help St. Paul (not talking appreciable figures at all).

    “e.g., sales, for tickets, concessions, products, worker’s paychecks, vendor services, and more at the stadium or generate by the stadium”

    Yep giving a big subsidy to a project can “create” a bunch of tax revenue, what is your point? There is also not much reason to think a disproportionate number of the workers will live in Saint Paul.

    “The generic “stadiums provide no economic benefit” conclusion is a generalization.”

    While that is true, it is an accurate generalization. In the context of the whole Metro throwing $100 million or whatever at a soccer stadium makes little sense, and on the scale of the nation as a whole it makes zero sense. Of course in individual cases if you define the areas benefiting small enough you can see a positive impact.

    Why doesn’t the state give me money for a new garage? I promise it will increase their property tax revenue, and sales tax revenue as I would likely get a second car, and would have more money to spend since I didn’t spend it on a garage.

    The biggest reason to do this is to get rid of a big eyesore of a site in one of St. Paul’s most economically challenged neighborhoods and it will continue the gentrification that is driving the low income residents out to the suburbs. Certainly that is good for St. Paul, not sure what the overall societal interest in communities pushing low income people around the metro is though. Just because they move 5 miles away doesn’t mean you solved poverty.

  7. Ok completly misleading head line. We know how stadium will be paid for ownership has very public announced they are paying for stadium. Land deal isn’t worked out so specific questions on who will own land are up in the air, but general information has said team will pay to lease land. If the lease is single payment or yearly is unknown, either way it is believed to be a number lower than buying land out right but higher than a normal lease might be since they aren’t buying it and it’s not ‘taxed’ it appears to be at least on surface to be revenue generation for a government entity.

    Opertutity cost if stays off tax role – you realized of course they have been trying to sell this land for nearly 10 years, actively for 1-2 then backed off, now actively again for last few.

    Stadium’s don’t make any since for government to invest money into, but working with a development (any development) to target or help with goals that allign with plans. I guess you can agrue about if government should do anything except be a barrier to development, but that wouldn’t be stadium related.

  8. Minnesota just is not ready. Bow out and let the Sacramento Republic get this slot. They got their sh!t together.