Dayton wants Vikings to put up more equity in stadium deal

  • Article by: RICHARD MERYHEW , Star Tribune
  • Updated: September 16, 2013 - 10:55 PM

He wants to ensure Wilfs don’t pass on stadium costs.

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Gov. Mark Dayton

Photo: Glen Stubbe, Star Tribune

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Days after an extensive background check of Zygi and Mark Wilf determined that they had the financial means to pay for their slice of a new Vikings stadium, Gov. Mark Dayton is pushing to make sure the team owners pay what he considers a fair share.

Dayton on Monday urged the public board overseeing construction of the $975 million downtown Minneapolis stadium to get the Wilfs to contribute “significant equity” to the project and to limit their ability to pass hefty construction costs on to the team’s most loyal fans. Final contracts for the stadium lease and development agreements are near.

“I strongly urge you to negotiate a final financial agreement, which requires the Vikings’ owners to provide a significant share of their financial contribution from their own resources, and not from Vikings fans through the sale of expensive personal seat licenses,” Dayton said in a letter to Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority.

Seat licenses, which typically sell for several thousand dollars on average, are paid by fans on top of the cost of a season ticket and often are used by NFL teams to help pay for new stadium construction. More than half of the league’s teams have charged such fees over the years, with sums ranging from a low of several hundred dollars a seat to $150,000, depending on the market, the team and the seat.

Several teams that recently built new stadiums, such as the Dallas Cowboys, San Francisco 49ers and New York Jets and Giants, have generated hundreds of millions of dollars in revenue through seat license fees. Local teams, including the Twins and the Gophers basketball and football programs, also have charged the fees, though they have generated far less money.

The Vikings stadium financing legislation approved in 2012 stipulates that revenue from stadium naming rights and personal-seat licenses counts as part of the team’s contribution to building costs.

Under the legislation, the Vikings are responsible for paying $477 million of the stadium’s $975 million construction cost, with the state of Minnesota and the city of Minneapolis responsible for the rest. Team funding also includes a $200 million NFL loan.

Lester Bagley, a team spokesman, declined Monday to discuss Dayton’s push to get more from the Wilfs, but said personal seat license fees were clearly “one element of a larger agreement” reached between the team and legislators in 2012.

But in his letter Monday, Dayton expressed concern that the Vikings’ owners could raise so much money off seat license fees and naming rights that very little of their own money would go into the project.

Rep. Bob Barrett, R-Lindstrom, citing the potential revenue and the fact that the team’s value topped $1 billion for the first time in franchise history this year, said Monday that “that is unconscionable.”

Barrett, a longtime critic of the stadium deal, urged Dayton to “do what’s right” and revisit the funding issue to reduce taxpayer exposure.

Among his suggestions: requiring the Wilfs to contribute $200 million out of their own pocket without tapping seat-license fees and naming rights revenue. That money, in turn, “should more appropriately be used to reduce the taxpayers’ obligation,” Barrett said.

“I realize it’s late in the game,” he added. “But this is the proper way to fund it.”

Still talking

Dayton’s letter comes as the authority and the team complete negotiations on lease and development agreements for the stadium, which tentatively is scheduled to open in time for the 2016 season. The authority board is expected to vote on those agreements Sept. 27, slightly more than one month before stadium construction work is scheduled to begin.

The stadium legislation gives the authority the “exclusive right” to sell the seat licenses, but it retains the team to act as the marketing and selling agent. Dayton said that arrangement gives the authority the right to set the “maximum prices” for the seats.

Kelm-Helgen said Monday that the two sides have yet to agree on how much of the 65,000-seat stadium will be designated for licenses and what those fees will be.

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