Don Davis, Forum News Service, Published October 03 2013
Minnesota Vikings stadium panel OKs construction
Owners Zygi and Mark Wilf are responsible for $477 million, most of which will be borrowed, for the $975 million stadium. Thursday night was the first time the Vikings said the Wilfs will pay $100 million in cash.
The Minnesota Stadium Facilities Authority unanimously approved, after almost no discussion, an outline of specific financing components for the multi-use facility due to be built next to the Metrodome in downtown Minneapolis. Negotiations have gone on for months, with the deal completed shortly before the Thursday night meeting.
“This is going to deliver a beautiful stadium,” Vikings Vice President Lester Bagley told the authority. “It will be the best fan experience in the NFL.”
A string of Minnesotans, including several of Minneapolis’ 35 mayoral candidates, complained that the public did not have access to the agreements before the authority approved them. The authority posted the documents online at the same time the meeting began and did not allow the public to comment until after board members approved the agreements.
Authority Chairwoman Michele Kelm-Helgen said seat licenses were the most difficult part of the financing package to negotiate.
The licenses would be charged on 75 percent of the stadium’s 65,000 seats and range in cost from less than $1,000 to $10,000. The average cost is expected to be $2,500. Buyers of licenses own them forever or may sell them.
Season ticket prices are more than the seat licenses.
The $100 million the licenses will provide is a quarter of what many recent stadiums collected in other parts of the country. But Gov. Mark Dayton said that a $1 license is too much.
Still, he said, it was necessary. Without the licenses, he added, “we wouldn’t have a team staying here.”
The overall financing package probably will not be well-received by Minnesotans, the governor said. “For most Minnesotans, this will look like a questionable deal because the economics of professional sports are questionable all over the country.”
With contracts signed, the next major stop on the timeline is a Nov. 1 date when the Vikings have to produce paperwork guaranteeing their portion of the construction funding. By mid-November, a groundbreaking ceremony is to be held about the same time the state sells bonds to finance its portion.
The stadium is to be ready for the beginning of the 2016 season.
The documents signed Thursday night outline the financing:
- $348 million from the state.
- $150 million from Minneapolis.
- $150 million loan to the Vikings from the National Football League.
- $50 million grant from the NFL, considered part of the Vikings’ contribution.
- $177 million from the team, including $100 million in cash from the Wilfs.
- $100 million from personal seat licenses, which the Vikings will collect.
Dayton said the team originally wanted to raise $154 million with licenses, before negotiators whittled it down to $100 million.
For operating expenses, the Vikings will pay the stadium authority $1 million rent for each of the 10 home games per season. The Vikings will receive most of the advertising and concession revenue during their games, while the authority gets that money for other events.
Kelm-Helgen told the legislative committee overseeing stadium construction that the Vikings agreed to pay $219,000 for an investigation into whether the Wilfs still would be able to uphold their stadium construction commitment after a New Jersey court found them liable in a civil racketeering case. The probe indicated the Wilfs would have no problem with stadium financing.
At the authority meeting, officials authorized a 30-year agreement with options for four more five-year leases.
They also learned that the deal with the Vikings requires the team to sell 3,200 “affordable tickets,” costing 80 percent of the average low-price ticket.
Kelm-Helgen revealed that it appears early costs for the project are running high because the construction industry has more work than in recent years and costs are rising all over. “We are essentially over budget,” she said.
“We have had to make some cuts,” she added, estimating it appears the costs will be $20 million to $30 million more than expected.
The Vikings did not like the cuts and put up $13.1 million to keep some items in the construction plan. The team could end up paying that, or if other costs come in under expectations the Vikings may be paid back.