Gov. Mark Dayton's harsh review of the Minnesota Vikings' owners' new legal troubles in New Jersey is igniting fresh concerns about the state's agreement with them and threatens to complicate the entire project in the closing days before final contracts are signed for the $975 million publicly funded facility.
"Everybody is on high alert that this is going to be looked at under a fine microscope," said Minnesota Sports Facilities Authority Board Member Duane Benson, a former legislator and NFL linebacker. "The governor is not going to, nor are we going to, treat this lightly. A lot of legislators will be watching this very closely, as well we should."
The sudden blowup is emerging as stadium authority board members and team officials are finalizing a critical menu of details, such as who will control stadium construction, pay for cost overruns and set terms for the seat licensing deals for fans. All the details must be worked out over the next two weeks, before the state sells taxpayer-backed bonds to pay its share.
The new doubts about the Wilfs intensify pressure on stadium negotiators to come away with the best possible deal and perhaps press for added concessions or assurances.
In recent days, the project became swamped with new questions after a New Jersey judge said the Vikings owners, real estate moguls Zygi and Mark Wilf, committed fraud, breach of contract and violations of the state's civil racketeering statute in a 20-year-old real-estate partnership.
"The bad faith and evil motive were demonstrated in the testimony of Zygi Wilf himself," Superior Court Judge Deanne Wilson said in a New Jersey Star-Ledger report.
Dayton said Friday the lawsuit should change the state's approach in the final days before the deal is sealed.
"The judge's decision means the stadium authority's legal counsel and their financial advisers need to renew their due diligence and really go back and review the representations made by the team and by the owners," he said. "It's very distressing."
As Dayton demands deeper scrutiny, the Wilf family and the National Football League are working to assure the state that the project is on track.
The Wilfs and team officials spent the last part of the week asserting that the legal troubles in New Jersey have no bearing on the stadium agreement or their ability to fulfill their financial commitment.
"This civil lawsuit will have absolutely no impact on the stadium project," the Wilfs said in a statement. "The Vikings' guarantee of $477 million in private financing has gone through two years of review and due diligence by our public partners … The funding is secure."
Some lawmakers, who were already skeptical that the state drove a hard enough bargain, are renewing calls for state leaders to walk away — or at least take time to cool off and take a tougher look at the stadium agreement.
"I don't think we're at the point of no return," said Rep. Kelby Woodard, R-Belle Plaine, assistant House minority leader and a supporter of the original stadium deal in 2012. "If the Wilfs aren't able to live up to their obligations, the deal is off."
The governor and the public have raised critical questions about the project before.
Dayton became furious when he realized the team was looking at charging a seat license fee, which would force season-ticket holders to spend thousands for the right to buy premium seats. Then the state's much-debated funding plan — new electronic pullÂtabs and bingo games — fell far below projections, causing Dayton and state leaders to pull tobacco tax money and close a corporate tax loophole to pay the state's share.
Dayton continues to back the framework of the agreement, which he calls "a fabulous deal." But, he added, "there are things I would do differently if I could go back and do it again."
He said the seat license provision — which will make it harder for middle-class fans to get the best seats — was "sneaked in there." But Dayton said it is not reason enough to sink the project.
Due diligence
The Wilfs' legal troubles and Dayton's tough talk should put the stadium authority on notice to be extremely diligent in verifying the ability of the Wilfs and the team "to put their money on the table," said Steve Cramer, chairman of the Minnesota Ballpark Authority, which negotiated a final lease and development agreement with the Minnesota Twins for Target Field.
"Until a lease and use agreement is signed, it's not done," Cramer said. "That's sort of the bottom line. I think it would be extraordinarily unusual for something to fall apart at this late stage. But it's kind of like when you buy a house — until you sign on the dotted line and get the key, you are not the homeowner."
The legislation approved in 2012 calls for the state of Minnesota and city of Minneapolis to pay for $498 million of the stadium's $975 million construction cost. The Vikings are responsible for the remainder through a $200 million NFL loan, stadium naming rights, sponsorships, seat license fees and other sourcing.
The framework of that deal won't change in the closing days. "But there are a lot of issues that will be resolved in those documents being negotiated right now that were not in the legislation," Cramer said. "You are going to a much greater level of detail in an agreement that people will have to live with for the next 30 years or so."
Lester Bagley, the Vikings' vice president for public affairs, said the team and authority have worked through "literally thousands of issues" over the past year, ranging from signage and advertising rights to deciding the revenue splits for public events and team or NFL events.
Among the key issues still to be decided is who will oversee construction. The stadium authority now has that responsibility but could turn it over to the Vikings if the team requests control. Whoever takes charge would be responsible for any cost overruns.
The two sides also must decide terms of personal seat license fees charged to season-ticket holders. The financing legislation stipulates that revenue generated from the licenses would go toward the Vikings' share of the construction cost. At issue is how many seats in the 65,000-seat stadium will be designated for license fees and what those fees would be.
The five-member authority, chaired by former Dayton aide Michele Kelm-Helgen, knows that the governor will be watching final negotiations with the Wilfs.
"It's one thing to be a shrewd businessman, schooled in the ways of development in New Jersey, and it's another to go beyond that to what they were ruled by the judge to have done … intentional, willful misrepresentation," Dayton said. "That's what we need the authority board to ferret out before they sign the documents."
Staff writer Jennifer Brooks contributed to this story.
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