Minnesota’s Recent Sports Stadium Welfare Disasters: @savethevikesorg

Paul C. Udstrand wrote up an excellent history of Minnesota sports stadium welfare debacles at Twin Cities Indymedia last month. I’ve pulled a couple highlights below, but the whole thing is worth reading by anyone seriously considering funding yet another professional sports stadium welfare program in the State of Minnesota.

The Xcel Energy Center’s failure to pay what was promised:

The arena was built with two $65 million dollar loans, one from the state of MN and the other from the city of Saint Paul. The state loan was an interest free loan to the team that the NHL is helping to pay off, and the City loan was raised via bond sales that are supposed to be paid off by rental payments from the team. In calculating the costs of the state portion McGladrey seems to assume that since it was an interest free loan, it cost the state nothing to issue it. This is an odd assumption to make. That money came from somewhere, and even if the state didn’t borrow it or issues bonds for it, it was money that was not available for other expenses. Even if that money is paid back (which is doubtful since $17 million of that loan has already been forgiven, and the team is now asking for the remaining $39 million to be forgiven) it represents a $65 million hole in the budget at the time of the loan, that’s money somebody somewhere else could have used.

The Minnesota Timberwolves dumped the Target Center arena on tax payers for $50 million less than it was worth at the time.

They play at the Target Center arena that cost $104 million dollars to build. Originally the team owned the arena and paid $83 million for the construction while the city of Minneapolis made up the difference with $20 million of financing. However by 1995 the team was losing so much money on the arena they wanted to unload it, at that point the city jumped in bought the arena. Although the stadium was only valued at $35 million dollar by then, the city paid $84 million dollars to take over the arena. Since 1995 the Target Center has continued to lose $1-$2 million a year [of taxpayer’s money]. In 2004 the Target Center underwent a major renovation but I don’t know how much that cost or how it was paid for, whatever it was, it wasn’t enough because the Mayor of Minneapolis now wants another $155 million, more than the original cost of the arena, for more renovations.

The Twins haven’t come back to the government for a fresh handout yet. However, we haven’t even reached the All-Star Break in their second season in their new stadium, so give them a bit more time. That said, due to the poor performance of the team, people are now donating their tickets to Tix for Tots rather than going themselves. If the trend continues, those tickets won’t be purchased in the first place, leading to another bail out of another stadium by another professional sports franchise.

By the way, guess what people get when they donate their tickets? You guessed it: A tax deduction. You can be sure that people are taking the deduction based on the face value of the tickets (when they were more optimistic about the Twins season) rather than what ticket holders value their tickets at today.

4 thoughts on “Minnesota’s Recent Sports Stadium Welfare Disasters: @savethevikesorg”

  1. This sports corporate welfare is worse then ‘welfare’, it is corruption of society, it is pillaging of society’s taxes, which were supposed to be for the common GOOD being mis-applied for the lowest common denominator forms of entertainment.

    Remember when sports tried to be named as a ‘national pastime’…have our schools become so bad that none of you know what a ‘pastime’ is? It is a distraction from work, something to fill some idle time…and in USA where people now have to–
    –work multiple jobs to stave off foreclosure,
    –many of these jobs without benefits,
    –many without a chance of funding a 401k,
    –where even good jobs with benefits now require people to work insane hours and productivity levels to stay employed…
    ——–who has time for any ‘pastime’ anymore?

    Pro sports are a luxury item…the first thing a sane person will to drop from your household budget, right? It’s a game, it was always a game, living off of legends, half of whom were doped up during their playing days, and many of which are wounded and functionally disabled now.

    In a modern america with lethal austerity measures being pushed down societies throat, why would we even consider for a minute supporting this corporate welfare at the expense of pillaging $100s of millions of dollars from our civic welfare?

    No wonder we have bridges falling into rivers and the Plymouth avenue bridge closed for a year…and yet STILL, STILL this item is put into consideration? This indicates the a complete lack of wisdom, vision, understanding, compassion, anything that might remotely define a leader I would follow to even suggest this stadium deal be done.

    And not just political leaders, anyone in this state who considers themself to be a community-minded leader, a THOUGHT leader, a CHRISTIAN leader–well, here is your Waterloo moment!

    You have GOP legislators playing political ‘football’ with the lives and general ‘welfare’ of my fellow citizens and I REFUSE to ignore your actions OR INACTIONS to handling this stadium deal. Don’t even pretend to call yourself a leader without debating this issue publically. A plague on all of you until you do.

  2. Wow, I can’t believe McGladrey would completely gloss over the time-value-of-money implications of an interest-free loan. Any person with the least bit of knowledge about finance would laugh at that.

  3. @The Freets, it’s just money. What’s the big deal? In the current plan, believe the terms of the hundreds of millions of dollars of financing is 1.8% fixed for 30 years. Not bad, eh? Does the state offer loans at that rate to people other that Ziggy Wilf for his corporate welfare program?

  4. I’ve donated some tickets this year. I’d rather take the deduction based off what they were selling for last year.

    So, um, anyone want a pair of tickets for Tuesday?

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