The party plaza in front of the Metrodome is now Ground Zero in a legal dispute between the owners of the land and the Minnesota Sports Facilities Authority (MFSA), the public body overseeing construction of the new $975 million Vikings stadium.
Minneapolis Venture LLC owns the plaza that is home to the Downtown East light-rail station, as well as the spot where pre-game Vikings festivities are held. In a lawsuit filed last month, Minneapolis Venture called for a Hennepin County judge to clarify whether the land there and its underground parking garage are part of the stadium's broad reach.
Located along Kirby Puckett Way between Fourth and Fifth streets, the plaza is not part of the new stadium's actual footprint. But it's an important conduit to the light-rail station, downtown and a proposed public park west of the stadium. Negotiations have been ongoing between Minneapolis Venture and the authority, which wants to buy the land.
In a Tuesday letter to MSFA CEO Ted Mondale, an attorney for Minneapolis Venture claims the authority violated a 2003 agreement between the authority's precursor body and the city that permits pre-game festivities. In this case, the Vikings' Aug. 29 preseason game against the Houston Texans is part of the dispute. (The Vikings lost 27-13.)
The letter alleges that the authority failed to gain written approval prior to the festivities, and that use of the plaza began more than 24 hours before the pre-season game and continued 24 hours after the game, among other violations.
Said Minneapolis Venture spokesman Jon Austin, in an email statement: "As the Authority is well aware, it failed to seek (much less obtain) our written consent for its use of the Plaza last week, it set up on Tuesday for a Thursday evening game and has left its tents up through today and it failed to provide any proof of insurance for the vendors using the plaza. All of those actions are expressly detailed in the use agreement that the MSFA has chosen to ignore."
Minneapolis Venture has already threatened to cancel plaza activities for the final four games of the season and any post-season games -- because the current agreement expires Oct. 31.
The authority has said that Minneapolis Venture is "grossly" overstating the value of the land in an effort to squeeze millions as the stadium's groundbreaking nears. The new stadium is expected to open by August 2016.
In response to Tuesday's letter, Chair Michele Kelm-Helgen said all information that isn't already available on the authority's website will be forwarded to Minneapolis Venture "in a timely manner."
Janet Moore covers commercial real estate for the Star Tribune.
The nearly $1 billion Vikings stadium project cleared another hurdle Friday when the Minneapolis City Council unanimously approved design and planning recommendations delivered earlier this summer by the city's Stadium Implementation Committee.
The 25-member committee, made up of neighborhood residents, business leaders and political officials, met for the past year to establish guidelines for how the giant and glassy stadium should look and how it could best be integrated into the east end of downtown and its surrounding neighborhoods.
Groundbreaking for the stadium, which will replace the Metrodome, is tentatively set for early November. Before that can happen, the project had to win final design approval from the city.
The Vikings and the Minnesota Sports Facilities Authority, which is overseeing the development, must also finalize lease and development agreements, which will determine terms of the team's stay at the stadium to who will control the construction phase of the project.
Those negotiations stopped last week after the authority launched a deeper financial and legal background investigation into team owners Mark and Zygi Wilf. The probe stems from a decision earlier this month by a New Jersey judge, who ruled that the Wilfs had defrauded partners in a real estate deal there. At the time of the ruling, the judge indicated that she would award compensatory and punitive damages in the case, which could cost the Wilfs tens of millions of dollars or more.
Concerns about the sum of the damages prompted the authority to conduct a more thorough review of the Wilfs' business dealings to make sure they can finance their portion of the $975 million construction cost. The Vikings are responsible for $477 million of that cost.
Michele Kelm-Helgen, the authority chairwoman, said this week that the review should be complete by the second week of September. The Vikings, citing a loss in leverage in the lease and development talks because of the audit, have said that they will not resume negotiating the agreements until the review is complete.
In the meantime, the authority plans to hold a special meeting at 7:30 a.m. Wednesday to discuss the review work and its contracts with the team.
A nasty dispute over a key piece of land near the $975 million Vikings stadium site got stickier Friday when the public board overseeing the project charged the property owner with "grossly" overstating its value.
In a counterclaim to a lawsuit filed last week in Hennepin County District Court, the Minnesota Sports Facilities Authority alleged that Minneapolis Venture LLC, which owns the land under the Downtown East light-rail stop, has greatly inflated the property’s development potential and value — nearly double the authority’s appraised value —in order to squeeze millions of dollars from the board at a time when a tentative construction start on the stadium is only weeks away.
It also contends that Minneapolis Venture cannot terminate a 2003 agreement with the Metropolitan Sports Facilities Commission, the authority’s predecessor, over using a portion of the block as a public plaza before NFL games or other sporting events. That agreement expires Oct. 31.
Michele Kelm-Helgen, the authority chairwoman, Friday called the threat to end the plaza deal "a negotiating tactic" by Minneapolis Venture to gain leverage in the valuation dispute.
"They know it’s an important piece of property to their project," she said. "And to me, they are grossly overstating what the value is. From the public’s perspective, there’s no way we could ever agree to that."
The authority’s response comes as it races to complete a thorough financial and legal background check into team owners Mark and Zygi Wilf in time to meet a tentative, Nov. 7 stadium groundbreaking date.
The "due-diligence" review was prompted by a New Jersey judge’s ruling earlier this month that the owners had defrauded partners in a real estate deal in that state. The judge, who was highly critical of the way the Wilfs do business, is expected to rule on damages, which could cost the owners tens of millions of dollars or more, sometime in coming weeks.
Minneapolis Venture filed a suit against the stadium authority earlier this month claiming that negotiations over the property have been "perplexing and unproductive."
It asked a judge to rule on whether the above-ground plaza and its coveted underground parking garage are part of the massive stadium’s reach, stating that at times, it was unclear whether the authority even wanted to purchase the land although "it was communicating to the public that Downtown East was within its control."
Jon Austin, a spokesman for Minneapolis Venture, said Friday in response to the authority's counterclaim: "In the space of a few short pages, they manage to stake a nonexistent claim to our property by implying that even though we own the land we cannot use it, to falsely assert that we have some unwritten obligation to agree to any terms they think appropriate and to demand — without any basis in fact, contractual language or law —that we dedicate our land to be used by the Vikings and the MSFA without compensation."
Attorneys for the Minnesota Sports Facilities Authority have made "substantial progress" over the past 24 hours on a deeper background check into the finances of Vikings owners Mark and Zygi Wilf.
Authority chairwoman Michele Kelm-Helgen said Wednesday that representatives for the team and the Wilfs turned over a "substantial amount of information" Tuesday dealing directly with the Wilfs' financial interests, data that is needed to complete the audit quickly and ensure that construction of the team's $975 million downtown Minneapolis stadium stays on track.
"There still is more work to be done, but it's definitely moving forward," she said.
Authority attorneys had requested the information as part of a more thorough financial and legal background check of the team owners following a New Jersey judge's ruling this month that they had defrauded business partners in a real estate deal there.
Gaining access to the records became an issue last week when the authority attorney leading the probe said that the Wilfs and the team had not responded to repeated requests for the personal financial information.
The authority is conducting the review to make sure the Wilfs can finance their portion of the stadium, which will serve as the team's new home beginning in 2016. The judge in New Jersey is expected to award compensatory and punitive damages, which could be substantial, in coming weeks.
The Vikings, meanwhile, have said they will not resume negotiations on lease and development agreements that must be approved before construction begins until the due diligence work is complete.
Kelm-Helgen has said that the team's stance could delay construction by at least one month.
Days after a public squabble over access to the financial records of Vikings owners Zygi and Mark Wilf, team representatives delivered some of that information Tuesday to the Minnesota Sports Facilities Authority.
Michele Kelm-Helgen, the authority chairwoman, said that attorneys and representatives for both sides planned to meet well into Tuesday night to review the financial data.
"Getting all that information is a very positive thing," she said.
The authority's additional scrutiny of the Wilfs' finances was triggered by a New Jersey judge's ruling earlier this month that the Wilfs had committed fraud and breach of contract in a real estate deal in that state.
The authority, the public board overseeing development of the team's $975 million downtown Minneapolis stadium, ordered the deeper background check to make sure the court case, which could cost the Wilfs tens of millions of dollars in compensatory and punitive damages, wouldn't hurt the team's ability to help finance stadium construction.
The Vikings are responsible for $477 million of the construction cost, with the state of Minnesota and city of Minneapolis picking up the rest.
Tensions over the "due-dilgence" work bubbled up Friday, however, when an attorney with Dorsey & Whitney who is leading the probe, issued a statement saying that despite repeated requests, the Wilfs had to date "refused to provide us with any personal financial information that our advisors need to obtain comfort that the New Jersey court case will not impact their ability to meet their financial obligations."
The statement followed comments by Lester Bagley, Vikings vice president of public affairs, who had said the team was cooperating fully with the review and delivering the requested information.
Bagley said Tuesday that the team had previously shared financial data through a major bank. He said the paperwork provided Tuesday involved financial data "directly from the Wilfs."
"Today was progress," Bagley said.
What affect that "progress" will have on stadium negotiations and the construction timeline is unclear.
Late last week, the Vikings stopped negotiating with the authority on important stadium lease and development agreements until the due-diligence work is finished. Those agreements must be approved before the team secures all of its financing and the state issues taxpayer-backed bonds to pay for its share of the project.
Kelm-Helgen has said that if the team doesn't return to the negotiating table soon, stadium construction could be delayed by a month or more.
Project groundbreaking is tentatively scheduled for early November. The team and authority hope to open the stadium by July 2016.
Bagley said Tuesday that he believes the project is "still on time and on budget. We still feel like everything is on track."