He says Minnesota Management and Budget, the state’s finance division, is expecting a rising tide of paper pulltabs, which have grown by 6 to 8 percent in recent years, will still buoy gambling taxes, and contribute to the state’s $348 million pledge to finance construction of the new $1 billion stadium in Minneapolis. They’re the bread and butter of charitable gambling.
State law dedicates rising charitable gambling tax receipts overall – not just those from electronic pulltabs — to pay the state’s mortgage on the new stadium. Belden reports that MMB believes about $7.7 million will be available to help pay.
The rest — about $20 million is expected to come from new corporate taxes, enacted last year when the electronic pulltabs flopped. Gambling will pay about 27 percent of the state debt according to the projections obtained by the Pioneer Press.
The state also pitched in $26.5 million in one-time cigarette taxes last year to prime the financial pump that will pay back the state’s share of the bonding for the new stadium. The state bonded for a total of $498 million for the new stadium, and the city of Minneapolis will be paying for $150 million of that debt.
Well, neither the Saints nor CHS are saying how much money exchanged hands to put the company’s name on the taxpayer-funded stadium in Lowertown.
“It’s a very beneficial agreement for both companies, but we’re not going to disclose what the financial arrangements are,” said CHS president and CEO Carl Casale when pressed on the matter this morning.
Mike Veeck, from the Saints, demurred as well.
But money is supposed to change hands, we know that. The naming rights proceeds, in fact, are a key factor in financing the new stadium, particularly after soil remediation problems hiked the price of the deal by nearly $9 million.
Here’s the language from the agreement:
Saints Rights. The Saints will have the exclusive right to exercise, market and sell all Naming Rights and, except as provided in this paragraph (b), to receive all revenues therefrom. The Parties agree to cooperate in the solicitation and securing of the Naming Rights, and to negotiate in good faith to establish a base Naming Rights receipts number; above which revenue received by the Saints for Naming Rights shall be applied to the repayment of the City Loan and shall not be included in Annual Gross Ballpark Revenues or the Revenue Sharing Report for Revenue Sharing purposes. Once the City Loan is paid in full, all Naming Rights revenue shall revert to the Saints and such amounts shall be included in Annual Gross Ballpark Revenues and the Revenue Sharing Report for Revenue Sharing purposes. The Saints will not seek or offer Naming Rights, except in accordance with this Agreement and the Advertising and Naming Rights Standards attached hereto as Exhibit G. Any naming of the Ballpark or plazas within the Appurtenant Area must be approved by the City Council; for elimination of doubt, the requirement that City Council approval be obtained does not apply to the naming of interior portions of the Ballpark. In approving or disapproving a name, the City Council may consider, among other things, the propriety of the name or the product it represents for a public facility or whether there is a geographical conflict.
It’s hard to pick all of that out.
But in layman’s terms, the city says that the Saints get the first $500,000 of the total naming rights proceeds. The rest will be reported as part of the revenue that the team has agreed to share with the city. That revenue sharing will help pay off the $6 million “internal loan” that St. Paul pledged to close that $9 million financing gap.
With the help of state, county and Metropolitan Council grants and a lease with Hamline University, that $6 million loan is already down to about $1.2 million.
So presumably at least the first $1.7 million of the naming rights (if there is that much) could be at least partly disclosed to the city council to let them know that they can cover their mortgage on the ballpark.
And the rest? We may never know.
UPDATE: The Saints released what might be construed as a clarification this afternoon. Of sorts. If you read between the lines, the Saints are merely saying that if as many people show up at the new park as the old park, there should be revenue sharing with the city. So the deal presumably is worth more than $500,000.
The Saints and CHS have agreed to keep the financial terms confidential. The City of St. Paul will have an opportunity over the next 13-years to share in revenue associated with the naming rights, if attendance at CHS Field meets performance standards consistent with historical attendance at Midway Stadium. The city will also have an opportunity to share in overall Saints revenue as well as proceeds if there is a future sale of the ballclub, which does not exist with any other professional team in Minnesota.
Agribusiness giant CHS Inc. has purchased the naming rights for St. Paul’s new Lowertown ballpark, which will be named CHS Field, city officials said Monday morning during a press event at the construction site.
The Inver Grove Heights-based company has 75,000 farmer members and about 1,100 co-ops that own stock in the company. It’s better known for Cenex fuel and other brands like Marie’s salad dressing and Dean’s dips. The stadium name could boost the public’s awareness of the company and all its businesses, said CHS President and CEO Carl Casale.
“It’ll certainly provide that recognition, just because of the proximity to 52 and 94, and the other events that we’ll have here in conjunction with the Saints,” Casale said. “You know, we’ll be able to build some name recognition for CHS. People may not know exactly what we do, but at least they’ll have heard of the company and build that recognition over time.”
CHS was formed by the combination of Cenex and Harvest States in 1998. CHS is a Fortune 100 company, employs about 10,000, with annual revenues of about $45 billion. The company is owned by about 75,000 farmers and 1,100 member cooperatives that represent another 300,000 farmers and ranchers.
“It’s our expectation that our owners will be able to enjoy this venue when the come into town,” Casale said. The company does get some limited rights to the facility for community activities, like United Way campaign kickoffs and the like, but doesn’t have any marketing deals or other benefits.
The newly corporate brand on the stadium,, though, won’t change the team on the field, said St. Paul Saints team president and co-owner Mike Veeck. The games will still be instilled with the same fun and silliness as always he said.
“Rarely do the stars align so that two companies have the same belief in culture, in family and in fun,” Veeck said.
The $63 million stadium is under construction in downtown St. Paul, across the street from the St. Paul farmer’s market, and a few blocks from the city’s revitalized Union Depot. It is scheduled to open for the Saints in about nine months.
Officials declined to say how much CHS paid for the stadium naming rights.
Saints refused to disclosed Lowertown name deal, but they keep 1st $500k. Rest goes to repay St. Paul, so $ should turn up eventually.
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