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: