Mayor formally pitches his financing proposal but finds public support from only one. .
A near-majority of council members said Thursday that they were opposed to the mayor's plan to fund a new stadium using existing city sales taxes, and only President Barb Johnson was willing to support it publicly. The hearing was the first time Rybak formally presented his stadium funding proposal to the body.
"There's a window of opportunity for us to do some big things," Rybak said. "And I do think it's in the bottom-line interest of the city."
Rybak's plan to cover the city's $300 million share of a stadium involves redirecting most of the hotel taxes, citywide sales tax and special downtown taxes that currently support the city's convention center. That money will be freed up when the city pays off bonds on the facility in 2020.
Some of that will also support renovating Target Center and lifting it from dependence on property taxes, which Rybak says will bring needed relief for taxpayers.
But using local taxes to fund a state facility and a private business while depriving the convention center of potentially important funding emerged as two key obstacles for the council.
"What I'm opposed to is myself and my constituents and the people who we are begging to come downtown and eat and play and shop, to have to pay that tax 365 days a year for the benefit of a private entity," said Council Member Lisa Goodman, who represents downtown.
At least three council members said they support holding a citywide referendum on the plan. The charter requires a referendum when the city spends more than $10 million on a sports facility. Rybak wants to bypass that requirement, but he said in a meeting with reporters that it is "murky" whether it even legally applies in this case.
"It clearly applies," Council Member Gary Schiff countered in an interview. Schiff posted on Facebook that Rybak's purple tie wasn't enough to sway the council, particularly since the convention center will need renovation funding in the out-years.
"It leaves us with a hole for paying for the convention center," Schiff said. "We don't just need to pay off bonds for the convention center and say 'Yay, we're done.'"
Another major question is whether the city's contribution to the stadium will be sufficient. The state wants just over $8 million a year to pay for operating costs, but the city won't be able to reach that level until 2020. The lead author of the House legislation cited that Wednesday as a serious pitfall in the city's plan.
"We may need to have another partner on this, because I'm not certain we can totally fill this gap with just these dollars," Rybak said.
That hole is a result of Rybak's insistence that the deal include property tax relief, he said. He noted that the city would be in a better financial position if sales tax revenues exceed expectations or the Legislature approves a 1 percent increase in Minneapolis hotel taxes.
A different approach
Just months ago, Rybak was pushing a plan that would pay for the stadium using a citywide sales tax and hotel tax increase to pay for the stadium. But he was forced to pivot when legislators took local sales taxes off the table.
The new plan has intrigued at least one council member who was opposed to the sales tax idea. John Quincy, who said in October that he is generally opposed to public stadium financing, is on the fence about the latest proposal since it does not impose new taxes.
"As I was understanding this deal today, I don't know if it meets the public financing threshold," Quincy said.
Others disagree. Council Member Betsy Hodges, chair of the city's budget committee, said "the challenge I have with the plan ... is that any plan we put in front of us that involves a public investment is bad economics."
Hodges said that while stadiums do have some economic impact, the money would be better invested in areas such as education and infrastructure.
Rybak told reporters that he wasn't surprised by the reaction of the council.
"This is a big city with lots of opinions, and we do things in a democratic, messy, wonderful way around here, where people ask tough questions," Rybak said. "We give answers back, and I think we made a lot of progress."
He said he believes most council members are "in the middle," though he knows the idea has its firm opponents.
Eric Roper • 612-673-1732 Twitter: @StribRoper