GLOBAL SOLUTION

REDEFINE THE PROBLEM Part of the challenge on the stadium issue seems to stem from fatigue associated with dealing with stadiums year after year. Since 1994, the legislature and public have wrestled with these issues seemingly non-stop. In the face of constant budget crises, divisive elections, and divided government stalemates, this topic has provided yet another reason to keep policy makers and the public divided. Amidst this challenge, there is an opportunity to redefine the problem and hit “reset” with a global solution that once and for all solves the long-term question of how to responsibly plan and maintain sports facilities. A way to keep our pro sports teams competitive –without over-indulging owners and players. This redefinition also helps extract the conversation from the history associated with other stadium conversations. By making this about all teams and facilities, we engage the widest possible political 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 stadium solution is so large that you can roll up all the other buildings and they collectively make up only 1/3rd 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. BROADEN THE SUPPORT By broadening the solution, you also broaden the potential for support. The coalition effort to renovate Target Center, along with other sports teams, business groups, labor leaders and local government bodies can help quickly build bi-partisan support for the global solution. A REGIONAL SPORTS AUTHORITY There are two basic kinds of statewide or regional sports authorities and commissions. The first kind is an advocate/promotional/marketing group. This is similar to a convention and visitors bureau like Meet 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 or oversee sports facilities and other similar buildings. Ohio, Maryland, New Jersey, Arizona and the City of Pittsburgh have this type of organization and California has a bill in the legislature this year to 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 revenue from the building. The revenue generally goes toward debt service, operating the buildings and a reserve/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 lines listed 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 sporting events

GLOBAL SOLUTION COSTS
ACQUISITION/RENOVATION COSTS A global solution would cover the acquisition of existing facilities, construction of two new facilities and renovations. These initial costs can be covered by the issuance of 25 year municipal bonds through the Metropolitan Council. 1. Minnesota Vikings Stadium a. Infrastructure 2. Target Center a. Existing Debt 3. Xcel Center a. Existing Debt 4. St. Paul Saints Stadium 5. HHH Metrodome (keep it) Total Costs $ 700,000,000 100,000,000 155,000,000 59,000,000 20,000,000 94,000,000 45,000,000 0 $1,173,000,000

OPERATION & MAINTENANCE 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 it currently supports. Because of these needs, a fund of $7M-$10M will be needed annually for this. LONG-TERM REPLACEMENT FUND COSTS One of the primary advantages of this newly constituted board is that it will be positioned to deal with sports facilities long-term. Therefore, it is essential to build a fund that will be used to build or renovate the next generation of sporting facilities in Minnesota. We believe that $13M annually will be sufficient for this. MINNESOTA AMATEUR SPORTS COMMISSION In seeking support of any funding source, it is likely that we will need a program to contribute back to the communities/counties that provide the tax income. Much like the Twins project, we can fund projects through the MN Amateur Sports Commission –thus making funding decisions easier for policy makers. ANNUAL COSTS TO ACCOMPLISH Public Debt Service Private (team) Debt Service Operations & Maintenance Long Term Fund MN Amateur Sports Deduct private (team) payments TOTAL PUBLIC COST ANNUALLY

$ $ $ $ $ $

50,000,000 25,000,000 7,500,000 13,500,000 4,000,000 99,000,000

--$25,000,000 $74M

GLOBAL SOLUTION FUNDING
SOURCES AND FUNDS FOR 25-YR BOND We taken some general information regarding team commitments and combined it with a public source (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” at the numbers so everyone can begin to see how it may look. Year 1
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Year 10

Year 25

Income Vikings/NFL Facility Fund (30 year commitment) Wolves (20 year commitment) Wild (25 year commitment) Saints (25 yr commitment) Public Funding Source (TBD) Totals Expenses Debt Service: public Debt Service: private Ops & Maintenance Long Term Fund MN Amateur Sports Totals Long Term Fund Cumulative

21,000,000 2,150,000 2,150,000 1,150,000 74,000,000 $100,300,000 50,000,000 26,450,000 7,000,000 13,000,000 4,000,000 $100,450,00 0

21,000,000 2,150,000 2,150,000 1,150,000 83, 000,000 $109,450,000 55,500,000 26,450,000 8,200,000 15,300,000 4,000,000 $109,450,000 146,169,506

21,000,000 2,150,000 2,150,000 1,150,000 101,450,000 $127,900,000 50,400,000 26,450,000 10,050,000 37,000,000 4,000,000 $127,900,000 429,925,398

DISCLAIMERS • We acknowledge that all financing must comply with current U.S. Treasury regulations. Numbers above are used to illustrate general commitments. • We understand that actual capitalization for private entities may look very different than presented above. • We understand that actual pledges from sports teams are yet to be negotiated.

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Global Solution | Thursday, March 10, 2011

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