Hennepin County will make an early payment on the bonds issued to pay for Target Field again next month in what has become an annual routine that will have the public debt eliminated a decade early.
Like many home mortgages, the bonds on the Minnesota Twins’ Minneapolis ballpark were to be paid off in 30 years. Instead, it now appears that the public’s $350 million share of the project will be paid off with interest in 2026.
The reason: The county levied a 0.15 percent countywide sales tax increase to back the bonds. Stable collections from the tax coupled with conservative estimates on the revenue it would produce have created an enviably speedy payment plan.
Contrary to fears about the tax when it was proposed, the tax hasn’t been diverted to the general fund.
“We don’t sit on the money; we pay the debt,” County Commissioner Mike Opat said Friday.
Opat, the architect of the plan to build the $555 million ballpark, said the backing from the sales tax also helped the county obtain the lowest possible interest rate when the bonds were issued.
With the exception of a dip in 2009-10 after the economic tumble in fall 2008, the 0.15 percent ballpark sales tax collections have risen steadily. Collections were $27 million for 2010. The county collected $33.7 million last year from the tax.
When the bonds are paid off, the tax will be eliminated. The increment amounts to 3 cents for every $20 spent in Hennepin County on taxable items.
Unlike the funding for the Vikings stadium, the ballpark financing has always been stable. For the Vikings’ $1.1 billion stadium, scheduled to open in less than a year, the state initially planned to use electronic pulltabs to pay for its $348 million share. When the gambling revenue didn’t meet expectations, Gov. Mark Dayton diverted other state funds to the project.
Target Field opened in 2010.
The bond payment will be made in early December, county budget director Dave Lawless said.