Breaking Down the StarTribune’s Vikings Stadium #Wilfare Editorial

The StarTribune’s latest editorial lobbying to spend the public’s money to subsidize Zygi Wilf’s business shows that they aren’t really interested in convincing the Vikings to stay in the current Metrodome, convincing business leaders to subsidize Wilf’s business, or convincing fans to pay for Zygi’s stadium. They just want the state and city to pick up what Zygi Wilf refuses to pay for his own stadium (and buy some of their land). Here’s a breakdown:

Minneapolis City Council members have a rare opportunity to make history by having the civic-minded fortitude to back a nearly $1 billion public-private investment that can pay dividends for the city and state for decades to come.

Minneapolis City Council members could make history by keeping downtown Minneapolis sales taxes at record high levels. They could force downtown residents and employees to pay not only those taxes on a daily basis, but to feel the pain of the $400 million hit the state would take if the city council went along with the state’s plan.

Without a clear signal that a majority of the 13-member council supports the current Vikings stadium proposal, however, opponents and fence-sitters at the Legislature will have the perfect excuse to ignore the politically sensitive issue during this election-year session.

Good. It’s a bad plan. Take a year to think about it.

Gov. Mark Dayton no doubt made that point when he met privately Monday with Council Members Kevin Reich and Sandra Colvin Roy, whose support could make the difference at City Hall and at the Capitol. We trust that Dayton also emphasized that the stadium deal now on the table includes the following benefits for the city:

The plan Dayton and the MN Building Trades presented to Kevin Reich and Sandra Colvin Roy was painfully misleading about the economic realities and public support for a Vikings stadium. Reich and Colvin Roy should do what’s best for their constituents, which means relying upon feedback from their constituents rather than misleading push polls.

To fund its $150 million initial contribution, the city would use some of the existing sales and hospitality tax revenue that currently funds the Minneapolis Convention Center, while redirecting some of that revenue for economic development, including renovation and debt payment on the city-owned Target Center. The arena has become a financial drain for city taxpayers, and this plan, by covering the $5 million a year needed to pay off the facility’s debt, offers a chance for much-needed property tax relief.

The city is already dealing with one professional sports stadium economic disaster: the Target Center. Minneapolis residents also pay for the bulk of the Twins stadium due to a Hennepin County tax Minneapolis residents didn’t get a chance to vote on. And now they are being asked to take on yet another subsidy on behalf of a professional sports team owner who’s unwilling to pay for his own business’ stadium. But, this one is the most expensive yet, with the fewest game days. And even worse deal.

City Council members concerned about political fallout need to cut through the often inaccurate antistadium rhetoric and educate their constituents. The city’s contribution to the stadium is a no-new-taxes approach that actually would result in property tax relief.

Few people are anti-stadium. They just oppose public funding for a stadium. That said, if the Vikings and Vikings fans are unwilling to pay for their own stadium, I guess that makes them anti-stadium.

Yes, the stadium plan could reduce property taxes by 2%. It would do that by shifting the tax burden to a combination of city and state taxes. Among the groups that would be paying increased taxes would be gambling addicts. Personally, the property tax break on my family’s home would come to $82.85. I’d rather pay that than contribute to extracting hundreds of millions of dollars from gambling addicts in the State of Minnesota. My property happens to be worth around double the city’s average property, so we can avoid increasing gambling addictions in the state for less than $4/month on average.

Noting that the Convention Center taxes were authorized by the Legislature, GOP legislators have threatened to end them after the center’s bonds are paid off in 2020. Legislation to fund the Vikings stadium would allow Minneapolis to maintain those taxes for another 25 years. The worst-case scenario for the city would be an empty Metrodome and ongoing debt woes for Target Center.

Maintaining a revenue source for a bad project is a bad idea. The worst case scenario of the Target Center is less than $10/month. The worst case scenario on the Metrodome is something our elected officials should have a serious conversation with the Vikings, Vikings fans, and local businesses who claim that the Vikings matter to them about. If those groups aren’t willing to pay for a new stadium, let’s keep using the Dome.

By committing to cover $150 million in construction costs, the city will do its part to secure a downtown Minneapolis investment of $427 million from the Vikings and $398 million from the state. (In addition, the team would pay $327 million in operating costs, while the city would cover another $189 million over 30 years.)

The editorial does not mention the net return to the city from this gift to Zygi Wilf.

The City Council can make a strategic investment in the 65,000-square-foot stadium — much like the Hennepin County Board did with Target Field and the Warehouse District — and give new life to the east end of a downtown that serves as the region’s most important economic engine.

We already have the Metrodome. Replacing it with a new stadium will not create “new life”. Stadiums are dead zones. The designs call for that, by requiring parking and an empty plaza rather than new downtown housing and new businesses including retail at a major LRT hub.

Plans call for a large public plaza, a block for tailgating and other amenities — all closely tied to the expanding light-rail system.

Nearly 355 days of emptiness next to an LRT hub.

With thoughtful urban planning and additional private investment, the new facility can do for Minneapolis what Lucas Oil Stadium has done for Indianapolis.

I’ve been to Indianapolis and past Lucas Oil Stadium. It’s a dead zone similar to what the Metrodome is today. I wouldn’t expect anything different from a new stadium. In fact, based on the increased footprint that shifts currently taxable land off the tax rolls (thus shifting a tax burden to other city property owners), I’d expect less.

(Disclosure: The stadium site plan includes a block owned by the Star Tribune, and the value of other property owned by the newspaper near the Metrodome is likely to increase if the project is approved.)

That’s clear.

If they turn their backs on the Vikings, the City Council will need to answer to constituents who are desperate to fill some of the 13,000 construction and service-sector jobs that would pay an estimated $300 million in wages over the next four years. Beyond those benefits, business leaders are quick to point out that major-league sports help them recruit top talent to the Twin Cities.

The StarTribune is claiming that the stadium would create nearly twice as many jobs as even the Vikings claim, which puts the Strib’s claim around 20X more than reality, by my calculations. Here’s how the Strib could determine that their own numbers make no sense. If you divide $300 million by 4 years by 13,000 construction and service-sector jobs, one can see that the average annual salary of those jobs would have to be $5,769 with no benefits. Put another way, for the StarTribune’s inflated figures to make sense, the average construction and service-sector job of the 13,000 the Strib claims this project would create would have to pay $2.77/hr with no benefits.

A commenter at the Strib named Alanson also looked at the Strib’s ridiculous jobs claims:

Please stop repeating the nonsense about 13,000 jobs for four years being supported by $300 million. Do the math. That’s $75 million a year. $75 million per year divided by 13,000 jobs is less than $6,000 per year per job. Those are either very bad jobs or very intermittent jobs. A better number for the number of jobs supported by $75 million per year would be about 1,000 (if we are lucky).

City Council members should not be asked to defend the economics of professional sports.

Correct. Instead, they should reject them.

The unfortunate reality is that public subsidies are almost always the price of admission for cities that want to attract or retain major-league teams.

True. Justify them.

To its credit, the Wilf family has refrained from threatening to move the team

Perhaps it’s because he’s afraid that people would say “Go!”

, and the NFL clearly wants the franchise in this market.

The NFL makes a ton of money in MN with the Vikings playing in the Metrodome. The money is in TV.

But after nearly a decade of lobbying

The Vikings’ lease only expired 2 months ago (or, has 10 months to go, depending on how you read the contract) so looking at how long the team has been lobbying is nothing but a regurgitation of a Vikings lobbyist talking point rather than an honest look at the situation.

and countless pledges from public officials that they would work with the team to secure its future — time is running out.

Working with the team doesn’t mean meeting the team’s demands to the detriment of the public. Public officials represent the public. Wilf represents Wilf. Both need to do what’s best for themselves. And, Vikings fans should do what’s best for themselves. If none of those groups are willing to come up with the cash to pay for a new stadium, we can continue to use the existing, paid-for, new field, new roof Metrodome.

By moving quickly to join forces with Mayor R.T. Rybak and City Council President Barb Johnson, council members would remove a key obstacle to the project at the State Capitol and put the pressure back on the Legislature before it’s too late.

The city is obligated to uphold the city charter, which states that the residents have a right to vote on spending more than $10 million on a professional sports stadium. If Rybak and the city council come up with a plan to build a new stadium that’s good for the city, they should have no problem selling it to voters. But, the current plan would have no shot of passing a referendum since it’s a bad deal for the city and state (which city residents happen to belong to as well).

Or, as nomeds wrote in the StarTribune comments:

ROFLMAO! Who wrote this dribble? The city council is answering their constituents by following the law and letting the residents of Mpls decide. It isn’t for the city council to decide. Why are the easiest things so hard to understand?

Frankly, it would be cheaper for the state or city buy the StarTribune’s land and turn it into a tailgating plaza for the current Metrodome than buy into what the Strib is selling in this misleading editorial. Perhaps that should be done for the 2012-13 season as a way to convince the Strib to editorialize on behalf of the public rather than Zygi Wilf’s checking account?

Update: Rossberg got to the bottom of this issue in a comment at the StarTribune:

This has nothing to do with civic-mindedness or any other feel-good drivel. This is about needing the City Council to sell out their constituents’ rights in order to provide political cover for a Mayor who should never have made a proposal without the council’s approval and in violation of the city charter and a Governor who should have never accepted it. They’re only looking for a politically expedient way to override the charter amendment explicitly preventing this kind of expense without a referendum. Since the charter amendment speaks for itself and doesn’t require any Council approval the best solution is for the Council to just stay out of it and not have a vote. Let’s see if the Rybak and Dayton have the political will to override the amendment on their own and jam this down the throats of the Minneapolis residents without having others take the political heat on their behalf or if their bravery only extends as far as having secret meetings with individual council members whom they feel may be pliable.

15 thoughts on “Breaking Down the StarTribune’s Vikings Stadium #Wilfare Editorial”

  1. Entertainment industry wilfare, time and again the gov’t is called upon to create another subsidy for some entertainment group, or some real estate development created in the name of the buzz of entertainment.

    Our political parties, who talk the talk about producing jobs, but can only seem to support entertainment jobs, and only after providing reams of spin about the money that will be made later once we help these entertainment industries build their Taj Mah-Wilfare entertainment castle. The one that produces nothing but the latest purple uniformed circus and funds that only flow east.

    As a double-taxed Minneapolitan, I suggest we reverse the entertainment/hospitality subsidy political system–how about we use this half a billion dollar MN subsidy to pay for construction of a downtown renewable energy engineering zone.

    This caught my eye–
    http://real-economics.blogspot.com/2012/03/renewable-energy-in-asia.html
    “The change (government efforts to reinvent China’s economy with a massive investment in renewable energy) is evident soon after driving across the plains from Jiuquan, an ancient garrison town on the Silk Road that is now a base for more than 50 energy companies.”

    This production-oriented gov’t subsidy would be one I would support. One that creates real and cutting-edge energy jobs, one that would develop engineering expertise in greening cities directly instead of stripping more land to create wind/solar farms and needing more transmission lines to pipe the energy into cities.

    I suggest we tell the Vikings to leave the Metrodome and turn it over to 50 energy companies as an engineering sandbox, give them the charge of increasing renewable energy production for Minneapolis each year for the next 40 years.

    Fifty energy companies with good engineering and technical jobs, working in the proximity of the UofM, eating in downtown restaurants and living year-round in the community. All tasked with improving energy production in a dense urban environment, and spreading their findings around the world.

    Instead of wilfare. The NFL needs to build their own stadiums, not hold fans and communities hostage to subsidize this already mature entertainment industry. If gov’t is to subsidize an industry, it should be a growth industry that will provide meaningful jobs that produce real value.

  2. @Ed Bravo. That was a pretty good post. I think you did an excellent job of tearing apart the Strib’s points of view.

    Of course, the Strib is also trying to deal with its conflicted role which it appropriately disclosed.

    There is no doubt that you oppose a stadium if it cannot be built with private money only. This is an economic argument. How does that differ with folks who refuse to use government money to funds the arts and culture? It seems to me that your argument is no better than theirs—but you have radically different values.

    When it comes down to the most basic part of the stadium issue–all of your proposals that claim that the fans could pay for it with personal seat licenses and more support—are highly unrealistic. If we get a stadium, it will be publicly funded or none at all. This has been the economic reality of in all NFL cities because the NFL model is driven by TV revenues more than ticket sales.

    In the end, you can shoot holes in the stadium on the economics, which is easy to do, but the basis of your objection is to Wilfare for a pro-sports team. How is that really different from some of the TParty folks who feel that arts and culture funding should only come from private sources. They don’t value Opera, music and art objects. You don’t value the Vikings. It just a flip side of the same coin.

    FYI. You do need to comment on “other Mike’s” connection of the Vikings stadium to what is going on in China!!! (If you want to build web-site traffic—ducking reader comments doesn’t help your cause.)

  3. @Rick, thanks for the advice on how to run my blog.

    There probably is a point where some public money can be justified. We’re far from there today. As I’ve said before, the plan has to be good enough for the legislature to hold their noses and vote for it, knowing it’s a bad deal, but not so bad that they can’t touch it.

    You seem to be confusing Vikings fans with Tea Party folks. With Tea Party folks, it isn’t a case of differences in government spending priorities.

  4. @ed Actually I am trying my best NOT to confuse your “my way or the highway” argument tactics with that of the TParty, but it becomes quite difficult. I also suspect that most Vikings fans in MN are of both parties and many are quite liberal in political views. This is not a party line issue at all.

    Interesting to note that you are apparently conceding that public money will come into play– “probably is a point” in your words. I read that as a lead-in concession that your private funding ideas are, in fact, fizzling even though you won’t abandon the ship.

    I suspect that the legislators are much more in tune with public sentiment here than you are. They know it is a divisive issue and there are plenty of folks with strong feelings on both sides. To characterize a vote as one they will have to “hold their noses” is a very unfair characterization on your part. The legislators who despise public funding, like you do, will just vote NO. Apparenltly, you just do not want to accept that there are a very large number of people —and even a MAJORITY–who want a Vikings stadium and are very willing to go along with public subsidy of billionaires to get it done–if that is what is required. Nobody wants to gift money to the Wilf’s if they don’t have to.

    FYI–I am happy to help with building site traffic and suggest you set up a separate topic for the silk road in China not to be confused with the vikings stadium!!!

  5. @Rick, the majority of Minnesotans oppose public funding for a stadium. While you seem to want to believe otherwise, that’s what Survey USA’s poll showed.

  6. @Ed. I guess you are willing to believe the Survey USA results right over the edge. The same polling also found that Minnesotans favor the marriage amendment by 5 to 4, so I guess that by your high STANDARDS the vote on it will be a YES.

    Of course surveys are only as good as the population sampled, the rigor of applying statistical rules, and the structure of the questions in specific wording. Now we all know you bought the 68% result hook, line, and sinker–but have you ever thought that if the question was posed differently that the outcome might change a lot?

    What do you really think the poll would show if the question was worded ” would you support Wilfare if the only other option is the team leaves Minnesota???”

    You are probably going to come back and say that the polls will tell the team to leave and the marriage amendment is going to be enacted. Yup–polls don’t lie.

    I wonder if Survey USA is really all that impartial considering that KSTP who sponsored the poll is owned by Hubbard who is a conservative political activist much like the Koch Bros??? I suspect that if Ch5 had more of a vested interest in NFL broadcasting these days–the Vikings part of the survey results may never have been disclosed.

  7. I haven’t heard anyone contest the quality of the Survey USA poll. From what I understand, the current marriage amendment polling is running around 48 in favor and 43 opposed, which is pretty darn close to what the Survey USA polling showed. Since a non-vote counts as a no-vote in an amendment election, so turnout and down the ballot voting are variables that could shift the results a few percentage one way or the other.

    What’s your take? What is the current support for subsidizing the majority of the costs of a stadium in Minnesota when Survey USA’s polling claims it’s overwhelmingly against such a deal?

  8. @Ed. The critical question isn’t the one that was asked? If I asked my circle of friends the same question–the answer would be 100% NO. Some would say HELL NO!!

    The real question to be asked of politicians and voters if if they would agree to Wilfare if it was the only way to stop the Vikings from leaving–I think it would be closer to half and half. If you ask the same question as finance it with gambling–the approval would be close to 55 -60%–maybe even more if the Vikes had a contending team. We just haven’t gotten close to the desperation decision yet in the polling.

    The marriage amendment polling is probably bogus because the folks who want it are rabid and actively state their opinions. A large part of the population really is ambivalent and doesn’t influence the results. When the referendum comes up—I would be very surprised to see anywhere near 50% vote in favor. I tand to believe that the GOP has screwed up so badly that DFL voters will wake up and vote in high participation rates. The GOP only won the legislature because the voters went anti-incumbent last time and normal DFL voters didn’t turn out and were not enthralled with Dayton. This election is likely to be much different despite what your trusted polling says.

  9. @Rick, the “real question” is the question Vikings fans should be asking themselves. It’s not the state’s job to subsidize Vikings season ticket holders.

    On the marriage amendment, ambivalence benefits love over hate since ambivalence may be a non-vote which is a no vote. I think turnout of the hate crowd could drop if Obama and Klobuchar are well ahead in November. Are people more likely to turn out if they’re confident their candidate will lose without or without them, or if they’ll win with or without them? That may be the dynamic in this fall’s election.

  10. @rick…the REAL question…is none of the above, instead it is asked of your ruling class / politico spokespeople–
    “what private businesses should our citizens subsidize?”

    That was what I was getting with the Real Economics blog posting above, which of course you didn’t read and instead just took the one quote out of context, to twist the point into something akin to how much you enjoy your silk boxers.

    Maybe this link is more real to you–
    http://www.bloomberg.com/news/2012-03-20/atlanta-s-water-war-is-first-in-a-gathering-flood.html
    –this is what gov’t should manage and subsidize–water. Similar to my posting about, which was about Energy and not silk boxers.

    The state of Minnesota and city of Minneapolis needs to get out of the entertainment business, and refocus on the infrastucture of BUSINESS business. It certainly should not build a freaking Billion dollar Zygiworld for the already privileged NFL private business that is past peak mature.

    And if somehow after dropping an Interstate bridge into a river and causing state gov’t shutdowns both based on reducing taxes, the state can still somehow can find 500 million laying around to ‘invest’ in the NFL, why can’t they at least get better contract terms and ROI on that investment?

    These bald giveaways of public dollars to private entertainment businesses reek of picking 1% ‘winners’ while over-taxed 99% citizens have to scramble to pay tax bills inflated by these subsidies.

    None of the tortured studies and polls have shown ROI to justify this stadium. Then it comes down to no one wants to explain to their kids why the Vikings might leave town.

    If you’re not man enough, send them over to me. I’ll take them fishing on fall Sundays and teach them how to hunt in winter, and while we are out there enjoying things, I’ll explain some facts of life to them for you.

    The biggest one is they don’t need to have a purple team in town to enjoy life in Minnesota. You just need some clean water and undeveloped land to share with your friends. Just keep those silk boxers covered up by your pants, eh?

  11. @Ed At least we seem to agree about the dynamics involved with the marriage amendment.

    Your argument about fans paying for the stadium has always been flawed. Part of the problem is that you keep arguing about “fan support to pay for a stadium”, when in fact you have little idea about the statistical makeup of this “savior” fan group.

    The fans are made up of ticket buyers and non-ticket buyers. The vast majority only watch on TV. Some tailgate and party around the vikes and never go to the games. It is only the “ticket buyer” group that can be tapped for stadium funds and this group will be tapped by Zigy for all they can get. It’s already cooked into the price.

    You apparently have little idea about the majority of fans who value the team identity with MN and never buy a ticket.

    Try visiting the congregating places and even the small towns of MN where the bars host plenty of Vikings fans who watch on TV and could give a rip about how there favorite fall sport is funded. They don’t care about how it gets done, they just want a team to cheer for. They watch on TV.

    Perhaps they have a case of “Tunnel-vision” but they will vote for public subsidy and don’t focus on other issues. Remember how Ventura got elected? I will bet you didn’t see that coming either. And I also bet you were one of the few folks who supported John Marty for Governor—which was a noble effort but was a waste of time.

    @Other Mike. Ed is still over-due in replying to your comments—you should hope he reads them.

  12. @Rick, if you think there is a more equitable way to extract more than half a billion from Vikings fans to pay for a stadium they don’t seem to be interested in paying for, let’s hear it. Personally, I look at the season ticket holders as a key group since they are some of the most loyal fans, and wealthiest Minnesotans, so may actually see enough value in a “saving” the team to write checks.

  13. @rick…Ed and I are friends, but I don’t need affirmation from Ed as I take my stances. I’m surprised you need it. He may well agree or not, either way, I guess that is part of being friends.

    And Rick my friend, as a friend let me say you seem way too accepting of things for my liking…the NFL model, this stadium deal, your ‘the way it is’ acceptance thinking.

    But hey, that is fine, that’s where I was back when the Metrodome was the place to be. Innocent, trusting of my civic leaders to make good decisions for the greater society. It was easy to be so simple.

    But then what happened since 1982 to change things?
    1–America stopped producing things, we outsourced everything.
    2–Houses that were once thought to be secure investments, tipped over with underwater mortgages.
    3–Pro sports that were once considered a break from our jobs suddenly became ‘the jobs.’
    4–Guys like Red from TX and Zygi from NJ became the owners of ‘our’ teams.
    5–Political parties began to shut down gov’t and allow freaking Interstate highway bridges decay enough to fall into the Mississippi River, just to make their statement of ideology.
    6–The NFL decided to hold hostage and extract the most profit possible from its most loyal fans and host communities.

    And I can go on, but why bother Rick? If you prefer a 1980 view of America, that is your choice.

    As for me, I believe Carlin had it right–
    http://www.google.com/search?q=carlin+american+dream&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

    I might think you are asleep my friend; or worse, you are enabling this nightmare. Who knows, since you are careful to twirl your skirt to avoid any real stance, but really who cares what you or I think, eh…it is all about the NFL’s model. God Bless the NFL!

    Regardless, life has a way of resolving issues and trust me I’m not losing any sleep over Zygiworld. Whatever the result, I know how to change. As I explained in an earlier comment–I can change.

    I’d prefer to keep my business in town and enjoy restaurants in Minneapolis but I’m walking distance from St Paul, and I suppose I can reclaim my Wisconsin roots easily enough. I’d prefer not to leave Minneapolis, but this stadium may be enough for me to relocate my business, change my locale, and my lifestyle.

    I can change from being a tax-paying, civic-minded Minneapolitan just as easy as I did from being a squeezed-out NFL fan. In the end, someone else will face the 40 year burden of the NFL in MN, not me.

    How about you, Rick…you staying in town for the next 40 years to pay for this stadium?

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