Friday roundup: Warriors rail stop turns pricey, West End stadium undead again, Montreal mayor meets with would-be Expos owners

Superbrief mode today:

  • Expanding light-rail service to the Golden State Warriors‘ new arena is now expected to cost at least $62 million, which is a lot for Muni Metro, though not for some other transit systems. The Warriors owners are kicking in $19 million, but the rest will be funded by tax money from the arena district, which may or may not be enough to cover the entire nut. Tim Redmond saw this coming.
  • F.C. Cincinnati owners are officially pivoting back to the West End stadium site that it had declared dead last month after not getting offered enough property-tax breaks on the land. How come? Team CEO Jeff Berding said of the other two options, Oakley is “not as close to the urban core as desired,” and the team couldn’t secure land in Newport, Kentucky. Sounds like the West End has the club over somewhat of a barrel, which it should be able to use to ensure the team pays full property taxes, at least, though some residents may be more concerned about keeping out a stadium entirely over fears it will further gentrify their neighborhood.
  • The mayor of Montreal is meeting today with an ownership group that wants to bring a new Expos MLB team back to town. “We don’t need a cent from the city of Montreal, but we need a little help,” prospective co-owner Stephen Bronfman said earlier this week; your guess is as good as mine what that actually means.
  • Minnesota taxpayers have spent $1.4 billion on new or renovated sports venues over the past 20 years, if anyone is counting.
  • The Pawtucket Red Sox‘ stadium demands continue to be stalled, if anyone is keeping track.
  • “A deputy in one of Russia’s 2018 FIFA World Cup host cities has claimed that a latest inspection by the world’s footballing body has neglected a missing column at a newly built stadium.” You’ve just got to read the whole Moscow Times article now, don’t you?


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Las Vegas Raiders to have fans park in Idaho, and other Friday stadium news

I’ve been busy this morning working on further research into Jeffrey Loria’s Miami Marlins windfall for an article set to run at Vice Sports on Monday, so rather than let the day slip away entirely, let’s do another round of news briefs:

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MN United finally gets $57m in tax breaks, one year after misplaced “or” almost scuttled them

Almost exactly one year after Minnesota United had a property-tax break for its new St. Paul stadium vetoed by Gov. Mark Dayton because somebody accidentally wrote “or” instead of “and” in an unrelated part of the bill about paying off the Vikings stadium with bingo-hall proceeds, the team finally got its money Tuesday night, when Dayton signed the bill after the state legislature re-passed it. Now that the team has its $57 million in tax kickbacks, construction is now expected to begin in the next month or two, with the stadium scheduled to open in time for the 2019 season, because soccer stadiums are relatively simple and so don’t take three years to build like, say, NFL stadiums. Still, that’s a year later than it would have opened if some state official had been more careful with their conjunctions (or, I suppose, if United had been willing to build a stadium and pay taxes on it, instead of only being willing to do one or the other).

In unrelated news, the New York Times decided yesterday to get rid of all of its copy editors. The future is truly a wondrous place.


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MN legislature: Sorry for delay in $54m MLS stadium tax break, here’s $3m more to make it up

Last May, it looked like the Minnesota United stadium in St. Paul had the full go-ahead, after the state legislature approved a property tax exemption worth an estimated $54 million for the project. But, as it turned out, there was a snag: Whoever wrote the omnibus tax bill it was attached to accidentally put in an “or” instead of an “and” in a description of tax breaks for bingo halls — a typo that would have cost the state $100 million in tax revenue — and so the governor refused to sign it, leaving the MLS team’s tax break in limbo.

There’s nothing stopping the legislature from re-passing the bill this year, of course, so that’s exactly what they’re doing. And as an apology to the team for taking so long, they’re sweetening the deal with an additional $3 million tax break on construction materials as well:

Minnesota United team owners have said the tax exemptions are essential to moving forward with a $150 million stadium in St. Paul, though they’ve also said that they were confident the Legislature would come through. They have denied that the lack of exemptions was a hold-up for starting stadium construction.

That … what? Whoever at the St. Paul Pioneer Press was responsible for editing that paragraph really needs to have done a better job, since saying that tax exemptions are “essential” to moving forward and also not “a hold-up” to moving forward are, well, contradictory. Admittedly, it’s the kind of contradiction that team owners like to put forward — We’re going to build this either way, don’t worry, but if you don’t give us money we can’t build this — but there’s really no need for newspapers to be their enablers, now is there?

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MN gov: Who said Vikings could have exclusive soccer rights to stadium? (whistles, averts eyes)

Minnesota United, which starts play in the MLS next year, is building a new stadium in St. Paul, with the help of state tax breaks. The team’s owners would like to use U.S. Bank Stadium, the new home of the Vikings that got about half a billion dollars in state funds and is owned by the state so that it can get hundreds of millions more in property tax breaks, for a few friendly matches (that’s soccer for “exhibition games”) against international teams. Vikings owner Zygi Wilf, whose own application for an MLS franchise was rejected in favor of Minnesota United’s (which was backed by, among others, the owner of the Twins), is now threatening to sue, saying they have exclusive rights to have an MLS team play home games at the stadium, and exhibition games count as home games, so nyah.

All this pissing match between two sports gorillas (er, sorry for that image) has left Minnesota Gov. Mark Dayton in the rare position of being able to attack one local sports baron in the defense of another, and he took full advantage on Wednesday:

Gov. Mark Dayton called the Vikings’ opposition to possible Major League Soccer games at U.S. Bank Stadium “sour grapes” because the team’s owners lost an expansion franchise to a rival group led by former UnitedHealth Group CEO Bill McGuire…

“This is not the Vikings’ stadium,” he added. “This is the people of Minnesota’s stadium. It’s run by the stadium authority for the people’s benefit which means generating opportunities for Minnesotans to come together and support the various opportunities they enjoy.”

You go, Mark! Maybe everyone will forget that the whole reason the Vikings have that stadium — and the lease clause about soccer rights — is because you spent years campaigning for it.


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Hundred-million-dollar “or” could threaten Vikings, United stadium funding

Minnesota has been through some awfully weird stadium shenanigans in its time, but this takes the cake: A one-word typo in a tax bill meant to raise money to pay off the almost-completed Vikings stadium is now endangering not just funding for that project, but for the new Minnesota United stadium, too.

How’s that work, exactly? Well, it seems as if the Minnesota state legislature, as part of a bill designating pulltab gambling money for the new Vikings stadium, intended to carve out a tax exemption for bingo halls — i.e., places where bingo is the main business, not other gambling establishments that happen to host bingo from time to time. So they wrote this into the legislation:

[A bingo hall is a place where an organization] regularly conducts bingo if that organization gets half of its revenue from bingo or no other organization conducts lawful gambling.

See the problem here? If that “or” were an “and,” only organizations that got the majority of their revenue from bingo could get the tax break. Instead, any gambling organization can get it just by “regularly conducting bingo,” so long as it’s the only gambling organization on the site. It’s a whopper of a typo, one that state budget officers say would cost the state $100 million in revenues over the next three years, “all of the revenue over the next three years from charitable gambling intended to offset [Vikings] stadium expenses.”

That’s right up there with the infamous million-dollar comma, but the fallout from the typo could be even more far-reaching: Minnesota Gov. Mark Dayton says he’ll veto the entire tax bill unless the typo is fixed, and since the tax bill also contains Minnesota United’s $54 million property tax exemption for their new stadium, now suddenly the expansion MLS franchise is caught up in this, too.

It’s extremely likely that all this will get worked out, but with the legislature already having ended its session for the year, it may not be a simple fix. (Some legislators are saying they’ll just write a letter saying “that’s not what we meant,” but state budget officials say a special session would be needed to set this right.) In any case, it’s all a great opportunity to point and laugh at Minnesota elected officials, not to mention a terrific case for why it’s important to have copy editors.

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MN governor to United: Here’s some tax breaks, if you want more later, just ask

Turns out there indeed wasn’t much suspense around the Minnesota legislature’s vote on a full property tax exemption for Minnesota United‘s new stadium in St. Paul: The tax break was rolled into the annual tax bill and easily passed on Sunday. At least the exemption only applies to the stadium itself, not any surrounding development, but even then a Minnesota Public Radio investigation came up with numbers that imply that United’s owners will save $54 million worth of future tax payments via this stroke of the legislative pen.

The new MLS club also got a liquor license approved on the last day of the legislative session, but, interestingly, did not get an exemption from construction sales tax, a common subsidy for many development projects, sports-related and otherwise. (The MPR report gave an estimated value for this of around $3 million.) Gov. Mark Dayton, however, said that just because United isn’t getting the sales tax break now doesn’t mean that it can’t get it later:

As Dayton considers a possible special session, he said in a Monday afternoon news conference that he hoped United officials could see they received most of what they wanted at the Capitol…

While the tax break on construction materials was unapproved, Dayton said United can apply for a sales tax refund under existing state law, an avenue used to build the Saints’ year-old stadium in Lowertown. The law, shared by Coleman’s office Monday, relates to building materials for capital projects of regional significance.

“While the city sought an up-front exemption at the Legislature this session, which is easier from an administrative perspective, the lack of action simply means that contractors can move forward and a refund will be granted on the back end,” Coleman said in a statement.

Okay, sure, the state can just cut United a $3 million check after the stadium is built. But — and I can’t stress this enough — why on earth would it want to? The whole reason for considering the tax breaks in the first place was that United principal owner Bill McGuire claimed that he wouldn’t move ahead with building the stadium without them. (Whether that was true or gamesmanship, we’ll never know at this point, but let’s leave that aside for the moment.) If United starts construction now, it’s not like they can give up halfway if they don’t get their retroactive construction sales tax rebate check — they need to decide if they’re going to move forward under the current law, and if they do, giving them an extra $3 million is just a gift, not a negotiated agreement in order to get a soccer team.

Taken along with Florida’s crazy new stadium-subsidy system, this is an extremely worrisome trend: Suddenly, not only are sports team owners getting public cash because they’re driving a hard bargain, but just because, you know, they asked, and they’re nice guys who built something, so don’t they deserve not to pay taxes on it like normal people? Taken to its logical extreme, it’s probably only a matter of time before Tom Ricketts demands retroactive tax rebates on all the economic activity that Wrigley Field has brought to Chicago over the last century — oh crap, I just gave him an idea, didn’t I? Quick, somebody go distract him with pictures of baby pandas or something until this post has expired from his Twitter feed.

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Minnesota senate approves United soccer stadium tax break, whatever the cost

The Minnesota state senate voted 37-30 yesterday to approve a full property tax exemption for St. Paul’s proposed Minnesota United stadium, without once attempting to calculate how much this tax break will be worth to the team owners. Or at least that’s what all available evidence is showing — for starters, here’s the entire text of the stadium-related portion of the bill they voted on:

Section 14. Soccer stadium; property tax exemption; special assessment. Provides that any real or personal property acquired, owned, leased, controlled, used, or occupied by the city of St Paul for the primary purpose of providing a stadium for a Major League Soccer team is exempt from property tax. The properties are still subject to special assessments. Any real or property subject to a lease or use agreement between the city and another person for uses related to the purpose of the operation of the stadium and related parking facilities are also exempt regardless of the length of the lease or use agreement.  This property tax exemption does not apply to any real property that is leased for residential, business, or commercial development or any other purpose not necessary to the operation of the stadium. Effective upon approval by the St. Paul City Council.

Also, the Minnesota senate has only posted partial video of the hearing, but there’s no discussion there of an actual price tag on the value of the tax breaks, or any talk about the stadium at all. (Yes, I actually listened through 38 minutes of an omnibus tax bill hearing to determine this, so you don’t have to. I’ll be hitting the Advil early today.) So our best guess is still the $57 million in present value that Minnesota Public Radio estimated back in March.

Two notes on this: First off, yes, a tax break is still a public cost even if it’s on land that’s not currently paying taxes. For United’s owners, paying $57 million less in future taxes is exactly the same as getting $57 million in cash from taxpayers to help pay for a stadium. (Well, slightly different in that they’d be getting payments over time instead of all at once, but they can always just borrow $57 million from a bank and pay it off with the future tax savings — that’s precisely what “present value” means.) United owner Bill McGuire has been saying that there’s no way he can afford to build a stadium without the tax exemption, and whether you believe him or not, clearly it’s worth a significant pile of cash if he’s threatening to walk away from the stadium plan without it.

Second, it’s worth noting that this same senate voted 61-4 to approve a ban on tax breaks for a Minneapolis soccer stadium last year. The difference? Minneapolis mayor Betsy Hodges was opposed to it, while St. Paul mayor Chris Coleman is in favor of it. You can pretty much ignore most of the arguments made for or against the tax exemption on the grounds of what’s good policy or how much it’d cost whom: This comes down to “the mayor wants it, so the senate isn’t going to argue with him.” It’s possible things will be different when the state house votes — both Coleman and the senate leadership are Democrats, and the house is controlled by Republicans — but given past history, I wouldn’t hold my breath.

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Minnesota senate to vote today on $54m in tax breaks for United soccer stadium

The Minnesota state senate is set to vote today on whether to give a full property tax exemption to Minnesota United‘s new stadium project, writes the St. Paul Pioneer Press:

On Tuesday, the Senate Tax Committee passed a tax-related measure, including property tax exemptions for the pro soccer team’s proposed stadium at the intersection of Interstate 94 and Snelling Avenue.

“That’s great news,” bill sponsor, Sen. Sandy Pappas, told the Pioneer Press. “We certainly expected this. The soccer stadium is very popular on both sides of the aisle, and we think that as long as we have tax bills that are moving in the Senate, we have a really good chance to be in the final bill.”

The Pioneer Press goes on to add that a related proposal to exempt the stadium from construction sales taxes is expected to be added in conference committee once both houses of the state legislature have voted, and has a lot more to say about the plan … with the notable exception of how much these tax breaks would actually cost, which seems like an important detail. For the record, the best estimate so far is that the tax breaks would cost about $57 million in present value ($54 million in property tax breaks, $3 million in construction sales tax breaks), which for a $150 million stadium would be a decent chunk of change. We’ll see if any updated numbers emerge during today’s senate vote, but I’m not holding my breath.

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St. Paul approves spending $93m in public cash and tax breaks toward United’s $150m soccer stadium

The St. Paul city council voted 5-2 yesterday to approve $18.4 million in spending on infrastructure for a new Minnesota United soccer stadium, as was revealed last week would be the city’s price tag. United’s owners are now just awaiting state legislative approval of a full exemption from property taxes and construction sales taxes, and then they say they’ll begin construction.

So what exactly did the St. Paul council agree to? There are a whole lot of documents, but the most interesting one is the “playing and use agreement,” which is effectively the team’s lease. It says, in short:

  • United gets all rights to the stadium and “appurtenant” areas. (Whoever wrote this document really likes the word “appurtenant.” As they should, because it’s an awesome word.)
  • United will pay the city $556,623.96 a year in rent, which is the exact amount that the city will have to pay the regional Met Council in rent for its land.
  • The city can use the stadium for high school sports and stuff, unless United doesn’t want to let it.
  • United will be responsible for all operations, maintenance, and capital improvement costs to the stadium. The city gets to maintain the sewers, because that’s why they’re paid the big bucks.

This answers most of the remaining questions about the deal, and is mostly reassuring — you could argue that the city might have wanted to shop around to see if someone else would pay more for development rights to the land, but at least the public’s costs do seem to genuinely be capped at $18 million. Plus whatever the property tax and construction sales tax break would be worth, of course — previous estimates of the property tax break have put it at around $2.4 million a year, rising over time, which would come to around $54 million in present value, while the construction sales tax break would add about another $3 million.

So the final total public subsidy looks to be $93 million — on a stadium that will cost $150 million to build. Which just goes to show that there’s a big difference between mostly reassuring and all reassuring.

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