Dayton wants Vikings to pony up 'significant equity' in new stadium
- Blog Post by: Richard Meryhew
- September 16, 2013 - 2:05 PM
Gov. Mark Dayton, a leading supporter of the nearly $1 billion Minnesota Vikings stadium project, said Monday that he is "encouraged" that an extensive legal and background check of team owners Mark and Zygi Wilf indicates that they can pay for their share of the team's new home.
But in a letter Monday to the Minnesota Sports Facilities chairwoman Michele Kelm-Helgen, Dayton urged the authority to make sure the owners and team contribute "significant equity" to the project, and not rely heavily on personal seat license fees.
"I strongly urge you to negotiate a final financial agreement, which requires the Vikings' owners to provide a signficant share of their financial contribution from their own resources, and not from Vikings' fans through the sale of expensive personal seat licenses," Dayton wrote.
The authority, the public body overseeing the stadium project, and team are in the final stages of negotiating important use and development agreements for the venue, which the team hopes to open in time for the 2016 NFL season. The agreements are tentatively scheduled to go to the authority board for a vote at its Sept. 27 meeting.
The Vikings are responsibile for paying $477 million of the stadium's $975 million construction cost with the state of Minnesota and city of Minneapolis responsible for the rest.
The team's portion of the funding includes a $200 million NFL loan and revenue from stadium naming rights as well as the sale of personal seat licenses to season ticket holders. Revenue from those sources could easily be tens of millions of dollars or more, leading critics of the stadium financing package to question whether the owners and team have much financial exposure at all.
Under the stadium legislation approved in May 2012, the authority has the "exclusive right" to sell the licenses, but retains the team to act as its agent in marketing and selling them.
"That exclusive right certainly includes the authority to set the maximum prices, which can be charged for those licenses," Dayton wrote. "While the legislation allows stadium builder's licenses to be a component of the team's financing, those revenues were not intended to replace the need for the team's owners to make a significant equity or capital contribution."
A month-long "due-dilgence" audit of the Wilfs by the stadium authority determined last week that the owners had more than enough money to pay for their share of the stadium's construction cost.
The audit, which stemmed from a New Jersey judge's ruling in early August that the Wilfs had defrauded business partners in a real estate transaction in that state, said that even in a "worst-case" scenario involving tens of millions of dollars in punitive damages, the Wilfs had the financial capability to pay their share of the building cost.
The judge is expected to award puniitive damages in the case next week.
"Your financial assessment reportedly shows that the Vikings' owners could finance their share of the stadium's costs with little or no revenues from stadium builder's licenses," Dayton wrote. "Therefore, I strongly urge you to keep those pricers at an absolute minimum. I have always said that this building should be a 'People's Stadium.' Excessive personal seat license fees conflict with that goal."
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