Let’s start with the simple part of this story:
Rep. Mohamud Noor, DFL-Minneapolis, said he will seek relief from the city’s first scheduled debt payment of $17 million [on U.S. Bank Stadium] — and then push for a longer-term discussion about restructuring the stadium’s debt to give relief to Minneapolis.
The city of Minneapolis owes $150 million toward construction costs on the Minnesota Vikings‘ stadium, with the state covering another $348 million and team owner Zygi Wilf another $600 million. (Though when you add in the team’s property-tax break and city money being spent on stadium operations, Wilf’s tab is really closer to $0.) The pandemic has trashed the city’s budget, especially the sales taxes it had set aside for stadium debt payments, so Noor is looking to the state to bail it out.
The reason why the city is looking for state help — other than that cities will always do that when they can — has to do with the insanely convoluted financing structure the two levels of government set up during the rush to approve funding for the Vikings’ stadium. The city put off paying down any stadium debt until 2021, because it was busy paying off debt on its convention center until then. The state, meanwhile, decided to fun its share with pulltab gambling revenues — which turned out initially to bring in no money at all instead of the $62.5 million that had been projected, forcing the state to raid its cigarette tax fund instead to pay down stadium debt. Then Minnesotans finally started getting hep to the pulltab gambling thing and money started flowing from that, which led to a small but growing surplus in the pulltab fund, which led Minneapolis officials to start salivating over how nice that money would look plugging their budget hole.
So far this is all just city and state governments bickering over who’ll cover how much of $1-billion-plus stadium tab now that money is tight. But then we get to the debt on Minneapolis’s convention center, which is another drag on the city’s budget:
Earlier this fall, Minneapolis City Hall decided to refinance the remaining $26 million convention center debt for up to five years…
City Coordinator Mark Ruff declined multiple interview requests but provided a written statement saying the city had seen an “unprecedented decrease” in sales tax revenues from the pandemic. City staff recommended delaying the convention center debt for greater “flexibility,” he said.
But Ruff warned that if sales tax revenues do not recover quickly, “revenues will need to be diverted from future capital improvements at the Convention Center to debt payments.”
Put it all together, and we have: If Minnesota doesn’t share some of its surplus money it ended up with after dumping more cash into the stadium project, then Minneapolis won’t be able to spend more money to upgrade its convention center. A convention center that nobody wants to go to during Covid, and probably no one will want to go to even after Covid because convention spending is in a long-term decline. This is maybe not the argument that I would want to go to the state capital with, but all’s fair in love and bailouts.