The new Minnesota Vikings stadium project ran into a problem late last year: Where to store the unexpected amounts of reusable dirt from the soon-to-be demolished Metrodome.
The obvious solution: Three nearby parking lots owned by the Wilf family, the Vikings owners.
Officials said the deal could save as much as $1 million in construction costs, but also concede that it included a potential PR headache: the Wilfs, who were already getting significant public subsidies for the new stadium, won’t have to pay property taxes on the former parking lots while the dirt is stored there.
“I knew that this would obviously attract attention,” said Michele Kelm-Helgen, the chair of the Minnesota Sports Facilities Authority. She was correct — the deal has drawn concern from two state legislators.
As public officials raced to sign leases with the Wilfs in December and January to store a series of 20-foot-high piles of dirt, internal documents show they were mindful of the perception that the Wilfs might be seen by critics as taking advantage of the situation. Both the sports facilities authority and the Vikings insist the opposite is true, and that the Wilfs are in fact saving the $1 billion project substantial money.
The lease arrangements are complicated, but the deal is relatively straightforward: In return for storing the dirt on the Wilfs’ adjoining land, the sports facilities authority is paying the property taxes, about $90,000. The stadium authority also agreed to pay any cost being charged the Wilfs — in the end there were none — for terminating their parking contracts.
In the case of two of the parking lots — the Wilfs own each property under a different corporate name — the stadium authority is paying 264/365ths of the land’s 2014 property taxes.
“The Wilfs [are] not being paid. We’re being made whole,” said Lester Bagley, the Vikings vice president for public affairs and stadium development. Bagley said the Wilfs did not volunteer to store the dirt for free because “we’re making significant investment into the project, and that investment continues to increase.”
The Vikings currently are committed to pay $477 million toward the stadium, although, the team is getting a loan from the National Football League and revenue from seat licenses and other sources that will substantially reduce the Wilfs’ own investment in the project.
Criticism of the deal
Kelm-Helgen said the stadium project is spending $2.1 million overall to haul dirt from the site to landfills. Instead of being taken to a landfill, the material stored on the adjacent Wilf property — about one third of all the excavated dirt — will be reused as fill for the new stadium.
It “seemed like an obvious, correct decision,” she said.
The decision to pay the Wilfs’ taxes brought criticism from Sen. John Marty, DFL-Roseville, a longtime opponent of the public subsidies being used for the stadium. “In the big picture of things, yeah, it’s small potatoes,” Marty said after details of the lease were described to him. “But, I mean, do we have to give [Vikings owner Zygi Wilf] everything the guy ever wants?”
Sen. David Osmek, R-Mound, agreed. “I think it’s a good deal, but it could be a better deal,” he said. Osmek said that paying the Wilfs’ property taxes “does seem to be nickel and diming” Minnesotans.
Kelm-Helgen acknowledged that, instead of asking whether the Wilfs would store the dirt for free, the stadium authority offered the tax deal.
Stadium officials also extended insurance coverage to the Wilf properties at no extra cost to the stadium authority — a move that internal e-mails suggested may have been taken to block the Wilfs from taking legal action should the dirt storage lead to problems. “If the Wilf family companies are now ‘insurers’, [they] technically can’t bring a claim against the” stadium authority for damages, wrote Kate Dodge, a senior executive for Willis Environmental Practice, an insurance broker for the stadium authority.
Documents and e-mails show that the Wilfs, while willing to help the project, were concerned with preserving their interests, including having no environmental liability under the plan. At one point, lawyers for the Wilfs wanted to make sure that sight lines for billboards on the parking lots were not blocked by the dirt piles. “Protecting the billboard revenue is important” to the Wilfs, said Thomas Bray, an attorney for the Vikings owners.
Bray also cautioned that the Wilfs were concerned that storing the dirt could lead to more than “ordinary wear and tear” on the property.