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Global Stadium Solution, 3/10/2011

Global Stadium Solution, 3/10/2011

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Published by Tim Nelson
The Timberwolves have a plan to renovate Target Center and fix the stadium problems for the Vikings, the Minnesota Wild, and the St. Paul Saints, as well.
The Timberwolves have a plan to renovate Target Center and fix the stadium problems for the Vikings, the Minnesota Wild, and the St. Paul Saints, as well.

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Published by: Tim Nelson on Mar 11, 2011
Copyright:Attribution Non-commercial


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Part of the challenge on the stadium issue seems to stem from fatigue associated with dealing withstadiums year after year. Since 1994, the legislature and public have wrestled with these issuesseemingly non-stop. In the face of constant budget crises, divisive elections, and dividedgovernment stalemates, this topic has provided yet another reason to keep policy makers and thepublic divided.Amidst this challenge, there is an opportunity to redefine the problem and hit “reset” with a globalsolution that once and for all solves the long-term question of how to responsibly plan and maintainsports facilities. A way to keep our pro sports teams competitive –without over-indulging ownersand players.This redefinition also helps extract the conversation from the history associated with other stadiumconversations. By making this about all teams and facilities, we engage the widest possiblepolitical base and create public confidence that we will resolve these issues for decades to come.Finally, this is an opportunity to really, truly solve the problem long-term. The Vikings stadiumsolution is so large that you can roll up all the other buildings and they collectively make up only1/3
of the project. Meaning that if you are going to have the pain of solving for a Vikings stadium,you can clean up a larger landscape for just a little more.
By broadening the solution, you also broaden the potential for support. The coalition effort torenovate Target Center, along with other sports teams, business groups, labor leaders and localgovernment bodies can help quickly build bi-partisan support for the global solution.
There are two basic kinds of statewide or regional sports authorities and commissions. The first kindis an advocate/promotional/marketing group. This is similar to a convention and visitors bureau likeMeet Minneapolis that focuses on attracting sporting events to their communities. Oregon, Utah,North Carolina Kentucky have these types of organizations.The other type of statewide or regional authorities are state-created entities which own, operate oroversee sports facilities and other similar buildings. Ohio, Maryland, New Jersey, Arizona and theCity of Pittsburgh have this type of organization and California has a bill in the legislature this yearto create an agency along those lines. In most cases, the Authority consists of members appointed
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by the executive and serve four-year terms. The Authority usually has direct sources of revenue,consisting of a combination of a dedicated tax, rent from the tenants and a percentage of revenuefrom the building. The revenue generally goes toward debt service, operating the buildings and areserve/investment fund.If we seek a global solution, we can either pursue a reconstitution of the MSFC (to better include St.Paul and suburban interests) or the establishment of a statewide board along one of the two lineslisted above.Additional Benefits of regional sports authority
Create economies of scale in the administration of the facilities
Create maximum leverage in various contracts (ticketing, catering, concessions, etc.)
Gain booking revenue by not allowing facilities to bid away rents and fees
Coordination of year-round regional efforts to attract professional and amateur sportingevents
A global solution would cover the acquisition of existing facilities, construction of two new facilitiesand renovations. These initial costs can be covered by the issuance of 25 year municipal bondsthrough the Metropolitan Council.1. Minnesota Vikings Stadium $ 700,000,000a. Infrastructure 100,000,0002. Target Center 155,000,000a. Existing Debt 59,000,0003. Xcel Center 20,000,000a. Existing Debt 94,000,0004. St. Paul Saints Stadium 45,000,0005. HHH Metrodome (keep it) 0 Total Costs
Operational costs will vary by facility and periodically may need to be subsidized. Additionally,regular maintenance will need to be performed that falls outside normal operational budgets.Finally, if the Metrodome is retained for public use, there is need for somewhere between $4M and$6M annually. This means that the Dome could operate for the next 20 years, thus providing the
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community the indoor location to for baseball, soccer, football and other community activities itcurrently supports. Because of these needs, a fund of $7M-$10M will be needed annually for this.
One of the primary advantages of this newly constituted board is that it will be positioned to dealwith sports facilities long-term. Therefore, it is essential to build a fund that will be used to build orrenovate the next generation of sporting facilities in Minnesota. We believe that $13M annually willbe sufficient for this.
In seeking support of any funding source, it is likely that we will need a program to contribute backto the communities/counties that provide the tax income. Much like the Twins project, we can fundprojects through the MN Amateur Sports Commission –thus making funding decisions easier forpolicy makers.
Public Debt Service $ 50,000,000Private (team) Debt Service $ 25,000,000Operations & Maintenance $ 7,500,000Long Term Fund $ 13,500,000MN Amateur Sports $ 4,000,000$ 99,000,000Deduct private (team) payments --$25,000,000TOTAL PUBLIC COST ANNUALLY
We taken some general information regarding team commitments and combined it with a publicsource (to be defined) and modeled out how the financing will work based upon a 25 year bond. Of course there are a number of disclaimers listed below but felt it was important to take a “stab” atthe numbers so everyone can begin to see how it may look.
Year 1 Year 10 Year 25
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