Let The Soccer Balls Fly!
To: Bill McGuire
When you drive around the Twin Cities—almost anywhere in Minnesota—it’s not hard to notice that what used to be baseball fields are now soccer fields. Frank Quilici, former Twins manager and player, once complained that baseball fields were being converted to soccer fields at a fast clip. And you gentlemen have noticed another trend: The demographics of soccer players and fans are considerably different from the demographics of the more established sports.
You have proposed an outdoor stadium with real grass, seating approximately 18,000 fans at the old farmers’ market site in Minneapolis, near Target Center. This is an underutilized area, except for a small number of unemployed individuals who often ride the rails, but it does sit at the nexus of the Blue and Green light rail lines. A stadium in that locale would vastly increase property values (note to politicians: more real estate tax) and would continue to build a vibrant metropolitan community.
As Blong Yang, the Minneapolis City Council member who represents that area, has pointed out, this is a great bargain, and the city would be foolish to let this opportunity go by.
Those who wish this opportunity to go by argue that we suffer from stadium fatigue. Taxpayers have indeed financed a number of stadia. In the good old days (Xcel Energy Center), the commonly quoted formula for public support of sports stadia was usually one-third/one-third/one-third, meaning one-third private investment, one-third state, and one-third local taxing authority. That formula was quickly abandoned when it came to TCF Bank Stadium—in part because the owner, the University of Minnesota, is a nonprofit entity. The Vikings stadium is approximately 50/50, for a total amount in excess of $1 billion. In fact, significant money from the taxpayers to build sports facilities is the norm in Minnesota.
In St. Paul, for example, the city-owned ballpark for the St. Paul Saints, CHS Field, is about 80 percent publicly funded. Giants Ridge Golf & Ski Resort, owned by a public authority, has never made a profit in 30 years, and in the past decade alone has lost more than $40 million. It is generally argued by opponents of large taxpayer-subsidized/private enterprise efforts that if the deal is such a great deal, then the owners should be content to build the stadium or facility themselves. As a state, we haven’t had much luck with this argument because of the marbles theory.
You know the marbles theory: If you don’t build me a stadium, I will take my marbles and go home. The marbles-go-home concept works particularly well as one approaches an election year (see Vikings stadium).
But you gentlemen have a better deal; you will build the facility, finance it and own it. This approach avoids certain pitfalls of previous (and successful) stadium-building projects. For example, you don’t have to invent an entirely new gambling option to build your facility (electronic pulltabs). And you are free, without gubernatorial opprobrium, to sell seat licenses to anyone who wishes to have their name on the place on which they plan to park their fanny. You will not be in a position of offering a grant, only to have it discovered to actually be a loan (ahem, Twins). No, you avoid all of these pitfalls by the simple proposition that if you build it they will come, and you are willing to build it.
Let’s talk about the owners of the proposed soccer stadium; not the taxpayers collectively (for a change), but real live taxpayers. This is an ownership group that has built tens of thousands of high-quality jobs throughout the entire state of Minnesota. You have generally kept your companies’ headquarters located in Minnesota and have strong family ties, in some cases over generations, committed to Minnesota. These facts should be noted by many of our elected leaders because they indicate, unlike sports owners of the past (Vikings), you as a group are committed to this state. And you’re willing to put your money where your mouth is; even better.
Financing for this stadium—principally your money—should be a no-brainer for the rest of us. Waiving sales tax on the actual construction of the stadium is a common practice (Twins stadium, Vikings stadium) and a great bargain for those of us who pay taxes in this state. Property tax abatement is a good deal too, particularly given the low property tax currently earned on the land where the stadium would be built. There are infrastructure expenses, such as roads, curbs, sewer connections and the like; these represent a core function of government. A note of caution: While in the past taxpayers have sometimes ended up paying for parking ramps and other “infrastructure,” here we should require an estimate of true infrastructure costs and hold to that budget. But again, none of you seem to be opposed to this.
So here’s the deal. We have the opportunity to secure over $250 million of private investment in exchange for waiving sales tax on a large construction project, abating a property tax increase due to the improvement, and providing infrastructure as we would for any large project (with a budget!). In exchange for that, we get to revitalize part of downtown Minneapolis, build the urban core and recognize that our demographics are in the process of changing. We have an ownership group of real Minnesotans who have helped build this great state and who, based on their past performance, will continue to build this great state. We would be foolish not to allow the soccer balls to fly!
Vance K. Opperman
A Fan of Economic Development
Vance K. Opperman (email@example.com) is owner and CEO of MSP Communications, which publishes Twin Cities Business.