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Minneapolis City Council approves tax shift for Vikings stadium

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Stadium vote
Scott "Skolt" Asplund, left, and Greg "Sir Odin" Hanson celebrate the Minneapolis City Council Committe as a Whole approval vote on the Vikings stadium at City Hall in Minneapolis, Thursday, May 24, 2012.
MPR Photo/Jeffrey Thompson

The Minneapolis City Council gave preliminary approval to a Vikings stadium deal Thursday afternoon, ratifying the deal struck by the team, the state and Mayor R.T. Rybak a few weeks ago.  It clears the way for a final vote Friday on the team's goal: a new $1 billion home.

   The plan to build a new football stadium for the Minnesota Vikings, remake the Target Center and keep the lights on at the Minneapolis Convention Center passed by a single vote Thursday afternoon, 7-6. 

The measure redirects the city's hospitality tax to pay its $150 million share of construction costs for the new stadium on the site of the Metrodome. The tax is levied on purchases of food, liquor  and lodging downtown. 

Rybak is the plan's chief architect. He hailed the passage, which was essentially a ratification of the stadium bill passed by the Legislature earlier this month.

"This is definitely one of the largest projects we've ever done," said Rybak. "For most people who just come in and out of the city, they'll see a couple buildings. To us, it's going to mean a huge investment in the hospitality industry, and also cleaning up some of our books."

It'll do that last part by refinancing Target Center, which the city purchased more than a decade ago to bail out another pro sports team, the Minnesota Timberwolves of the NBA. 

City property taxes have been propping up that deal to the tune of about $5 million a year -- and that will end. Sales taxes and the hospitality taxes, paid in part by visitors to the city, will serve as a substitute.

Minneapolis City Council roll call vote
How the Minneapolis City Council voted.
MPR News

Even supporters conceded that doubling down on pro sports, with $150 million in city taxes going towards a Vikings stadium, seemed a peculiar way to accomplish Minneapolis' financial goals.

But Council member Don Samuels said the convergence of high finance, pro sports and a historic economic downturn mean a new $1 billion stadium is just what Minneapolis needs.

"I know this is a strange marriage. We have weird guys dressed up in Vikings clothes. And then we have hard-hatted guys, African-American guys," he said, referring to members of the public who came to listen to the council debate. "But there's a strong link between them -- between the things we like to do for fun, and the jobs we get to support our families."

  'THE WRONG PLAN AT THE WRONG TIME'

"To me, this is a really sad day for the city,"  said Council member Lisa Goodman, who represents downtown. 

Goodman said she believes the deal simply won't work. She said subsidizing the Vikings won't spark any real economic benefits, and will just crowd out other business. 

"I think that the people who support this on the council believe they are doing something good. But I just believe from an emotional and an academic point of view, this is such the wrong thing to do and it's the wrong time to do it," said Goodman. 

Another opponent of the plan, Council member Gary Schiff, helped author and win approval of a $10 million cap on city stadium spending in 2007. He called the Vikings deal a betrayal of the voters.

Schiff also questioned whether it was actually a good deal to extend sales and hospitality taxes for more than 20 years for a deal that may cut property taxes by just 2 percent.

"I'll pay far more in those sales taxes than I'll ever get back in a property tax rebate," said Schiff. "So to sell this as a property tax rebate is misleading to taxpayers."

Schiff and Goodman were two of the six that voted against the deal.

TAKING A RISK

Council President Barb Johnson led the supporters. She told her colleagues that the deal is a risk they have to take, like so many others that have been taken in the past that helped improve Minneapolis.

"We wouldn't have a theater district in our community. We wouldn't have the Nicollet Mall if people hadn't taken tough positions and invested in this community," said Johnson. 

Six others joined Johnson in supporting the stadium, to provide the 7-6 winning margin. It matched a test vote earlier this spring.

The council's approval was a procedural vote. The same 13 members have to repeat the vote Friday morning to formally satisfy a state requirement that they sign off on the deal.

Assuming the measure passes on Friday, a five-member authority will be set up to oversee construction of the stadium. Rybak will appoint two people to the panel, Gov. Mark Dayton will name three -- two members and a chair. 

The law lays out a complicated bidding process on the project, and either the stadium authority or the Vikings or both can oversee construction. The massive construction project will likely not begin until the spring of 2013.