Thursday, April 26, 2012

How to Have a Stadium Referendum in North Minneapolis

Post by the Hawthorne Hawkman.  Top document from the city of Minneapolis, bottom image from the Daily Norseman blog.

The Vikings Stadium bill is moving along in the state legislature, and morphing too often and too quickly to keep up with on this blog.  But one key provision that our mayor and seven council members have turned their back on is the fact that the Minneapolis city charter specifically calls for a citywide referendum on any stadium funding greater than $10 million.  At the city council meeting that produced a 7-6 vote in favor of the stadium (Rybak calls that strong support), the city's chief financial officer was asked what the total cost to the city of Minneapolis through 2046 would be for this stadium proposal.

$675 million.

Now I might not be as smart as these people, so I pulled out my calculator to double-check a few things.  And just to be sure I didn't get mixed up with all these newfangled smartphone calculators, I used one that's fifteen years old and only goes up to eight digits.  $67,500,000 minus $10,000,000 equals $57,500,000.  I know I'm missing a zero in there somewhere, but I'm not too good at math and can't figure out where to put it.  Anyway, as best as I can figure, we're allocating far more than ten million in city resources under this proposal, and yet eight of our Minneapolis elected officials are ignoring the referendum requirement.

As an aside, the city attorney has issued a verbal opinion, not a written one, and that this is okey-dokey because the state collects these taxes and gives them back to the city or lets us use them or converts them into unique monetary units that only the Vikings faithful can see, or something like that.  We don't really know, because this is a VERBAL opinion and not written out.  In my opinion, the mayor and city attorney are selling the gang of seven short.  I find it extraordinarily flimsy for a $675,000,000 decision to be made on verbal guidance alone.  If there were a written opinion, then the support that the seven CM's gave would have more weight at least.

So if there's going to be no referendum, what do we do in north Minneapolis?

First up, we do have state elections this year.  Bobby Joe Champion is running for the Senate seat, and he has sent out an email asking for constituent opinions on the Vikings stadium bill.  His letter is full of milquetoast capitulations about why this bill is supposedly good for the district, and I suspect he will vote for it unless he hears from constituents in 59A and 59B.  Flood his inbox with messages in opposition, and tell him that without a city referendum, the deal is unacceptable on its face.  Then, if he votes for the bill in a form that spends more than $10,000,000 of city money without a referendum, he should not be elected to represent us in the Senate.  In all likelihood though, a protest vote against Bobby Joe would be the safest and most meaningless actions one could take, as he is probably going to win the district convincingly.

In 59A, Joe Mullery has sent out his own email asking for constituent input on the bill.  Mullery's letter is highly and appropriately critical of the bill, while still seeking community input.  He appears likely to vote against it, and should be commended for doing so - both in messages and in votes during the primary and general elections.

In 59B, we have an open seat with Raymond Dehn, Ian Alexander, and Terra Cole vying for Champion's vacated spot.  Alexander has already issued a press release indicating his support for the stadium, and specifically states that he would vote for the bill right now.  He just lost my support, and if you feel the same way, contact his campaign and tell him that.  Dehn has been active with downtown Minneapolis 2020 Partners, who have issued a letter of support for the stadium.  It's not clear whether he supports the current bill however.  Terra Cole's campaign page states that if a stadium is built in the district that it should be done in a way that benefits the community.  So let's keep track of what our candidates' positions are, and vote accordingly.

Likewise, two current players in the stadium debate are vying for the open Hennepin County Commissioner seat.  I try to base my support of a politician on their work as a whole, and not give all of a decision's weight to one issue.  But $675,000,000 is a pretty big weight and as a result, I just don't see how I can support Don Samuels in his bid for Stenglein's seat.  This is a hard decision, because I genuinely like Don, and have spoken very highly of him as a city council member up until this point.  Likewise, Linda Higgins is also one of my favorite people and I have great respect for her record as Senator.  But if she votes for a Vikings stadium bill that doesn't require a referendum and is fiscally irresponsible, then I could not support her campaign for the county position either.

RT Rybak has repeatedly said he's willing to stake his reputation and political future on the Vikings stadium.  That's an easy claim for him to make because he's insulated from ramifications for another year.  Therefore, the only way we can have a referendum is by forcing immediate consequences on the stadium supporters.

ADDENDUM #1 - Joint letter from Bobby Joe Champion and Linda Higgins

Dear neighbors and friends,  This past session, discussion over whether to fund a Vikings stadium has been on the minds of many in our state. The unfolding of last week’s events, culminating with the meeting between NFL Commissioner Roger Goodell and Governor Dayton, has brought this issue to the forefront here in the legislature. As such, it is becoming increasingly more likely that we will see this issue come to a vote in the next few days, before this legislative session adjourns. 

The Vikings stadium issue has been controversial, with both sides providing important concerns to consider. As representatives of our community and district, we believe it is imperative that we ask you for your input on this issue. 

As this issue makes its way through the legislative process, it is prone to being changed through amendments. However, we thought it would be helpful to provide you with information on what the proposal being considered at the Capitol currently looks like. 

The current proposal would build upon the existing Metrodome site in Downtown Minneapolis. Under this plan, the $1 billion cost to construct the stadium would be paid by the Vikings, the State, and the existing Convention Center taxes. A majority of the Minneapolis City Council also support this plan, including Council members Barb Johnson, Don Samuels, and Diane Hofstede. The funding for this plan would be financed in the following way:

 ·         Require the Vikings to pay over 50% of the capital and operating costs of the stadium;
·         Have the state pay $300 million in the form of permitting electronic pull tabs for charitable gaming. This raises $42 million a year to back the state issued bonds and provides tax relief to the charities. This is also the mode of gambling expansion favored by Tribes;
·         Redirect existing Minneapolis taxes from the Convention Center to pay operating costs for the Vikings Stadium and provide funds to pay for the operation of the Target Center.  Currently, Minneapolis taxpayers pay $5 million a year to operate the Target Center.  The legislation would relieve Minneapolis taxpayers of this property tax burden.

 In addition to keeping the Vikings here in Minnesota, proponents for this proposal cite the opportunity for increased economic development for the region. Building of the stadium would result in immediate construction jobs with a competitive wage and with nearly 300 non-football related events taking place at the stadium, employees will be needed to maintain and operate the building year-round. Additionally, constructing a new Vikings stadium provides a revenue generating opportunity for local businesses like bars and restaurants.

 Another important component of the potential gain in economic development a stadium may incur is that current language in the proposal makes a strong effort to employ women, members of minority communities and residents from zip codes with high rates of unemployment and poverty. This is also extended when contracting with businesses with efforts being made to contract with women-owned and minority-owned businesses.

 While the potential for increased economic development is compelling, it’s also important to examine the arguments against the proposal. Most notable of these arguments is recognizing that we have more important priorities moving forward, such as education and affordable housing. Instead of focusing on finding public revenue streams to fund a stadium, we should be putting those same efforts into making sure our schools are fully funded and public transportation is more affordable. We should not be subsidizing private companies and business owners, when we still have so many in our community feeling the effects of the economic recession.

 As we noted before, some details of this proposal remain to be worked out and may change. We would support a Vikings stadium bill only if it advances our community’s interests.
 With this plan evolving every day, it’s important that we hear from you. Not just about whether or not your support the funding of a stadium, but why you do or do not. Would you support the current plan? Would you support a stadium bill that includes the current proposal along with revenue for education or housing? Would you be more willing to support a plan that further specifies language regarding efforts to hire women, members of minority communities and individuals living in zip codes with high rates of poverty and unemployment?

 Let us know quickly what you think. The House and Senate will likely vote in the next two days on the proposal. Additionally, please be sure to include your name and address in any response you send. 

We believe that regardless of how we vote on this issue in the end, whatever we can do in the meantime to make sure our district fairs well is of the outmost importance. We appreciate your feedback on this issue.

 As always, it continues to be an honor serving you and our community. 

Sincerely,

Bobby Joe Champion, State Representative
Linda Higgins, State Senator

ADDENDUM #2 - Letter from Joe Mullery

VIKINGS STADIUM BILL PROVISIONS – REQUESTING YOUR INPUT

The Vikings stadium bill provisions seem to change each hour.  Here are some of the provisions and some facts of the current stadium bill.

The State share is $398 million, the city of Minneapolis puts in $150 million, and the Vikings share is $427.

The state will put in no money for operating expenses, Minneapolis will put in $189 million, and the Vikings $327 million.  That Vikings amount includes their normal expenses of a tenant such as rent, security, upkeep, maintenance, etc.  At the same time, the Vikings get monies that would normally go to the government as the owner of the stadium, such as naming rights for the stadium.  Business magazines believe the Vikings will get roughly $150 million for naming rights from corporations.  They will get vastly more in revenue from selling advertisements all over the stadium, but no one has estimated the value of that to the Vikings.  Normally the owner of the facility gets the revenue from such advertisements.

Of all the stadiums built in the last 10 or more years, the government is putting in the second most of any stadium for construction of the Vikings facility.  Including the amounts put in by the government for construction and operating expenses, this will be the biggest public contribution of any stadium.

The city of Minneapolis is actually putting in almost as much as the state; yet Minneapolis loses some property tax it now collects because more property will become tax exempt.

The state's share will supposedly come from the state's tax on charitable gambling.  That money is normally allocated to the general fund, which is what pays for almost all of state government, plus schools, health and human services, etc.

A 178% increase in charitable gambling would be required to get enough money to pay the state's share.  A key question is whether there will be an enormous increase in charitable gambling; if not, there will have to be another source for the state money for the stadium.  One of the backup plans is to take a portion of the Hennepin County Tax, which was set aside for the Twins stadium.  The state would override the present law and take part of the Twins tax, which is used to pay off the Twins stadium bonds and fund libraries and youth sports.

The bill also uses the proceeds from sports tip boards, which almost everyone agrees is contrary to federal law.

There are claims 8000 construction jobs could be created; about 2,500 for each of three years, and about 4000 additional, temporary jobs on Viking game days.

A major issue is the impact the financing package will have on Minneapolis.  The present
half-cent sales tax, plus the food, beverage and lodging taxes in Minneapolis go to the present convention center bonds, the visitors' bureau and tourism, and are now allowed by law to go for neighborhood economic development.

After the bonds for the convention center are paid off in 2020, the Minneapolis taxes would go only for the Vikings stadium, the convention center operating expenses, and the Target center---all of which make money for the state general fund.  The other major cities in Minnesota can use their local sales tax for economic development and other community needs, but Minneapolis will lose that ability under the Vikings stadium law.  Moreover, if the local sales tax increases by more than 2%, a portion of that must also go to the stadium.  By comparison, only 40% of the St. Paul sales tax goes to their hockey stadium; the other 60% goes to community economic development.

There are studies that show that Minneapolis does not benefit as much as other metro cities from Vikings games; for instance, most hotel rooms used are in other cities, not Minneapolis.

A recent study in Forbes magazine showed that the NFL does not want the Vikings to move, because it would mean a huge loss to the other teams.  If the Vikings move, the other clubs only get about $200 million to split between them.  If the NFL expands, the other clubs get to split 6 or more times that much.  It also points out that the new San Francisco stadium is built with only around $50 million of public money.  Likewise, the New York, San Francisco and Dallas stadiums are being built almost entirely with revenue from seat licensing, naming rights, ads, etc., which, under this bill, is going into the Vikings’ pockets instead.

Only the Indianapolis stadium, in the last 10 or more years, is as bad for the public as is this proposal for the Vikings stadium.

The Vikings get at least $150 million from the NFL; possibly $200 million.

There is a quality of life component from a new stadium for those who go to many games.  And of course, there is a small possibility that the Vikings would move if they don't get a stadium.

PLEASE LET ME KNOW WHETHER YOU THINK WE SHOULD PASS THE PRESENT VIKINGS PROPOSAL FOR A STADIUM.

Addendum #3 - Press release from Ian Alexander

ALEXANDER CALLS FOR LEGISLATIVE ACTION ON NEW VIKINGS STADIUM

Ian Alexander, a DFL candidate for the Minnesota House of Representatives in District 59B, today called upon the Legislature to approve the proposal for a new sports stadium for the Minnesota Vikings.

“If I were a member of the Legislature today,” said Alexander, “I would vote to support the current compromise funding proposal for a new football stadium in downtown Minneapolis.

“Risking the loss of the Vikings to another city because of legislative inaction this year on a stadium proposal is not in the best interest of Minnesota or the City of Minneapolis,” he said.

Alexander stated he supports the basic financing proposal for a new stadium because it does not include any state dollars that are needed to fund critical needs for housing, health care, education, safety net programs and other state priorities.

He also noted that the financing contribution from Minneapolis is an existing tax and the package will provide future relief to Minneapolis taxpayers by relieving some of city residents’ responsibilities for the Target Center arena. “Perhaps we should re-name the team, the ‘Minnesota Vikings of Minneapolis’ to reflect the City’s contribution to keeping the team in Minnesota,” he said.

“Stadium construction will mean immediate jobs for our state’s hard-hit construction industry,” said Alexander, “and long-term, I believe it will provide additional jobs for Minneapolis residents, including residents of District 59B.”

Alexander said he is committed to working with the City of Minneapolis and downtown businesses and residents to maximize additional economic development benefits from the construction of a new Vikings stadium.
 
Alexander is seeking the DFL endorsement for House seat 59B in the August 14 DFL primary. He is an attorney and consultant to the Minneapolis Civil Rights Department who resides in the City’s Near North neighborhood.

4 comments:

  1. A leap at the wheelApril 26, 2012 at 10:27 AM

    I haven't looked into it in the last 3 years or so. However, until then, there have been no, I repeat *no* objective studies of post-stadium economic activity that have shown new stadiums lead to expanded economies. If anyone is aware of a study showing growth, I'd be interested in a link or cite.

    There are arguments in favor of public-subsidized stadiums. Sports teams are strict public goods, and you can always make an argument for financing a public good. However, voters should be aware the economic-growth arguments are at best incorrect and more likely mark 2 political bull-shit.

    HH - If you are interested, and if I have time (new baby :) I can try and track down some papers that study this topic.

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  2. Hawkman,

    My kid is really good at math. I will get in touch with him and see where your extra zero went. Depending on what's up with the extra zero, we can move on from there.

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  3. Two more reasons why the stadium bill needs to go back to the drawing board, or at least why a Minneapolis referendum should be a fundamental requirement:

    1. According to this article from the Strib, the city's costs could rise to as much as $890 million if tax revenue grows by 5% each year over 30 years. So apparently if the stadium does indeed produce or contribute to or simply exist alongside the economic boom its supporters claim it will bring, then our contributions to it could increase? Is that right? And if so, then this is a tax decrease how?

    2. The GOP has introduced a roof-ready option. This makes more financial sense, but the point is that the possible bill has morphed so much and so frequently as to be almost unidentifiable when compared to what was presented at the handful of Minneapolis public meetings.

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  4. And here is a post from the Minneapolis Issues Forum, where the city attorney once again refuses to provide a written statement in regards to avoiding the referendum:

    Sen. John Marty: Madame Chair, Ms. Segal, could I SEE the opinion on the Charter amendment here? And also I want to suggest to Senator Dibble, I'm working on an amendment that would make this language apply -- the limitation not apply to Target Center. Because I agree wtih you, I'm very disappointed in how the Target Center thing developed 15 years ago, but I understand the box the City's in on it. But I have real trouble seeing how when the City comes to the State and says, "Hey, please do this to us," basically begging the State to override our Charter. It's like we go to the federal government and say, "Could you override our Constitution?" It's saying that this is outside of what the voters -- I think 3-1 margin back in '97 or whenever it was -- said this was not to happen. And for the City to say, "Well, we'll just funnel all the money through the State and the State'll do it to us," I just think that that's clearly getting around this. And if we take out this provision
    except for the Target Center, then in effect -- then they can fight it out and attorneys can argue over whether it applies or not. But I have trouble believing it's not going to apply, because it seems pretty clear that the voters wanted that. And I had a problem with the Target Field one when they said well, we'll use the County instead of the City to do it, to get around that. If you give the voters the ability to set a Charter, and they adopt by a 3-1 margin a Charter provision, it seems to be really troubling to see the City come in here and say, "Well, you can override our Charter." Which is in effect what I hear you saying has happened, because, "well, we don't need it to apply, because this is all State revenue." And I'm not sure it doesn't apply, which is why I'd like to take this out except for the Target Center. But I would like to SEE the opinion because I'm not an attorney, so I don't know, but I'd like to see how the arguments on it are, and I'm sure the other s
    ide has arguments as well.

    City Attorney Susan Segal: Madame --

    Chair Julianne Ortman: Ms. Segal.

    Ms. Segal: -- Chair and Senator Marty, I was just going to clarify that with respect to Target Field, that was a new County-wide sales tax. The City had nothing to do with it in terms of funding, and the State made the decision in that legislation to allow it to go forward without there being a referendum, overturning in essence its own laws on local sales taxes.

    Sen. Marty: Madame Chair.

    Chair Ortman: Senator Marty.

    Sen. Marty: Ms Segal, I understand that for the Target Field, and I sympathize with the City's problem with the Target Center. I think, however, that this is something that -- I mean, it sounds to me like it's certainly not clear, which is why I would love to SEE the opinions -- that this might apply. Because the City is, even if the bonds are going through the State, the City is giving up lot of -- giving up some of its parking revenue, it's giving up some other things it has. It certainly seems to be -- it clearly violates the spirit of the Charter, and violates it in a ten-fold or more so ways.

    Chair Ortman: I'm sure Ms. Segal will PROVIDE the amendment, Ms. Segal -- or the opinion, excuse me, to Senator Marty at some future point?

    Ms. Segal: Certainly, I'd be happy to TALK with Senator Marty. And while as a City Attorney, I'm always arguing that we have lots of local powers, particularly, you know, as a city of the first class, State does trump local government. I'll just admit that right here and now.

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