Tax-cut bill veto clouds future of St. Paul soccer stadium

MN United stadium rendering
The view from the north lawn at Minnesota United FC's upcoming stadium in St. Paul.
City of St. Paul

A plan to bring Major League Soccer to Minnesota is facing another obstacle after Gov. Mark Dayton let a signing deadline expire on a major tax bill. That bill includes a key property tax break for a soccer stadium in St. Paul.

The tax bill passed with wide bipartisan support and would have delivered hundreds of millions of dollars in new credits, exemptions and deductions. Dayton had been set to sign it — until last Wednesday.

"I'm not going to sign the bill as it is now because of this $101 million error," he said.

That goof-up came from a single confused conjunction an eagle-eyed state employee caught, but only after lawmakers had adjourned for the year.

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In language about charitable gambling, the bill had an "or" instead of an "and." The provision is meant to give a handful of bingo halls a tax break. But the error could let pull-tab sellers across the state claim an exemption, jeopardizing a key funding stream for the new Vikings stadium in Minneapolis.

Dayton's decision to pocket veto the measure could spell trouble for Minnesota United, a second-tier pro soccer franchise that wants to be part of Major League Soccer. The MLS deal hinges on the team getting a new stadium. And backers of the $150 million proposed project say they can't break ground without a property tax exemption that's part of the vetoed legislation.

But St. Paul City Council Member Dai Thao isn't worried. Thao said the stadium — planned for an old bus garage site at Snelling and University Avenues — will be an economic boost for his ward. With so much else at stake in the tax bill, Thao said he's confident Republicans and DFLers at the Capitol will sort things out.

"I trust that our legislators and our governor will do the right thing and they'll have a special session and they'll hash out all the details and make sure that everyone in Minnesota wins," Thao said.

Dayton is calling for a special session to resolve other issues, and Republican House Speaker Kurt Daudt has said he's ready to discuss calling lawmakers back. But Daudt said Monday a vetoed tax bill could be difficult to resurrect because of damaged relations with the governor.

Tom Goldstein, an opponent of the stadium who lives in the Hamline-Midway neighborhood, said the drafting error is an opportunity for city and state leaders to revisit the project. Goldstein said the soccer stadium is another example of sports team owners benefiting at the expense of taxpayers.

"The only reason they want the tax exemption is because they want the risk of professional soccer to be borne by the community rather than them," he said. "If it's not a moneymaker then why are they investing in it?"

Minnesota United owner Bill McGuire could not be reached for comment, and Major League Soccer officials in New York declined comment.

Kyle Mianulli, a spokesperson with the Hamline-Midway Coalition, said that even if the soccer stadium is scuttled over a legislative error, the neighborhood will still move forward.

"We've sat with that lot being underdeveloped for quite some time, and Midway has continued to be a thriving, vibrant neighborhood in spite of it," he said.

Mianulli said the Hamline-Midway Coalition has not taken a position for or against the project.

But St. Paul Mayor Chris Coleman supports the stadium, and said the future of professional soccer in his city shouldn't hinge on the words "and" and "or." In a statement, Coleman urged Dayton and lawmakers to come together for a special session, saying leaders have only one shot at bringing the world's game to Minnesota.