The Met Council, the regional governing body that covers the Twin Cities region, is set to vote today on authorizing a ground lease
with Minnesota United on a St. Paul stadium site* with the city of St. Paul on a Minnesota United stadium site, which means it needs to actually say what will be in the lease. So: The Met Council will spend up to $4.5 million on pollution cleanup of the site! But: The Met Council will get $556,620 a year in rent payments for 52 years, which totals $29 million but in present value is closer to $10 million! And: “The stadium itself will be built by team owners and given to the city,” according to mayoral spokesperson Tonya Tennessen!
Okay, so deeding the stadium (but not control of its revenues) is actually a benefit to the team, since it would get out of paying property taxes. But we knew that was in the works — what we didn’t know was what the lease would look like. And a tradeoff of $4.5 million in cleanup costs for $10 million in rent doesn’t sound bad, though one should probably account for the opportunity cost of whatever you could get to rent it out to someone else instead as well. So if that’s all there is to the lease, then—
Council Member Jane Prince said she remains concerned that the city would be left footing the bill for millions of dollars of stadium-related infrastructure costs, such as streets and sidewalks.
Oh, right, the infrastructure, and the possible tax kickbacks from surrounding development that could be used to pay for it. That still isn’t spelled out in the lease? What’s the holdup?
Council Member Amy Brendmoen, who chairs the city’s Housing and Redevelopment Authority, said the city is working on a memorandum of understanding with the team but isn’t yet locked into anything.
“Until we get the property-tax exemption, we probably can’t execute a lease,” Brendmoen said.
So the Met Council will vote to authorize a lease, but then the state legislature has to authorize a property-tax exemption, at which point Met Council can write a lease and the city council will decide on whether to spend on infrastructure — if this all seems backwards to you, you’re not the only one.
I’d also want to know who’d be on the hook for both rent payments and actually paying off the stadium bonds if the team ceased to exist or ended up demoted to a lower-level league, which given the way MLS is handing out franchises like candy isn’t an impossible scenario, especially over a span of 52 years. So there’s a fair bit to work out yet. But hey, renderings to be unveiled today at mnunitedfc.com, that’s always shiny!
*Gaaaaaah, sorry, you guys, when I read this in the early morning I completely failed to notice that the lease is between Met Council and the city, not the team. So everything above only applies to Met Council’s costs and revenues — in other words, the regional body is pretty much assured of being made whole here, but the city would have a load of unknown costs (including that $10 million worth of future rent payments) and unknown future revenue (because there’s still no lease or MOU between the city and United).
Thanks to commenter Scola for pointing this out, and I will try to get more sleep before reading lease terms in the future.