Above: Bill McGuire enters the office of Senate Majority Leader Tom Bakk earlier this month.
Building a new soccer stadium in Minneapolis will be "very difficult" if requested tax breaks aren't secured this year, Minnesota United FC team owner Dr. Bill McGuire said Thursday.
But McGuire added that stadium backers are flexible about how the property tax savings are achieved, including possible public ownership of the stadium. McGuire made the comments on Minnesota Public Radio, in his first extensive remarks since announcing the proposal earlier this month.
Major League Soccer awarded a new team franchise to McGuire and his group in late March, setting off a scramble to finance and build a stadium.
McGuire and his investment group -- which includes Star Tribune owner Glen Taylor -- are seeking to build a $150 million stadium near Minneapolis' farmers market. They are also seeking tax exemptions on construction materials and ongoing breaks on property taxes for the facility, the latter of which faces opposition from Mayor Betsy Hodges.
Asked why those tax breaks are needed -- after the investment group has paid so much for the stadium -- McGuire said the facility would be essentially "non-economic" at $25 million to $30 million a year in revenue.
"Each one of these things that cost money go against that and pretty quickly you run into the problem of financing this on an ongoing basis so you’re not asking people to – above and beyond the money they’ve put in in the beginning – to write a check every year," McGuire said. "So that’s just one of the elements.”
Hodges has said it would be unprecedented to give a private entity a permanent property exemption. She estimated the city would lose out on $3.4 million to $4.2 million per year.
The city does offer tax increment financing to redirect taxes toward debt payments on major private projects -- but those districts have expiration dates. Other local stadiums don't pay taxes because they are
privately publicly owned.
Seeming to loosen his call earlier this month for a complete exemption, McGuire said they are seeking "some kind of help on the property tax on the land and the structure that is built."
“We have not been specific as to the vehicle it can take," he said, adding later that they are not adverse to the stadium being publicly owned. The head of the Minnesota Ballpark Authority, which owns Target Field, has been active in the MLS deal behind the scenes.
“We have been ... thinking about [public ownership] as something that might make sense for a number of reasons," McGuire said. "And certainly that puts us in the realm of the other entities. Of course the other entities all got public money as well.”
McGuire said Minneapolis and other communities have a long history of offering tax relief to lure various businesses. "Not everybody has agreed with those, but they have certainly occurred," McGuire said.
The deal faces long odd of passing the Legislature this year, given a lack of interest and time running out toward a May scheduled adjournment. McGuire wouldn't say definitively if the stadium was contingent on a deal this year -- the league has said the team is working to have a plan finalized by July 1.
"I think it would make it very difficult to build the stadium," McGuire said.
He somewhat dismissed a Senate vote earlier this month expressing opposition to subsidies for a soccer stadium. "It is not necessarily indicative of a lack of interest or support," McGuire said. "And it also mentioned subsidizing the stadium ... is that construction or not? We have come forth with a plan that says we are not asking money for construction.”
McGuire took heat from several callers, including one who asked "How much is enough for someone who is a billionaire?"
“I’m not a billionaire. I’m far far less than that. ... But I think the bigger question that you’re getting at – people are coming forth, a group of people, to do something that is unprecedented in the community and frankly pretty much around the country," McGuire said. "And that is to privately fund an economic development play for our community to make sure soccer is here.”
Precisely what happens next with regard to the deal remains unclear. No legislators have authored a bill to make it possible. And while Senate Majority Leader Tom Bakk said he wants to see support from Minneapolis and Hennepin County, neither have yet expressed that formally.
State Rep. Raymond Dehn, DFL-Minneapolis, said Thursday he has drafted an amendment relating to the stadium, but has so far held off on introducing it.
“We’re trying to determine what the Legislature and the governor’s sentiments are and what the path might be this year, if there’s a path this year,” Dehn said.