New stadium plan has Hennepin County, Vikings as safety net

  • Article by: MIKE KASZUBA , Star Tribune
  • Updated: April 2, 2012 - 8:58 AM

Hennepin County and the Vikings would be asked to cover funds not gained from charitable gambling.

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This artist's rendering shows an interior view of the proposed $975 million Vikings stadium.

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Negotiators for a new Minnesota Vikings stadium reached agreement Sunday on a plan that could jump-start the project at the Legislature, relying on the team and Hennepin County as backup funding sources for the state.

If approved, the plan could resolve the controversy over using electronic bingo and pull tabs in Minnesota's bars and restaurants -- an untested source -- as the sole means of raising the state's $398 million share of stadium costs.

Officials of charitable gambling, who said an earlier proposal did not provide them with enough tax relief, applauded the latest plan, saying it would cut their tax burden by 29 percent -- a reduction of $36 million a year.

"It wasn't a simple solution," said King Wilson, executive director of Allied Charities of Minnesota, an umbrella group for the charities. "But we got there."

The proposal leaves only a $10 million-a-year cushion between what the state needs to pay for the stadium and what the new charitable gambling revenues are expected to provide.

Included now are four separate funding backups should electronic pull tabs and bingo fall below projected revenues.

The first backup would be a tax on luxury suites in the new stadium. If that also fell short, state officials would turn to a sports lottery game to fill the gap. Next, they would tap extra sales taxes already being collected by Hennepin County for the Minnesota Twins' Target Field. The final backup would be a Vikings stadium admissions tax.

"The Vikings, I'm sure, would prefer not to have an admissions tax" or a tax on luxury suites, said Rep. Morrie Lanning, R-Moorhead, the chief House author of the stadium legislation. "They're not going to jump up for joy."

The new plan is hardly a slam dunk. Hennepin County Board Chair Mike Opat opposes it and Vikings spokesman Lester Bagley said the team objects to the "principle" of having to back up the state's funding plan even after it contributes $427 million to building the $975 million stadium .

Bagley said Sunday that the latest idea is preliminary and could change.

"It's not a final deal," said Bagley, the team's vice president for stadium development and public affairs.

Momentum building

Sunday's developments give fresh energy to a project that had recently stalled. In just a week, the stadium's three thorniest sticking points all have been addressed: The Minneapolis City Council has given its support, the charitable gambling industry's concerns about tax relief have been addressed and there are now multiple financial backups.

But the politics of passing the stadium legislation at the State Capitol remains unsettled at best.

The new proposal will get its first House hearing Monday in front of the Commerce and Regulatory Reform Committee, chaired by Rep. Joe Hoppe, R-Chaska. A Senate panel had given an earlier proposal a hearing last month, but did not vote on it.

Hoppe said he has long wanted a tax on stadium luxury suites and seats as a way to fund the stadium, but was met with resistance. "The [National Football] League didn't like it. The team didn't like it," he said.

Wilson said the agreement with the charities was reached in the past few days with the House leadership team, which at least indirectly included House Speaker Kurt Zellers. Zellers, the lead House Republican, has been vague about how much influence he will exert for the stadium before the Legislature adjourns in the coming weeks.

But the new plan has risks.

Lanning said it would drop the state's take of the new charitable gambling revenue to roughly $52 million a year in order to satisfy the charitable gambling industry. State officials had already reduced the projected yearly take to $62 million, down from the $72 million a year they initially said the new gambling sources would yield.

Lanning said estimates show the state needs roughly $42 million a year from charitable gambling to pay for its share of the stadium.

Tip boards a clincher?

Wilson said a big factor in satisfying the charities was the willingness to calculate tax based on net gambling receipts rather than gross receipts. The change would make it easier for charities to reach an 85 percent prize payback for games. "That is really significant," King said.

Another new provision in the plan, a sport-themed tip board, would give charities another $16 million annually in tax relief -- bringing the charities' total tax relief to $36 million annually.

Wilson said the sports-themed tip boards may in the end prove more popular than either electronic bingo or electronic pull tabs. In one version, he said, customers could buy a ticket that would include, for example, the numbers 1 and 6. If the Vikings were playing the Green Bay Packers and the final score was Vikings 21, Packers 16, that ticket would be a winner.

It was unclear late Sunday whether the NFL, which long has opposed overt links between pro football and gambling, would object to the plan as part of an overall Vikings stadium funding package.

"They're the most simplistic things there are, but people love them," Wilson said of the sports-themed tip boards.

mkaszuba@startribune.com • 651-925-5045

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