A legal challenge halted the sale of $486 million in bonds, threatening the 2016 opening. The state high court will rule.
A last-minute legal challenge to Monday’s planned sale of bonds for the new Minnesota Vikings stadium could keep the field from opening in 2016.
At a hastily called news conference on Sunday, state officials said the sale of $468 million of stadium bonds had been unexpectedly halted.
Stadium leaders hope the Minnesota Supreme Court will rule quickly on issues raised in a Friday afternoon filing with the court, but said even a two-week delay in the bond sale could add a year to the stadium’s ambitious construction schedule.
“Major problems will result from any significant delay,” Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority, said Sunday in a conference call that also included state Management and Budget Commissioner Jim Schowalter. The authority will own and operate the $1 billion stadium slated to open in July 2016 on the Metrodome site.
“We will be short $28 million if we are not able to pay our bills [without bond proceeds] … by the end of the month. Architects and Minnesota companies have done work in the past month and submitted bills due at the end of January,” said Kelm-Helgen. She said bond funds need to be available by Jan. 23 to avoid delays that could postpone the stadium opening for a year. The delay could also jeopardize the Downtown East park and business development, she said.
The “petition for a writ of prohibition” was filed by three Minneapolis residents: former mayoral candidate Douglas Mann, his wife, and former city school board member David Tilsen.
Mann said the bond sale is unconstitutional and should be stopped because it depends partly for repayment on Minneapolis dedicating sales tax revenues to that purpose. He said the city should hold a referendum and let voters decide if they want to fund a new stadium. Mann said he filed a similar lawsuit last summer against the city and has appealed an adverse district court ruling in that action.
The state is required to disclose any pending legal actions when bonds are sold, according to federal law and Securities and Exchange Commission regulations, Schowalter said.
Although the writ raises issues that have already been “previously dealt with” during the stadium debate, Schowalter said his office decided to delay the sale after consulting with the attorney general’s office, Stadium Authority counsel and bond counsel. He said attorneys will ask the state Supreme Court for an expedited ruling.
It’s not clear when the bond sale could go forward.
Gov. Mark Dayton said he supported concerns expressed by Kelm-Helgen and Schowalter. He added in an e-mail comment:
“I hope that this matter can be quickly resolved to prevent severe damage to the project’s financing and the loss of many important jobs.”
Kelm-Helgen said that her agency has $14 million left from $50 million put up for stadium work by the Vikings. The state agreed to provide the next $50 million by selling bonds. She said the bond funds are needed by Jan. 23 because her agency needs $17 million that day to close on the purchase for the transit station block just west of the Dome.
That deal needs to be done so Ryan Companies can sign a development agreement with Minneapolis the next day for the Wells Fargo office towers and park. That agreement, in turn, must be sealed before Ryan can acquire in late January five blocks of land from the Star Tribune Co. for the new park planned near the new stadium, she said.
If the bonds are not sold quickly, she said, “that entire development could be in jeopardy” along with the 5,000 jobs it would bring. Kelm-Helgen said she thinks the Supreme Court “will understand the urgency of this and will make decisions quickly.”
Neither Vikings nor Ryan Cos. officials could not be reached Sunday for comment.
Sen. Sean Nienow, R-Cambridge, a stadium foe, said that at a December finance committee meeting senators learned taxes and other dedicated revenues for the stadium were coming in under projection. He said he asked Schowalter about the shortfall and was told that borrowing funds was a possible interim alternative.
“Now we are seeing potential impact of that,” Nienow said. “If this gets delayed, that could create a problem.”