Public on hook for Vikings stadium overruns

  • Article by: MIKE KASZUBA , Star Tribune
  • Updated: May 7, 2012 - 4:42 PM

Deal to put Vikings' new home in Minneapolis makes taxpayers responsible for operating overruns, more.

The agreement to build a new Minnesota Vikings football stadium in Minneapolis features a key difference from the plan to build the project in Ramsey County and even from the Minnesota Twins' new Target Field.

Once it is built, any Vikings stadium operating cost overruns ultimately will be the public's responsibility.

And not just overruns. The public will be legally obligated to maintain the stadium "in a manner that is first-class and consistent with comparable" National Football League stadiums -- a clause that could translate into substantial future costs.

As the Minnesota Legislature sits on the brink of voting on the stadium plan, Ted Mondale, Gov. Mark Dayton's chief stadium negotiator, and other state officials have emphasized the Vikings will pay $13 million annually toward the stadium's operating costs, Minneapolis will add $7.5 million a year, and both figures will rise over time. Mondale said that when the team's upfront costs of $427 million are combined with its operating cost payments, the Vikings will pay for more than half the project.

But officials in the NFL cities of Indianapolis and St. Louis have found out how agreeing to similar conditions can go wrong.

Ramsey County officials said making a public stadium authority, rather than the Vikings, responsible for cost overruns was part of an attempt to lure the team back to Minneapolis. State officials "were under immense pressure to convince the Vikings to turn their attention" to Minneapolis, said Lee Mehrkens, Ramsey County's finance director.

He said that under Ramsey County's now-discarded stadium plan -- which also called for a public stadium authority -- the public's exposure on operating cost overruns would have been capped. In Minneapolis, the cap is on the Vikings' exposure.

State officials scoff at the idea that they are exposing the public to any undue risk in Minneapolis. They say the public stadium authority likely would get $2 million a year in revenue in addition to the yearly operating money from the Vikings and city.

Mondale released a letter from Honeywell which reviewed as a courtesy the proposed Vikings stadium and compared it with four NFL stadiums, including the Detroit Lions' Ford Field. "Honeywell is confident the operating and life cycle costs previously submitted are accurate," said James Keesling, a Honeywell vice president and general manager.

"We've done a good job," Mondale told a Senate panel Wednesday. He added later that he is confident state officials have avoided a "long history" of mistakes public officials in other NFL cities have made because they have been distracted by getting a "shiny car."

Vikings spokesman Lester Bagley said it was the state -- not the team -- that wanted the public to have more control of the new stadium in Minneapolis. Mondale agreed and said that in keeping with Dayton's wishes, "the philosophy in 'the People's Stadium' is that the public would run the stadium."

Bagley said team and state officials "carefully and thoughtfully" studied what happened in Indianapolis, where operating costs for the Indianapolis Colts' new stadium exceeded revenues, and in St. Louis, where the St. Louis Rams are in discussions over what is meant when the public is obligated to maintain the Edward Jones Dome as a first-class facility.

Lucas Oil Field in Indianapolis opened in 2008 and when the stadium's operating costs quickly exceeded projections, the pressure fell on the Capital Improvement Board, the public body that operates the stadium.

"The operating expenses increased because the new venue -- I don't want to say quite doubled the size -- but it was a much larger venue" than the Colts' older stadium, said Dan Huge, the board's chief financial officer. "There was definitely a step up."

In response to the financial crisis, he said, state lawmakers in Indiana authorized a hotel and motel tax and created a sports development area -- two moves that now generate $11 million a year extra for the operating costs of both the stadium and a nearby convention center.

Huge said that in Indianapolis, the Capital Improvement Board is ultimately responsible for the stadium's operating costs. The Colts pay $250,000 a year in rent, or roughly $25,000 per game.

The story in St. Louis is different, but also has lessons for Minnesota.

The St. Louis Rams' lease at the Edward Jones Dome requires that in 2015 the facility be viewed as a "first-tier" NFL stadium, or one that is better than three-quarters of all NFL venues when judged on 15 criteria. If the St. Louis Convention and Visitors Commission, which manages the building, cannot bring the facility to that level, the Rams could terminate their lease and leave.

In the proposed deal for the Vikings stadium, language is more vague. The public authority would be obligated to operate the stadium in a "first-class" manner "consistent with comparable NFL stadiums, such as, but not limited to, Lucas Oil Stadium."

Bagley said the clause is "comfort language" for the team, and is not a St. Louis-type commitment. "It doesn't give us the ability to escape the lease," he said. "You can't compare that phrase to what's going on in St. Louis."

Though Mondale has said the Twins' Target Field is essentially a single-use ballpark and not comparable to a new multi-use Vikings stadium, the Twins are responsible for operating costs in their new facility. The Twins pay 100 percent of the operating costs and have to maintain the facility in a first-class manner, said Dan Kenney, executive director of the Minnesota Ballpark Authority, the public body that owns Target Field.

In Cincinnati, where the NFL's Bengals got a new stadium in 2000, the costs have forced Hamilton County to sell a hospital. Greg Hartmann, the county board president, said the county not only paid for most of the stadium's construction, but also pays for most of its escalating operating costs.

"I'd love to trade with you," he said, in explaining the county's stadium dilemma.

Mike Kaszuba • 651-222-1673

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