Reusse blog: An option to the bad stadium deal
- Blog Post by: Patrick Reusse
- August 6, 2013 - 11:51 PM
Mark Dayton had more to do with getting a Vikings' stadium approved than anyone in Minnesota. The bill passed the Legislature on May 10, 2012.
The governor was not happy six months later after seeing the media reports that the Vikings were looking into taking an aggressive approach to obtaining seat license fees.
On Nov. 12, Dayton sent a letter to Vikings owners Zygi and Mark Wilf protesting the idea that charging fans for seat licenses was going to be used to help pay the Vikings' $477 million share of the $975 million stadium project.
"I strongly oppose shifting any part of the team's responsibility for those costs onto Minnesota Vikings fans,'' Dayton said in the letter. "This private contribution is your responsibility. Not theirs. I said this new stadium would be a 'People's Stadium,' not a 'Rich People's Stadium.' I meant it then, and I mean it now.''
The Vikings defended their right to proceed with seat licenses, issuing a statement that included the euphemism "stadium builder's licenses'' for seat license fees. The Vikings said these fees "were vetted by the Legislature, testified to by Vikings and state of Minnesota negotiators, and most importantly, specifically reflected in the stadium legislation that was passed and signed by the governor.''
This controversy has gone underground for a time. The Vikings are waiting for the final season in the Metrodome to be played out and a shovel to be placed in the ground before giving customers the official bad news on the size of advance fees to secure season tickets in the Taj Ma Zygi (opening in 2016).
Dayton's letter was an indication it was becoming clear at the State Capitol as to what a generous deal this new stadium was for the Wilfs. Naming rights, a $200 million loan from the NFL (that's more grant than loan) and the seat licenses will take care of most of the Vikings' share.
Bob Barrett, a Republican house member from Lindstrom, expressed his view of the situation in April, during the most-recent legislative session. Barrett, a "no'' vote on the stadium in 2012, took note of the enormous shortfall in electronic pulltab revenue, the alleged funding source for the state's share.
One alternative offered by Barrett to cover the state's output was "to transfer revenues from stadium naming rights or from loans or grants from the league to cover shortfalls.''
The Vikings' protest to this said Barrett's proposal "would dramatically change the deal that was negotiated and ratified by the Legislature in May 2012.''
In both instances, with Dayton and seat licenses, and with Barrett and naming rights and NFL loans, the Vikings gave the same indignant message:
A deal is a deal. A deal is an unbreakable bond. Basically, more formal version of, "Hey, we shook on it.''
Obviously, the Wilfs believed in that, and the governor and he Legislature should have believed in that, too.
I also believed in that.
Until I started reading about the decision of Judge Deanne Wilson is a civil lawsuit in New Jersey that pitted Ada Reichman and her brother Josef Halpern against the Wilfs. The case has gone on for 21 years, with Reichman claiming the Wilfs had systemically cheated the partners out of profits from Rachel Gardens, a 764-unit apartment complex in Montville, N.J.
Wilson ruled in favor of Reichman and Halpern. The damage claim was $51 million from the pair. The judge will announce her award in a couple of weeks, and the Wilfs will appeal again, presumably.
But here's the part that interested me:
Judge Wilson said, "The bad faith and evil motive were demonstraded in the testimony of Zygi Wilf himself.''
This was a reference to Zygi's admission that he felt Reichman had received "too good a deal'' in an arrangement inititated by Harry Wilf (Zygi's uncle) in the 1980s when construction began at Rachel Gardens.
So what did Zygi do? "Reneged.''
Didn't like the deal, so he "reneged'' ... admitted it right there in his testimony.
The governor and most Legislators know by now that in the stadium arrangement the Wilfs received "too good a deal.''
And now this could be an option,right out of Zygi's playbook: renege on the first deal, change the terms, and battle in court for the next two decades.
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