Lawsuit dismissed, Vikings stadium builders must close finance gap

  1. Listen Lawsuit dismissed, Vikings stadium builders must close finance gap

    Jan 23, 2014

Vikings stadium builders in Minneapolis say they’re figuring out how to get financing back on track today after the Minnesota Supreme Court dismissed the final legal challenge to the facility’s funding plan. A pair of suits threatened to set back the construction, and possibly delay the opening into the 2017 season.

Stadium opponent Doug Mann’s plea to the Minnesota Supreme Court earlier this month was the legal equivalent of a Hail Mary pass — a last minute, long shot attempt to beat the Vikings in court. The former Minneapolis mayoral candidate sued twice to block stadium financing that includes millions of dollars in city sales taxes.

But now that those challenges have fallen short, stadium builders are in hurry-up mode.

“The construction bills that we’re looking at by the end of the month are about $18 million,” said Michele Kelm-Helgen, chair of the Minnesota Sports Faciltiies Authority, the agency building the new stadium.

The stadium authority expected to have nearly a half-billion dollars in hand by now, borrowed from investors that purchased stadium bonds. That would have been more than enough to buy a Downtown East parking ramp by tomorrow and pay off the bills for the new stadium work that’s started. But the court challenge halted the bond sale the state was planning, starting Jan. 13.

While the state’s finance agency says the way is now clear to sell those bonds, the Minnesota Management and Budget office can’t say yet when the deal will close and the money will be in the bank to pay stadium bills. So stadium builders are putting together a backup plan.

“We will not be closing on the Downtown East property on Thursday. That certainly gives us money that can be applied to the construction bills,” Kelm-Helgen said, adding that her agency still has about $15 million in the bank. That’s what’s left of the $50 million down payment the Vikings had to put up last year to get the project started.

That leaves the stadium authority just a few million dollars short. The plan is to pay the smaller businesses that are sub-contractors on the project first, and work out payment terms with Mortenson Construction, the general contractor in charge of building the new stadium.

It also leaves another project up in the air. Downtown East is a $400-million mixed use development planned for five blocks of Star Tribune land in downtown Minneapolis. That deal hinges on a new parking ramp the stadium authority wants to build. The ramp is planned next to two 18-story Wells Fargo office buildings and a two-block downtown park.

The real estate deal was supposed to be done just after Christmas, but still hasn’t closed.

Ryan Companies is building that project. Vice president Rick Collins says the Supreme Court decision to strike down the stadium challenge helps clear the path.

“It’s great progress for the overall project. We have continued to work on a daily basis with the MSFA and the city of Minneapoolis moving toward our closing of the purchase of the Star Tribune land and we’re getting very near to the date when we’ll be able to do that,” Collins said.

The project schedule calls for a groundbreaking in April. Both Downtown East and the billion-dollar stadium are expected to be finished in 2016.

For his part, stadium opponent Doug Mann says he is disappointed that his last-ditch court effort failed to stop the stadium. He also says he hasn’t entirely given up. The Court of Appeals also yesterday threw out the first stadium lawsuit he’d filed — and which he lost in Hennepin County district court in November.

“I’m weighing my options,” he said, but concedes the odds are very long against him now for a second try at the Supreme Court. “I don’t think it very likely that the Supreme Court will agree to review this. You know, spending the 550 dollars might be just throwing money out the window.”

In the meantime, work is still ongoing on the new stadium, and demolition crews were chipping away at the Metrodome with a wrecking ball yesterday.