After much drama and a few delays, the Vikings and the Minnesota Sports Facilities Authority (MSFA) have cleared the last major hurdle before beginning construction on a new stadium. On Oct. 3 the MSFA board and Vikings officials signed the stadium use and development agreements, 519 pages dictating dozens of policies, procedures and responsibilities between the two parties.
The Development Agreement
- Stadium Design and Construction group: A four-member board (two people from the MSFA, two people from the Vikings) will oversee the construction of the stadium.
- Minimum design standards: The stadium will have to be LEED certified, with a fixed roof and a large operable door.
- Financing: The project budget is $975 million. However, construction bids have been coming in have been higher than expected, so the Vikings have offered up a $13.1 million contingency fee upfront to retain extra design features that may have been at-risk of getting cut to stay under budget.
The Stadium Use Agreement
- Length of contract: The Vikings play at the new stadium for a minimum of 30 years. The team can choose to extend the agreement for five years up to four times.
- Stadium revenues: The Vikings pay all costs and receive all revenue – including ticket, merchandise and concession sales – from the 10-12 game days each year. The MSFA pays all costs and receives all revenue from any other event at the stadium.
- Use Fee: The Vikings will pay the MSFA $10 million per year to defray operating costs and pay for capital enhancements. The $10 million fee will raise by three percent every year.
How is the stadium being funded?
- State of Minnesota: $348 million (35.7%) coming from an increase in cigarette taxes, and at some point, revenue from a new electronic gambling program, although the state received zero dollars from the program this year.
- City of Minneapolis: $150 million (15.4%) coming from a continuation of the taxes that helped pay for the Convention Center, which include a half-cent sales tax, 3 percent downtown restaurant/liquor tax, and 2.65 percent lodging tax.
- Vikings: $477 million (48.9%) coming from $100 million in personal seat license revenue, yet-to-be-determined naming rights, a $200 million loan from the NFL and a private contribution from the Wilfs.
What about Personal Seat Licenses?
The most controversial new stadium policy is the Vikings’ plan to sell personal seat licenses (PSLs) for 75 percent of the estimated 65,000-seat stadium. PSLs at the new Vikings stadium will require a one-time fee ranging from $500-10,000, and the average cost of a PSL will be $2,500.
When a fan purchases a PSL, they are granted the exclusive right to buy tickets for that particular seat. PSLs can be paid off interest-free over a three-year period, and will be considered a financial asset that can be resold or handed down in wills.
The Vikings say selling PSLs will raise $100 million, which will be put toward their share of the stadium financing.
Gov. Mark Dayton has been an outspoken opponent of using PSLs to finance the stadium, but more than half of NFL stadiums have been financed using PSLs.
“As far as I’m concerned, personally, a dollar for personal seat licenses is one dollar too much,” said Dayton at a press conference on Thursday.
Did the MSFA violate Open Meeting Law?
At the MSFA board meeting Oct. 3, a public comment period was held after board members voted to approve the stadium use and development agreements. Many speakers complained about the lack of public engagement during the recent negotiations and raised concerns that open meeting law had been violated because the agreements weren’t available to the public prior to the meeting.
However, open meeting law states “at least one copy of any printed materials relating to the agenda items of the meeting…shall be available in the meeting room for inspection by the public while the governing body considers their subject matter.”
Summaries of the agreements were provided to attendees of the meeting and the full agreements were available online at the beginning of the meeting, so technically no violation of open meeting law occurred.
In mid-Oct. Mortensen Construction, the firm chosen to build the stadium, must deliver a guaranteed maximum construction price. Previously that number was estimated to be around $700 million. After the guarantee is in place the Vikings will close on its contribution and then the state will issue $498 million in bonds to finance the public contribution.
Mortensen hopes to break ground on the new stadium before Thanksgiving, and crews will begin to dismantle the Metrodome immediately after the Vikings’ last home game.