Minnesota legislators say 'modest' MLS deal facing long odds

Backers of a professional soccer stadium who made their first appearance at the Capitol on Tuesday to press for a comparatively small taxpayer subsidy were met with stiff and bipartisan skepticism among legislative leaders.

Dr. Bill McGuire, who owns the Minnesota United FC, said the group is seeking a property tax exemption and a sales tax break on construction materials for the new stadium near the Minneapolis Farmers Market. The new stadium would host about 20 professional games a year.

The ownership group would pay $30 million to buy the land, a $100 million franchise fee and $120 million to build the new, open-air stadium.

Despite the tax exemptions — which could amount to $3 million in the case of the sales taxes — McGuire characterized the deal as having "no public subsidy whatsoever." The amount of deferred property taxes had not been estimated.

"We think these are appropriate things for an economic development effort of this magnitude, where we're putting in $250 million of private money," McGuire said.

DFL Gov. Mark Dayton, who said he would oppose a direct stadium subsidy, expressed an openness to the plan. Senate Majority Leader Tom Bakk said it was a "modest" request, but nearly impossible without city and county support. Soon after, however, Minneapolis Mayor Betsy Hodges voiced strong opposition.

"These elements constitute a public subsidy, and I do not support a public subsidy for this facility," Hodges said in a statement. Two key City Council members were more amenable to the tax exemption.

McGuire was joined in meetings by Bob Pohlad of the Twins ownership family, Wendy Carlson Nelson and team president Nick Rogers. Also present was Chris Wright of the Minnesota Timberwolves, whose owner, Glen Taylor, also owns the Star Tribune.

The stadium subsidy proposal is much smaller than the what was required for Target Field and the new Minnesota Vikings stadium, which were far more expensive and proved politically wrenching for both parties. But the new $1 billion Vikings stadium is barely halfway complete and legislators again find themselves at the center of a stadium financing debate.

Legislative leaders, who are already wrestling with a multibillion-dollar state budget proposal and a number of divisive issues before the May 18 scheduled adjournment, offered a tepid response.

"My advice to them was not to underestimate the amount of stadium fatigue around the Capitol," said House Speaker Kurt Daudt, R-Crown. "I think they'll have somewhat of an uphill battle."

Daudt said he was nonetheless "encouraged" they were not seeking direct public money to build the stadium itself. "They're asking for some exemptions in some taxes … I think that's a much more reasonable place to start," Daudt said.

Bakk, DFL-Cook, suggested they pursue tax abatement with Hennepin County, as well as exploring local tax breaks with the city and county.

As for the sales tax break, Bakk said, "It's a general fund cost. I think that's a hard sell right now."

Hennepin County Commissioner Mike Opat, who has aided McGuire's effort, said in an e-mail that he has "no plan to bring support for a property tax exemption or any other MLS soccer matter to the Hennepin County Board at this time."

Exemptions on property taxes are typical for stadiums in Minnesota since most of them are publicly owned, though McGuire said they expect this facility to be private. Along with direct taxpayer subsidies, the Vikings stadium and Target Field received sales tax exemptions on construction materials amounting to $22.5 million and $18.1 million, respectively. St. Paul's CHS Field and a renovation of Target Center did not receive that benefit.

"We're not asking for anything new," McGuire said.

McGuire declined to say whether passing the tax package — this year or not — was a deal-breaker for the stadium's construction. "I don't know," he said. "That's not something for us to be concerned with right now."

Dayton said he made no commitment to the proposal, but he welcomed the franchise to Minnesota.

"A number of reports have pointed out that we're really booming with the millennials around the country," Dayton said. "And this is certainly one of the ways we're going to make this area more amenable to young people, to people from other countries who have grown up with their version of football."

The proposal would potentially put another stadium deal in front of the Minneapolis City Council. Council President Barb Johnson said she is open to the idea because she supports Minneapolis' stature as a regional attraction.

"I think what we'll have to do is look at what's being generated on the property right now, what kind of sales tax and entertainment tax it would generate if there was a stadium there, and make some decisions based on that information," Johnson said.

Council Member Blong Yang, who represents the Farmers Market area, said it would be foolish to say 'no' to the prospect of a $250 million private investment. "I don't know what the [tax deferment] amount will be overall," Yang said. "But when you look at it compared to the Vikings [stadium], this is such a better deal."

Here is the full overview (below) of tax exemptions, outlined by the Department of Revenue.

Stadiums and Exemptions

Eric Roper • 612-673-1732

Twitter: @StribRoper