Despite Hodges' opposition, soccer stadium could receive tax break

Minnesota United players listened before a drill.
Minnesota United FC players listened before a drill at the team's practice in Blaine, Minn., April 23, 2015.
Jeffrey Thompson | MPR News

While the players and coaches of Minnesota United have been gearing up for their home opener this weekend, team president Nick Rogers has been trying to build political support for the stadium he wants to build in Minneapolis.

Key to the team's plan is a property tax break for the proposed stadium, something Minneapolis Mayor Betsy Hodges opposes.

But Rogers said most of the city's elected leaders have been receptive.

Minnesota United FC president Nick Rogers
Minnesota United FC president Nick Rogers watched the team's practice in Blaine, Minn. Thursday, April 23, 2015.
Jeffrey Thompson | MPR News

"The majority of people that we talked to about this are very positive about the plan and what it can mean for Minneapolis," he said. "Obviously the mayor's not in that majority, but that doesn't necessarily prevent us from moving forward with what we want to do."

A team of investors led by former United Health Group CEO Bill McGuire wants to build a $150 million stadium near the Minneapolis farmer's market. The team also would pay a $100 million franchise fee to join Major League Soccer.

The investors plan to cover those costs themselves, but they want to avoid paying sales taxes on the construction materials and they're asking for a property tax exemption — something the other major league stadiums in Minnesota automatically receive because they're publicly owned.

For Hodges, waiving property taxes is a non-starter.

"If there were some other developer or some other project, who came to the city and said, 'we want to put a $250 million development at one of the places in the city that is most ripe for economic development, on which we expect to make a significant profit, and all we need is to never ever pay property taxes on the site of that development,' they would be laughed out of the city," Hodges said.

But many members of the City Council aren't laughing. Council President Barbara Johnson said she's keeping an open mind, because the stadium would attract more people to visit Minneapolis.

"I think it's important for people to have many, many, many reasons to come to our city, including going to the theaters, including going to professional sports events," Johnson said. "We're a regional center. So if soccer's going happen, I want it to happen in my city."

Council Member Linea Palmisano agrees.

"I'm very open to this," Palmisano said. "To me, this is an investment and it could be a way to create a really unique public and private partnership that benefits the city in a way that we haven't before."

Palmisano said the city could stand to gain more in sales tax revenue from ticket, food and beer sales at the soccer park than it currently receives in property taxes from the site.

Head coach Manny Lagos, right, instructed players.
Minnesota United FC head coach Manny Lagos, right, instructed players during the team's practice in Blaine, Minn. Thursday, April 23, 2015.
Jeffrey Thompson | MPR News

Council Member Jacob Frey questions whether economic development will happen in the Farmer's Market area if the stadium isn't built.

"We're talking about a $250 million private investment in a part of town — the north side — that has gotten little to no private investment in the last 50 or 60 years here," he said. "So I don't want to shut the door entirely on anything."

With support for the stadium growing on the 13-member council, Blong Yang, who represents the north side, said he might be able to marshal nine votes needed to override a mayoral veto.

"That's within the realm of possibility," he said.

That's because only a few council members have come out as strongly against the proposed tax break as Hodges. Lisa Bender is one of them.

"I guess I'm surprised a little bit at the speed to which people seem to agree publicly to a deal that we don't have — or at least I don't have — any details that show economic benefit to the city," Bender said.

Bender won a seat on the City Council in 2013 by unseating Meg Tuthill, who supported subsidies for the Minnesota Vikings stadium. Bender said that vote was a big issue for voters in her ward.

"My constituents didn't send me here to make a less-bad deal for them. They sent me here to be a good steward of their tax dollars," she said.

Before Bender and the rest of the City Council vote on anything though, they'll need to see what happens at the state Legislature. Minneapolis likely would need the state's permission to waive property taxes for the proposed stadium.

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