Soccer Stadium in Minneapolis (cancelled)

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Didier
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Re: Major League Soccer Stadium in Minneapolis

Postby Didier » April 14th, 2015, 5:35 pm

The PDF within that link has more information, but the formatting isn't copying into the forum.

Here's one that might be of interest, though.
Improve the historic and widely-used Farmers' Market through creation of a year-round, market centric produce, product and food neighborhood.

Wedgeguy
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Re: Major League Soccer Stadium in Minneapolis

Postby Wedgeguy » April 14th, 2015, 5:41 pm

The Minnesota Republican Party can't piss off their major donors. Especially when they are still over a mil in the red and the FEC is breathing down their throats as it is with a decent fine for their sloppy record keeping. 2016 is coming up and they need cash desperately.

David Greene
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Re: Major League Soccer Stadium in Minneapolis

Postby David Greene » April 14th, 2015, 9:25 pm

Absolutely NO to a break on property taxes. That's a long-term revenue stream.

fehler
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Re: Major League Soccer Stadium in Minneapolis

Postby fehler » April 15th, 2015, 9:57 am

Don't bet on a complete rejection by the Republican House. There is a strong soccer undercurrent in the suburbs ("Soccer Moms" are a thing). Having a "Major League" team in the metro area gives them validation. With more families with top athletes eschewing the other football due to long-term injuries, soccer will grow even stronger.

RailBaronYarr
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Re: Major League Soccer Stadium in Minneapolis

Postby RailBaronYarr » April 15th, 2015, 11:43 am

David Greene wrote:Absolutely NO to a break on property taxes. That's a long-term revenue stream.
If the land is worth $30m, structure $120m, we can find comparable PTs on downtown parcels with total value of ~$150m. The US Bank tower parcel is valued at $144m, pays $6.2m in property taxes. If you assume a 1% increase every year for 30 years, that's $209m in foregone tax revenue to Henn Cty. Even a couple hundred apartments/condos would net $2-3m in property taxes.

I can all but guarantee the employees of US Bank's building spend more on food/drinks/shopping in a year than 20,000 gameday attendees for 27 games. This isn't an indictment of MN United. I think it's BS that the 'publicly owned' nature of the other sports venues exempt them from paying Minneapolis/Hennepin County property taxes as well. I'm actually ecstatic that they came to the table with a full private financing model. But the City should not back down here - we do have 2 venues in town that can host soccer games already paying no taxes. This area of town has development potential and the opportunity cost shouldn't be ignored.

xandrex
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Re: Major League Soccer Stadium in Minneapolis

Postby xandrex » April 15th, 2015, 11:55 am

RailBaronYarr wrote:I can all but guarantee the employees of US Bank's building spend more on food/drinks/shopping in a year than 20,000 gameday attendees for 27 games.
As a person working in US Bank Plaza, I think I can say that the Chipotle line alone might produce more sales tax revenue than some entire buildings. :mrgreen:

Silophant
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Re: Major League Soccer Stadium in Minneapolis

Postby Silophant » April 15th, 2015, 12:02 pm

As a person standing in that line on a regular basis, I'm inclined to agree.

Didier
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Re: Major League Soccer Stadium in Minneapolis

Postby Didier » April 15th, 2015, 12:03 pm

RailBaronYarr wrote:If you assume a 1% increase every year for 30 years, that's $209m in foregone tax revenue to Henn Cty. Even a couple hundred apartments/condos would net $2-3m in property taxes.

I can all but guarantee the employees of US Bank's building spend more on food/drinks/shopping in a year than 20,000 gameday attendees for 27 games. This isn't an indictment of MN United. I think it's BS that the 'publicly owned' nature of the other sports venues exempt them from paying Minneapolis/Hennepin County property taxes as well. I'm actually ecstatic that they came to the table with a full private financing model. But the City should not back down here - we do have 2 venues in town that can host soccer games already paying no taxes. This area of town has development potential and the opportunity cost shouldn't be ignored.
You're making two false connections, though.

1. It's not a decision between a tax-free soccer stadium and a couple hundred apartment/condos. There's no indication that anyone other than Minnesota United has concrete interest in developing this area.

2. Just because two other venues exist does not mean they're actual options. If this proposal is rejected, Minnesota United will either remain a minor league team in Blaine or else get the same deal to build an MLS stadium in another suburb.

It's perfectly valid to oppose this plan, but I just want to be clear that the alternatives you are suggesting don't actually exist at this time.

RailBaronYarr
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Re: Major League Soccer Stadium in Minneapolis

Postby RailBaronYarr » April 15th, 2015, 1:44 pm

They're not alternatives. They're examples of how the city treats other large/valuable uses of land. Justifying no property taxes because we'll get a boost in entertainment/general sales taxes misses that hundreds of other parcels bring equivalent to many-times the number of people an MLS stadium would bring. I'm not saying a giant office tower would come in. I'm saying it's worth $144m, roughly the same as a stadium. Why treat them differently?

The baseline is $500k/yr - the amount the parcel is currently netting the city. You could make the case that an MLS stadium might spur area development that might not otherwise happen in a no build situation (or even no-build + SWLRT). I guess I don't know, and MN United certainly hasn't done that analysis. It's not hard to imagine the site getting at least some stick apartment buildings paying $1-2m/yr in property taxes if the stadium is built in some suburb (or other city). I'm inclined to believe that SWLRT + the type of public reinvestment in this area the stadium would require anyway would make residential/office space here pretty dang valuable (proximity to downtown, Target Field, LRT, etc). Who knows. But $0/yr is worse than anything we can envision.

nickmgray
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Re: Major League Soccer Stadium in Minneapolis

Postby nickmgray » April 15th, 2015, 1:55 pm

Does the tax property conversation have to be an all or nothing proposal? Can't the city/county propose a plan which would make the stadium property be tax free for only 5-10 year. After that, the owners would need to pay regular property taxes on the land and stadium.

RailBaronYarr
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Re: Major League Soccer Stadium in Minneapolis

Postby RailBaronYarr » April 15th, 2015, 2:14 pm

Certainly. And MN United requested "Property tax exemption/relief limited to the MLS facility and land only" so they're obviously not set in stone in asking for $0. But they do reference that no other stadium/arena pays PTs. They also specifically call out an exemption from future levies on the stadium/operations that don't exist today in their wants.

Didier
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Re: Major League Soccer Stadium in Minneapolis

Postby Didier » April 15th, 2015, 3:03 pm

The figures from your first post presented the case that not building a stadium, or pushing the team to play elsewhere, could result in more taxes for this West Loop site. While that's true — taxable development could occur without a stadium — I was just pointing out that you are comparing an actual proposal with hypotheticals.

If you're fundamentally against a tax-free stadium plan, that's fair.

However, I'd say that the circumstances here merit a more nuanced approach. We're talking about a pretty random part of downtown Minneapolis. Besides the $130 million stadium, an influx of private development seems unlikely. Further, relying on small-scale projects to fill in this area could take decades. Or it could never happen. This is all conjecture, of course, but without a viable alternate I think it's fair to consider.

You also have to consider that a 20,000-seat stadium is a pseudo-public space, and that our elected officials have used that logic to justify this same tax break — and much, much, much, much more — for our other local teams. Including the St. Paul Saints.

So we have in hand a proposal for $130 million. This investment would create a major development in an area that would otherwise need many smaller developments to see noticeable change. This investment would also go toward enhancing the farmers' market and creating a year-round market. In addition, this investment would centralize entertainment dollars into downtown Minneapolis, benefitting both the city and the county.

The only negative is potential lost tax revenue. But as of now, there is no concrete alternative to generate that tax revenue.

So to flat-out reject this opportunity because it would receive a tax break that other local sports teams are afforded seems short sighted.

RailBaronYarr
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Re: Major League Soccer Stadium in Minneapolis

Postby RailBaronYarr » April 15th, 2015, 3:16 pm

That's all fair. I guess I wasn't trying to have a black/white conversation, but just paint the picture of the opportunity costs. I'm assuming that a stadium like this would require substantial site improvements borne by the public sector. Maybe most of that would come from SWLRT station investment anyway, maybe not. If you bundle those public costs (not direct, per the stadium backers' language) into the picture, it's hard to imagine this site not being at least somewhat lucrative for redevelopment. That's why I said even some 6-story apartments would bring in the range of $1-2m/yr in taxes.

It's tough to weigh the intangibles like further solidifying this area as entertainment, the benefits of a more year-round farmer's market, etc. I'm not pretending to know how much those things add value to nearby properties, the positive spillover effects the city would see long-term. I guess that's where more time (like, longer than the July date the MLS gave) would allow the city to do a little more studying to understand if it's worth giving any tax relief for the stadium (partial or all).

David Greene
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Re: Major League Soccer Stadium in Minneapolis

Postby David Greene » April 15th, 2015, 3:25 pm

Didier wrote:The only negative is potential lost tax revenue. But as of now, there is no concrete alternative to generate that tax revenue.
Sure there is. Keep the site as-is. That would generate more revenue than a stadium paying no property tax.

Didier
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Re: Major League Soccer Stadium in Minneapolis

Postby Didier » April 15th, 2015, 3:34 pm

Revenue is not limited to property tax.

mattaudio
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Re: Major League Soccer Stadium in Minneapolis

Postby mattaudio » April 15th, 2015, 4:11 pm

Didier wrote:Revenue is not limited to property tax.
Local government revenue is.

Wedgeguy
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Re: Major League Soccer Stadium in Minneapolis

Postby Wedgeguy » April 15th, 2015, 4:17 pm

You might want to check land records as I do believe that part of the land is used by the city or county for maintenance facility across from the Farmer's Market.. Those would not be taxable unless they were privately held parcels. At present I think only the Stark Electronic, Absolute Quality Manufacturing, and United Noodle are taxable, Not sure what the status is with the large warehouse to the north, But the north side of Royalston is Mary's Place/Sharing caring Hands so I don't see any jump from taxes with her being a nonprofit.
Needless to say but I think that between the Garbage burner and the 394 trench, getting a lot of interest in the area will be more difficult that you think. It is pretty cut off from the core as it is. LRT will only help so much, but it will not be the answer to a lot of logistical problems. Mary's Place would also give pause to some real estate developers as far as market rate residential.

Tyler
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Re: Major League Soccer Stadium in Minneapolis

Postby Tyler » April 15th, 2015, 4:40 pm

mattaudio wrote:
Didier wrote:Revenue is not limited to property tax.
Local government revenue is.
Parking revenue? Sales tax? "Value" added to surrounding properties?

Usually stadium deals seem unequivocally bad for the public financially speaking. This one is at least thought-provoking.
Towns!

mattaudio
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Re: Major League Soccer Stadium in Minneapolis

Postby mattaudio » April 15th, 2015, 5:06 pm

If they don't want to pay property taxes, they can transfer the ownership to a public benefit corporation or trust of some sort. Easy enough. But then the public, via some mechanism, would also realize the appreciation in real estate if this property is ever sold or redeveloped.

Wedgeguy
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Re: Major League Soccer Stadium in Minneapolis

Postby Wedgeguy » April 15th, 2015, 5:08 pm

For all who want to believe that you can add huge value to this area, I say look at Google Map. You have a freeway trench to the east, a rail trench to the east and south, I-94 a block to the west and a bus garage that I really doubt will be moved in the next 20 years surrounding the land. One can have fantasies about a lot of things, but when reality sucks the life out of them you don't have much of a concrete basis right now.

Also, many of you on here have never really seen a real estate market collapse and what it does as far as long lasting effects. Once the Fed starts raising interest rate and the overseas cash infusions into our economy dry up due to the drop in commodity prices, oil, natural resources, and assets. Oil exporting countries are already selling off assets to make their own budgets in their countries. This building boom we are in now will slow sooner rather than later. Greater care will be taken on what they are willing and where they are willing to risk money. Once we hit a snag this area will fall off many radars as a potential development area. Sorry, just my opinion after watching 30+ years of the real estate and development market. I'm willing to say I could be wrong, but I have some history on my side here to say this area will be among the last to get developed. The stadium might be a once in a life time chance to enhance this area, but piece meal it will not fly.


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