Second lawsuit from opponent threatens to stop Vikings stadium

Courtesy/HKS
  1. Listen Lawsuit may stop work on Vikings stadium

    Jan 13, 2014

A last-minute legal challenge to the financing of the new Vikings stadium is delaying the process yet again.

A petition for a writ of prohibition was filed in the Minnesota Supreme Court to restrain Jim Showalter, commissioner of Minnesota Management and Budget, from selling bonds to pay for construction of a new Vikings Stadium. The move came from one-time Minneapolis mayoral candidate Doug Mann, who lost another legal challenge to the stadium last year.

Mann is repeating that challenge again, saying the charter of the city of Minneapolis bars the city from using hospitality taxes to pay the $150 million then-mayor R.T. Rybak and the city council pledged to the stadium — at least without a referendum.

“Those taxes raised can be used to pay for bonds issued by the city, but they cannot be used to repay bonds issued by another political entity, including the state,” Mann said today.

He tried a similar argument, based on the 1997 cap on stadium spending set by Minneapolis voters in 1997. A Hennepin County judge threw out that challenge in November.

Still, the state has decided to put off selling stadium bonds scheduled to go on the market tomorrow. The proceeds were going to pay $498 million the state and the city of Minneapolis pledged to the project. Here’s what Minnesota Management and Budget commissioner Jim Schowalter said on a conference call earlier today:

“As we looked at the suit, we felt it was appropriate and prudent both for taxpayers and the market to take a look at this suit. As a result, MMB has decided to delay the sale of the bonds. The delay will provide an opportunity to clarify any issues related to the lawsuit. And we continue to work on financing so that funds are secured on a timely basis to support stadium related costs. A decision when we go back into the market will be made on a day-to-day basis. This is not a long term delay. This is a decision not to offer bonds on Monday.”

Schowalter said that the state still hoped to close on its financing deal by Jan. 23.

But stadium officials said they’re worried that anything but a brief delay threatens to imperil both the stadium and the neighboring Downtown East project.

Here’s what Minnesota Sports Facilities Authority chairwoman Michele Kelm-Helgen had to say about the potential today:

“There are major problems that will result from any significant delay… we will not be able to pay our bills if we don’t have cash from the bond sale at the end of the month. We will be about $28 million short to pay the architects and all the Minnesota companies that have done work throughout the past month on the stadium and have submitted bills that are due at the end of the month.”

She also said that the MSFA was planning to close soon on the purchase of a parking ramp and a block of land near the stadium for construction of a new parking ramp, a key element of the proposed $400 million development Ryan Companies is hoping to break ground on in April. “And if we can’t make good on our commitment… potentially the entire Downtown East… could be in jeopardy,” Kelm-Helgen said.

Schowalter said that the state is reviewing its legal options, including asking for an expedited hearing on Mann’s lawsuit, filed late Friday. Schowalter said that, because it was filed late in the day, his agency hasn’t been able to contact the Minnesota Supreme Court to seek quick legal action in the matter.

Kelm-Helgen said that she feels “fairly comfortable that the legal issues can be handled. They’ve been looked at by other courts previously. It’s just a matter of working its way through the system.”

Here’s the paperwork from Mann’s suit:

  • joe

    Are the vikings asking for the seats back ?

  • Bawana

    Between the city, county, and state, just about every rule in the book has been squeezed or overlooked entirely. Has anyone even looked at the fact that the star tribune has spent the last twenty years buying up property for nothing that is now “needed” for the new park/party area for the new stadium? This whole thing stinks!

  • Todd

    It takes alot of guts to fight something like this. I’m glad I don’t live in Hennepin County, the taxpayers will take it in the shorts on this deal.

  • Roger

    This will do nothing to stop the building of the new stadium. It’s too late for that. Move on people..

    • Jack

      It may not stop the building of this stadium but it could stop the run on the taxpayers’ coffers for the next one. StarTribune’s article about the possible return of soccer to Minnesota referenced a desire by Dr. Bill McGuire to get a team and a new taxpayer funded stadium.

  • msdean

    Welcome to Northern Minnesota metro folks where almost anything we try to do here is met with law suits that delay the projects, sometimes for years.

  • Dan Feidt~hongpong

    excellent work from Doug Mann trying to intervene against illegal government operations that will enslave us further to wealthy bondholders. He is correct, it was and is an illegal debt creation operation. Also we need a state bank like North Dakota has because it is stupid to pay interest for public projects on these fancy tokens we call ‘money’.