November 7, 2013 To: Ways and Means/Budget Chair and Mayor-Elect Betsy Hodges and Committee Members: From: Paul Ostrow On today
s continued Ways and Means/Budget agenda is the opportunity for public comment on the proposal to give final approval to sign a binding agreement with the Minnesota Timberwolves and AEG Management that will require the issuance of 97 million dollars of city-backed general obligation bonds for the renovation of Target Center. Since I cannot join you in person, I am providing my comments in writing for your consideration. First, as you all know quite well, I do not oppose the use of public funding for stadiums or arenas. I supported the financing of Target Field largely because we honored the City Charter and because it was financed regionally through the Hennepin County sales tax. Second, I believe city staff and the Timberwolves have negotiated in good faith and that the share of the costs borne by the public is reasonable and fair. The Timberwolves ownership and management are first class. In the interest of full disclosure, I love the Timberwolves and now that I am not attending nightly neighborhood meetings, I have purchased season tickets. I will benefit directly from the Target Center renovation. As I am sure you recall, I pushed for the inclusion of the Target Center in our bonding priorities for years.
At least while I was on the Council our position was that the Target Center was a statewide
resource and any major renovation required financial support from the state
. During my last year on the Council we debated the scope of our legal responsibilities and financial capacity to address the needs of the Target Center. We determined at that time that the City
s contribution to Target Center capital needs would be limited to fifty million dollars from 2010-2029. A majority of the Council decided to extend the Common Project Tax Increment District and split the proceeds of that district between neighborhood funding and Target Center capital needs between 2010 and 2019.
One of our bedrock financial principles over the past decade was to avoid paying an undue
burden for regional facilities and amenities that benefit the whole state
. This policy served us well during the Target Field discussion. I am concerned that the city continues to take on massive debt and obligations that more appropriately should be borne by the state or the region. The 2012 stadium legislation does not require the city to use its discretionary sales tax dollars to renovate the Target Center. Neither did the stadium legislation grant the city the authority to use available sales tax dollars for the Target Center. That authority already existed under 2009 amendments granting the city the very broad authority beginning in 2012 to use available sales tax revenues for
capital projects advancing economic development or housing downtown or in the neighborhood.
The only significance of the 2012 legislation as it relates to the Target Center is that