Gov. Tim Pawlenty inched closer Wednesday to becoming a pivotal player in the Minnesota Vikings stadium debate, suggesting that state lottery money and other means could help publicly finance the controversial project.
Pawlenty, whose office has taken a more active role in exploring funding options, said in a radio interview that the state could use proceeds from a new state lottery game to generate an estimated $12 million annually for a stadium.
While Pawlenty said he was not specifically proposing such a funding plan, he said lottery funds could be part of a public subsidy package that would generate the $29 million to $42 million annually that team officials say would be needed for a stadium.
"If you look at the Minnesota Lottery, for example, there's new games added all the time in the lottery," Pawlenty told a radio audience. "There was one just added the other day called Mega Millions that's going to generate $20 million a year," the governor said.
Although 40 percent of those funds -- $ 8 million -- is constitutionally dedicated to an environmental trust fund, "the other $12 [million] can be used for other stuff. People will say it should go into schools or roads or whatever, but ... that's another way to do [the stadium]."
The governor's comments were noteworthy on several levels. They signal that Pawlenty may be moving closer to brokering a proposal even as the Legislature convenes Thursday to grapple with a $1.2 billion shortfall. They also show that stadium proponents, who have been working largely behind the scenes, are sorting through a series of public subsidies that include a metrowide hospitality tax and federal stimulus money.
One particularly novel element that Pawlenty offered: a pumped up version of tax increment financing, a complex financing tool that typically has allowed developers to divert their property taxes to develop their properties.
The Vikings have examined a variation that would allow them to capture not only the increase in their property taxes, but also the rise in a broad array of tax revenue they would generate, including income taxes paid by players. They would then use that money to help pay for a stadium, which has an estimated $870 million price tag.
Vikings spokesman Lester Bagley said the team had also explored the tax benefits of creating a stadium development district to capture the rise in "all of the economic activity" surrounding a new facility.
"We applaud the governor," Bagley said Wednesday of Pawlenty's comments on Minnesota Public Radio.
Not everyone, however, was applauding.
Former House Minority Leader Marty Seifert, now a leading GOP candidate for governor, said state officials should eschew public financing for a stadium. If 3M wanted a new plant, asked Seifert, would Minnesota "do a 3M lottery game?" Seifert said that "It's always easy to get the government to try to pay for things. ... [but] the state is bankrupt."
Roy Terwilliger, chairman of the Metropolitan Sports Facilities Commission, which owns the Metrodome, said using lottery proceeds for a stadium has been discussed, as has a proposal to divert income taxes paid by players and coaches. "There is ongoing dialogue" with the governor's office, Terwilliger said.
The Vikings, who have played in the Metrodome since 1982, have said they will not renew their lease when it expires in 2011.
Dale McDonnell, general counsel for the Minnesota Lottery, said the new Mega Millions game is expected to yield at least $20 million a year. "There are people [who] think it could be a lot higher," McDonnell said. A Pawlenty spokesman said the game's proceeds were not included in the November revenue forecast.
If the state were to create a new lottery jackpot game for a Vikings stadium -- an administrative process that could take just three to six months -- "the only [money] that would not be able to go to the Vikings stadium would be the 40 percent of profit" obligated to an environmental trust fund, McDonnell said.
Pawlenty spokesman Brian McClung said the governor was not recommending that money from the new Mega Millions game go toward a Vikings stadium, but was simply using the game as an example.
"It is important to know that the governor will be utilizing the estimated $12 million in new general fund revenues from the Mega Millions game for non-stadium purposes in his upcoming budget proposal," McClung said.
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