Connecting Regional Sports and Entertainment Through Transit

Dave Albersman 612-349-2778

Mark Oyaas 612-338-0330

Bruce Lambrecht 612-349-2775

  Connecting Regional Sports and Entertainment Through Transit 
November 3, 2011 The Honorable Mark Dayton Governor of Minnesota 130 State Capitol 75 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155 Dear Governor Dayton: For more than a year a group of interested citizens has been crafting and refining an urban revitalization plan that includes a new downtown Minneapolis site for the Vikings stadium, a redevelopment plan for the Metrodome, an exciting vision for what could be on the site of the current building, as well as a proposal for a new structure for financing and operating the region’s sports and entertainment facilities. The Stadium-related events of this past week alone are ample evidence that we don’t have a system in place to make these important infrastructure decisions; we have merely established a 55-year-long pattern of bad behavior. This submission is made in hopes that our State’s leaders will fill the void created by the collapse of the proposed funding formulas with a new framework that recognizes the potential power of a billion dollar stadium investment and harnesses that power to maximize public benefit. We call our efforts “The Corridor” [www.corridormn.com]. This refers to a concept which leverages current and planned fixed rail transit to connect the region’s major sports and convention facilities. It speaks to the synergies of a sports and entertainment district in Minneapolis utilizing all of the transportation and transit infrastructure the public has already paid for. From this perspective the plan is a roadmap for recruiting large scale sporting events like soccer’s Gold Cup or the Pan Am Games. If properly managed a legitimate bid for the Olympics could be in reach. On a macro level this proposal provides a means to come to grips with the ongoing crisis management that continually clouds efforts to enhance the State’s sports infrastructure. We turn to the Metropolitan Airports Commission (MAC) as an inspiring model for managing critical public assets and submit the Metropolitan Entertainment Commission (MEC) for your consideration. It is time to get the house in order. Between now and the regularly-scheduled legislative session it would be possible to convene a group of qualified and engaged citizens to form the MEC. They could consider governance, operations and financing options. Additionally this group could act as an arbiter for site selection. A MEC offers the opportunity to capture and consolidate the multiplicity of taxes and related publicly-generated revenues that could amount to $300 million which could be used toward immediate stadium needs. When combined with team owner contributions and other private sector support we submit that it is possible that the State contribution may be a manageable $200 million. Our assumptions have been vetted by finance professionals from both the public and private sectors, but they need the scrutiny that only State revenue officials can apply. In close, inspired by your willingness to lead our State in this difficult discussion, we give you our best efforts with hopes that they will continue to forward the dialogue towards a positive long-term good for the people of Minnesota. Sincerely, David J. Albersman, President – Albersman & Armstrong, Ltd. Bruce Lambrecht, President Investment Management Inc. Mark Oyaas, Managing Partner – Neerland & Oyaas, Inc.

cc: Rep. Kurt Zellers, Speaker of the House Rep. Paul Thissen, Minority Leader Rep. Morrie Lanning (author) Addresses: Rep. Kurt Zellers (R) (District 32B) Speaker of the House 463 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, Minnesota 55155 Rep. Paul Thissen (DFL) (District 63A) House Minority Leader 267 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, Minnesota 55155 Rep. Morrie Lanning 379 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, Minnesota 55155 Sen. Amy Koch Senate Majority Leader 75 Rev. Dr. Martin Luther King Jr. Blvd. Capitol Building, Room 208 St. Paul, MN 55155-1606 Senator Thomas M. Bakk Senate Minority Leader 100 Rev. Dr. Martin Luther King Jr. Blvd. State Office Building, Room 147 St. Paul, MN 55155-1206 Sen. Julie Rosen 75 Rev. Dr. Martin Luther King Jr. Blvd. Capitol Building, Room 322 St. Paul, MN 55155-1606

Sen. Amy Koch, Senate Majority Leader Sen. Thomas M. Bakk, Minority Leader Sen. Julie Rosen (author)

Billion Dollar Investment Maximize Public Benefit

Target Field Revisited The “Corridor” Why Farmer’s Market? Metrodome Medical Campus The “MEC” (Metropolitan Entertainment Commission)

“Site too small and next to garbage burner”

Rapid Park ‐ 1999

Twins Ballpark (Rendering by Albersman & Armstrong, Ltd. – 2000)

Twins Ballpark (Rendering by Albersman & Armstrong, Ltd. – 2000)

The “Sports Corridor” – 2002

Rendering by Duncan Malloch

Connecting Regional Sports and Entertainment Through Transit

Arden Hills

?

Site

Minneapolis Saint Paul

Mall of America

Arden Hills

?

Site

Minneapolis Saint Paul

MSP Airport Mall of America

Arden Hills

?

Site
Vikings Stadium Target Field Target Center Block E Convention Center

Minneapolis Saint Paul

HCMC MOA Field U of M Hospital U of M Sports Xcel & RiverCentre Union Depot

MSP Airport Mall of America

Downtown East / North Loop Master Plan Adopted October 2003

Sports & Entertainment

Downtown East

ALBERSMAN ARMSTRONG

Why Farmer’s Market?

Farmer’s Market Site Location

34 Acres

ALBERSMAN ARMSTRONG

Metrodome Site Location

22 Acres

ALBERSMAN ARMSTRONG

Issues:
Rail, Bus and Bike Parking / Roadway Access Skyway System Bars and Restaurants Redevelopment Need Highest and Best Use Land Value Interim Location Land Assembly

Rail, Bus and Bike
Farmer’s Market Site

Metrodome Site

ALBERSMAN ARMSTRONG

Rail, Bus and Bike
Hiawatha LRT Central Corridor LRT Southwest LRT Bottineau LRT NorthStar Rail Bike Trail Interchange Station MTC Bus Stations

Existing Metro Bus Transit Stations

ALBERSMAN ARMSTRONG

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access Skyway System Bars and Restaurants Redevelopment Need Highest and Best Use Land Value Interim Location Land Assembly

Farmer’s Market Site – Parking

SITE

Source: City of Minneapolis, and aerial survey using Google Earth Pro ALBERSMAN ARMSTRONG

Farmer’s Market Site – Parking
Garage Parking: 8,000 (55%) Surface Parking: 6,600 (45%) Total Parking: 14,600 (100%)

0 Blocks, 50 Stalls

Stadium Footprint

Source: City of Minneapolis, and aerial survey using Google Earth Pro ALBERSMAN ARMSTRONG

Farmer’s Market Site – Parking
Average Walking Distance = 3.2 Blocks

0 Blocks, 50 Stalls

Stadium Footprint

ALBERSMAN ARMSTRONG

Farmer’s Market Site – Roadway Access

53% of all parking has direct freeway access

ALBERSMAN ARMSTRONG

Metrodome Site – Parking

SITE

Source: City of Minneapolis, and aerial survey using Google Earth Pro ALBERSMAN ARMSTRONG

Metrodome Site – Parking
Garage Parking: 5,600 (44%) Surface Parking: 7,000 (56%) Total Parking: 12,600 (100%)

Stadium Footprint

Source: City of Minneapolis, and aerial survey using Google Earth Pro ALBERSMAN ARMSTRONG

Metrodome Site – Parking
Average Walking Distance = 3.6 Blocks

Stadium Footprint

ALBERSMAN ARMSTRONG

Metrodome Site – Roadway Access
10% of all parking has direct freeway access

ALBERSMAN ARMSTRONG

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System Bars and Restaurants Redevelopment Need Interim Location Interim Location Land Value Land Assembly

Farmer’s Market Site – Skyway System

ALBERSMAN ARMSTRONG

Metrodome Site – Skyway System

ALBERSMAN ARMSTRONG

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants Redevelopment Need Highest and Best Use Land Value Interim Location Land Assembly

Farmer’s Market Site – Bars and Restaurants

ALBERSMAN ARMSTRONG

Metrodome Site – Bars and Restaurants

ALBERSMAN ARMSTRONG

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants + Redevelopment Need Highest and Best Use Land Value Interim Location Land Assembly

Farmer’s Market Site – Redevelopment Need

Metrodome Site – Redevelopment Need

Metrodome Site – Redevelopment Need

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants + Redevelopment Need + Highest and Best Use Land Value Interim Location Land Assembly

Farmer’s Market Site – Highest and Best Use
Farmer’s Market Site

Metrodome Site

ALBERSMAN ARMSTRONG

Farmer’s Market Site – Highest and Best Use
North Loop & Warehouse Sports Restaurants Central Theaters Business District Medical Elliot Neighborhood University West Mill City District

ALBERSMAN ARMSTRONG

Farmer’s Market Site – Highest and Best Use

Sports and Entertainment CBD

Housing, Medical and Educational

ALBERSMAN ARMSTRONG

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants + Redevelopment Need + Highest and Best Use + Land Value Interim Location Land Assembly

City of Mpls Land Cost Analysis:
Infrastructure: Property Acquisition: Demolition: Totals: Difference: Farmer’s Market Site Low Estimate High Estimate $69 Million $181 Million Metrodome Site Low Estimate High Estimate $30 Million $70 Million

$47 Million $3 Million $119 Million $86 Million more than Metrodome

$47 Million $4 Million $232 Million $158 Million more than Metrodome

$0 $3 Million $33 Million

$0 $4 Million $74 Million

Source: Jim Nelson of Eberhardt Advisory

Land Valuation Comparison:
Farmer’s Market Site Value/S.F. 1 Value Assessed Market Value: $14.84 $16,160,000 Metrodome Site Value/S.F. 1 Value $32.58             $35,480,000

Recent Sales: 100% Cost Premium: 2

$17.25             $18,785,000

No Recent Sales 3

$29.68

$32,320,000

$65.16

$70,960,000

Source: Hennepin County Assessor’s Office 1 Based on 25 Acres 2 100% increase over assessors market value. 3 Option in 2001 of bare land for $48.sq.ft.

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants + Redevelopment Need + Highest and Best Use + Land Value + Interim Location Land Assembly

Interim Location (est. $15 million/year)

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants + Redevelopment Need + Highest and Best Use + Land Value + Interim Location + Land Assembly

Land Assembly - Metrodome

22 Acres

ALBERSMAN ARMSTRONG

Land Assembly – Farmer’s Market

34 Acres

ALBERSMAN ARMSTRONG

Issues:

Farmer’s Market Site Metrodome Site Rail, Bus and Bike + Parking / Roadway Access + Skyway System + Bars and Restaurants + Redevelopment Need + Highest and Best Use + Land Value + Interim Location + Land Assembly ? +

Summary:
Selecting the best location is more important than simple implementation A good location with flaws can be fixed, a flawless plan in a bad location cannot The stadium on the Metrodome site is not compatible with current emerging development Farmer’s Market site would give much needed boost to this area of North Minneapolis

Sports & Entertainment

Downtown East

ALBERSMAN ARMSTRONG

Site

ALBERSMAN ARMSTRONG

Vikings Stadium Concept
Connection Connection Farmers Market Tailgating, Railgating, Trailgating 370 Stalls Future LRT Extension 550 Stalls The Energy Interchange Station Resource Center

1,500 Stalls

1,600 Stalls

Baseball
1,600 Stalls Twins Plaza

Football
Connection

1,150 Stalls

Basketball
4,600 Stalls

LRT Station

Theater, Entertainment

ALBERSMAN ARMSTRONG

Vikings Stadium Concept
Connection Connection Farmers Market Tailgating, Railgating, Trailgating Future LRT Extension 550 Stalls The Energy Interchange Station Resource Center

1,500 Stalls

1,600 Stalls

Future Development Football
Connection

Baseball
1,600 Stalls Twins Plaza

Future Development Basketball
4,600 Stalls

LRT Station

Theater, Entertainment

ALBERSMAN ARMSTRONG

Vikings Stadium Concept
Connection Connection Farmers Market Tailgating, Railgating, Trailgating Future LRT Extension 300 Stalls The Interchange Station

1,500 Stalls

1,600 Stalls

Future Development Football
Connection

Baseball
1,600 Stalls Twins Plaza

Future Development Basketball
4,600 Stalls

LRT Station

Theater, Entertainment

ALBERSMAN ARMSTRONG

Vikings Stadium Concept

ALBERSMAN ARMSTRONG

Vikings Stadium Concept

ALBERSMAN ARMSTRONG

Vikings Stadium Concept

ALBERSMAN ARMSTRONG

Vikings Stadium Concept

ALBERSMAN ARMSTRONG

Metrodome Medical Campus

Downtown East / North Loop Master Plan Adopted October 2003

Downtown East / North Loop Master Plan Adopted October 2003

Metrodome Medical Campus
U of M Medical School Mayo Satellite Specialty Clinics U of M Ambulatory Care Medical Device Incubator HCMC Housing
Metrodome re-use illustration
HCMC LRT Station

Metrodome Site

Why the Metrodome Medical Campus ?
Proximity to the U of M Parking Potential Access to Transit Identity Opportunity Medical Synergies Roadway Access Compatible with Emerging Development
HCMC LRT Station

Metrodome Site

Metrodome re-use illustration

Why Not?

The Stadium Problem
The Current System is Broken and Dysfunctional:
      

Competition between government jurisdictions Lack of coordinated planning Financial burden not fairly shared Finances difficult to understand Duplicative facilities and management Site selection based on crisis management Public benefit not maximized

“Metropolitan Entertainment Commission”

The MEC

A New Model for Development, Ownership and Management of Sports, Entertainment and Exhibition Facilities

Issues Billion Dollar Investment
 Should accomplish more than just a stadium

Maximize Public Benefit
 Utilize existing freeway and major arterial systems  Capitalize on existing and planned transit  Maximize existing parking infrastructure/investment  Access to jobs  Strengthen urban core  Create sports and entertainment synergies  Create operational & management efficiencies

Fixing the Problem…

The MAC Model
(Metropolitan Airports Commission)

The MAC Model

(Metropolitan Airports Commission)

Operates and Manages:
      

Minneapolis/Saint Paul International Airport Saint Paul Downtown Holman Field Flying Cloud Airport Crystal Airport Airlake Airport Lake Elmo Airport Anoka County – Blaine Airport

The MAC Model Versus Sports & Entertainment Facilities
Similarities:
    

Large publicly-owned facilities Multiple large tenants (e.g. Twins & Vikings / Delta & Sun Country) Multiple revenue streams Capital & ongoing financing needs Recognized public benefit

The MAC Model Versus Sports & Entertainment Facilities
Differences: Metropolitan Airports Commission
 Compensatory – landside and terminal revenue flows to MAC  Single management  Oversight by statewide representation  Accountable to legislature

Sports & Ent. Facilities
 Residual – revenue flows to team owners  Multiple owners/management authorities  Regional and local oversight  Accountable to local sponsors

 Capital cost recovery based on user fees  Capital cost recovery based on taxes

The MAC Model
Summary:
       

(Metropolitan Airports Commission)

User fees based budget Taxing authority (not used since late 1960’s) Oversight by benefitting jurisdiction Professional management Accountable to legislature Staggered terms provide political stability Bonding authority Power of eminent domain

The MEC Model
Summary:
       

(Metropolitan Entertainment Commission)

User fees based budget Taxing authority (not used since late 1960’s) Oversight by benefitting jurisdiction Professional management Accountable to legislature Staggered terms provide political stability Bonding authority Power of eminent domain

The Metropolitan Entertainment Commission (MEC)
MEC Phase I:
   

Target Center Target Field Minneapolis Convention Center Mall of America Field (Metrodome)

MEC Phase II:
  

Xcel Center RiverCentre Midway Stadium

Potential Financing Plan – Phase I
Metropolitan Entertainment Commission (MEC):

Lead with Private Money
  Team owners Corporate investment Capture TAD garage revenues Refinance Minneapolis Convention Center Sell Metrodome Development rights Refinance Target Field Sell naming rights / sponsorships

Maximize Unencumbered Existing Revenue Streams
    

 

Realize Management Efficiencies Finish with new public money

Example Financing Plan – Phase I
(Estimates Only)

Lead with Private Money: $ 520 M Finish with Public Money: $ 480 M Total: $ 1 Billion

Example Financing Plan – Phase I
(Estimates Only) Lead with Private Money: Vikings / NFL Timberwolves MN Corporate New Market Tax Credit Total: $ 400 M 1 $ 50 M 2 $ 50 M 3 $ 20 M 4 $ 520 M

1. From Vikings published reports. 2. From City of Minneapolis Timberwolves finance plan. 3. From a combination of corporate bonds, sponsorships, naming rights, private seat licenses, philanthropic contributions. Naming rights and PSL’s would be shared with Vikings. Transit station and Farmer’s Market naming rights. HERC naming rights. Lottery user fees. 4. Availability based on Farmer’s Market site considered blighted. Sale of NMTC to Minnesota Corporate community.

Example Financing Plan – Phase I
(Estimates Only) Finish with Public Money: Reduce Bureaucracy TAD Garages Convention Center HC Twins Bonds Twins/Vikes Ent. Tax Sale of Metrodome Add’l Public Contribution Total: $ 20 M 1 $ 50 M 2 $ 50 M 3 $100 M 4 $ 50 M 5 $ 30 M 6 $180 M 7 $480 M

1. Reduced admin. expenses bonded over 30 years. 2. Assumes all net revenues after 5pm weekdays and weekends from events. 3. Assumes refinance of current taxes used for Convention Center. Extend and refinance of debt., Assumes 3% food and liquor, 0.5% sales tax already in place and extended. 4. Assumes use of excess revenue already being collected for Twins games, 0.15% sales tax. 5. Assumes 3% entertainment tax already in place for Twins games as well as 3% Vikings entertainment tax. 6. From published reports. 7. Gaming, bonding, legacy funds or foundations.

Why MEC? (Metropolitan Entertainment Commission)
      

Eliminate duplicative bureaucracies Take politics out of the planning process Broader representation by benefiting jurisdictions Establish ongoing funding Reduce leverage of team owner Transparency Maximize public benefit

Next Steps
 Extend Vikings Lease for One Year  Create MEC Task Force:
    Governance Financing Operations Site selection

 Lead with Private Sector Investment  Prepare for Legislative Session

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