State wants to verify team can still meet its obligations.
Minnesota Vikings officials have agreed to provide analysts with more financial information on team owners Mark and Zygi Wilf, but fears continue to grow that construction of a new football stadium in downtown Minneapolis is falling behind schedule.
“I’m really concerned right now that 2½ years ahead of the opening, we’re already looking at potentially a one-month delay,” said Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority, the public board overseeing development of the $975 million stadium on the site of the Metrodome.
A public spat over the financial documents surfaced late last week. An attorney working on an audit, ordered after a New Jersey judge ruled earlier this month that the Wilfs had systematically defrauded partners in a real estate deal, said that despite “multiple requests” for the information, the Wilfs had, to date, “refused to provide us with any personal financial information.”
That data, the lawyer said, was needed to assure the authority that the New Jersey court case, which could cost the Wilfs tens of millions in compensatory and punitive damages, wouldn’t hurt the team’s ability to help finance the stadium.
Kelm-Helgen said Monday that attorneys for the NFL club relented over the weekend, pledging to provide that paperwork. But Vikings officials also reiterated that they will not continue to negotiate critical stadium lease and development agreements until the authority’s independent financial audit of the Wilfs is complete, potentially delaying construction and costing the project millions of dollars.
As of Monday afternoon, authority attorneys had yet to receive the information, Kelm-Helgen said. But, she added, “I am cautiously optimistic” it will be delivered.
Lester Bagley, the Vikings vice president for public affairs, said the team has already provided information with “more to come.” Even then, however, it might not be enough to keep construction on track.
Kelm-Helgen said Mark Wilf told her Monday that the team has no intention of returning to the negotiating table to hammer out the lease and development agreements until the audit is complete, which could push back the construction timeline by a month.
Team and authority officials hoped to break ground on the 65,000-seat stadium by October and have it completed by July 2016.
Partly because of the audit, groundbreaking was pushed back last week to early November.
Even then, for the stadium to open on time, Kelm-Helgen said, deadlines for completing the lease and development agreements must be met by Sept. 15, the date the audit is scheduled to be completed.
Those agreements will determine everything from who will control the construction (the authority now has that role, but the Vikings could request it) to how much season-ticket holders will pay in license fees to reserve the best seats.
Both agreements must also be approved before the team secures its financing and the state sells taxpayer-backed bonds to pay for its share of the project.
The Vikings are responsible for $477 million of the construction cost with the state of Minnesota and city of Minneapolis financing the rest.
Bagley said Monday that the team is equally concerned about the construction timeline. But he said the Vikings won’t return to the negotiating table until the authority is certain the team and its owners can meet their financial commitment.
He said the audit or “due diligence” work is “having an impact on negotiations” and the team’s “leverage” to negotiate the lease and development deals.
He declined to be more specific, but said that if the authority doesn’t “feel 100 percent confident in us, how can we negotiate those agreements? They don’t have confidence that we have the ability to deliver financially. And until that is squared away, there shouldn’t be negotiations on partnership agreements.”
The Wilfs and Vikings have repeatedly said that the lawsuit, and pending compensatory and punitive damages to be decided by a New Jersey judge in the coming days, will not affect their ability to finance stadium construction.
In a statement Monday, NFL executive vice president Eric Grubman said the league’s commitment to the project — a $200 million loan — is secure and on track.
“The financial commitments are very strong from the Vikings and the NFL,” he said. “The NFL fully intends to proceed with its financial commitment to this project. The project needs the support of all parties to remain on time, and we expect all parties will work diligently toward that goal.”
Tensions bubble up
Tensions between the authority and team surfaced just days after the authority ordered the deeper background check into the Wilfs’ finances.
At the time, Kelm-Helgen told the Vikings that the authority planned to bill them or the Wilfs for the audit, a tab that could easily reach six figures.
Bagley responded by saying simply, “we don’t have a business relationship” with the law firm or forensic accounting firm performing the work.
A week later, the Vikings broke off talks on the lease and development agreements. A day later, the authority went public with its frustrations at its monthly board meeting.
When Bagley later said the team was cooperating fully with the review and providing all documents requested, attorney Peter Carter of Dorsey & Whitney, who is leading the audit, issued a statement saying that was not the case.
“They keep telling us that everything is fine and in order,” Kelm-Helgen said Monday of the team and the Wilfs. “That’s good, but we need to see it.”
John Wood, senior vice president for Mortenson Construction, the stadium builder, said in a recent interview that the construction work was proceeding on schedule pending the outcome of the authority’s audit.
Richard Meryhew • 612-673-4425