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A Super Bowl Stadium Scam

Sunday February 4th, 2018   •   Posted by Craig Eyermann at 7:33pm PST   •  

Super Bowl 52, or rather, Super Bowl LII, to follow the numbering convention that the National Football League has chosen to distinguish all of its championship games but the 50th one from each other, featured the Philadelphia Eagles defeating the New England Patriots at the U.S. Bank Stadium in Minneapolis, Minnesota.

Now that it’s all over, we can confirm that the biggest loser at the big game wasn’t the New England Patriots, but rather, the residents of both the state of Minnesota and the city of Minneapolis. And it’s not just because their home town team didn’t win enough games to make it to the Super Bowl this year.

Instead, it is because Minnesotans got taken to the cleaners by a billionaire team owner who wanted a stadium that would be Super Bowl-worthy, regardless of whether or not the Minnesota Vikings ever played in the championship game. City Journal‘s Steven Malanga describes how the taxpayers of Minnesota and Minneapolis got played:

Vikings owner Zygi Wilf, a New Jersey real estate developer, began pushing for a new stadium soon after purchasing the team in 2005. His supplications became more earnest after the roof of the Vikings’ old home, the Metrodome, collapsed in December 2010. Wilf originally proposed contributing just one quarter of the new stadium’s $1 billion cost, a spectacularly low-ball offer in an era when backlash against stadium subsidies for professional teams increasingly force owners to pony up a bigger share of construction costs. Wilf claimed that he couldn’t afford more, but he wouldn’t release the financial details of his real estate empire. A Minnesota state investigation, undertaken after a New Jersey judge ruled that the Wilf family had defrauded real estate partners in a local project and had to pay them $84.5 million, determined that the family could afford to pay up to $500 million for the stadium.

Even after Wilf upped his offer, the road to the stadium deal was paved with controversy. Minnesota financed a portion of its share of the costs by introducing a state-licensed electronic-gambling game to generate construction revenues, but the game proved a clunker with local residents; to fill the financing hole, Minnesota drew on revenues from its tobacco tax and increased corporate taxes. Then Wilf announced that he’d help finance his part of the deal by charging season ticketholders a seat license fee—prompting a threat from Minnesota governor Mark Dayton to pull government financing. Dayton soon changed his tune, explaining that sports financing has its own ineffable logic. “I’m not one to defend the economics of professional sports,” he said. “Any deal you make in that world doesn’t make sense from the way the rest of us look at it.”

To translate that last statement, Minnesota’s governor most certainly knew that it was a very bad deal for the state’s taxpayers, one where the state would become a de facto business partner of a billionaire NFL team owner who had been found in court to have defrauded his previous business partners, who would most certainly be the biggest beneficiary of the deal, and chose to do it anyway.

But Governor Mark Dayton wasn’t the only politician to spend their way into the Hall of Shame for stupid stadium deals using their community’s tax dollars. Malanga continues with the story of how more local politicians got in on the deal at considerable cost to their community:

Though it lent its balance sheet to the deal, the city of Minneapolis, according to critics—including one former city councilman—has been “hosed” by the Vikings. The city officially contributed $150 million to stadium construction, but these observers contend that that figure doesn’t include expensive infrastructure improvements that Minneapolis was forced to make. As part of the stadium package, Minneapolis also agreed to send $7.5 million a year in operating subsidies to the authority running the facility, which amounts to $225 million over the course of the deal. City taxpayers also apparently remain on the hook for any shortfalls in the revenues that back the bonds used to build the surrounding infrastructure. Residents understand little of this financing because, as the Minneapolis Star Tribune noted, the stadium deal “was as transparent as the Berlin wall.”

Clearly, it wasn’t such a good deal for either Minnesota’s or Minneapolis’ tax-paying residents. But the story is different for a billionaire team owner that the politicians were desperate to please, who was the one and only clear winner in the taxpayer-financed stadium shenanigans.

Of course, the stadium has been a boon for the Vikings ownership. The Vikings are worth an estimated $2.4 billion, and the new stadium has increased the net worth of Wilf’s business empire by $200 million, according to estimates.

And now, Minneapolis and Minnesota have hosted their one and only Super Bowl, where the NFL is scrapping the bidding process that would make it possible for the city to ever host another. But they’ll always have memories of Super Bowl LII. And the bills for the stadium that it was played in.

Featured Image:
City of St. Paul, Minnesota

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February 2018