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State officials scramble after delayed stadium bond sale

Posted by: under Gov. Mark Dayton, Minnesota legislature, State budgets Updated: January 13, 2014 - 5:00 PM

Minnesota state officials are still trying to assess the significance of a new legal challenge that is delaying the sale of nearly $500 million in bonds for the new Minnesota Vikings stadium.

“We don’t know and that’s the problem,” said Minnesota Management and Budget Commissioner Jim Schowalter.

Former Minneapolis mayoral candidate Doug Mann and two others filed a petition Friday with the Minnesota Supreme Court to stop the sale of bonds for the public share of the $1 billion stadium. The group argued that supporters muscled through the project without a citywide vote required by the Minneapolis city charter.

The issue is not a new one, but suddenly slammed the crucial bond sale to a grinding halt.

State budget officials had methodically prepared for the bond sale to ensure the lowest possible interest rates. Now the project costs could creep up, not only with the potential for higher interest, but also added administrative and legal costs.

“Ultimately, the cost of financing the stadium will be more expensive because we are not in the market in timely manner,” Schowalter said. “We are taking on the challenge of creating a lot more legal and administrative time. That is not the message we want to be sending to the market.”

As of Friday afternoon, Schowalter was preparing to fly to New York to oversee the bond sale early this week. After numerous consultations with legal counsel, Schowalter canceled the sale Saturday afternoon and stayed in Minnesota.

Schowalter said they do not yet know how much additional legal and administrative time will be necessary if the Supreme Court ultimately allows the bond sale to go forward.

It is not clear when the Supreme Court might weigh in on the matter, said John Kostouros, spokesman for the State Court Administration.

Mann also filed a petition with the Minnesota Court of Appeals to overturn a Hennepin County District judge's decision on the issue last November, seeking a citywide vote on the stadium agreement in Minneapolis.

The leader of the the Minnesota Sports Facilities Authority, which is overseeing stadium construction, said delays in the bond sale are a serious blow to the already razor-tight deadline. They said it could jeopardize the 2016 opening of the stadium.

Gov. Mark Dayton said in a statement that he was concerned about the delay. "I hope that this matter can be quickly resolved to prevent severe damage to the project’s financing and the loss of many important jobs," he said.

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