Vikings Stadium Legislation/Financing Package

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Rich
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Re: Vikings Stadium Legislation/Financing Package

Postby Rich » March 13th, 2013, 2:22 pm

With respect Viktor, my point is that all this complaining won't undo the deal. So now our only choice is to consider what's next. Why not work to make the building function as well for the state as it possibly can? Also, the bright side of Minneapolis' oversized financial sacrifice is that it puts them in a better position to demand more from the state on any number of issues going forward. And the reality of this stadium doesn't prevent action on any of the more pressing challenges we have. One doesn't have to choose between one or the other. One can do both. Unless of course one is Republican. ;-)

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Nick
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Re: Vikings Stadium Legislation/Financing Package

Postby Nick » March 13th, 2013, 2:24 pm

Everytime someone incorrectly states that Zygi Wilf is a billionaire, an angel gets its wings.
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Re: Vikings Stadium Legislation/Financing Package

Postby Viktor Vaughn » March 13th, 2013, 4:33 pm

Forbes has speculated that Zygi Wilf (not including his co-owner brother) is worth a few hundred million. This is before taxpayers padded the value of his NFL team, and during the depths of a real estate recession. As a big-time property owner/developer his holdings can be difficult to value and are highly variable. I worked with developers who went from being worth an estimated $120M to practically nothing on paper when the market crashed. Now, with values coming back some, they again have tens of millions in equity. With highly leveraged real estate a 20% value increase can easily equal a 100% increase in equity. My point with all this is to say -- I don't know if Wilf is a billionaire and neither do you.

Also, there's no real good word for someone worth hundreds of millions. Wilf is a millionaire like Mitt Romney is a millionaire, in other words, they both have the lifestyles of billionaires, even if they're probably not worth quite that much, "billionaire" is at least the right order of magnitude.

But without any evidence to say he's a billionaire, I shouldn't use the shorthand. So I (a bit belligerently) stand corrected. I avoided the term during the stadium debate because inaccuracy undercuts valid arguments.

It's just, you seem to have good judgment on many topics Nick. You clearly understand the facts on this issue. I just don't understand why you're so snide on this topic. Maybe I just don't get where you’re coming from since I don't care about football?

And thanks for your respectful response Rich. I do understand it's a done deal. That's why I've wasted very little time or energy on this since the deal passed. It's just frustrating to hear the fatalist views people have on this stadium. It's almost as this stadium exists in a vacuum where the laws of the universe don't apply.

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Nick
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Re: Vikings Stadium Legislation/Financing Package

Postby Nick » March 13th, 2013, 7:29 pm

It's just, you seem to have good judgment on many topics Nick. You clearly understand the facts on this issue. I just don't understand why you're so snide on this topic. Maybe I just don't get where you’re coming from since I don't care about football?
The Vikings stadium debate in general was/is one where almost no one really had all that level-headed of an opinion, including very intelligent people I know in real life whose opinions I respect highly. When things like that happen, my defense mechanism is to be sarcastic. The deal was obviously bad. But at a certain point, all the people saying New Jersey billionaire started to sound an awful lot like the disheveled woman at a neighborhood meeting shaking her finger at a developer for turning our city into Chicago. Everything will be fine. The city will be fine. I will pay slightly more in taxes, and I will live. I was 11 when Rybak took office, so I don't really remember the 90s, but from everything I understand the man basically saved the city financially. There are some wizards at Minneapolis City Hall. This isn't Detroit. They'll figure it out.
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Re: Vikings Stadium Legislation/Financing Package

Postby RailBaronYarr » March 13th, 2013, 9:17 pm

It's just, you seem to have good judgment on many topics Nick. You clearly understand the facts on this issue. I just don't understand why you're so snide on this topic. Maybe I just don't get where you’re coming from since I don't care about football?
The Vikings stadium debate in general was/is one where almost no one really had all that level-headed of an opinion, including very intelligent people I know in real life whose opinions I respect highly. When things like that happen, my defense mechanism is to be sarcastic. The deal was obviously bad. But at a certain point, all the people saying New Jersey billionaire started to sound an awful lot like the disheveled woman at a neighborhood meeting shaking her finger at a developer for turning our city into Chicago. Everything will be fine. The city will be fine. I will pay slightly more in taxes, and I will live. I was 11 when Rybak took office, so I don't really remember the 90s, but from everything I understand the man basically saved the city financially. There are some wizards at Minneapolis City Hall. This isn't Detroit. They'll figure it out.
I don't think the problem is that they won't figure it out. No, we're not Detroit; yes, we have a much larger business and population tax base and it will all be okay. The Vikings won't ruin the city. It's just a shame that the city and state has this revenue to prop up a stadium in place of other civic projects and investments. Many other small things could make the city just as livable, and the Vikings would have 'figured it out.' I never took the out-of-state developer angle, or even that he was a billionaire (or whatever it is), or that it is a bunch of millionaire athletes as my frustration. To be sure, a large stadium is obviously a civic asset to the city and state. But I'm not sure the amount we as people paid was worth it, particularly given the financing over time and the risk involved with how we fund the payback. And if me venting online every now and again about it and the specific reasons why helps shed light to other people for the next time simply because my voice was never heard when the lawmakers made their decision, then so be it.

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Re: Vikings Stadium Legislation/Financing Package

Postby HoratioRincewind » March 14th, 2013, 9:14 pm

Everytime someone incorrectly states that Zygi Wilf is a billionaire, an angel gets its wings.
Forbes has speculated that Zygi Wilf (not including his co-owner brother) is worth a few hundred million.
I'd be curious to see that Forbes speculation because I can't find it through a perfunctory google search, and a perfunctory google search would suggest that he is worth about a billion dollars.

Right, since he's in real estate it's never that simple. He may only have a 4-500 million dollars in liquid or semi-liquid assets, lots of it will be tied up in his holdings etc. But, the guy is almost certainly worth at least a billion dollars.

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Re: Vikings Stadium Legislation/Financing Package

Postby woofner » March 15th, 2013, 10:03 am

I was 11 when Rybak took office, so I don't really remember the 90s, but from everything I understand the man basically saved the city financially.
Every time someone says RT saved the city financially, his ego adds a belt notch. Minneapolis was never in dire financial straights. Things got tight in the last decade but that was due to changes in state policy (reducing commercial property's share of the property tax levy, reducing state aid) more than financial mismanagement. The pensions were fucked, but there are very few pensions that are not fucked, which is why every other city had already dumped theirs on the state.

The weird thing Rybak did was not use the city's substantial bonding capacity to carry out new projects. This is not necessarily a good thing for those of us who think that the city has some infrastructure needs that could be fulfilled with this funding source, and it's a particularly weird approach for someone as fond of Keynesian stimulus as Rybak.

I agree that while the stadium deal was bad, everything will be fine. I would even credit Rybak for it being a relatively less bad deal for the city, in that it is a bad deal for the city that could have been much worse. If I remember right, though, Rybak insisted on the dome site, which reflects extremely poorly on his understanding of urban planning (cf thisAlon Levy post).
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Re: Vikings Stadium Legislation/Financing Package

Postby nordeast homer » March 15th, 2013, 10:48 am

If I remember right, though, Rybak insisted on the dome site, which reflects extremely poorly on his understanding of urban planning (cf thisAlon Levy post).
I don't believe that was his first choice, he was in favor of putting the stadium on the west end by the farmers market. I don't think he gave his approval until the state told him it was the dome site or nowhere.

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Re: Vikings Stadium Legislation/Financing Package

Postby Viktor Vaughn » March 15th, 2013, 11:25 am

Nope, Rybak consistently advocated for the dome site. It was the downtown council and county that pushed the west downtown sites.

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Re: Vikings Stadium Legislation/Financing Package

Postby MNdible » March 15th, 2013, 11:56 am

Minneapolis was never in dire financial straights. Things got tight in the last decade but that was due to changes in state policy (reducing commercial property's share of the property tax levy, reducing state aid) more than financial mismanagement. The pensions were fucked, but there are very few pensions that are not fucked, which is why every other city had already dumped theirs on the state.
That's not the whole story -- the city had very real financial problems that became apparent almost immediately upon the old administration leaving office, and they definitely predated reduced state support (although that certainly exacerbated the situation). The city had been robbing from Peter to pay Paul for far too long, and that was during a period when both the economy and state support was very strong.

As for why he didn't bond more for infrastructure projects (which certainly would seem to be appropriate), my sense is that he worried that the city was going to have to bond to fund its pension obligations. The city did in fact due this on a couple of occasions, and was in general carrying an unusually high debt service. A decade of limited bonding, refinancing at low interest rates, and a new stream of income made available by wrapping up NRP and the Vikings Stadium legislation means that the city probably is in a position where they could again bond for some major undertakings.

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Re: Vikings Stadium Legislation/Financing Package

Postby woofner » March 15th, 2013, 12:57 pm

I don't believe you are correct about this. This chart shows that debt as a % of taxable property was about 4.5% in 2003, declining to 2.5% in 2012:

Image

The state allows municipalities to get to 5% of taxable property, which is a somewhat conservative cap (some guidelines allow up to 7%). That 2% decline represents over $400m in bonding.

I'm not sure what financial improprieties you're talking about, but this chart implies that the city had a lot of breathing room to deal with them. Minneapolis was surely never Detroit, let alone Jefferson County, Alabama. And Rybak sure as shit could have injected some stimulus without even coming close to runaway spending. The fact that he didn't could mean that he was more interested in stimulating his national political profile than stimulating our local economy.
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Re: Vikings Stadium Legislation/Financing Package

Postby woofner » March 15th, 2013, 12:58 pm

Minneapolis was never in dire financial straights.
By the way, I'm deeply embarrassed about missing the geographical metaphor in this figure of speech.
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Re: Vikings Stadium Legislation/Financing Package

Postby MNdible » March 15th, 2013, 1:21 pm

Minneapolis was never in dire financial straights.
By the way, I'm deeply embarrassed about missing the geographical metaphor in this figure of speech.
Unintended, I assure you. Talk about embarrassed.

I don't mean to suggest that Minneapolis was on the verge of bankruptcy, or even that it would not have been able to bond. Impropriety is your word not mine -- nobody was doing anything illegal as far as I'm aware. But, Minneapolis was using the same types of internal accounting gimmicks that the state has been known to use during recessions. Except they were using them during economic boom times, and so when the recession(s) came, it was a really terrible blow.

I hate the idea of having to bond to fund pension obligations, but there was a point in time when it seemed like it might be necessary at a very large scale, and the city felt the need to hold that excess capacity in reserve. In the last couple of years, I'd probably agree with you that the city could/should have bonded a bit more (they have done some bonding recently to accelerate street repairs), but I think there's still a feeling of pragmatism and a desire to keep their powder dry.

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Re: Vikings Stadium Legislation/Financing Package

Postby twincitizen » March 15th, 2013, 2:47 pm

MPR has a "Stadium Watch" page dedicated to all of our follies: http://blogs.mprnews.org/stadium-watch/

They just put up a map of bars that have e-pulltabs rolled out, as well as the avg daily take.

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Nick
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Re: Vikings Stadium Legislation/Financing Package

Postby Nick » March 15th, 2013, 4:23 pm

Everytime someone incorrectly states that Zygi Wilf is a billionaire, an angel gets its wings.
Forbes has speculated that Zygi Wilf (not including his co-owner brother) is worth a few hundred million.
I'd be curious to see that Forbes speculation because I can't find it through a perfunctory google search, and a perfunctory google search would suggest that he is worth about a billion dollars.

Right, since he's in real estate it's never that simple. He may only have a 4-500 million dollars in liquid or semi-liquid assets, lots of it will be tied up in his holdings etc. But, the guy is almost certainly worth at least a billion dollars.
In the midst of the stadium debate, I never saw any credible-looking source that had a number higher than that mid-300 million dollar figure. And that refers to his net worth, not cash in hand, and I don't think suburban New Jersey real estate was a particularly easy commodity to unload throughout the vast majority of the stadium debate. I'm sure it's easier today, but six months to a year makes a lot of difference.

Anyway, the point isn't to argue that Zygi isn't a wealthy man, or (again) to argue that the stadium deal was a good one. I just saw way too much hyperbole and hysterics from people who should know better.

Hey, you know what would be great? Get some Congresspeople and Senators to introduce legislation preventing the NFL from abusing their legal monopoly altogether. Problem solved.
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Re: Vikings Stadium Legislation/Financing Package

Postby mplsjaromir » March 24th, 2013, 11:55 am

Complete Fraud

It is not too late to pull the plug on this thing!

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Re: Vikings Stadium

Postby mullen » April 6th, 2013, 11:36 pm

it's surprising that having these epull-tab gaming devices in only a fraction of the projected number of restaurants and bars isn't raising what the studies last year said they would. oh wait, no it's not, the mn lottery has mismanaged this roll-out thus far.

if the legislature and media didn't have stadiums to talk about not sure what they do. i guess it's a minnesota trait. like being passive agressive and horrible at freeway merging.

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Re: Vikings Stadium

Postby Viktor Vaughn » April 7th, 2013, 10:10 am

it's surprising that having these epull-tab gaming devices in only a fraction of the projected number of restaurants and bars isn't raising what the studies last year said they would. oh wait, no it's not, the mn lottery has mismanaged this roll-out thus far.
Except the slow roll out is only part of the reason revenues are less than 5% of what was projected. Revenue per device is also way down from estimates. Anybody paying attention could have told you the E-pulltab projections were complete fantasy at the time the law was passed. It was just part of the effort to make is seem like giving away hundreds of millions in state dollars has no opportunity cost. In an honest cost/benefit analysis this stadium wouldn't stand a chance.
if the legislature and media didn't have stadiums to talk about not sure what they do. i guess it's a minnesota trait. like being passive agressive and horrible at freeway merging.


Or had the media done it's job, the financing package would have been vetted before the bill became law. Too bad the dominant news organization in town had a four-downtown-block-sized conflict-of-interest on this stadium.

Now if you said, "if the media didn't have professional sports to talk about, I'm not sure what they'd do" I could agree. Media has focused on sports (& celebrity gossip) to the point of shirking their civic responsibility to cover issues that actually matter.

But whatever, bring on the shiny renderings. Who cares how it's paid for...

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Re: Vikings Stadium Legislation/Financing Package

Postby Viktor Vaughn » May 16th, 2013, 4:19 pm

The Star Tribune is reporting that the Governor's secret revenue plan for this stadium is to use the cigarette and corporate taxes to backfill the stadium funding shortfall. These are taxes that were already on the table to fund core government functions. We could argue whether these taxes are good revenue raisers, my opinion is they are among the least-bad, but the plan to divert them to cover the stadium is infuriating.

There was a clear promise not to raise taxes to fund this stadium. Minneapolis accomplished this in a bullshit technical sense by extending the set-to-expire convention center taxes. All the talk on the state end was expansion of gambling, sports memorabilia tax, or fees on stadium parking or season tickets. Nobody dared suggest raising taxes to pay for the stadium. And for good reasons. For one, the legislature was controlled by Grover-pledging anti-tax zealots. And second, the stadium was sold as if it exists in a vacuum, the last thing stadium boosters wanted was for the stadium funding to have opportunity costs like education spending, road infrastructure, and core government services. No, they promised -- nobody would have to contribute to the stadium if they didn't want to play a depressing money-sucking ipad.

Now that e-tab revenues have come in at 5% of their completely fabricated estimates, they want to turn around and rob the general fund to cover the shortfall. I read the other day that the value of Wilf's ownership in the Vikings increased by $250M from this stadium deal. Could any of you think of a more quintessential example of government redistributing wealth from the poor and middle class to the incredibly wealthy? I know a lot of you have resigned to the fact that this is just the way it is, but that complacency makes us complicit. We can do better.

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Re: Vikings Stadium Legislation/Financing Package

Postby RailBaronYarr » May 16th, 2013, 5:35 pm

I know it was stated before, but the stadium legislation is just that - a law that can be changed or voted out of existence. One could easily argue that the financing plans we as a state/city were banking on clearly failed and our end of the bargain to pay nearly $500M cannot be held up without significantly impacting other government activities. In light of the fact that the Falcons ownership is willing to put in a much more substantial share of money, we should press our legislators to change the financing of the stadium.


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