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Minnesota Vikings owners Zygi and Mark Wilf have more than enough money to pay for their share of their team’s new stadium, even if a New Jersey judge orders them to pay hefty punitive damages in a bitter real estate case, a top stadium official said Friday.
But an extensive, monthlong background check into the Wilfs’ legal and financial affairs by the Minnesota Sports Facilities Authority identified “one potential future issue,” which won’t affect the stadium’s construction timeline but could keep the Wilfs entangled in court for years to come.
Under New Jersey law, any civil case that results in punitive damages must be referred to the state attorney general and local prosecutor’s office to determine whether criminal charges should be pursued.
Michele Kelm-Helgen, chairwoman of the authority, the public board overseeing the nearly $1 billion stadium project, said Friday that “we have no idea what the timing would be if those things would happen.”
But, she added, in a worst-case scenario, the NFL has indicated that it will stand behind the project, even if the league required a change in team ownership.
“Right now, we feel real comfortable that we can move forward,” Kelm-Helgen said. “Everything” on the background check of the Wilfs “has come back very clean.”
Groundbreaking on the $975 million stadium, which is expected to replace the Metrodome in time for the 2016 NFL season, is tentatively scheduled for early November.
The authority, at the urging of Gov. Mark Dayton, the leading supporter of the stadium, ordered the more thorough “due-diligence” review released Friday after a New Jersey judge ruled last month that the Wilfs defrauded business partners in a large real estate transaction there.
At the time, Judge Deanne Wilson was highly critical of the Wilfs’ business practices, saying at one point that Zygi Wilf’s own testimony in the 21-year-old case had exhibited “bad faith and evil motive.” She also said “I do not believe I have seen one single financial statement that is true and accurate.”
Wilson is expected to award compensatory and punitive damages — which could be substantial — later this month.
She also has ruled that the Wilf family’s net worth should be public but has given lawyers for the family 20 days to appeal that decision.
Attorney backs authority
Peter Carter, an attorney with Dorsey & Whitney who oversaw the due-diligence audit, repeated Friday what Kelm-Helgen told reporters last week after meeting with Carter and his team — that even in a “worst-case” scenario, such as tens of millions of dollars or more in punitive damages, the Wilfs’ “significant” financial holdings indicate they have the clout to pay for their share of the stadium.
The Wilfs, the Vikings and the NFL have said repeatedly that the lawsuit will have no bearing on the team’s ability to finance the stadium.
The Vikings are responsible for $477 million of the $975 million construction cost, with $200 million of that coming from an NFL loan. The state of Minnesota and the city of Minneapolis are paying for the rest.
In a statement Friday, the Vikings said Dorsey’s findings are “consistent” with the team’s previous statements on the issue. “This report, combined with the NFL’s unwavering support, make that clear,” it said.
The report included a copy of a letter from NFL Commissioner Roger Goodell, who indicated again that the league “strongly supports this project.”
Dayton, who within days of the New Jersey ruling pushed the authority to do everything it could to get an “absolute, airtight guarantee” that the Wilfs had the financial wherewithal to meet their obligations, had no reaction Friday to the report. A spokesman, Matt Swenson, said the governor wanted to fully review it over the weekend before responding.
‘1000s of documents’
Carter said Friday that the due-diligence probe involved “15 to 20 professionals” who worked “around the clock” and “reviewed thousands of documents” involving the Wilfs.
Auditors and attorneys scrutinized the Wilfs’ personal financial records, the NFL’s background investigation of the team owners, “all civil litigation” involving the Wilf family and the underwriting files from the family’s primary lender — U.S. Bank.
Tax returns, property records and other documents were checked, too, along with all the transcripts and files of the New Jersey civil case.
“All the background checks came back absolutely clean,” Carter said, adding that other than the New Jersey case, “there were no other lawsuits that would have a material effect on the Wilfs’ ability to meet their obligations” on the stadium project.
The report indicated that the Wilfs “will likely” appeal Wilson’s ruling, potentially delaying by months, if not longer, any referral of the case to the attorney general or county prosecutors.
The stadium financing legislation approved in May 2012 required the authority to make sure all private funding sources for the project are “adequate to design, construct, furnish and equip the stadium.”
It also dictated that “any financial information” it obtained related to the team or its owners remain confidential. Financial details of the audit were not released.
Before stadium groundbreaking takes place, the Vikings and the authority must complete negotiations on use and development agreements, which will dictate terms of the team’s lease to how revenue is split and how much season-ticket holders pay for seat licenses.
The Vikings walked away from those talks several weeks ago after Kelm-Helgen said that the authority planned to bill the team and the Wilfs for the additional due-diligence work. That, in turn, prompted Kelm-Helgen to express concerns that construction could be delayed by a month or more.
The Vikings returned to negotiations earlier this week as the review wrapped up.
Kelm-Helgen said she hopes the authority can vote on the agreements at its Sept. 27 meeting, in time for the team to close out its financing by November, just before construction begins.
Meanwhile, she said the team still has not agreed to pay for the additional legal and financial scrutiny into the team’s owners.
Staff writer Jim Ragsdale contributed to this report.