Vikings stadium bill writers mull backup financing
Published 8:48 am Wednesday, March 7, 2012
ST. PAUL — Minnesota lawmakers crafting a Vikings stadium bill are discussing whether and how to include a backup funding plan in case proceeds from gambling in bars doesn’t adequately cover a needed state contribution, prominent lawmakers said Tuesday.
The hang-up is one reason why legislation for the nearly $1 billion football stadium won’t become public earlier than Monday. That’s more than 10 days after city, state and team officials celebrated a handshake deal to build their treasured franchise a new home.
The difficulty turning a term sheet into actual legislation is but one challenge ahead for the Vikings stadium effort. The session clock is working against advocates: Lawmakers expect to adjourn no later than April 30, and a gauntlet of time-consuming committee and floor votes stands between the bill and Gov. Mark Dayton’s desk.
The House sponsor, Republican Rep. Morrie Lanning, acknowledged that “time is short” and said that negotiators are still working through key details, including the security of the state financing.
“We’ve recognized all along that it could be an issue. That’s one of many things that has to get sorted out,” said Lanning, of Moorhead. “Some people may want more comfort than what might be readily available.”
Neither Lanning nor others involved in the project will disclose what backup sources they prefer.
The financing blueprint splits the construction costs three ways: $398 million from the state, $427 million from the Vikings or other private sources and $150 million from the city of Minneapolis, where the stadium would be built.
Under the stadium framework, the state would get its share by allowing charitable groups to shift from operating paper pull-tab games to electronic forms of the game of chance. The state Department of Revenue estimated recently that the pull-tab expansion would generate about $72 million a year in new tax revenue to the state.
That would seem to leave plenty for the $35 million a year that stadium supporters say would be needed to cover the state’s bond payments. However, bond investors typically seek assurances that revenue coming in will be well more than the annual debt and interest owed, sometimes as much as double that amount. That’s especially true with bonds like those eyed for the stadium, which won’t be backed with full state taxing authority.
In addition, the charities that would run the new electronic games say they are expecting to see tax rates on their profits lowered, further cutting into the main funding stream.