Minnesota becomes latest state to OK public financing of new NFL stadium

Stateline Midwest ~ June 2012

After many years of debate, the Minnesota Legislature has approved a plan to build a new stadium for the Vikings, the state’s National Football League team.

Under HF 2958, signed into law in May, the state will contribute $348 million to the project — about one-third of the costs. The team and the city of Minneapolis will cover the remaining expenses.

Legislative supporters say the move was necessary to keep the team from leaving the city. They also note that the new facility will bring in revenue by serving as a venue for other events, and that its construction will create 13,000 jobs.

To pay for the state’s portion of the costs, lawmakers agreed to add electronic bingo and pull-tabs to the list of games allowed under the state’s charitable gambling law — which permits licensed nonprofit organizations to conduct gaming activities at locations that they own or lease (including parts of bars and restaurants). If this does not cover the costs, the state will then start a sports-themed lottery game and institute a 10 percent tax on luxury seats at the stadium.

Minnesota joins several other Midwestern states where the public financing of new professional sports stadiums, or renovations to them, have been approved. Other examples include:

• Lucas Oil Stadium, Indianapolis Colts — Increases in local restaurant, auto rental taxes and admissions taxes were used to help finance the project. To raise money, too, the state began selling Colts license plates
• Soldier Field, Chicago Bears — Revenue for the public portion of the $587 million renovation came from a reallocation of city of Chicago hotel-tax revenue. The Illinois Sports Facilities Authority, established by the legislature in 1987, issued municipal bonds for the project.
• Lambeau Field, Green Bay Packers — Public financing came from state infrastructure funds and a voter-approved increase in local sales taxes.

Some studies have questioned the value of public financing of sports stadiums. A 2003 University of Maryland study found that professional sports teams decrease jobs and earnings in a number of U.S. cities due to “substitute” economic activity — spending inside stadiums replaces spending outside the venues.

A 2005 study by Harvard professor Judith Grant also found that the true cost of these projects is underestimated “due to the routine omission of public subsidies for land and infrastructure and the ongoing costs of operations, capital improvements, municipal services and foregone property taxes.”


Supporters of the Vikings project, though, say the new stadium will generate $26 million a year in tax revenue and employ thousands of Minnesotans.