Gov. Mark Dayton
Glen Stubbe, Star Tribune
Sept. 16: Dayton wants Vikings to put up more equity
- Article by: Richard Meryhew
- Star Tribune
- September 16, 2013 - 10:55 PM
Days after an extensive background check of Zygi and Mark Wilf determined that they had the financial means to pay for their slice of a new Vikings stadium, Gov. Mark Dayton is pushing to make sure the team owners pay what he considers a fair share.
Dayton on Monday urged the public board overseeing construction of the $975 million downtown Minneapolis stadium to get the Wilfs to contribute “significant equity” to the project and to limit their ability to pass hefty construction costs on to the team’s most loyal fans. Final contracts for the stadium lease and development agreements are near.
“I strongly urge you to negotiate a final financial agreement, which requires the Vikings’ owners to provide a significant share of their financial contribution from their own resources, and not from Vikings fans through the sale of expensive personal seat licenses,” Dayton said in a letter to Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority.
Seat licenses, which typically sell for several thousand dollars on average, are paid by fans on top of the cost of a season ticket and often are used by NFL teams to help pay for new stadium construction. More than half of the league’s teams have charged such fees over the years, with sums ranging from a low of several hundred dollars a seat to $150,000, depending on the market, the team and the seat.
Several teams that recently built new stadiums, such as the Dallas Cowboys, San Francisco 49ers and New York Jets and Giants, have generated hundreds of millions of dollars in revenue through seat license fees. Local teams, including the Twins and the Gophers basketball and football programs, also have charged the fees, though they have generated far less money.
The Vikings stadium financing legislation approved in 2012 stipulates that revenue from stadium naming rights and personal-seat licenses counts as part of the team’s contribution to building costs.
Under the legislation, the Vikings are responsible for paying $477 million of the stadium’s $975 million construction cost, with the state of Minnesota and the city of Minneapolis responsible for the rest. Team funding also includes a $200 million NFL loan.
Lester Bagley, a team spokesman, declined Monday to discuss Dayton’s push to get more from the Wilfs, but said personal seat license fees were clearly “one element of a larger agreement” reached between the team and legislators in 2012.
But in his letter Monday, Dayton expressed concern that the Vikings’ owners could raise so much money off seat license fees and naming rights that very little of their own money would go into the project.
Rep. Bob Barrett, R-Lindstrom, citing the potential revenue and the fact that the team’s value topped $1 billion for the first time in franchise history this year, said Monday that “that is unconscionable.”
Barrett, a longtime critic of the stadium deal, urged Dayton to “do what’s right” and revisit the funding issue to reduce taxpayer exposure.
Among his suggestions: requiring the Wilfs to contribute $200 million out of their own pocket without tapping seat-license fees and naming rights revenue. That money, in turn, “should more appropriately be used to reduce the taxpayers’ obligation,” Barrett said.
“I realize it’s late in the game,” he added. “But this is the proper way to fund it.”
Dayton’s letter comes as the authority and the team complete negotiations on lease and development agreements for the stadium, which tentatively is scheduled to open in time for the 2016 season. The authority board is expected to vote on those agreements Sept. 27, slightly more than one month before stadium construction work is scheduled to begin.
The stadium legislation gives the authority the “exclusive right” to sell the seat licenses, but it retains the team to act as the marketing and selling agent. Dayton said that arrangement gives the authority the right to set the “maximum prices” for the seats.
Kelm-Helgen said Monday that the two sides have yet to agree on how much of the 65,000-seat stadium will be designated for licenses and what those fees will be.
“I’m doing the best I can to try to negotiate something that protects the public as much as possible,” she said, adding that “nothing has been finalized.”
Bagley also declined to talk about the negotiations, other than to say that the seat-license issue is “one of several open issues.”
Dayton first aired concerns over seat licenses last November, after the Vikings e-mailed surveys to season-ticket holders to gauge their willingness to pay thousands of dollars more to secure the best seats. In a letter to the Wilfs at that time, he threatened to undo the deal if they insisted on passing on to fans a portion of the team’s share of the construction cost.
“This private contribution is your responsibility. Not theirs,” he wrote at the time. “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.”
Team officials said at that time, however, that they would expect those fees to be less than those charged in bigger cities, such as San Francisco and New York. “This has to fit the market,” Bagley said then.
Dayton’s letter Monday follows by three days the stadium authority’s summary of a “due diligence” audit of the Wilfs. That audit, which included a legal and financial background check of Wilf family finances, stemmed from a New Jersey judge’s ruling last month that the Wilfs had defrauded business partners in a real estate deal in that state.
After reviewing thousands of documents, including personal financial statements and the owners’ net worth, auditors and attorneys working for the stadium authority said that even in a “worst-case” scenario involving tens of millions of dollars in punitive damages, the Wilfs had the financial resources to pay for their share of construction costs.
Financial details were kept confidential, however, as required by the stadium legislation.
The judge’s decision on punitive damages is expected next week.
Richard Meryhew • 612-673-4425
© 2016 Star Tribune