The NFL team says that it remains committed to a new stadium on the Metrodome site but that a credit crunch hampers financing now.
The Minnesota Vikings on Wednesday canceled a $45 million deal to buy Star Tribune property near the Metrodome, a move that could complicate the team's effort to build a new stadium at the site.
Team officials blamed the deal's collapse on turmoil in the nation's credit markets, which have made it difficult for even blue-chip companies to obtain loans. At the same time, the Vikings said they remain committed to building a stadium on the Metrodome site and are continuing negotiations for other nearby parcels.
Lester Bagley, the Vikings' vice president of public affairs and stadium development, said there is no connection between Wednesday news and the team's position on remaining in Minnesota.
"We have no intention to pursue any other location other than the Minneapolis site. That's the best and most cost-effective site there is. Mr. [Zygi] Wilf's position since the day he purchased the Vikings has been that he is not moving the team. That has not changed."
The Vikings completed due diligence on the Star Tribune property.
After that, Bagley said, "We decided not to proceed with the terms of the contract."
The Vikings' decision comes four weeks after the Aug. 1 collapse of the Interstate 35W bridge in Minneapolis and two weeks after widespread flooding in southeastern Minnesota -- both disasters that are to be addressed in next month's special legislative session.
"In the last 30 days, events have impacted a lot of lives in Minnesota," Bagley said Wednesday. "It's time to set the stadium issue aside. There will be a more appropriate time to engage on the stadium." Vikings owner Zygi Wilf said in early August that the team would not press its stadium agenda during the special session.
The team has been angling for a new stadium on the downtown blocks, with a projected cost nearing $1 billion. Though Wilf's family has an extensive real estate portfolio, he has repeatedly indicated that a Vikings stadium would need taxpayer help. The team's previous deal to build a stadium in Anoka County called for $280 million from a county-wide sales tax.
In June, the Vikings had agreed to pay Avista Capital Partners, which owns the Star Tribune, a reported $45 million for the land, which includes several blocks of surface parking and the newspaper's 25-year-old Freeman building, the newer of its two downtown buildings. The package had been valued at $21.5 million, according to Hennepin County records.
Bill Lester, executive director of the Metropolitan Sports Facilities Commission, said the commission's top priority is to lock the Vikings into a 30-year commitment to Minnesota beyond Jan. 31, 2012, when the team's obligation to play at the Metrodome expires.
Lester said the collapse of the Star Tribune deal "doesn't necessarily mean it's dead altogether." He said he has no evidence that the Vikings felt the Star Tribune's price was too high, but "maybe they felt that way."
Wilf had touted the Star Tribune deal as a major step toward building the stadium. But that acquisition by itself left unanswered how the Vikings would pay for the facility.
"Conceivably," Bagley said, the team could make a pitch to the 2008 Legislature. Bagley added that the canceled land sale will not affect other parts of the Wilf's vision for downtown Minneapolis. He said the team still plans to pursue its Winter Garden concept for an indoor light-rail station, as well as other plans for commercial and residential development.
Experts say the nationwide credit crunch that originated from bad subprime mortgages is spreading quickly throughout the real estate market. Businesses are finding it tough to borrow money because Wall Street investors, who had fueled the subprime boom by buying the risky mortgages, have stopped lending money. The Federal Reserve two weeks ago responded to the credit crunch by easing a key interest rate.
"It has been a fairly dramatic change," said Terry Kriesel, senior vice president of commercial real estate for St. Paul-based Bremer Financial Corp. The lack of credit "is creating a lot of problems."
Mark Reiling, a principal with Colliers Turley Martin Tucker in Minneapolis, said that commercial real estate lenders have tightened their underwriting standards.
|Chicago Cubs - LP: E. Jackson||2||FINAL|
|Pittsburgh - WP: V. Mazzaro||4|
|Baltimore - LP: K. Gausman||6||FINAL|
|Toronto - WP: B. Morrow||12|
|Cleveland - WP: Z. McAllister||12||FINAL|
|Boston - LP: R. Dempster||3|
|Minnesota - LP: J. Burton||6||FINAL|
|Detroit - WP: J. Benoit||7|
|LA Angels - WP: J. Blanton||5||FINAL|
|Kansas City - LP: E. Santana||4|
|Aug 9 - vs. Houston||7 pm|
|Aug 16 - at Buffalo||6 pm|
|Aug 25 - at San Francisco||7 pm|
|Aug 29 - vs. Tennessee||7 pm|
|2013 regular season|
|Sep 8 - at Detroit||Noon|
|Sep 15 - at Chicago||Noon|
|Sep 22 - vs. Cleveland||Noon|
|Sep 29 - vs. Pittsburgh (in London)||Noon|
|Oct 6 - Bye|
|Oct 13 - vs. Carolina||Noon|
|Oct 21 - at. NY Giants||7:40 pm|
|Oct 27 - vs. Green Bay||7:30 pm|
|Nov 3 - at Dallas||Noon|
|Nov 7 - vs. Washington||7:25 pm|
|Nov 17 - at Seattle||3:25 pm|
|Nov. 24 - at Green Bay||Noon|
|Dec 1 - vs. Chicago||Noon|
|Dec 8 - at Baltimore||Noon|
|Dec 15 - vs. Philadelphia||Noon|
|Dec 22 - at Cincinnati||Noon|
|Dec 29 - vs. Detroit||Noon|