Stadium chief backs tax

Published 8:33 am Thursday, April 11, 2013

ST. PAUL (AP) — The chairwoman of the state panel overseeing Vikings stadium construction said Wednesday that she supports a sales tax on professional sports merchandise as a backup for the financially struggling project.

Michele Kelm-Helgen was appointed last year by Gov. Mark Dayton to lead the Minnesota Sports Facilities Authority. She testified at a hearing of the House Taxes Committee on a bill that would levy the sports memorabilia tax and an accompanying luxury seat tax in response to lagging tax revenue from electronic gambling that’s supposed to cover the state’s share of the $975 million, downtown Minneapolis stadium.

“I think it makes a lot of sense. It would provide a good cushion,” Kelm-Helgen said of the sports memorabilia tax, a proposed 10-percent sales tax on clothes, sports cards, equipment and other items that bear a pro sports logo. It would apply not just to Vikings gear but to the goods of all professional teams, based in Minnesota or elsewhere, and to purchases made anywhere — not just at pro sports venues.

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Kelm-Helgen discouraged the luxury seat proposal, saying it would infringe on a deal state negotiators struck with the Vikings last year that led to the stadium bill the Legislature passed in May. Vikings spokesman Lester Bagley said the team is opposed to the entire proposal but acknowledged that the sports memorabilia tax would not violate the letter of that deal since those sales are not considered “stadium revenue” in the same way that luxury seats are.

Rep. Ann Lenczewski, the Bloomington Democrat who chairs the House Taxes Committee, introduced the new tax proposals earlier this week amid rising concerns about the disappointing performance so far of the electronic pull-tab games that are supposed to help the state generate $350 million in coming years to pay pack stadium construction bonds.

Lenczewski noted that she had voted against the stadium but said all lawmakers have a responsibility to address the problem before it gets out of hand. The first bonds are supposed to go on sale in August, and the groundbreaking is scheduled for October with a hoped-for 2016 opening to the new stadium.

“We don’t know what those numbers are going to be in June, July,” Lenczewski said of the underperforming gambling tax revenue. “We’re not going to be here after May 20, and we’re not going to be back until sometime in 2014. If we can see there’s potentially a gap coming, we should try to solve it now.”

Defenders of the gambling plan have said it needs more time to pick up steam. Also on Wednesday, members of Dayton’s staff, Vikings representatives, lawmakers and others met privately to discuss ways to better market the games, which are offered in some bars and restaurants. Bagley said the Vikings agreed to lend “marketing muscle” toward making the games more successful.

But lawmakers from both parties praised Lenczewski’s effort to head off bigger financing problems, even as some Republicans complained about the specific approach.

“I don’t think this is fair to fans of other sports, or to fans that can’t afford to go to games but want to support their team by wearing a cap or a jersey,” said Rep. Kurt Zellers, R-Maple Grove. That was echoed by representatives from the Twins, Wild and Timberwolves.

“For us and for our fans, it comes down to the accessibility and affordability of the fan experience,” said Twins executive Kevin Smith.

Several other proposals from House Republicans surfaced Thursday to address the Vikings financing concerns. One proposal would cut the state’s $348 million share of the project by $200 million. Another would make the Vikings chip in more money or turn over naming rights to the state.

“I voted for the stadium bill, but we do have a problem here,” said Rep. Pat Garofalo, R-Farmington. “We should have an option on the table that the Vikings should pay more.”

Bagley said the team would not be willing to up its commitment. The Taxes Committee did not vote on Lenczewski’s proposal, but she said she’s likely to include it in a broader package of tax changes that will be unveiled soon.