The Wilfs won’t pay property tax on lots while the stadium dirt is stored there.
Marlin Levison • firstname.lastname@example.org,
Wilf deal to park Dome dirt solves stadium dilemma – for a tidy sum
- Article by: Mike Kaszuba
- Star Tribune
- April 28, 2014 - 10:59 PM
The new Minnesota Vikings stadium project ran into a problem late last year: Where to store the unexpected amounts of reusable dirt from the soon-to-be demolished Metrodome.
The obvious solution: Three nearby parking lots owned by the Wilf family, the Vikings owners.
Officials said the deal could save as much as $1 million in construction costs, but also concede that it included a potential PR headache: the Wilfs, who were already getting significant public subsidies for the new stadium, won’t have to pay property taxes on the former parking lots while the dirt is stored there.
“I knew that this would obviously attract attention,” said Michele Kelm-Helgen, the chair of the Minnesota Sports Facilities Authority. She was correct — the deal has drawn concern from two state legislators.
As public officials raced to sign leases with the Wilfs in December and January to store a series of 20-foot-high piles of dirt, internal documents show they were mindful of the perception that the Wilfs might be seen by critics as taking advantage of the situation. Both the sports facilities authority and the Vikings insist the opposite is true, and that the Wilfs are in fact saving the $1 billion project substantial money.
The lease arrangements are complicated, but the deal is relatively straightforward: In return for storing the dirt on the Wilfs’ adjoining land, the sports facilities authority is paying the property taxes, about $90,000. The stadium authority also agreed to pay any cost being charged the Wilfs — in the end there were none — for terminating their parking contracts.
In the case of two of the parking lots — the Wilfs own each property under a different corporate name — the stadium authority is paying 264/365ths of the land’s 2014 property taxes.
“The Wilfs [are] not being paid. We’re being made whole,” said Lester Bagley, the Vikings vice president for public affairs and stadium development. Bagley said the Wilfs did not volunteer to store the dirt for free because “we’re making significant investment into the project, and that investment continues to increase.”
The Vikings currently are committed to pay $477 million toward the stadium, although, the team is getting a loan from the National Football League and revenue from seat licenses and other sources that will substantially reduce the Wilfs’ own investment in the project.
Criticism of the deal
Kelm-Helgen said the stadium project is spending $2.1 million overall to haul dirt from the site to landfills. Instead of being taken to a landfill, the material stored on the adjacent Wilf property — about one third of all the excavated dirt — will be reused as fill for the new stadium.
It “seemed like an obvious, correct decision,” she said.
The decision to pay the Wilfs’ taxes brought criticism from Sen. John Marty, DFL-Roseville, a longtime opponent of the public subsidies being used for the stadium. “In the big picture of things, yeah, it’s small potatoes,” Marty said after details of the lease were described to him. “But, I mean, do we have to give [Vikings owner Zygi Wilf] everything the guy ever wants?”
Sen. David Osmek, R-Mound, agreed. “I think it’s a good deal, but it could be a better deal,” he said. Osmek said that paying the Wilfs’ property taxes “does seem to be nickel and diming” Minnesotans.
Kelm-Helgen acknowledged that, instead of asking whether the Wilfs would store the dirt for free, the stadium authority offered the tax deal.
Stadium officials also extended insurance coverage to the Wilf properties at no extra cost to the stadium authority — a move that internal e-mails suggested may have been taken to block the Wilfs from taking legal action should the dirt storage lead to problems. “If the Wilf family companies are now ‘insurers’, [they] technically can’t bring a claim against the” stadium authority for damages, wrote Kate Dodge, a senior executive for Willis Environmental Practice, an insurance broker for the stadium authority.
Documents and e-mails show that the Wilfs, while willing to help the project, were concerned with preserving their interests, including having no environmental liability under the plan. At one point, lawyers for the Wilfs wanted to make sure that sight lines for billboards on the parking lots were not blocked by the dirt piles. “Protecting the billboard revenue is important” to the Wilfs, said Thomas Bray, an attorney for the Vikings owners.
Bray also cautioned that the Wilfs were concerned that storing the dirt could lead to more than “ordinary wear and tear” on the property.
A quick solution needed
The reasons behind having to hurriedly turn to the Wilfs for help in storing the dirt were outlined in a series of stadium authority e-mails and documents before and after the Dec. 3 groundbreaking. Stadium officials were caught off guard by the large amount of soil that could be reused at the site to save money. Before settling on the Wilf properties, Mortenson Construction — the stadium builders — quickly explored sites in Minneapolis, Maple Grove and even in Ramsey County, where the Vikings stadium had once been proposed in Arden Hills.
Three days before the sports authority formally considered a lease regarding the Wilf’s first parking lot, finding a location had become urgent. “We need to be able to fence the Wilf site yet today,” John Wood, a Mortenson official, said in a Dec. 10 e-mail. “Will this be possible? When will the lease be done?”
With the Vikings still needing to play its final two games at the Metrodome last December, the team also asked that the stadium project pay for the Wilfs to find other spots on game days to park cars belonging to Vikings employees. “We should be able to find spaces for the cheerleaders,” Don Becker, representing the Wilfs, wrote in an e-mail.
“[But] whatever we need to spend to move these [other] cars for the next 2 games I would propose should be a project expense,” said Don Becker, representing the Wilfs.
But Kelm-Helgen said that, in the end, the sports authority blocked that additional payment.
As the arrangement was disclosed at a December meeting, Vikings spokesman Jeff Anderson reminded team and stadium officials to explain the deal in terms of its larger impact. In addition to the savings, remember that “neither the Wilfs nor the Vikings will receive revenue,” Anderson said in an e-mail.
Mike Kaszuba • 612-673-4388
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