MPR Special: Senate hearing debate on stadium liquor tax

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MPR’s Bob Potter reports live from the state capital on the Minnesota Senate Tax Committee, which is hearing witnesses on the proposed repeal of the metropolitan area liquor tax as it relates to the proposed downtown Minneapolis domed stadium. Witnesses include stadium opponent Senator Robert Ashbach, principal stadium supporter Senator Steve Keefe, among others.

Read the Text Transcription of the Audio.

(00:00:00) Good afternoon live from the Minnesota state capitol in st. Paul Minnesota Public Radio presents hearings by the Senate tax committee on legislation to repeal the 2% Stadium Liquor tax. That's the tax that is levied on liquor sold by the drink in the seven-county metropolitan area. It is being used primarily to back up the bonds which must be sold to build the stadium as a backup for those bonds so that the purchasers know that in fact, they'll be money there to pay them off. The tax was first levied on August 1st 1977 and it must continue until August 1st of 1980. And after that it will be levied as needed. It must come on when the reserve funds are insufficient to pay two years of principal and interest on the bonds and I must go off when there is a three-year Reserve. Half the proceeds from the first year of the liquor tax collections are going into the reserve fund and half to pay for some of the front end expenses involved in building a stadium things like planning and designing and things of that nature on Wednesday of last week. We heard from the proponents of the bills to repeal the liquor tax and today we'll be here to be hearing primarily from the opponents of the liquor tax repeal measures. The opponents are people who support construction of the stadium in Downtown Minneapolis. The first person that is on the official witness witness list for the tax committee and Senator Robert - Beck the minority leader in the Senate who is a sponsor of a repeal Bill he of course being a stadium opponent, but then we'll be hearing from Senator Steve Keith who carried the stadium bill passed the 1977 in the Senate and we'll be hearing from lieu de Mars president of the Minneapolis city council John Cowles Minneapolis Star Tribune company and Dave roll president of the Minnesota AFL-CIO Later in the afternoon. Probably quite a bit later. There will very likely be some debate within the committee and eventually a vote on whether or not to repeal the liquor tax. The committee could vote to send the bill to the floor recommending it for passage. It could recommend that the bill not be passed in which case the ability essentially died in the committee or the committee could do a third thing which is sent it to the floor without any recommendation at all. And if it looks like the bill does not have enough votes to pass that very that last possibility may very well be the one that is decided on Senator McCutchen explained at the last meeting that sending the bill to the floor without recommendation would at least give the Senators a chance to vote on it on the floor so that it won't be coming up as an amendment to any tax bill which comes up which of course could happen and could tie up the Senate and lengthy debate on the stadium issue on in fact, especially as a session draws closer. To an end around April and May they'll be other tax legislation to consider particularly, whatever they come up with in the form of a tax cut proposal. Well, as we mentioned the proponents testified last Wednesday with Senator John Chenoweth arguing that people were misled about the liquor tax a couple of years ago. Initially. He said legislators were told that it would simply be used to guarantee the sale of the bonds now according to Chen OU if it's becoming a long-term tax needed to supplement Stadium revenues Senator Chenoweth argued the public money should not be used to subsidize private Enterprise John that brought a rather heated response immediately from Senator Keefe. He came downstairs and I was a little bit upset about all of that was he not? Yes. He was Bob Senator Steve keifa Minneapolis, the the author of The Stadium Bill two years ago. I was listening to the hearings on the radio. He heard Senator chenoweth's remarks about him, which surprise some people in the hearing room of the hundred seventy five or so since they tended to take on a rather personal note from Chenoweth toward Keefe and Keith came down and defended himself and said that in no way we're lawmakers if they had been listening to Is it Go misled in thinking that of the connection between the two percent liquor tax and a dome stadium and as you will call Keith brought with him, apparently he had the tape already because he did this all on about a 10 minute notice a two-year-old tape of himself on cassette talking to chenoweth's operations committee government operations two years ago in which Keith was heard to say very emphatically public funds subsidy would be involved if a dome Minneapolis Stadium were built and keep also said that he was bitterly disappointed that chynoweth had made some of the remarks toward him personal as the leadoff witness at the first day of hearings. Now later Chenoweth said that the tape that Keith had played in that first hearing last week was before this committee, but on another bill and he said it was not the same exact bill that they eventually passed so you didn't you didn't really there was no way to respond to that. There was some follow-up to that of course. This weekend yesterday Sunday Senator Chenoweth held a press conference here in a darkened Capitol building where no one else was here. But he picked that time yesterday afternoon, and he called then on Governor Qui to take the nine members of the seven-county Metropolitan Council whose terms Chenoweth said have expired and either order them not to contact any people involved in the bond sales or conduct any Stadium business since they were appointed officials whose terms of expired or Qui should replace those nine officials with with his own people cui has been known to say that he would like to keep the Metro Council intact until the stadium bonds issue was cleared up since the council members have been following this for a few years now and queen is also known to support a new stadium. And of course, there's a lot of speculation as to and political circles. Whether it might come down to a dfl senate passing out the stadium Bill perhaps getting passed in the Senate if that should happen and landing on the desk of a republican governor. Should he veto that or not? And right now there is perhaps a little bit of pressure on cui to try to decide what to do about those possible vacancies on the Metropolitan Council John really the Minnesota Senate was in session until about 15 20 minutes ago and members of the tax committee are now filtering down to the room this room is being held in a different location than the meeting last time. This is in the if you've ever been to the capital, this is the large room right directly beneath the Rotunda. So it's a circular room fairly good-sized. Although not quite as large as the hearing room of last Wednesday, but this is the regular tax Committee hearing room. The table is a very large open-ended horseshoe-shaped Affair. And as we say a number of the committee members have taken their seats although Senator Channel with the chairman. It's not yet here. Also during the testimony last week. There were spokesman from a couple of neighborhood groups in the area where the stadium will be built Downtown Minneapolis. They were saying that they were concerned about the possible pollution traffic vandalism. And so forth the effect on the nearby neighborhood of the stadium. There were some liquor dealers hangeth are industry was being unfairly singled out for this tax and another group saying that the existing Metropolitan Stadium should be improved for football, but it's fine for baseball. And in fact, they say better than the better than the Dome facility in a lot of events of the past couple three days related to the stadium John mentioned one of them the press conference yesterday by Senator Chenoweth also over the weekend the the Metropolitan Council, which is actually responsible for issuing the bonds released a A report by one of its Consultants concerning financing the proposed Stadium. The study was commissioned to help the council meet a requirement of Stadium law saying that there must be a determination whether or not the stadium will pay for itself before it authorizes the sale of the bonds. Well that report was prepared by the accounting firm of Coopers & lybrand in Minneapolis. And it said that the stadium will infect generate enough money to meet the requirements of the law Dale. Conley has been following the Stadium events outside the legislature and he prepared this report on what that consultant study had to say actually only part of the accountants report has been released the part which includes the conclusions and the description of the project the details including numbers and the methodology used in reaching those numbers will not be released until tomorrow. When a metropolitan Council committee considers the full report the stadium legislation requires that a domed stadium in Downtown Minneapolis be able to pay for it. Service on the bonds and a substantial amount of operating costs with revenue from operation of the stadium a key word. There is substantial the legislation didn't Define what substantial is in the consultant's report so far. It doesn't Define substantial either in deciding that operating monies will pay for Debt Service and part of the operating costs. The Consultants made six assumptions one that the data and opinions. The Consultants used are correct to that. There will be no major economic decline in the 80s three that no major competitive facilities will be built in the metropolitan area for that construction will be completed by March 31st, 1980 14 55 million dollars as provided by the stadium law 5 that the operating cash flow and the liquor tax proceeds will not be used for improving the stadium after it's finished and 6 that there will be no change in the amount of money collected under the liquor tax. If any of the basic assumptions are wrong Coopers & lybrand warns that its conclusions may need to be revised but given those assumptions the And predict that the 2% liquor tax in the metropolitan area which collected about 3.6 million dollars in its first year. We will not have to continue for more than what's called a reasonably short time following completion of the stadium. The report was not more specific due to its Reliance on unproven assumptions and anticipated future events Stadium commission chairman. Dan Rutger has predicted that the liquor tax will not have to continue past 1983 the Coopers & lybrand report is based upon expected results, which includes moderately increasing attendance levels along with increases in rental income concession income and inflation, the accountants also considered a best case and the worst case it can be assumed that in the best case The Firm will also find that the stadium will pay for itself, but the worst case findings haven't been released yet the worst case assumptions include attendance at the current Metropolitan Stadium levels similar amounts of Admissions and concessions income and inflation levels similar to the expected case the worst case assumption also eliminates expected income from The University of Minnesota Gophers and the Minnesota kicks both of which have signed no agreements to play in a new stadium the complete consultant's report and Metropolitan council members reactions to it are expected Tuesday evening. I'm Dale Conley back again at the Minnesota state capitol as we await the start of this hearing by the Senate Ethics Committee on legislation repealing the backup liquor tax number of the committee members are in their seats were still awaiting the arrival of the senator McCutchen the chairman and as soon as he arrives, I expect we'll be we'll be underway this whole issue of course is drawing a lot of attention in both houses of the legislature the Senate of course having been able to organize itself very quickly and very easily this session has gotten underway first the situation in the house was delayed by the tie vote situation over there where they couldn't agree on the division of responsibilities and Powers until the second week of the session actually. But there is a bill over there that would do exactly the same thing and we understand from the chairman of the house tax committee. Will Chief author of the bill that it'll get a hearing as soon as there's some action on the Senate side and we expect some action of some sort during this meeting today. Perhaps in preparation for that the house local and urban Affairs committee is holding a couple of sessions related at the whole stadium question today. They heard from one of the gentlemen in-house research who has worked on this subject through the entire legislative history of the the stadium and also from John Bolin who is the outgoing chairman and executive director of the Metropolitan Council his successor Charles Weaver is was out of town today. And and so mr. Boland, I had the opportunity of presenting the The counsels View before the committee firstly Metropolitan Council has an interesting relationship with this whole thing. It has to sell the bonds and it has to see to it that the bonds are paid off. The Metropolitan Council does not does not have anything to do with the selection of the stadium design with the any of the construction details or any of that. It has a lot to do with the If the financial Arrangements do they attend the council had to go to some private Bond consulting firms and so on and order to different attorneys in order to make the decisions that were necessary on getting these bonds sold. Well Senator rather John the Boland the the chairman of the council was asked during the media day. Just when he figured it would be possible to make a decision one. They would know for sure when they would be able to sell the bonds and let's listen to some of his some of his testimony from this morning. I gave him the date of the regular council meeting of January 25th. That was done last summer. There is some indication in the media particularly by some legislators that we have speeded up the process. In fact, I submit to the Truman in this committee were behind because we are not finished. It is now past January 25th, and we have only really solved five of the eleven issues. And some of those are conditional which I will go through in a minute. That was the timetable that was set out. The reason being and representative cereals mention it there. We are up against a limit on the interest rate in those bonds. It was the by Consultants judgment that if we got those bonds to Market some time mid-march, we would be able if we could to beat their limit if we yard we're not able to sell them. That's the end of the whole issue. We tentatively have a date now of if we can finish this work by next Thursday. This coming Thursday February 1st, which again given the twins reluctance to sign the lease which we have not yet talked about looks as if that won't happen either. If we are able to do that, we will then go to market with these Bonds on March 16th. Again, and I'm speaking only his and hamburger in this. I hope you understand it relying heavily on Consultants. We've been informed by our bond people that if the liquor tax is removed at any point in this process that in fact kills the deal. If we sell the bonds in the liquor tax, then is removed. It's my understanding from legal counsel that that would be an illegal act. I don't know how I don't wanna get into that because that's your prerogative. You can discuss it in committee or in court but would be our judgment that that's the way it is. So those I think mr. Chairman answer some very general questions about the timetable. There will be a meeting of the council full Council in February 1st. The next meeting is scheduled February 8th, and then not until it, February 22nd. So any one of those three meetings could be the meeting that the new council with its new chairman passes the resolution sending these black these Bonds on and that was John Boland the chairman of the Metropolitan Council testifying this morning before the house local and urban Affairs committee John Boland emphasized one, very interesting fact. They're in his view removal of the liquor tax would essentially kill the deal would kill the sale of the bonds and that would make construction of the stadium impossible. Now part of the reason for that is that the law specifies that the interest rate on the bonds cannot be any more than seven and a half percent according to John Boland the market rate for those bonds at this point would be 7 point fifteen percent. So they're in quite a bit of a hurry to get those bonds sold before the market rate interest rates, and he goes up and Makes it impossible to sell the bonds of the because the interest rates too high. Senator McCutchen is in the chair now and it appears to be about ready to call a meeting to order. So he's holding the gavel and there it goes. So let's go to Senator Bill McCutchen chairman of the tax committee. Zach And Senator Chenoweth had pretty much wrapped up his testimony on. Wednesday of last week and thinner Ash packs was going to be with us. He is today. He's going to be our first witness and Senator. Ash Beck has a story to tell that I think will be of great interest. So there s back This is Senator Robert Ashley actually minority leader of the Senate stepping up to the podium now Senator rash back. Anything new to offer the committee, and he suggested I come let them decide for themselves. I know this is a an issue that's of great concern to many people my first of all, I want you to see they don't represent any group and not have been associated with any group. I just did my little old homework Thursday night and Saturday and Sunday and make a little presentation here. I also like to indicate to you that the basis on which I present. My estimates is based on information available to all of you and to anyone in the room and the assumptions and the deductions. I have made from that basis of that information, which is factual. I think it what a prudent man would accept. You're going to find out I find there are several million dollars in shortfall. And if we're really going to be honest with the people in Minnesota, we had that only not only try to keep the 2% tax and we're going to make this a viable project but we had a level with them and tell them the probability is even greater. We're going to have to increase the subsidy to make this project work. I read in the paper on Sunday. Where this stadium is? sound First thing this morning, what do I do call upwards or report? I called mr. Thompson at the Metropolitan Council. He said I've got the report I said, I'll be down and get it. He said it's not all here. He said we've got the conclusions, but we don't have the figures to back it up. And he said that's the way it's been all the time. So that I turn to page. And I like where it's under Jenna rather someone to read this first sentence and this is the sentence the qualification in as much as our work. As well as that of the commission staff is based on unproven and I'm quoting unproven assumptions and anticipated future events. We hesitate to predict any precise period during which the liquor tax proceeds might be required in the form of subsidies. Now, this is a headline like that. You and I as legislators got more to do than read headlines. It's our duty to see to it that we investigate what's going on and review these things. Yep, we need a stadium. I'm the first to admit. I'm a Chamber of Commerce person and I support the stadium, but I do not succumb to pressure and we are not buy anything automatically. those of us No, how many dedicated people are working for this project? But we as legislators are the balance wheel we've got to protect the public and we got to make sure the bills we pass are not deviated from or change in any way that's going to cost the taxpayers more money than what the legislature intended. We know that they were going to furnish the site ready for inspection or for construction and all of a sudden I find out telephone users are paying for moving the telephone lines some say this is unusual. I can tell you it's more unusual than it is usual. Electric companies were paying part of the bills electric rates the gas companies. These are not charge the stadium. Then we saw yesterday in the paper many apps crying for tax dollars and then we saw. Where the City of Minneapolis takes over a million seven hundred thousand dollars worth of Street and Road improvements and you've got that exhibit their based on a presentation to this Committee in 1977. They also are going to change the Senators sanitary sewers and storm sewers. About a million dollars yet. We read we need tax dollars. And I guess we'll probably be reimbursing them for that. There are times when people wonder and indicate that they have no faith in government. Senator Davies knows and I know about the zoo. We had $500,000 report. Oh, there's no viable project. Yes, it was viable. So we spend another 200,000 we found out it wasn't so viable. We spend another hundred thousand was even less viable. And we finally did pass the project doing there would be an 18 million dollar deficit over the years but their head of schedule the deficits. That's all. It's the same old game where they revenues are overestimated. The expenses are under estimated the old game. We ought to do something and look at it and see what we can analyze it. Well now we're here that we ought not be looking at the stadium because we made a decision. Well members of the committee were working about tax dollars and we look and review and oversight on a lot of items from rules to everything and I think it's our duty to do it and not to do it. We're shirking. Our duty others will say this job is too controversial. We got not be stirring the waters again. Let us settle we got more responsibilities are moral right to do something about it. I became interested because I watch the progress I even bet with Harvey Mackay worth of decision would go and I got an autograph ten dollar bill from it. But first of all, I watched the Bloomington decision, you know, he got illuminate one. And I was told by experts at the design that was proposed was several million dollars more expensive than need be at this pre-engineered told me they could change his anus save several million, but that wasn't the game that wasn't the game and when you read in the paper that the parking lot cost a million eight to rehabilitate and that just broke the back the million dollars in the thing that bothered me was I try to find out they put it in the Bloomington appraisals and cost. Do they do at the Minneapolis. Not that I can find a not that you'll be able to find it but they use it to break looming back. Not the time for Bloomington. I do have own proposal. But the point is we ought to be fair. We had to get apples and apples. And the second thing I read. We are the people of Minneapolis donating land. That's great. I read about the exclusive rights for development around the stadium a long way around normally in other cities. They use that Redevelopment exclusive rights to reduce the debt and deficit of the stadium. You answer the question whether doing that here then I also notice I asked how do they compute all their expenses necessary running of statement the payment the bonds and what basis of fact they had so they sent me a book which you got several Pages out. Wells here but this is the book they send you And this is the document summary of expenses and so forth. And this is the same one that consulted with page 70 or 60 or 70,000 for to say it's unsubstantiated and unproven estimates and assumptions. So I asked him. Okay, I got it all how do we as businessmen as a concern taxpayer. Wonder how we're doing down there. I look at the book and you look at page 16 or 10 or whatever the handout I gave you. Let's turn to page. 11 You know you list there some income from the various kinds of team from the various teams and to be sure of the revenue. You got to have a contract. So I asked my simple question. Do you have a contract with the Vikings? The answer is no then I say do you have a contract with a twins? The answer is no and I said you have a contract with the kicks. The answer is no. I talked with Jeff Barnett at the Kings coronation in Friday night in a bunch of the kicks were there no way but yet the include 770,000 from the cakes as justification to get the bottom line. I asked about the architect. You have a contract no contract. We have a proposal from them. So I got a copy the proposal for you to pursue if you care to I asked well now we got a guaranteed construction costs because I read the paper, you know, it's in the paper. It must be right you're gonna have a construction cost of fifty 1 million seven. I'm sure you got a contract for this construction manager, which out the incidentally is not a bid job. It's a negotiated kind of thing. But the consultant management you must have a contract with them because you know what the projects going to cause, you know, we don't. I said we have a proposal I said fine. Send me a copy of that which they very kindly did I said, I'm trying to figure out the bond cost. Are you got to figure of 4 million four hundred sixty six thousand in there? Where'd you get that fellow at the at the commission told me somebody told them but you better talk to Metro Council. So I talked to a Llewellyn Thompson. I think it is who's head of the division of the sector that's going to evaluate the stadium proposal I said, do you have a cost of the bonds know? I don't know. I never saw it. Well, I said work and I get a cost of the bonds, but with are likely to cost. He said I'll get some he bought some 11 o'clock to my office. And you got a copy of the bond proposals. They're not indicate to you. They're not accurate. They don't know what the rating is going to be. They're going to New York and February we're going to be hopefully issued about mid-march. well The problem is we're trying this businessman just find out the viability of the project. Everything I asked for was in a state of flux. Nothing is nailed down nothing. Not even what the users are going to pay. And what can what conclusion can you make from such a proposition? In fact one would indicate it's a very tenuous kind of thing hung together by string tape innuendo hearsay and Promises. And now we have the NFL 30-year agreement. They didn't have an I asked him that before. with the 30-year guarantee, and now, you know, there's a hole big enough in its around the whole end of the whole biking team through It only if someone happens to the file bankruptcy, will there be a problem anyone in business any lawyer knows the transfer assets and the kinds of things that can go on they can make that very possible. In fact, the Vikings want him to move to LA taking the place of the Rams who broke a long-term contract themselves. And I can assure you haven't seen a long-term contract from any of the people are going to really use it yet. Well, these things are prime legislative concern and I don't want to bore you but I want a very quickly go through some figures and indicate to you that I think there's room for lots of questions. And if I'm wrong, I'll be the first to admit it and change my figures and apologize to everyone but I think it's based on good judgment and accurate figures. So if we would go into the operation of the stadium, which is our page for on top. And behind it you will see a page 16 from the report they sent you. And you will notice the revenues. What they are paying in 78 the actual you will see what they've budgeted for 79. The only time anyone goes to a business deal you try to see the amount of gallons of gas they pump in a filling station what your occupancy room is in the motel if you're going to build it or whatever you do, you've got some track record to do it. And this is their track record in 1978 the indicate that the twins paid and Rental. A hundred sixty three thousand, but they've estimated 388. I'm not going to go through all those you can see they're less than 50% in special accounts and the whole bit admissions concession receipts 390 1000. They're going to have 1 million for in the new place admissions tax 445,000 actually received last year. You're going to get 2 million in 1981. So I would like now to turn the top page. And if you will look this one. In the year 1978 they took in and used $1,100,000. Of liquor money to operate the stadium to help pay some bills and also to finance some Stadium costs only and I've got the budget here I went through every item. If you take the liquor talk tax off. is revenue If they show on page 16 7 million 117, you will see You've Got 5 million 81 17 allowed there. That's the revenue. Actually they're going to get and I'm not arguing about their tenant someone else did that previously. I'm using their figures in that area. I'm not arguing with those figures. And you have to make that decision whether your tendons is there and I've got some figures on the tenants another sheet there for you and see the variation. So I took off any prudent person that was going to get that much revenue. We got to now start looking at the revenue picture. They on page 14. They indicate that the kicks are going to kick in 740 mm. Would you as a prudent businessman include their revenue when they told you time and time again, they're not going to use it. No way, but yet will build 55 Millions on rumor. There's somebody's going to move. What about the University of Minnesota are parking? We got 226,000 there. I think it was 228. No 226. I was right and I read in the paper. That's before you the Minneapolis City Minneapolis guaranteed 25,000. I don't know the guaranteed anymore my information is they have not. So I gave him the benefit of the doubt. I just took off a hundred thousand to twenty six two gave 126,000. You know, that's when you're twice what they guaranteed. Then the University of Minnesota some students are going to be looking for work. And Paul Gill was here. He said watch out. I'm going to testify. Well the point is there's about forty thousand a year. I'm told that the states that the university is going to lose on his revenue bonds for parking ramps and parking fees of the University. They don't go the athletic fun, but they do go to the university. And as you can see a little chart, you can see how much money they're going to make one concession from University of Minnesota. This means some students are losing jobs. This means that there's some area the state of the universe you can lose Revenue. I project they're going to lose about 200. They're going to be back to us and make it up in some form. You subtract that you're going to net revenue of four million seven. in the most interesting case of all Is the projected expense projected expense two million six? Do you know what the expenses were 78 out of Mets stadium? Did you worry about it? You care? Why worry about it. You only turned out to be three million for. You know inflation as a way of reducing the cost. Mr. Chairman administration of the last year last year. They spent at the stadium the Commission in their report. I have a copy here spent three million four hundred thousand dollars the commission spent three million four hundred thousand. How much did they spend an administrative expenses out of Bloomington? That's my question. Well, you see what you're doing and what they're trying to do is separate the cost of the commission and the salary and all that from from sweeping the seats and that sort of thing the whole budget and I have the mr. Chairman and Sunday Stokowski. I have the projected budget right alongside of it so you can see I thought well, maybe there's some just parity in the budget in the between the two years. But there was in all honesty and I get to that four hundred and sixty four thousand. I believe was the figure. Yes of things that they paid for conceptual design for engineering that's applicable to the new stadium. And that's only In fairness. I deduct that. So we start out with 2 million nine. Mr. Chairman, if you had 10 percent per year the 79 80 and 81 sherbet insider' - Buck we have comparable figures for 77 so we can compare your feet with him. I don't have with me but I do. Yeah, but I I assume there's a life disparity between 77 and 78. I'm Edna buy a lot of furniture. Well, I think it's because of the proposed stadium that the you know, well well, mr. Chairman the fact is this projects out and it's a reasonable ejection of 3 million nine hundred and thirty three thousand is estimated expenses of 1981. Now this is not dragged out of the air. This is a reasonable projection that any businessman would make and The Debt Service that they have indicated was 4 million for 66. I talked to the Metropolitan Council. I said What bond rate will we do when you've got two of them there 16 .7 + + 1 7 and a half. So I took it halfway between they thought they might have trouble getting it for seven and they sure are hopeful that wouldn't go over seven half so I went halfway between I think was it a prudent kind of a thing to do. We end up with expenses of eight million dollars a shortfall of three million seven. I'm going to hurriedly mr. Chairman get over another ones. I don't use up my half hour, but there are many other things. We got to talk about for instance. Normal thing you do he say what about construction funds? so they sent me a an item marked five This is what they sent me from the commission for construction funds very simple. I've noticed that construction according to the proposal start April 1st 79 that they complete in April of seventy eighty one the estimate the bond investment rate of 8% over half of the construction period And I guess the eight percent is correct the estimate the bond underwriting cost 2% of bond sale the estimate the legal fee at 90,000. The contingency said I'd fit five percent of the costs and you can see how they did it there 55 million. They sell the bonds then they got to pay a fee of 1 million won. However in the Minneapolis paper in the Minneapolis proposal or copy of it number six, and they're just a couple months earlier. They said their bond fee for a million eight or 453 million is a million eat. They show here million won. I don't know which is correct. I tried to find out which of the correct figure not available. So we got the same people estimating twice. Maybe it's halfway between the legal costs. The show's 90,000. If you read this page that they put out as in the book you can read it as 236,000. I don't know which is correct. One of them is or closer than the other you can see they got 53 million left over plus the bond investment one year at for at 8% as 4 million for leaving a balance of 58 less the contingency of two million five less the architect and construction managers fee of 4 million 925 And the funds available for construction or 50 million salmon, huh? I said they lost a million bucks. Already in the paper was 50 million 750 1 million 700. Well, you know, it's not too much but I wonder where it went. So I said what would you do a thing like that? So in the back you find my bond issue analysis using their figures? So I raised the million one fee for Bond sale from 1231 million three and I think that's a prudent thing to do because we had presentation to committees before and 77 is going to be a million eat. The legal process a is going to be one of the 60 million in this one and Minneapolis was 236. So I said why don't we raise it 25% we raise the 25% the bond investment of 4 million for and now I ask you we're starting in April Senator sellers in 79 and they're going to do a lot of work between then and the first year it's obvious. We cannot have the full amount of money on deposit for a whole year. There's drawdowns contractors estimates. So I said so taking half. Why don't I just reduce it by 30 percent thought I would be fair. I give them seventy percent the second year. There's no way it works in the construction business, but that's what I did to be fair. So instead of 4 million for is interest earned. It's only 3 million 30,000 the last two five percent contingency on the second page of five and then we get to the architect and the construction manager and I have those contracts with me. And you can all look at them and I want you to know that in The Firm contract with the construction Management Services. It said as soon as the depend upon the architect Furnishing it to us pays to for a guaranteed maximum price. We intended to guaranteed magic right there within the financial everything of the project. We will not be in a position to guarantee any cost figures until Phase 2. Well, we don't have a guarantee the proposal of sorts. It doesn't include the construction Bond that's outside the cost. Yeah, and this is two million three hundred eighty thousand and postures the feet and Cost Plus 3, and the architect speed is 2 million 545. If you look what the commission sense and use it for cost of the exact piece without any extra cost. And what is a surety bond cost for 55 million dollars or fifty million anywhere from a half percent depending on the contractor to 1% and I can assure you with the there's no incentive to shop around. When this commission is going to pay at the taxpayers are going to pay it. So you have to add something. And I added a reasonable figure with all the ads and pluses we came out to five million six instead of the 4 million 94 the funds available for construction or 48 million instead of 50 million or said the 51 is told to us. but however on the bond proposal it says we're putting the money in the bank we borrowed but we are not allowing any interest on it. If you look at the bond proposal, I've got it on the bottom. You can see three million 63 million six three million six 79 80 and 81 11 million dollars worth of Interest who's going to pay for that. We're already short on the operation. And the liquor tax income is three million seven. I use your figures three million nine and four million won. My point is members of the committee the stands of scrutiny. This is not that solvent. This is not that great a proposal for the people in Minnesota, and I just think that you and I got a responsibility to do something and I don't want the project killed. I think we need a dome stadium. And I think we ought to respond to what the people want and look at this thing carefully and I think we ought to monitor it and I believe further that we got to probably mr. Chairman members of the committee do something different like amend the law not to issue the bonds until we get the contract signed so we know for sure where we're going. This is the first proposal never had a firm bigger bid on the money the commitment no firm no firm commitments on Revenue. In fact, we use regular that won't even exist and how can we have a viable project and we can't not we cannot do less than be responsible legislators by letting that thing proceed get their contracts review it and if it is a viable project within reasonable limits allowed to proceed but under the present situation, if you repeal the tax, I can see where everything will probably come to a halt to the just can't go with the tax. It's got but the What we could do with all the delegated work by so many sincere dedicated people. We could we could I think mr. Chairman amend the law. So the bonds will not be issued and really get a construction drawing so we know what we're bidding on. And the report I indicated to you here says there aren't 65,000 seats or sixty one thousand seats when they put the boxes in there are lots of questions that are unanswered and I kind of hesitate to come here to relate this information to you. But you know, and I know that when it comes to something like this, I got to get my pencil out to see why and I don't know Wells is done this even the people that hired 60,000 says we just took the unproven assumptions and the unproven projections and based on those. It appears that the subject neither for a long time indefinite period in the future and mr. Chairman. I want to thank you and the committee for the opportunity to be here. I think we could work this out. I think there can be something there are a lot of questions that aren't answered. But I think one thing we got to do is been suggested before is hold up the bonds and then having legislative oversight committee come back and review it and if it seems viable, then you could go ahead but we cannot go to we get the contracts. We cannot go until we got things nailed down. You got a business deal. Thank you. Mr. Chairman - back to minority 20390707 do you think that would be how much of a difference? I don't know. It depends how difficult it is to work out the agreements I suspect but I don't think it'd be too long if they were sincere about getting a I think we can see the good faith of the teams that are going to participate. I think we could determine the good faith of the League's the rest of them will put this bill together to see if they can't come to terms and see what the revenue really is. Okay, mr. Chairman with the liquor tax continue during this period of time well, it'll have to otherwise the ship will sink. Senator Miriam Hanson, this is Miriam. Commission had the same material available with that looking at this past weekend entire. Why do you suppose they came to a much different conclusion? Mr. Chairman Senator my one or two, but when they spend this kind of money for report and they say in as much as I work as well as that of the commission staff is based on unproven assumptions, you know, they even reinforce what I've said, would you I asked mr. Thompson came to my office I said you were to protect of the taxpayer. Are you going to include in the revenue assumptions the revenue from the kicks? Well, you never thought about it. Well I said, how can you and they tell you they aren't going to be there any prudent man wouldn't allow that. He said I guess I would have to say we wouldn't allow it. I said you think it's right that they allowed it. There's he said they probably didn't know at that time, but I have got no revised figures from them and there are something that sort of thing. Thank you so much. Bye that's the far as I know concludes the testimony from the supporters of the Senate by Senator Keith. Now we'll we'll commence some testimony from the those who are opposed to the bill. Now, I want to just make one statement before the opponent's begin. And that's David goes something like this. I've permitted some Applause and the group because Applause is reinforcing and makes the speaker feel good on the other hand. I do not support any bullying or hissing in the audience because that's intimidating and nobody in my committees intimidated by anybody but the chairman so if we have people who get excited and can't control their emotions, you'll have to leave and I hate to see that happen. So I like to have a get my speech first going to be hearing from the Apple Senator Steve Keith Jarrett to warn everybody against hissing and booing before I stand up to school. It's always a big help in particular in workers compensation. I like to have it again a little Déjà Vu here I've been in this committee on this issue once before you may remember and nothing's changed and I'm going to give you sort of the same speech I gave them. We have a we have it seems to me that we have a political problem. I'm not here to argue with you about all the details of whether the bonds do this and what the interest rate is and whether there's a contract with the kicks are not goodness. I remember when we start talking about this issue. Nobody even her to stop soccer and now suddenly kicks are drawn to capacity crowds and adding to the revenues of the old stadium and presumably to a new stadium if they were to to a play there. So it's impossible to predict what's going to happen in the future and and anything that we do when we build a building is based on a certain amount of gamble. I suppose when they built the capital they had to assume that there'd still be a tax base around 20 years later to pay for those bonds, but the fundamental question is what's going to happen if we do and what's going to happen if we don't and I for one and I don't think there's anybody in the room who disagrees with me. I'm against any kind of a of a subsidy to the Vikings of the twins. I think that's a mistake. It'd be dumb. It's not the it's not the role of government, but we're politicians and we know that we do what our constituents want us to And while I'll show you polls saying that people say we should build a stadium and the opponents will show you polls saying that people think we shouldn't build you a stadium don't think there's any question just about everybody agrees that the people of Minnesota do not think the Vikings will leave even if we don't build a stadium. They think we'll be able to hang on to him somehow because there are team after all. And in overwhelming numbers, they think the Vikings are good for the Twin Cities and they're good for the state. They used to answer that. They thought the Twins were good for the Twin Cities and good for the state. I don't know what recent news stories have done about that. If we lose Rod Carew and say things to the Waseca Lions Club that always affects politics, but but the fact is that professional sports and that includes baseball team for the next 30 years of football team for the next three years Hope hockey team other things. I add to the economics of the Twin Cities here in the an intangible things to the quality of life here. Why is it that when were supposed to have such an unfavorable business climate? Why is it we have such a so much lower unemployment rate? Why do we have so many corporate headquarters here? Well, you know you all think about what it is about Minnesota that makes you want to live here instead of someplace warm and they're a lot of things going for us and and professional sports are no small part of them. The thing that I think about and the thing that worries me when I think about a state subsidy to professional sports in this area is what things were like in the late 50s and early 60s when we didn't have any major league sports teams what happened when we couldn't hang on to the Lakers and what happened? We were trying to attract the Twins and if you want to see public subsidies for sports and money wasted and I like to call your attention to Midway State and it sits vacant and in st. Paul that's a that's a memorial to a team to a City without teams trying to attract teams are also called your attention the difference between the contract the twins have with Metropolitan stadium and the contract the Vikings have it Metropolitan Stadium a City of Minneapolis, which as you know has not exactly been Blood Brothers with Bloomington on this issue built that Stadium out of Bloomington because we thought the metropolitan area desperately needed professional teams, and we were willing to stick out our necks for the tuna property taxes and to what in the in dollars in those days was actually more than we're kind of playing spending now. well, there's I talked to some Stadium opponents in my office a couple weeks ago and I told him that I you know, I thought that if we didn't build a stadium the Vikings would leave and then politics especially before us to build a stadium and we'd wind up building an almost entirely with public funds. We wouldn't get the tough contract. They were talking about negotiating now and they said well, they didn't think the Vikings would leave and they'd be very disappointed if they did leave and I asked them if they'd be very disappointed if General Mills decided the taxes were bad around here and they should leave and they said they'd be disappointed with that too. I know that this is the tax committee and that you understand that businesses while they may like it here. There's a limit to how much financially they're willing to put up with in order to stay here. And that's why you hear debate in this committee on business taxes and business climate. Nobody comes in here and tells you what business taxes ought to be what some absolute level ought to be what they tell you is. Well our taxes are higher than zones those taxes and if we don't offer people the same deal they get elsewhere, they'll go elsewhere. Well, that's the situation we're faced with in the stadium. There's a hundred thousand seat Coliseum see him. At least ninety thousand seats sitting vacant in the city of Los Angeles now, they don't have so far as I know four feet of snow on the ground and city of Los Angeles. My understanding is rains half-dozen times out there and that's about all the whether they get Phoenix is Big growing metropolitan area a lot of money down there. No professional teams. Memphis same sort of situation. I'm not saying the Vikings are blackmailing us. I just understand competition and if somebody offers them a much better deal than we're willing to offer them their business and they'll take it. In fact, I think if they weren't so attached to the Twin Cities, they probably have left before this because I'm sure they've had better offers than we've been able to come up with so far. They've hung around to see what we'll do. I don't think there's any question in this committee or in the legislature that if we repeal the liquor tax the backup tax, we will not be able to build the stadium the some sort of backup to X is needed to provide a guarantee on those Bonds in addition a small subsidies needed first to get it going. There's some difference of opinion as to what that He's going to be and unfortunately both mr. Brecker the chairman the stadium commission and mr. Pahst executive director are out of town today on business dealing with the stadium. It's my understanding has something to do with with arrangements for the bond sales, but they were not able to be here and it seemed to me that the tax committee would want that sort of testimony and I apologize to the committee for their for their absence. It's my understanding that they did that they did know about this engagement well in advance and I would remind the committee that the hearing was rescheduled twice it was We were originally supposed to be here on last Wednesday and then it will switch to Friday. And then Monday I understand the committee's the committee's time constraints and so on but I would think that the committee would like to hear from them before the hearing. I also tried to get hold of a mr. Lawrence Greenberg today. Well works for the accounting firm of Twin Cities firm of Cooper's and librarian, which is was hired by the Metropolitan Council to analyze the independently analyzed the figures that Stadium commission came up with for projected revenues and expenses. And they well you've got a car I have passed out of copy of this article. It says Stadium financing rated sound. I'm sure you would like to hear him answer your questions about whether the predictions are conservative or liberal or not. But let me say that the real point is not whether paragraph 62 a is right or whether the bond interest rate is a quarter percent too high or too. Low. Those things will be worked out as contracts are negotiated. And as as bonds are sold what matters is if we build the stadium now, we will be able to tie the Twins and the Vikings and kicks and everyone else who can contribute to revenues to tough contracts to require them to pick up most or all depending on how the revenue projections workout and how the future goes of the cost of the stadium. If we don't do it, we will wind up five years from now missing a team or two, maybe all three of them. With a public pressure telling us we're no longer a Major League City and we gotta lure new team and we're going to start building more expensive Stadium because of inflation and we're going to wind up signing sweetheart contracts with teams to get them to come here. That's the kind of public subsidy. We have to avoid the rest of this issue is is in my opinion. Mainly I wash the commission has done. I think a very good job at comparing the various sites. They made their decision in a reasonable way that I think all Sites have to agree is reasonably fair and their figures are backed up. Now, there's no guarantee. This game is going to be built there still no contracts yet. If there's not a contract with the twins and a contract with the Vikings there will be no stadium in addition there another number of other Provisions. There's limitations on the interest rates that could be charged for the bonds of this whole bunch of restrictions that we put in this bill in this committee two years ago and I have no doubt that those restrictions will be lived up to and that everybody will do their job. It seems to me that what the legislature should say is the commission has done its job the way we told it to it's lived up to the restrictions. This may not be exactly what everybody wants. But this is the best hope to get out of an admittedly unfortunate situation at the least cost to the taxpayers. Its chairman. I'd be delighted to answer questions if there are some from the committee committee members but I should say that I've stayed tried to stay away from the commission process for the last two years. I carried the bill and from time to time. I'd get a call from a friend in Minneapolis saying call a commission up and tell him what your legislative intent was and I haven't done that and I figured you'd want me not to we gave him the bill in writing and and told him to live with it and I'm satisfied that they've lived up to it. I'll try to answer your questions. Otherwise, I have about ten Witnesses here who would like to say a few words from mr. Chairman Senator Keith point out you fed. The commission has done its job. Let me point out a quote from the Minneapolis Star full of money, but Charles waiting or wedding wrote the article it had to do. The book I passed out which pages that well, I don't know if it's yours as I passed that on. I'm sorry variance from one of the proponents. Let me give you a quote. This is supposed to be a direct quote from representative Al Pat and the dfl Sartell. Who was the author of the 1977 bill. And he argued that the tax should be permanent. Even if there weren't Levy if it weren't Levitt that bars would go on collecting it and then he goes on to say that he was convinced that the stadium would need a liquor tax support for two to five years. Then he says, in fact, let me read this and I'll repeat it. In fact, he says he was surprised at the preliminary indications from the Metropolitan Sports commission that a covered I'm going to repeat it a covered multi-purpose. Stadium would need no liquor tax help at all. Can you explain that quote? Mr. Chairman, we always thought that a covered Stadium would require some subsidy. There's some confusion over the kind of subsidy that's required. They're there to questions involved first. The the liquor taxes you may know required in the bill is required to be levied until they build up a certain Reserve fund. I think it's three times the annual principal and interest then the tax is then then we stopped living the tax and you don't love it again unless the the fund Reserve fund Falls below twice the annual principal and interest at that time the Metropolitan Council May Levy the tax again, if they think it's necessary to build up that fun. It's our expectation that they would not that the subsidy that's required to handle. The stadium will be taken care of by the initial Reserve fund and will not be necessary to Levy the tax again when the bill was originally introduced in 1977. There was no blinking on and off of the tax tax was just a straight two percent liquor tax in definitely the You on and off of the tax was a partial compromise with the liquor dealers who found the tax owners and didn't like it was an attempt to give them an inch. I'm not suggesting that they agreed to support the bill at that time, but that was an attempt to compromise to make the tax less ownerís at the time. The bill was originally introduced the tax when it was not being used to support the stadium. Whatever revenues were left over would have been used to support met van Parks bonding but that provision is now much less significant since you're only talking about what's left over after the after the stadium reserves are covered the as I understand the the figures of the commission and I'm not an expert on this and I really wish either mr. Brecker, mr. Prosser. Mr. Greenberg, we're here to today because they could do a much better job of it. But as I understand it the commission Revenue projections, which are conservative say that the that the revenues will not overtake expenses until 1986 or 1987, which means that there will be some subsidy required until 1987. Now many people think that that means that the tax will have to be levied until 1987 but that is not in fact the case as the commission Revenue projections are the tax will be levied until nineteen some. Well there's difference of opinion on when it should be 81 or 82 or 83 83 at the latest attacks will be will be turned off and there will be enough money from then on to cover the projected Revenue deficit for the first six or so years without levying the tax again now how long you have to Levy it whether it's 81 82 or 83 depends to a certain extent on how much not on how much the stadium actually cost but on the expenses that the commission has the taxes you may know is to pay for the cost of the Commission in the in the process including the the environmental impact statements and so on so that so the trickiest took to build the revenue fund up to the point where it will cover cover more than three times the annual principal and interest and then it's our expectation that they would never have to turn the tax on again, but mr. Poston, mr. Green. Cannot testify to that if they get a chance to come in under teacher, mr. Strom. Mr. Chairman, Senator Keith. Did I understand you to say that it should go on until 1984? No, mr. Chairman. You didn't I said, I thought it would be turned off in some time from 1981 to 1983. Depending on what the Metropolitan Council decided to do about the size of the reserve fund. Well done. Isn't that projected tax collection about four and a half million dollars over those years a year per year. That's great. Pardon. That's I think so. Yeah, that sounds right. Well, even if it was on for five years wouldn't it give you roughly twenty-five Thirty million dollars? No, mr. Chairman. I would expect it to be on for about three or four years. And then what would happen and would be turned off and that would be it. Yep. Where's the money now? Where's the money now? That's cool. Any idea. I presume it's deposited in Bank someplace drawing and drawing interest. I'm almost positive that mr. Director doesn't carried with him. Well, mr. Chairman. I knew that too, but I don't know where the money is. Let me suggest mr. Chairman. I'd like to say that. Mr. Brett could had ample time. He knew this meeting was scheduled for today. He knew that this is an important meeting. There's no reason for him to be out of town. Mr. Chen. He's chairman of the commission. Yes. Mr. Chairman. Mr. Brecker is a part-time chairman as it happens. He's on commission business right now working on the bond sales. That was an engagement that he had made before this meeting was scheduled. It's my understanding that that's what he's doing. I haven't talked to him but this meeting was originally scheduled for last Wednesday, and then I was changed to Friday and then it was changed to Monday and it's my understanding that when he was told that the meeting was Monday that he told the staff of this committee that he would not be able to attend on this day because of an engagement that he couldn't get out. I haven't talked to him myself and I wouldn't want to speak for him. But that's mine. Just one more question the other day and testimony you came in with a tape and said that you were correctly and we maintain that we were correct. It's so turned out that we were both correct. The only difference was I'll tell you how this you quoted from a night or two year old tape. And our quotes came from a transcript of the last tax meeting when the bill was voted out and there is a big difference between a two year old tape. There were a lot of changes and the transcript that we have in quoted on that was heard in tax committee. Mr. Chairman. I wasn't going to bring this up again. But those that read the transcript of that task committee meeting can see Senator Frederick's quote in there where he specifically points out the place in the bill, which exactly contradicts what hits it was said in that meeting that we said. Now what I played for you was a quote of my statement. It was not a change tape. It was exactly the quote that and you heard it in my voice from that meeting in government operations committee. Now, it's suggested that that bill changed from government operations committee to tax it did it changed in the way it dealt with Bloomington and what it did about an open Stadium, but the same language was always in there about a dome stadium. Mr. Chairman, Senator Keith, you've made the statement today Senator that if there's no liquor tax, there's going to be no Stadium as I understand the thrust of this bill it repeals the liquor tax and nothing more it leaves everything else in the bill intact as I read. I believe it must be this vaults as part of the bill you part of the law which you passed out the J part relating to anticipated Revenue what that paragraph says is that if the facility is not doomed that then the commission must find that the revenues the anticipated revenues from the facility without the liquor tax. Not including the proceeds of the liquor tax are adequate to cover the cost of the stadium. So as I read the impact of this bill what we're saying is that if we pass this bill that the liquor tax is repealed and that those who want to get it covered stadium in Minnesota must go elsewhere to find the money to do that, but we're not precluding either an uncovered Stadium nor are we precluding a covered Stadium if those interested in that want to seek that type of financing in the private sector or what have you so isn't it? In fact true that the repeal of the liquor tax does not preclude the stadium and does not necessarily preclude a covered Stadium. Mr. Chairman. That was a certainly was an over simplification where I said the repeal of liquor tax. It seemed to me that the issue we're facing here is will there be a domed stadium or not and that's the political issue that is involved. Now the mechanics of what happens depending on what the tax committee does are more complex than that. Sleep if you come up with an alternative source of Revenue to back up those bonds the commission can proceed just as if nothing had happened, but without any source of backup revenue bonds that are provided there are revenue bonds. It's my understanding that the interest rates on those bonds make any sort of a on revenue bonds without a backup tax would make a would make a dome stadium on you couldn't do it under the restrictions in the bill. And so they would decide not to do that. They could conceivably build a nun dome stadium, but the trouble with a nun dome stadium is you're talking about 30-year bonds. And so you're talking about getting teams like the Twins and the Vikings and everybody else to sign contracts to play in the year 2011 in the Twin Cities in an uncovered stadium and the commission thinks that while you might well technically you might be able to proceed doing that you could never get the contract signed in as a result. You couldn't get an uncovered Stadium built either. What are they dressed Germans hundred real Dietrich st. Paul what the twins in the Vikings might do senator. Isn't it in fact true that private interests in City of Minneapolis have indicated that they will purchase a substantial portion of the bonds that are being offered by the stadium commission. Mr. Chairman, that would be nice. But I've stopped believing in Santa Claus long time ago the Minneapolis business Community, which is the who the private interests. I presume you're referring to has got themselves a fairly substantially expanded on this already and their donations of of land through all the various compliment contributions that are required in order to in order to meet the requirements of the bill. I don't remember the exact amount but it's a multi-million dollar amount and I would be very surprised to find that many apples and delighted to find that Minneapolis business Community could do that. I think it'd be great. But I think it's sort of whistling at the Minneapolis business Community is going It's something like 14 million dollars worth of land. Mr. Chairman. And then excuse me, sir. Mr. Chairman, that is true some it's something like I wouldn't want to testify to the exact numbers or anything like that. But I do have mr. Cole's from the Minneapolis Chamber of Commerce here is one of our Witnesses and maybe he could answer your questions better than I could well. Mr. Chairman, Senator Keith. Let me just follow up on that as I see the facility cost of an uncovered Stadium at about 41 million. It seems to me that if the Minneapolis business Community is already contributing 14 million. That's a substantial portion of the cost of the bonds. Now what I heard was I heard that the Cowles Foundation was going to purchase 30 million of the stadium bonds. I was just curious that is correct or not. Mr. Chairman. I'd that would be swell. The trouble is you're right 41 million, but if you reduce the cost of the stadium from 55 to 41, but eliminate the 30 year revenue from Twins and Vikings who the commission doesn't believe will sign the contract. Then you really have a tougher problem with the uncovered Stadium than you do with a covered stadium with the covered Stadium. At least you have substantial revenues from from the users with an uncovered Stadium. You're really just sort of taking a gamble but mr. Collins, I think can he probably can testify better about what the calls foundation of the Cowles Foundation is going to do than I can. Mr. Chairman, then urgency. I am with the general question how Carl Johnson from Sleepy Eye to get firm bid on it before or after the issue The Rock? I understand. Mr. Chairman before they issued bonds. You have to get firm bid. Yeah, there are a whole series of requirements in the law. And I think I didn't bother to bring a copy of the statute but their whole series of requirements that the at the Metropolitan Council has to be sure that the that the commission has met before they can give approval to the bond sale. Although planning for all these things goes on at the same time. They when they actually finally happen they'll happen in a certain order and among the requirements are firm contracts bonded contracts with the contractor to build the stadium for the agreed upon price that falls within the restrictions in the bill and contracts with the twins and the Vikings to provide rant and and there are there are there is there's language in there about how much the projected revenues have to have to constitute of the projected expenses and the language for a covered Stadium. I think is something like all the capital and and interest payments. Substantial proportion of the operating costs of substantial portion of the operating with Jimmy Keefe of I thought that Senator baucus said that he asked if they had the plans gone so they would be able to let bids I thought you said that they did not know what I don't understand this. Are there some plans drawn. We don't have mr. Chairman. I really can't speak for the commission. I don't understand what where they are in their process. I do know that they can't that the Metropolitan Council cannot approve the bonds until the until the contracts are signed and I presume the contractor won't sign the contract unless you sure the money will be there to pay him. But they're that contingency. I understand can be worked out. Mr. Davis, what's to keep the console Jack Davis in Minneapolis, even though those eleven requirements or whatever are not said mr. Chairman as I understand the language of the law. They are not they are not to set the law says they shall not sell the bonds unless the conditions are met and it would seem to me that if they if they said the conditions were met and voted to to sell the bonds that somebody could sue them for for violating the law. But Senator ladies who are Professor not me and then would they be personally liable if in fact their calculations have been ruined? Mr. Chairman I Senator Davis is the law professor. I would assume that you can if I were going to try to stop my try to get an injunction to stop the sale of the bonds. If I thought they'd been they were being sold in violation of the law. And here is why. Saturday's, I think that there might be some liability insurance coverage. They're only expecting fast expanding deals of insurance right now is like to know what company so we could short sell your view then that that the determination by the stadium are by the metro console would have to be supported by some sort of evidence and it would be in fact subject to judicial review of some sort. Mr. Chairman, I don't teach law and I that's I figured that if we say in the law they have to do it this way. They probably will and let the lawyers take care of but it's I would I don't know its energy Davies is the law professor. What would you like me to say senator Davis? Say the right there Davies Mr. Burnett. You don't know - okay. I don't know. Mr. Neither. Do I because in order to escape various provisions? We sort of set it up as a local governmental unit and I'm not exactly sure whether that's subject to the same kinds of reviews as would be an administrative agency. Interesting lawsuit potential here that are Keith you haven't last a year or two German. I have a whole bunch of witnesses. Would you like to begin? Yes, Flew To Mars president may have City Council. And the list of witnesses that took Sarah Keefe will call and so beginning. This is Lou Demars president of any other city council before. Mr. Mars get started. I want to put something on the record far as what Are you expected that liability insurance that might be covering the Metro concert would only cover the losses of the bond purchasers not but not the poor citizens. That's probably correct. Less common, but who everybody holds over we lame ducks are always available. Mr. Mars, thank you. It's my understanding that the members of the Senate asked committee have asked why the elected officials of the City of Minneapolis. You have supported a stadium in Downtown Minneapolis. Although we cannot speak for all the members of the city council. I believe we can tell you the general reasons why we believe the stadium is important to our city the metro area and to the state the present and immediate past City councils and mayor's of Minneapolis have worked hard to have a covered multi-purpose Stadium built in Industries where we are anxious to provide jobs for Minneapolis and area residents a study prepared by Real Estate research Corporation in April 1978 showed that such a stadium would create nearly 2,000 jobs after the stadium it was open and that the number of jobs will increase to 2800. These jobs would be in department stores restaurants hotels the stadium and so forth. We are also interested in expanding the tax base in Minneapolis. That means lower. Milray. In taxes for Minneapolis residents as well as a more equal mill rate with our Suburban neighbors the same study referred to above indicator indicates that there will be an accumulative increase of 81 million in construction in Minneapolis because the stadium between 1981 and 1990. That means Minneapolis will collect 4.5 million a year more in property taxes in 1990 using the 1979 Mill rates Minneapolis wants to be able to host major conventions today. There is no facility which houses more than 18,000 people from here to Chicago with the construction of a 65,000 seat Stadium Minneapolis would be able to compete for 39 major conventions, which would not be able to come to the metropolitan area today. Taurus and Convention dollars are input to the Minneapolis economy and to that of the entire metro area are city council believes that it's important to use our parking lots more fully Stadium events will generally be held when Downtown parking lots are empty on evenings and on weekends we could get double duty out of those parking lots were also interested in our downtown neighborhoods. Minneapolis has spent many millions of dollars in redeveloping Cedar Riverside and the city is working closely in renewal of Elliot Park. We plan to build a new town in Cedar Riverside and to preserve the Elliot Park neighborhood. We are working with the neighborhoods to make sure the stadium is a good neighbor. The Minneapolis Council has completed a traffic study with the cooperation of the Elliot Park residents that study showed how many apples can change the flow of traffic so that there will be only minor problems to the residents of that area the same applies to littering parking and security problems. We presently are doing a similar study in the Cedar Riverside Neighborhood in cooperation with the local. Good organizations Minneapolis wants to keep us down town alive and vital to keep Minneapolis keep Minneapolis people and the whole area of the state people living shopping working downtown. We have put in malls skyways expensive and inexpensive housing. We have encourage businesses to construct their offices in downtown. It's all working Minneapolis is an exciting City to visit early of the stadium helps keep that Vitality. We believe the stadium is also important to the metro area first the downtown stadium is about one mile from the heart of the metro area is easy to get to be is easy to get to being located on i-35w just off of I-94. There are forty six Lanes of traffic leading into and out of Minneapolis, the Real Estate research Corporation study showed that it will take the average Viking ticket holder 99 minutes to get to and from the Minneapolis Stadium if the facility we're located in Bloomington, it would take a hundred and Six minutes the state planning agencies environmental statement showed that it would take two hours for 65,000 number crowd to get their cars out of the Bloomington stadium and only one hour for the same crowd to move their cars out of downtown Minneapolis the to our exit time could be cut in Bloomington. If over 5 million of Highway improvements were made stated the environmental impact statement mass transit in the metro area is highly subsidized today. Anyway, we can encourage more people to use mass transit the greater chance. We have to lower the subsidy mass transit leads to the downtown Stadium senior citizens and young people who don't drive will be able to attend events. Finally the down't the downtown stadium is helpful to all residents of the state. The stadium is located next to the University's West Bank campus. The Gophers will be able to play at the facility and that will assist the University's Athletic program. In addition. The state taxpayers will not be asked to pay the identity the added cost remodel or build a new Memorial Stadium and a few Present University of Minnesota stadium is over 50 years old the Real Estate research Corporation showed that the state of Minnesota will accumulate over twenty seven point nine million of sales and income taxes over the next nine years because of new cover downtown Stadium the new sales and income will come from the added businesses which will occur in downtown because of the stadium. This is money that would not have come to the state. If a downtown Stadium had not been built. Finally. We believe that all people in the state should have the opportunity to enter the stadium if the sports commission have built-in open facility, it would primarily be a sports facility, but the commission wanted to make the stadium available to most minnesotans and so they put a roof on the building now I can be used for livestock shows political conventions rodeos religious rallies heavy equipment shows concerts and so forth the stadium can now serve the needs of many people. It is our hope that we have explained why we support the stadium. We hope after you review the procedures followed by the stadium. Mission you'll realize the stadium is sound Revenue expense figures are sound the stadium is guaranteed to cost less than 55 million to build and that the Safeguard procedures established in the laws have been followed now. I'd like to cover a few points were raised by some of the previous speakers and I don't mean to argue with Senator Keefe, but I think that the fact of the matter is as it relates to a domed or a non-covered facility is that the backup tax is necessary to market the bonds and if you repeal the backup tax, even though the numbers show that maybe you could support an open Stadium. The marketability of the bonds is probably not there. Someone made a mention that there would have there would be a students would be losing their jobs. I think that would be very clear for anyone to understand that if a stadium were built close to University that with baseball events and the Viking events potential for other events that there will be certainly be many more jobs in there. Doesn't lie is in the Memorial Stadium at the University of Minnesota mentioned something about our sewer. We have an old old sewer down below the stadium site, which we are relocating and the cost of $488,000. This will be paid for through our normal sewer maintenance fund over a period of three years. There's some mention about streets one point five five million of Street movement is going to occur in the city is guaranteed that we will take care of this. This will be paid for out of each year. The City of Minneapolis receives around 4 million and State Highway aid funds obviously, we will be dedicating a portion of those funds for several years to pay for that. We have $100,000 worth of water lines that need to be moved. We spend currently around 450,000 dollars each year of moving water lines and that is paid for obviously by the use of the of the water. That adds up to a total of approximately 2.2 million dollars. The other thing that was brought up with some remark about the Development Corporation that has the right to develop the land around the stadium. What they have is the right of first refusal for one year after a proposal is come comes forward for a site near the stadium. I think the other thing I'd like to close with is that the members of the Senate to think about members of this committee is that we're competing here not with just with ourselves, but we're competing with other cities in the United States other cities in the United States have shown their willingness to build stadiums and to build them they have used tax exempt bonds. That is the only way that stadiums are being built today. And if we want to compete on a national basis to have professional football and professional baseball, if you believe that's a good idea for the metropolitan area, then you have to have some form of public financing mechanism that will bring the interest rates down low enough so that You can afford to have the team's if you don't want to have the team's then you don't have to do that fact, is that wherever you turn in this nation? That's the way the stadiums are being built. And that's where you're competing with. We are competing with Memphis. We are competing with New Orleans. We are competing with Los Angeles and the teams that we have now are money-making operations. And and all they're going to do is they're going to look at the best deal of that's been given to them if they want to move their going to move and that's the way it is. Unless someone comes up with a national law that nationalizes sports that they can't do that. Then we have the Dilemma that we have facing us. I don't see any other answer at this point other than to keep the stadium backup tax in effect. You don't want to say to him. You don't want those sports teams here and get rid of the tax and get rid of the stadium. I'll be happy to answer any questions if I can and you move the Mars the president getting up the city council testifying before the Senate tax Committee in opposition to legislation to repeal the 2% Stadium Liquor tax question from the committee of the number of 400. I have number here $488,000 lose our native that will be spread on a property tax. No, how do you normally raise the cost of Duties to is that a pass-through tax also know that's the through the sewer maintenance charge which is a maintenance charge of sewers that we collect through the users of the sewerage system. So that You're going to pass through the cost of the sewer and the cost of the water lines by somehow changing your fee structure. That's correct. Okay, both the items are quite small in terms of total budget of either one of those divisions of the city government have a minimal effect on that. The sewer eventually would have would have to have had been replaced so that the moving in that sewer is not nearly as important as the changing of the water mains. Are there any other questions? Senator Byrd Hagen German. Mr. Mars. One of my constituents is in the medical field. Ask a question that he had seen. Oh someplace but did not find the answer and that is when you have a congested amount of traffic coming into this concentrated area. Is it Anyway disrupt the service where ambulances in such might need to go to some of the major facilities the hospitals that are near there and what have you and I do Drive Minneapolis, but I'm not that familiar with traffic patterns and such. Is that been a concern or have you heard of it or what might be done to eliminate us traffic studies that were done address that specific question is did the environmental impact statement and I'm not an expert in that field. So I don't really know all I know is that that question was raised and that's sufficient answers were given that it can be worked out. I'd like to whoever has that land. Mr. Chairman. I like to get a hold of the government could provide it for me and I like to respond to my constituent. It did raise a question the medical field Senator John Byrne Hangin from Hutchinson. Mr. Chairman, mr. Mars, so you just got done telling us that the teams will go where they get the best deal on and Trump is this deal the best deal that they can get probably not but I don't I don't know but I suspect it's not I suspect those cities that do not have teams would give him a better deal than we're offering them at the stadium Commission of the offer. Well, we heard this before it's a another I think that everybody in favor. The stadium makes the same pitch at the teams are going to lead but I just like to make known that the state of Minnesota does not guarantee. There is no anything in the Constitution that we have to have a big league team and the other thing that you mentioned that all these other events. I would like to ask you. I haven't gotten my book here the stadium commission, but how much do all these other events generates outside of the kicks and the twins and the Vikings? How much does it revenue? Does it generate? Well, I'm I'm here to respond to why the City of Minneapolis supports the stadium. We have not done the study the stadium commission has done those studies and has those answers and I suspect mr. Rucker. Mr. Posh could answer that question more directly at least what numbers are looking at in terms of projections. Oh, mr. Chairman, I don't have looked at those figures. Mr. Mars. I looked at those figures of all these other events and the amount of Revenue. They generate doesn't hardly cover the expenses. So that's that's not a big deal the all the other events that you mentioned if the revenue isn't generated by the Twins and by the Vikings and by the kicks, there isn't any Senator, I think In fairness to mr. Tomorrow's I think I think we should get those answers to your questions from that person or those persons who made those projections. It's my impression. They projected one other Revenue figures represent one other kind of event. They're doing a course of the year and I suppose it's a rock concert. Thank God we could have the rack on it. Okay there any other questions of mr. Tomorrow? Thank you very much. I was going to comment on what Senator Strom and said about, you know, relative to revenues genes to Koski Minneapolis have our own projections here and the ones the commission developed are actually quite different than the ones that the Senate development in their studies some three or four years ago. But the first Stadium events, obviously the rentals will be related to costs but in addition there's a 10% admission fee on all events at this at this new stadium. And so there obviously is going to be a net revenue impact of additional income it when you do have additional events set at the stadium and we're speculating as to what kind of events they might be. But but there's a real history throughout the United States and what these stadiums can do and do here the legislature can convene over there out of you excited I have either was one point. I forgot that was mentioned by Senator - Brock and that had to do with the amount of guarantee of Fucking Revenue that the City of Minneapolis has come forward with we originally guaranteed $75,000 a year from our parking meter fund $125,000 from the ramp that now exists Government Center ramp. We last Friday approved an amendment to the contract which would guarantee an additional hundred and sixty thousand dollars in the event that we built a parking ramp on the Block between 4th and 5th and between 7th and 8th be the block were Charlie's Cafe is on half of that block and the we also are contemplating a ramp that would be built on 5th and Washington. So if those two ramps are built, we will guarantee that additional money if they're not built we won't guarantee any additional length. It's jamming the center's handsome. Yes, sir. Well, as you are familiar with can you understand how it would be possible to let bids this project in a month or two or three? It's not like a huge project which would require quite a bit of a gnawing time for my understanding is that business will not be letting that there will be a negotiated price that that's what's being negotiated this point and that's all hinges upon what's in the bill which again, I'm not an expert on the bill, but as I understand it and that our own small role in working with the state of commission is that they've been very tough on requiring us to have contracts for all the things that are in the bill so that they have those contracts in hand before the mark of the bonds that they don't have the contracts will be no bond sold. Is that simple? I guess that's China. That's why I can't understand how they can draw up contracts and nobody. I didn't see something in here about the certain number of seats. We're going to have back then but usually to make a lot of contacts you have to spell out. What is all going to be made out of all that sort of thing. That's weird is all being done to my knowledge. I'm going to get another member of the commission or responsible you get mr. Possum. Mr. Bruck you here? I'm sure they can answer all those questions in my new detail. Well that in order in the more and more I listened to mr. Paws and mr. Butler. Mr. Paws. Mr. Butler. Mr. Brecker. Mr. Paws, you know that seems to me like something like the missing link or missing whatever the hell it is. Obviously to get the answers that you're asking for when I have to have one of those two gentlemen here one I understand is is down in Santa Anaheim, California on vacation. And the other one is in flying someplace between here and Denver. I don't know how I go about last week knows too much. One of them will be here so that we can get some quick answers to the questions that you're raising. I think it's unfair to have other Witnesses trying to answer a question is particularly when it's under my impression at the only man that knows anything about these Revenue projections are mr. Paws because they're his personal projections made but somewhere and perhaps he shared some of that with mr. Bruckner. And so Cinderella Miss Mars. I didn't quite catch what you meant by your parking guarantees that $75,000. We have 75,000 that we've guaranteed to give to the same commission based on what we feel are accurate projections from our parking meter fun other words. The parking meters in downtown will be used on those event days when they're not normally use now, so we'll have additional revenue and so we've guaranteed of that additional Revenue some 75-thousand dollars, even if there is no Revenue increase we still going to owe em, $75,000. That's the nature of the contract. The other hundred and twenty-five thousand that we've guaranteed comes from the ramp that presently exists called the government center ramps between fourth and fifth and between Sixth and fifth right across from Minneapolis. Armory understand is right. Then you're saying stadium is so valuable to the city that you're going to give them a check for $200,000 every year because you're going to have to increase parking Revenue know what will have we no longer term that we will have additional money coming into the city that we wouldn't have without the same. So we're going to give part of that back based on the dollar 50 a car, but we're guaranteed up to a certain amount of money. You see you've guaranteed to means that you possibly could give him more of them. That's that's a potential. Yes. That's a minimum. That will give Senator Sean mr. Chairman. Mr. Mars. Did I hear you? Say that the city was the City of Minneapolis was going to construct two more ramps We're considering two more ramps. That's correct centering two more ramps that's primary for what date completion on what date? Well, the one ramp is would be scheduled for start of construction in this year. And the other ramp is a up for grabs when that would be what's been talked about since 1971 and it could be 81 or to be never or could be next year. We don't know so then mr. Chairman. Mr. Mars that will generate additional revenue for the stadium that will generate additional Revenue beyond the $200,000. Isn't this mr. Chairman this another subsidy going to Stadium? No, it's not a subsidy. If you think about it. It's no more subsidy than the parking lot out of Bloomington collecting parking fees from people who Park their and then using that to help pay off the debt of the stadium. That's what they've been doing for years out there. This is doing the same thing the people coming to park obviously gonna have to park somewhere. They're going to go put the parking and ramps that the city happens to own. We don't think that we ought to just take and have that as a windfall profit. We're willing to share part of the profits of having those people parked on there with the stadium commission and help pay off the debt and if there was no Stadium, we wouldn't have any more money anyway, so it's really just kind of a wash so mr. Chairman, then you wouldn't build the ramps unless the stadium comes no Lord. Ram's have nothing to do with the stadium whether we build them or not. The other question I had you said that you generate this much income from parking meters. Would you charge for instance? The parking meters are now free, or is it on a Saturday evening? And Monday would you charge which will be a charge now? Certainly to be a charge to park on the streets. Absolutely. But only on Stadium games on both ends. There's a charge during all week long now except for Sunday if there's going to be a lot of people downtown we're going to charge for parking. My question is what there be a charge on Sunday certainly, but there is enough. That's correct. Mr. Chairman. Mr. Chairman. What's the policy would parking near the auditorium? Near the Minneapolis on near the auditorium. We charged 24 hours a day 7 days a week see around the auditorium. Once again, Senator Stokowski from Minneapolis what to do. What are the rates that the Orchestra Hall ramp know I'd have to get those figures for you Senator Davies. I don't know is that Insanity experiment? No, that's the that was at the auditorium ramp and I think we've raised that now to 50 cents a day 50 50 grams a day and then the very hand of dollar twenty-five cents on fie fie events in the evening. Thank you for the parking meters are on the Metropolitan Medical Center Hospital that since that's what's left. Are they free in the evening or are they 24? I really I can find out for you. My impression is that they're probably free after six o'clock, but I really don't know I'd like to look in it. So if you don't know if you job to policy of charging like you do around the auditorium every night to visit a patient at Metropolitan Medical Center hospitals for General Hospital. You'll be running into a pee meter I guess. That's correct. The be friends and relatives of sick people who will be y all I've been about all 20 of them that all 20 of the meters that are around the hospital. I suppose you could say at least 20 of them would contribute. Thank you. Mr. Chairman. One more question whether shrub mr. Chairman one more question on the parking meters. I haven't found a parking meter Minneapolis that goes beyond an hour. Would you have three our parking four hours six hours? Yes, we have parking meters. I think that goes up to that go up to 12 hours. So it depends on where you're talking about are these on the street? Sure. We don't put them in the high turnover area and 6 in heaven that he does. He does put them in a tree Senator Strom is from Albany and Central, Minnesota. My name is Allen Robinson. I am a citizen living in st. Paul where I was born as my father before me. I'm a taxpayer and own a home in st. Paul. I also work in the City of Minneapolis. I've come to know these two communities as part of a greater metropolitan area. I think the freeway I-94 and the other roads that connect to made things a great deal different when then when I was born many years ago. My father early on convince me of the necessity of doing things to improve the quality of life of our city and state as part of his appreciation for some of the things that he wasn't able to take for granted as a young man. So years ago, I served as the vice chairman of the st. Paul committee for school and Civic Improvement. I served for some years as a member of the school superintendents commission. I served as a director of the greater st. Paul Chamber of Commerce and more recently for our state. I have served as a member under four governors of the economic development commission Advisory Group in 1973. I served as the president of the Minnesota Association of Commerce and Industry and this year and I assure you I do not presume to speak for this organization. I am the President of the Minnesota Alumni Association I believe that much will be accomplished for our two communities and for the University Minnesota and for the quality of life, if we're able to provide a competitive year-round domed Stadium, I believe it's going to do a lot for the tax base of our two cities both st. Paul and Minneapolis and it's going to bring a lot more people back within the city limits. I've stayed here all my life. I haven't moved out to Suburbia and I intend to stay here just as my children and I think that there is a lot that we can do to guarantee quality of life. All things are not the taxes that I is a businessman or is one who will have an estate will pay I stay in Minnesota for a lot more reasons in the fact that it probably isn't number one so far as the tax climate, but I think all of us agree it's a wonderful place to live and I think that this dome stadium and what it will Do for the Twin Cities the university community will make it even better. I'd like to say that. We'll be able to give to the athletes at the University of Minnesota a greater opportunity for year-round participation in major sports. Obviously, you can gather I'm not a jock but we have here today Paul gill who has the athletic director can tell his own story as he would wish as a businessperson several years ago. I asked Senator George Pillsbury of the same party caucus as Bob Ash Beck how he felt about the feasibility and the numbers in the validity. He said he felt very strongly that they were good figures in support of the dome stadium and sent me a memorandum. I submit that Senator Ash back has that in his file in at the committee wishes and I didn't come prepared here with any prepared remarks. I'll be happy to send that to the chairman. I'd also like to make another comment about a name that has come forward today the name of Larry Greenberg who was a senior partner in the accounting firm of Cooper Xin Li Briand. I don't know whether Coopers and a librarian is the largest or the second largest certified public accounting firm in the United States, but they're one of the two and I would say that 3M relies on them for the certification of their several billions of dollars of figures and that I when I was acting as the chairman of a building committee for st. Mary's Hospital for a medical facility soffit and was able to rely on the numbers that Larry Greenberg of Cooper's and librarian was able to present. I have no interest in them. They are not the one of the firm's that does ours only they do the work of a number of clients and I would certainly hope that you'll be able to hear his presentation as I am sure that it will be a worthwhile one. I've heard some rivers of what I would call crocodile tears shed for the taxpayers in the Twin Cities and I've heard that we've got a tax that 2% that might well I'll not shouldn't be used. I would hope that this committee and its considerations would be certain to determine that if such attacks were repealed and I certainly hope it isn't because it would be destructive of this project. But if it were that these same people and their interests that they represent would commit to you that they would refund these percentages to their customers for whom they're pleading. I'd like to say another thing that I happen to know about the University of Minnesota Stadium. It's a very expensive outdated and outmoded facility. My father took me out there in the year 1927 when it was built in a lot of things have changed. It's probably got the best sight lines for a running track in the United States and probably the very poorest football sight lines. But again, I defer to people in the athletic establishment, but why do I mention the fact that it's outdated? I'll say to a yes, they do get money in there for concessions, but the money that they're taking in for concessions. I'm informed by people at the University are less than the amount of monies required to keep up that stadium and a workable condition. I just like to say this in passing. I think that the attitude of the business community of Minneapolis is a commendable one and it's certainly not been a it's not certainly been a Narrow Gauge one. I live in st. Paul where I am hoping that their attitude in support of the People Mover and their support of the move of the Amtrak station to the Midway of st. Paul and which they were very Noble I assure you I would hope that the reciprocity would go two ways because I think by working together in these two cities we can work a lot better than pulling apart and I don't need to point to anything more than that Monument out on Snelling Avenue the Fit near the fairgrounds where it was thought necessary to build a stadium. That's empty. We're talking about a stating that's filled. I think that the legislature is to be commended for the many safeguards that they saw fit to build into this legislation. There is nothing that can be built. Unless all of the economic answers are forthcoming. It will not be what Dan Rutgers says it won't be what? Mr. Paul says, it won't be what mr. Greenberg says, it won't be what I say or anybody else in the legislature. The facts will speak in the cards will read if you're able to get a bid within the framework and if they're able to sell the bonds and if all the conditions proceed and are met you'll have a viable project if any one of these are not met then they can't proceed. I know that there's a not a lawyer but I've often heard that Justice delayed is Justice denied and I would hope if anything that we don't say. Well let's keep talking about this thing in effect Talk of the death. I think it's a wonderful project and I hope that you'll be able to bite the bullet and to know that the state of Minnesota will be the beneficiary of the magnanimity magnanimity of the Minneapolis business Community. I wanna thank you for your consideration. I have two questions asked. Yes and McCutchen. Are you suggesting that there's some kind of arrangement going on between the Minneapolis and st. Paul Business Community? Am I suggesting? No, I just think that the people of both communities have learned to think. I Hope they've learned to think in terms that this is one big ballpark. It's no longer that parochial delimited area that we used to think of it when I was a kid and they used to practically have armed rivalry. We've got a lot of things going together and I think that's a very healthy symptom. There are no compacts. There are no agreements. I just think that some of our people are becoming more mature and far-sighted. That's what I think. It is intelligent self-interest. And one of the questions and if you can't answer that fine, everybody keeps talking about the sale ability of the bonds between six and a half and how much is that amount to the difference whether the bonds sold is 7 and 1/2 of 8 percent. Is that a significant figure? Well, of course the difference in the cost of these bonds is a significant figure. I am in the Venture Capital business and I talk to you because I'm interested in business development and developing this state. It isn't just the Twin Cities but to get back to the nitty-gritty of the cost of these bonds. I will say that from what I know and I will own up to knowing not knowing a lot of things but again, I think that if the stadium commission is unable to sell the bonds within the parameters of their debt servicing there is no project and I guess that again I'll take the same Refuge at the other Witnesses. Did you have All of the protection of what will be will be and if it isn't going to add up to and to you won't get it if it adds up to three and if it adds up to 5 will be the beneficiaries nice answer but I didn't get my question. I can't give you the answer. The answer is in your legislation Senator. Thank you. Are there any other questions? If not, thank you very much. Thank you. The next witness is all he'll live hearings before they send a text committee. We're hearing from opponents legislation to repeal the 2% Stadium Liquor tax. This is Paul Gill and how flooded director at the University of Minnesota Paul Gill director men's Intercollegiate Athletics University of Minnesota. I couldn't help but think a little bit earlier Senator when you said no booing maybe a little bit of cheering encourage people on. I may need some encouragement and it was reminiscent and I'll make it brief of a little thing that happened to me not too long ago. I was in my hometown of Winona, Minnesota. It's an indication that I am a Native Son. And I was speaking at a Legion Baseball gathering at the local Legion Hall a my little son Tommy with me age 10 at the time and he's been with me and many speaking engagements. So he's heard all the stories very hard to impress maybe because I made the effort to get out and Winona to speak on behalf of Legion Baseball as Sport and program have been good to me in the past. I thought I did a decent job at not all that great. Nothing really to write home about and When I completed my speech they gave me a standing ovation. As I was ready to leave I said to my son Tommy I said Tommy how about that? They gave me a standing ovation. I can't believe it. I don't think I was that good. He said you weren't so I don't think I'll necessarily be all that good, but I am going to speak from my heart. I'm going to start off by saying something that is a necessity that I'm here as the Director of men's Intercollegiate Athletics at the University of Minnesota. I'm not representing the Region's Central ministration any other department on our campus? I'm representing men's Intercollegiate Athletics. And specifically Golden Gopher football if you will. If I were to throw out at you some little known facts, I would venture to say even within this committee. There would be some unaware that men's Intercollegiate Athletics ever since its Inception back in the late 1800s has never had one sent the taxpayers dollar spun off to our program. We have remained completely self-supporting men's Intercollegiate Athletics and Compasses and 11 sport program with only three that we put into the revenue-producing category. I think the three are rather obvious to for certain football basketball and in the last couple of years when our hockey teams have been extremely competitive winning a couple of national championships. Putting in a few more fans into an obsolete Williams Arena. We've been able to generate some revenue from hockey. television rights and I share the wealth basis in the Big Ten Rose Bowl receipts that share that might be spun off to the University of Minnesota and other schools who aren't so fortunate perhaps to go to the Rose Bowl but who are recipient under our share the wealth and our Williams Fun fundraising not for frosting on the cake, but for our Pure operating budget to try to keep a total program alive at the University of Minnesota, so the not only the football player the basketball player the hockey player can take a bow or get the big write-up so that a young man if he be in gymnastics or swimming The chance for his place in the sun being at the Big Ten level or the NCAA level are the Olympic level as young man a few years ago. I had that opportunity is name was Craig Lincoln from Hopkins Eisenhower and had an opportunity to go to the Olympics in Munich in 1972 and come back with the bronze medal. I think that's important for me to say those two things number one. I'm not speaking. Necessarily for the University of Minnesota. I'm speaking on behalf of men's Intercollegiate Athletics. That we are completely self-supporting and football is still even when basketballs taking a lot of boughs these days football is still King as far as their income producer. We're in a very competitive market really ladies and gentlemen, I should probably not be here today and hope that Things Fall by the wayside that the University of, Minnesota. By default has a windfall because up until 1961. We were the only show in town and win or lose. We packed in some 57,000 or 65,000 into Memorial Stadium. We were indeed the only show in town. I have people say to me constantly. Wouldn't it be great if we could get back to those days? It's a whole new ballgame. So why am I here? As our president of our Minnesota Alumni Association said dear old Memorial Stadium is just that it's Antiquated not 1927. He may have gone there in 27, but it was erected in 1924. The ghost of Red Grange is still trying to score a touchdown against the Gophers, but that's when it was erected. And it is crumbling and deteriorating fast and they're probably spending thank God for a change not out of my budget out of buildings and maintenance about a hundred thousand dollars a year to keep it from falling apart any further in another fifteen to twenty thousand dollars a year to maintain the grass. Is a couple of years ago we out of necessity had to go from artificial back to natural grass to see what was going to happen on the stadium issue. If we are ever going to catch up and be competitive in my opinion and it's shared by Joe Salem our new head football coach comes from northern Arizona the Big Sky Conference at Flagstaff Arizona where they have a dome if we're ever going to catch up and be competitive with the Michigan's and the Ohio State's indeed with the rest of the country. I think the most single important factor for Golden Gopher football is to be playing in a dome stadium in downtown, Minneapolis. I honestly believe that that will be that intangible factor that will help us because ladies and gentlemen were recruiting at this time of the year and we start off first and foremost trying to get the best. We possibly can student-athletes from our own natural drawing area. That only makes good Common Sense good PR and it's cheaper on the budget. And as Joe Salem said the other day, it's easier to teach the young man from Minnesota the Minnesota Rouser that it is somebody from out of state but it is also a reality of life that if that's not good enough in this competitive Society the fickle fan. We will have to recruit outside our natural drawing area. And I have to say this it's tough when you're trying to impress a 17 year old and an 18 year old from some other part of the country. The only thing he knows about the state of Minnesota is what he's watched on TV and maybe the Vikings in December in a playoff game and you can see the breath and you see the snowmobile outfits. And if he's a blue-chip athlete as the expression goes and he's had an opportunity to go almost anywhere in the country and it's 35 below wind chill factor here. Unless you get in the recruiting Wars. You've almost got a losing cause on your hands. It's difficult. And I believe that recruiting is the name of the game. You do have to have good material to win and when you win you do put fans in the stands. And by putting fans in the stands, we generate Revenue in are completely self-supporting situation and we have an opportunity. Therefore to stay self-supporting stay off the tax rolls. Take care of our total program concept. I wouldn't have to be here or anywhere for anyone if it was strictly football basketball hockey, but I do not want to see gymnastics or wrestling or golf or tennis or swimming. Track the great baseball program at Dixie bird buildup relegated to intramurals. We may be on the verge of that. Anyway, five years down the road. Women's Intercollegiate Athletics is here now. And Governor cui said the other day. The women's Intercollegiate Athletic budget, which is funded by the legislature may not see an increase in the next biennium. I can see some people in central ministration looking over my budget right now the lowest budget in the Big Ten and I say very proudly next to Michigan. We've got the second best all-around competitive program. The stadium is important. And as I said earlier, I could stay away from here and hope that we won something by default, but I don't feel that way. I mentioned earlier. I'm from Minnesota. I'm from Winona. I tried to get the side out for a while and baseball not to successfully but I did play for the twins for a little bit and I did work for the Vikings and professional sports are a way of life. They're here. Don't tell me it didn't mean something the last few years when the Vikings were going to a Super Bowl adventure to see the emotion of the day would have carried this entire issue of they'd won a Super Bowl here is a certain amount of hypocrisy among all of us Yours Truly included winning does carry the day many times but I think it is important to keep the Vikings here. I'll take care of my own knitting even though it's competition. I think it's important to have the Minnesota Twins here the North Stars in the kicks and quite frankly. I'm sorry. The Fighting Saints did make it will take care of our own in hockey got a good st. Paul man. Heading us up. Although he's dropped a couple of better talk to him. He said he's going to win it all. So that's why I'm here because it's important. To our quality of life and I know what it means the golden go for athletics per se not just a football program, but it has to start with the football program and I might conclude with this under little known facts because I'm very proud of it. When I went to the University of Minnesota seven years ago. I found that we were wearing the black hat for some reason or other it looked like we might be going into the hole into a deficit. And I had Marsh rhyme and my predecessor do a study. Did the University of Minnesota Golden Gophers do something for the state other than? Six national championships in football 16 Big Ten titles owned outright or shared in football Dixie Birds great record in baseball. Did we do anything in terms of bricks and mortars? Yes indeed after a year my Shrine reported back to me that 9 million dollars in men's athletic department reserves 9 million in nineteen Thirty and forty type dollars and fifty type dollars before the inflationary spiral went into facilities on the University campus and the University of Minnesota never went to the legislature for any help for recreational needs intramural needs women's Athletics. Our men's Athletics. In other words Williams Arena basketball hockey was paid for by our Reserves. A hundred thousand dollars went into the Union. The tennis courts on Fourth Avenue were paid for by men's Intercollegiate Athletics land acquisition, which the beermen complex now sits were intramurals and women's Athletics all enjoying it the golf course. May I add long course in short paid for by our reserves are gone. We're hanging on by the skin of our teeth trying to make ends meet. So the University of Minnesota and Paul Gill has never asked for anything either but I would like to see this because we have a chance than to succeed. Oh my God, answer any questions. It's wrong to Gail. How many of the Big Ten teams play Thunderdome not in a dome none to my knowledge. So although in Detroit, they're playing some basketball University of Michigan, Michigan State exam. Mr. Mr. Gil. What you're seeing is be easier to recruit if you had a dome and so you're going to come up with a winner. I very definitely feel it. That's what I said at the onset. So in that particular case, let me just say then they all come up with a dome because Minnesota is the leader then and so they're going to go after and they got to have a dome. So the same may be true of Wisconsin, Illinois all the teams in the Big Ten. Well, let me put it this way. I'm not worried about them as far as what they do. I'm worried about the future of the University of Minnesota. There are some things that we do have going against us some fans don't like to hear it because it sounds like the proverbial Kapa we have four million people in our state and they have 11 million in Michigan and 12 million in Ohio. They've got some natural built-in advantages. They don't need a dog there whether although the last couple of winters would belie that their weather is year in and year out more advantageous in a recruiting time of the year than the Twin Cities. Mr. Chairman. I just like to point out that I was always over the opinion that football was a false sport that you quit when the weather gets cold. Like they do the colleges universities quit the middle of November if they have a game be on the 20th of November. It's very upset excitedly, but now we have with Pros going through November through December to January now, we're close to the 1st of February. I believe there's a game tonight now. Well, I make no bones about it Senator. It's the pros whether it be the Twins and Calvin is talked about his need and inclement weather to have the dome stadium and I think it's agreed that the Minnesota Vikings. I don't know how they've done is well as they've done with the inferior facilities that had to work with not only on game day but practice and so forth that Midway state When they've had to move things back and forth, I think I tip my hat to Bud Grant and his staff every day. They will get more out of it. What it will mean to us is that those three or four or five young people that can mean the difference in any program? Whether it's mine or Ohio State's in winning to put fans in the stands because they're not going to be there. If your mediocre I've found that out. It gets to be after a while when you're five and six or six and five even seven and four and I'm hoping for that little Edge to be able to catch up with a Michigan's in the Ohio State's and the rest of the country and put more importantly some fans in the stands so I can keep a total program alive. I could have the easiest job in town if it were strictly for football basketball and hockey and I could get by with 35,000 and football 15 or 12 thousand in basketball and for 5,000 in hockey, but the rest I would have to say and I think that's terrible your Minor Sports. We don't care go Club level. I don't mean that at all because I remember the days of the national championship teams. I saw Bill Bevin play without a helmet the whole game and today. I don't know where he'd go. Maybe they wouldn't allow him to play. I saw a tenor large agreed Visine all these people and you couldn't buy a ticket to the Gopher game. If you'd paid three times the price the scalpers were out there asking everybody come along you want to sell your ticket you want to sell you too. You couldn't get in there. Those were the days that wasn't domed Albany Senator headstrong comfy was Paul Gill to University wide open recruiting and Coast to Coast with the coming of the jet age and so forth. Any other questions? Mr. Chairman Paul said it's been said that an alternative that has not been looked at would be to remodel and old Memorial Stadium. Are you saying that that's not feasible? There was a wonderful feasibility study back in 1972 a joint venture between educational Laboratories and the University of Minnesota matching funds. I believe education Laboratories with part of the Ford Foundation at the conclusion of that study, which had to do with taking existing facility that was sitting idle basically nine months a year. Could you make it usable 365 days a year for the University of Minnesota for its total recreational intramural Athletic program and if the professionals wanted to come in not built for baseball, but for football on a Sunday could that be worked out the Region's accepted the report as a very wonderful study but on their priority list, Coming to the legislature with their needs as far as the academic Community as far as buildings and that's your name Prejudice typical when it comes to Athletics. We were down here and I think if you were to talk with the Regents of the University of Minnesota Central ministration, they would say yes Paul is correct. It would it was a nice study. But as far as our immediate needs we don't foresee anything like that happening or even being requested for several years if maybe never So that's why I'm here saying that I support the domed stadium in Downtown Minneapolis. I'm not optimistic about that sort of thing for the University. Although I'd be less than honest if I didn't say back in 1972 and 73, I was all for that mr. Chair. You don't think there's enough if the dome stadium is built down Tommy after you don't feel that the universe will be back in a few years from now wanting a dome over there too. I don't believe that at all. I think the the thing that the University of matter of fact they may have it in the request now, maybe they do not I'm not in on all of those procedures but it would be for some kind of a all-purpose Recreational Sports building that would include a track and and where they could play soccer and where they might have a new swimming pool to replace the one that was built in 34 on a WPA project can cook all that kind of thing, but not as far as a dome stadium per se That's about German poet with the introduction to functions of Rhode Island project back in 71 72 and did that include a dome? Yes. It included a dome the ultimate scheme which had to do with lowering the sight lines and double decking it. So it would be back up to 65,000 from the present 57,000 doming it and encircling it in front of cook Hall by knocking out sections 1 and 2 and 29 and 30. They ultimate scheme at that time was 22 million dollars. Ultimate because he had other schemes as a senator for undaunted and not lowering the sightlines and so 45. There being no other questions. Thank you. Thank you Paul Gill testify before the Senate Ethics Committee Paul Gill former All-American at the University of Minnesota. And he also has indicated played in professional baseball for a while Senator Stokowski from Minneapolis making a point now. next Witnesses David row do you rule the president of the Minnesota AFL-CIO chairman and members of the committee. My name is Dave Row and I'm representing the Minnesota AFL-CIO. I don't think that I need to take any time this afternoon in rehashing the arguments that have been used over the last several months particularly in the last couple of years and outlining what ought to be done with respect to a domed stadium. The Minnesota AFL-CIO has been on record for a domed stadium. We did not pick a site that was left to the legislature left to the commission that has now been agreed to Seems to me what we ought to be looking at this afternoon, at least from the point of view of the AFL-CIO. Is whether the state legislature has an agreement that they want to live up to and I understand the the procedures with respect to to legislation. You know the legislature giveth and the legislature taketh away, you know, and God bless the the legislature. I think that's fine. We've said here over the last two years attempting to give the arguments and what ought we be doing. I remember in Middle 1950s when we were lobbying the City of Minneapolis. To have them participate and sell General obligation bonds for the stadium that's presently out in Bloomington. the City of Minneapolis concurred with those arguments Reached an agreement with the taxpayer and keep in mind that particular time. We were talking about General obligation bonds not revenue bonds and I would assume things have have changed and because of the circumstances it's the wisdom of the state legislature that we ought to be looking at revenue bonds and not General obligation bonds. And I think we also know that there's a difference between the rate between General obligation bonds and also revenue bonds. And we've heard those arguments. Parking don't have to shouldn't have to review that someone mentioned. Mr. Gil at the dirty. Mr. Biermann's time sixty sixty-five thousand people for brought into Memorial Stadium. No Highway 35 No 494. No, none of these particular none of these particular highways. An agreement an agreement was reached. An agreement was was requested by the building Tradesman. Are they construction workers with respect to a no-strike agreement? Minneapolis Building Trades Council concurred in that and made an agreement At the present time you stand that the Vikings are looking at a provision in the law. Says that 90 the 90% provision with respect to two television. It would be my my thoughts and my feelings that the Vikings better get with it. They better concur in the agreement as laid out by the Minnesota Legislature. And signed an agreement with the sports commission with that provision. I'm not so sure at this particular time and it's that important that they haven't reached an agreement with the with the twins haven't reached an agreement possibly with some of those other users of the stadium. I think that takes time. talking about the about subsidizing I also know that there's a difference between some people look at a stadium and others may look at other public facilities, but I'm reading the last issue of the labor World labor paper in Duluth where the central body backs a continuation of city tax on meal and beverages in the city of Duluth. So they can continue to subsidize Spirit Mountain the depot the arena Auditorium and the Duluth tourist and Convention Bureau. Am I led to believe that there's a possibility if there's a change now in the agreement that the state legislature has made with respect to the to the stadium. But I can make a call this afternoon and tell our friends up in Duluth that could very well be that the subsidy that has been enacted by the state legislature and keep in mind that this special taxes dude is due to expire the summer unless the Minnesota Legislature permits the extension. I'm concerned. I'm concerned. Mr. Chairman and members of the committee without belaboring this its contracts are important to us in the labor movement. We've made them and had to live up to him agreements have made them and had to live up to him over the years. We've come before this body and made agreements some good some bad. I'm sure regardless of that. We stayed there I would hope mr. Chairman that this committee would take no action at this afternoon wait until the representatives from the sports commission. Mr. Butcher. Those people who are representing the bonding portion of the of the Metropolitan Council. To give you an opportunity of their expertise and their testimony before action is taken. This is a pretty important to us. The all economic arguments that we used in the 50s and bringing big league baseball and football as a business into the state of Minnesota are just as valid today as they were in those days and I would hope that we would look at it very carefully and make a decision. That would be in all of our best interests. Give us the girl any questions. Thank you, Dave room. There's a Minnesota AFL-CIO and next we'll be hearing from John Cowles of the Minneapolis Star and Tribune company. Mr. Chairman, my name is John Cowles Junior. Normally chairman of the Minneapolis Star Tribune company, but for the last 18 months, I think I've spent at least as much if not more time as chairman of the stadium site task force greater Minneapolis Chamber of Commerce. and let me say that that task force is a rather tough task force both recruit and to get involved in this particular Stadium project because include among a number of rather hard-headed skeptical people who had to be convinced by things like the environmental impact statement prepared by the state planning agency or Real Estate research report and getting acquainted seeing over a period of months the work of the stadium commission itself before members of my task force began to Be convinced that locating a covered multi-purpose facility in Downtown. Minneapolis was indeed the best alternative for the metropolitan area. the site in question in Industry square is a 25 Acre Site lying within a 245 acre renewal area called industry Square renewal area. And the industry Square renewal area lies essentially occupies that portion of Minneapolis between the University of Minnesota's West Bank campus and downtown. It's an area of Rob's best characterized by. Railroad tracks that aren't much used anymore and warehouses that aren't much used anymore. And for a number of years the Minneapolis Housing and Redevelopment authorities been trying to redevelop the area and has had little or no success. Now as you well know the site the law requires that the site be provided free to the Metropolitan sports facilities commission, unless it were a site in Bloomington. and without understanding a number of us began to study the subject quite intently after the legislature in the spring of 77 past the enabling Act when we entered the began our study the common assumption was that site would cost about 10 million dollars. In fact, as you well know the offer that we made as part of the Minneapolis proposal to the Metropolitan sports facilities Commission in mid-november totaled 14 and a half million dollars for the site at least as the private sectors private sectors portion of providing that 25 Acre Site to the stadium commission out of the 14 and a half million bucks. Foreman in dollars was direct charitable contribution and ten and a half million dollars represented investment in a new limited dividend development company to be called industry Square development company. many people have wondered why did we use a mixture of charitable contributions and a development company and the answer is twofold first of all Most companies many companies in Minneapolis, as you know are quite generous or quite enlightened in their charitable contributions policies and a number number of them are already out or close to the five percent limit of pre-tax earnings, which they can give every year under the IRS code to charity or non-profit Public Service Enterprises. And we felt that we would have little chance of success. If we ask the entire Stadium burden of the the in effect the entire cost of the site be handled as a charitable contribution. That's why only a portion of it is being paid for by charitable contributions. The other reason for using a development company mechanism and you realize I think that the development company will give will use most of its capital nine and a half million dollars in affected by the helped by the site and turn the site over to the stadium commission leaving only 1 million dollars approximately for working capital. Second reason for using a development company is that then we had created a mechanism for the further Redevelopment of these railroad yards and warehouses and little underutilized 220 Acres lying between Downtown Minneapolis and the university and any further Redevelopment or development of that area that we could stimulate or encourage or make possible some provides more tax base for the entire metro area and more jobs. We put a six and a half percent return limit on the return from this development company and we chose six and a half percent because it was high enough. It seemed to us at least potentially and you realize there's nothing guaranteed about this return as highly speculative, but six and a half percent seemed high enough to be creditable with the accountants so that it was indeed a bona fide investment and yet low enough to be clearly a public service rate of return not a competitive market rate of return for ones ones. Our contract with the Housing and Redevelopment Authority which in essence is other than working capital will be is the only asset of the development company is a 15-year contract. But first of all, it applies only to Parcels that the HRA already owns or has on its acquisition list, which are relatively few in number. And secondly as to those parcels and those alone development company gets a what I call a twelve-months head start or I think Lou to Mars called it a 12 months right of first refusal with any third party who may wish to come in and and utilize a Housing and Redevelopment parcel. So while it is a 15 year agreement at any given time during that 15 years the Head Start so to speak or write a first refusal runs for only 12 months and applies only to HRA partners. I'm often asked why do companies in Minneapolis? Why have they contributed or invested? So substantially in such a project is stadium and my answer is that while everybody has a slightly different mix of objectives. I think most everybody would include in their objectives one a desire to contribute to the economic or stimulate economic health and prosperity of the metro area and secondly to contribute to the quality of life in this metro area. This is important. Two local companies because both their employees and our customers are here. And it's important to National companies. I would mention Honeywell, for example, because it while it has very few sales here in this part of the country. It has a great many employees and it is continually in the process of recruiting. He people from elsewhere in the country to come here and work and of holding those key people here. So the quality of life is very important competitively Both for locally essentially local companies such as mine and National companies such as Honeywell. The stadium project the kind of investment or contribution that Minneapolis companies essentially Minneapolis companies have made in the project is not all that unusual. If you look at the record, I'll be very brief, but I think some of these figures may interest you. If you go back to the early 60s. Essentially Minneapolis people put up the money contributed the money to build the Guthrie Theater. It was about 3 million dollars. Minneapolis and st. Paul people raise the money twelve million dollar endowment fund for the Minneapolis orchestra that was in the mid-60s essentially Minneapolis people put up five million bucks to build the Walker Art Center New Walker Art Center in the late 60s. eight million dollars to build a new Orchestra Hall in Downtown Minneapolis in the early 70s so far about 33 million out of a total of objective of 38 and a half million has been raised to rebuild and expand the Minneapolis Institute of Arts a new children's theater and a greatly expanded and improved Minneapolis College of Art and Design. early 70s a new YWCA in Downtown Minneapolis was built completed recently and the Y is raised almost all of the 6.4 million is needed for that and most of it from people in Minneapolis. Augsburg College has raised Foreman in of the 4.8 million of its current capital campaign Dunwoody industrial Institute is raised three and a half of its 6.1 million Abbott Northwestern Hospital 4.3 out of the seven man. It's needing for its plant expansion. The Guthrie Theater is raised three and a half million of the seven million dollars million dollars. It's after 4:00 endowment and up in Center for the Arts the old Masonic temple building on Hennepin Avenue. Has so far raised 3.9 of the four and a half million. It's seeking Junior Achievement 2.1 of the 2.3 million. It's after United Theological Seminary one and a half million of the five minutes after Walker Art Center's has raised 5.3 million of a six million dollar endowment. The YMCA is just beginning of 29 or 30 million dollar Capital funds campaign. So the kind of contributions are invested. This is a hearing before the Senate acts Canal gun legislation repeals 2% state of your tax. If the committee comes back for a vote during this session during all things considered will be back for live coverage of that. If you'd be interested in purchasing a tape cassette of the coverage this afternoon, you may order one by calling 221 1500 in Minneapolis. And st. Paul or eight hundred six, five two nine seven zero zero in other parts of Minnesota the technical director for this broadcast. Is Linda Murray and with John murli, this is Bob Potter speaking. You're tuned a Minnesota Public Radio a listener-supported service 5 (02:29:36) o'clock. As we had before and I know that when you people get to be 60, 70 80 you watch football in the state of Minnesota. Like I have baseball I used to be on top of the roof and the old Kenwood Armory at the University of Minnesota watching when I was a kid. We still want things like that in the state of Minnesota for seniors wanted and thanks very much. any questions Final witness today is Bruno I had Jolla How do you pronounce that? Ask Doug? Oh, that's right. Mr. Chairman members of the committee. My name is Bruno angel on I reside at 38:53 26th Avenue, South, Minneapolis. I am the first vice president and former president of the Minnesota senior Federation. I am not and I repeat not representing the Minnesota's or Metropolitan senior Federation contrary to the reports in the newspapers in the media. No individual is authorized to speak for or against the proposed Stadium or methods of financing. We have such a large variety of people in the Federation from every Walk of Life and political and cultural background. The endorsement is impossible. I'm speaking as a senior citizen and believe a new enclosed stadium is a necessity the legislature the location and availability of Transportation are important factors to consider. Removing a tax at the bars does not guarantee that the current tax bill will be removed from the prices charged to the tavern. Taryn Gore, I do not condone that the taxpayers dollars be used to bail out the stadium. The cost of the moving the utility lines should not be used as a COS item resulting in consumer be paying higher utility rates. The rates are too darn High nine utilities for the average person. I don't just be for seniors, but for all the poor handicapped and the seniors. They just can't afford this kind of this kind of increase, but I do hope you consider very seriously, but the don't stadium and the possibilities lot of work for the people that need it and it's not the it's not the highly skilled people that be working there after stadium is built. It's going to be that little folk down there the gal that wants to help supplement. Their annual is their weekly income. It's going to be the young handicap that will be getting the benefits are there stadium, and I know they needed. Thank you. any questions no question seems to me that before weekend Senator Keith launched a list before we get to finally bring this to a conclusion. We have to have either mr. Bruckner or mr. Paz respond to some of the questions that the committee raised. It's my impression that mr. Paws is an Anaheim California on a vacation and will not be available. It's also my impression that mr. Brett GE is in town but there's no guarantee that he'll show on Wednesday. At least the staff could not give us that commitment. We will meet Wednesday at 3 o'clock and at that time. Mr. Bruckner is in town or somebody else in that commission wishes to make a comment or be here so that we can ask him questions on that financial statement. Mr. Chairman. Yes, mr. Chairman, and I haven't asked I haven't been able to talk to mr. Brecker about this meeting. And I also I have been able to ask him personally whether he whether he could come to this or not, but when I talked to him twice. Before in the past about talking to legislators. He has told me specifically that his position is that he doesn't go out and Lobby for the stadium that he thinks it is his job to do the work that's required the legislation and he's neither for nor against the stadium. But whenever asked he will come and explain what the commission has done and answer any questions would seem to me that that's the circumstances under which the committee might want to hear from him. May I also suggest that this is a Lawrence Greenberg that's discussed in the in the article in the Sunday at st. Paul Pioneer Press about to stay in financing this apparently done an independent audit of the stadium figures might also be invited to yeah, it's my impression that there was a summary report put out by that man and (02:34:54) Gary what's happened now is that chairman Bill McCutchen? The recent attacks committee has indicated that the committee will adjourn until this kind of Wednesday. Mr. Bryant when it'll have a chance to question. Mr. Brecker and mr. Paws of the Metropolitan sports facilities commission about some of the specific Revenue projections and other financial data that the committee members need before they can make an intelligent vote on this matter apparently. Mr. Oh Bret Grammer Pasar out of town at this point not available for the hearing today Senator John Chenoweth. The chief sponsor of the repeal bill is at this moment at the podium addressing the committee members and let's go on and listen to that briefly placed on the agenda. They were aware of it. Suddenly. We find out that we are one story that Rutger has to be somewhere to deal with bonds. We hear another story that someone else is on vacation. And maybe they won't be here on Wednesday. I have heard about the old technique of the stall job. And I'm afraid that I just have to say that I think this committee is getting the stall job from the stadium supporters. And it's a good reason why they're giving you the stall job. They are trying to buy time. They are deliberately stalling an attempt to be able to have the Metropolitan console proceed with the criteria of the law approved those matters get them out of the way to clear the bond sale. I don't know what the legal implications are that I read that statute the Metropolitan console could vote as German said as early as February 1 when is February 1 That's Thursday of this week. I don't know what the legal implications are, but it's possible for them to vote February 1 as early as that and improve the authorization for the bond sale that happens. Does that then mean? That this committee would be deprived of taking any further action regarding the stadium tax and his removal without the provisions. That would say that you can't do anything about it after that. I don't know. I don't know the answer to that but I'm very curious as if anyone can give us an answer as to what this delay means. I think this committee has a right to know what the meaning of this delay is and what impact it will have on the ability of this legislature to act. furthermore What mr. Poss or mr. Brett Kirk who tell us you members have already received in terms of their reports that they made base their decisions on I don't think that mr. Brecker can tell you anything really new or different the facts are available. If we dig into them some of the facts are that this committee was told that the stadium tax was a basic backup tax that it was impossible for the private sector to sell bonds without having some kind of public backup tax to make those bonds saleable. Number one number two to reduce the interest rates. We bought that story we were also told that the projections would be that this facility would be self-supporting and would be only if substantial costs were involved that it would not be we would not have a tax levy we were told things like the concessions will be dedicated to the commission for the purposes of paying off the stadium. But the fact is that the stadium funds that are derived from the concession sales. Don't all go to the commission that there is a backup or I should say a kickback provision of a quarter of those funds going back to the Twins and the Vikings subsidize their new higher rents in a dome stadium. There was also a provision that said that the people were to be guaranteed that franchises would be available to this area and supposedly that agreement has been made. It's a phony agreement. It does not meet this letter or the intent of the law does not guarantee us franchises in spite of that. They've approved that and they're moving on. They've made other projections about revenues projections like the kicks playing which have been brought up here $700,000 gentlemen. It would be nice if we could get some straight honest answers because the issue before us isn't whether or not we are opposed to improving facilities for the Vikings in the twins. I haven't heard anyone stand here and say they're against improved sports facilities the legislature agreed we acted on that the issue is whether the taxpayers. That's right, whether the taxpayers should subsidize the teams in this Venture and whether or not it's a fair share on the part of the teams that they are paying less than 10% of the cost of this new video. If this is a sound program as speakers have indicated here if Coopers and librum who I understand where Nixon's accountants when he got into his tax structure if they all think this is a sound program the business community of Minneapolis things. Sound program then why don't they stand behind it? Why do the taxpayers have to be the goats? Because frankly that's what's going to happen. The taxpayers are going to end up holding the empty bag in this bill. Now we can delay. I frankly am disappointed to hear that request being made today. It's your judgment as to what you want to do about it. I think the facts of spoken for themselves. I think it is a disservice. I got say worse what I think it is those men are not here today. But hey, I come back to the inescapable conclusion that they are buying time so that they can sell bonds and build the stadium regardless of what you think is individuals or regardless of what the public thinks. I think this is the wrong way to start a new stadium. It will bring about bad will on the part of the public and certainly will bring about continued public lack of confidence and the process of their government by which these decisions are made and I would hope that we would not delay this action. Mr. Brecker. Mr. Paws have anything new to add this bill will have to lie over while it's on the calendar. There will be ample opportunity and the committee of the whole to debate it will be opportunities for amendments to be made to be a layover again before final vote. There is adequate time for whatever information they have I think. Brad Cooper and mr. Paws have many people they can pass it information onto I for one more than happy to relay any information that they have and I don't think that the Minnesota Senate should be delayed any further because someone is vacationing in Anaheim, California or someone is out trying to sell the bonds. When if the testimony is correct. We don't even have an architectural drawing for which contractors to make bids for I ask you does it make much sense for someone not to be here today explaining how they got to where they are and not down in Florida talking to some Bond salesman if that's where he is. I have no further comments. I think I sum up not only my feelings but I think the feelings of the people how they feel dissipating a boat this afternoon on the bill to repeal the 2% liquor (02:43:20) tax. And we are here for the purpose of answering some of the questions that are raised. Everybody has been using the financial statement that has been the basis for the pro and con argument. So it's I think it's appropriate that we have mr. Butkin here so that we can get him on tape and that he could share with us all the good news now Senator Dietrich (02:43:59) Senator Davies in (02:44:00) Minneapolis. He says I don't have the answer to that you'd have to ask well Senator and I think that's a fair question. It seems to me that we should act on it Wednesday, but I don't same time want to be in the position of having the Senate Ethics Committee not listen to mr. Bradford because we're all quoting him. The opponents and the proponents both and he's not here. He may have a totally different story to tell US senator and certainly we should have that on tape so that it would set those issues to rest. That's German Saturday jury for back. Uh, mr. Chairman, I do I can let me ask you this. Mr. Chairman that can the committee activeness at this time if they feel they have sufficient information to do so it was that the appropriate time perhaps we should decide if we do feel we have special for hey Senator, certainly you can do you can make whatever emotion you want. Sometimes the chair doesn't recognize but bonus German, I guess I'd like to say a few things about why I think the committee ought to have (02:45:08) this is Senator 92 expressing applied. (02:45:20) And I've heard testimony on this plan for I think throughout that entire period of time and I've also do not recall an issue which is so galvanized public opposition to any project during this the six years. I've served in the legislature. There may be those are the served longer who recall projects that have galvanized more opposition, but I don't recall opposition which is more crystallized more hardly defined and more organized by people who are not organized and mr. Chairman. I think that the legislature has a duty to act in this matter and it appears to me that the grave danger here is that the legislature will not act but that our actions will be co-opted by delay and I think that that mr. Chairman would constitute a reflection of bond. The entire legislative process in Minnesota, it would be unimportant to me that this committees actions that the majority of this body would be superseded in co-opted by delaying tactics on an issue which is so galvanized public opposition. Mr. Chairman. I think it'd be a reflection also on the majority caucus in this body. I think this legislature has heard enough of this issue. I think we can act and I would hope that whoever's intending to make the motion on this issue would make that motion because I think we've I don't like to disagree with the chairman. I know that chairman likes to act with all the facts before you but we're not really acting on whether mr. Drucker is done his job. We're acting here on whether on some more basic issues in that I believe I think that we should act and I think we don't it's going to reflect badly on our legislative process. Dietrich I very much appreciate your impassioned plea to the position that I hold. I have not supported this issue. Since it first came in the legislature nonetheless. I think that as the chair of the tax committee. I've got a responsibility to see that as you indicated. All the evidence is on the tape and before us prior to coming to the session this afternoon, I did some checking to look at the time frame and to see what would be the implications of not acting today and so far as I can tell the Metropolitan Council will not have the issue before it be till Thursday of this week February 1st. It will then take a series of plan steps as I end up from the understand it from bonds counsel that the process cannot be any faster than the March 16th as I recall the bonds will be in sale at in New York because there are certain series of steps that take place. And so I understand what you're saying, but I don't think that we need to panic that we can have. Mr. Bruckner here on Wednesday that he will be in town that understand that he may even in fact be in the capital on Wednesday on the other side of that coin. I don't know how we get. Mr. Paws here. I've also been told that mr. Paws is the one that made those projections. But weighing all of it. It just seems to me that. When all of the arguments are in and all the proponents and opponents have settled away the table indicate very very for all of us to see that we've had a fair hearing and that the evidence is that our decision was based on the other German. I guess I'll yield to it is Senator Channel with Bill. I guess I'll yield to his desires whatever they may be regard. Mr. Chairman. If I could raise a procedural Point Senator Martin Jansen their hands members of the committee should be no note that the full Senate is adjourned until 10:00 o'clock on Thursday. And so that if we take action on Wednesday, it will be referred to the full Senate and under our rules. We can have it there on Thursday morning, which is no quicker than if we take action today. That's (02:49:57) great. This is a live hearing by the Senate Ethics Committee on the poles of the repeal the 2% Stadium Liquor tax will be returning to All Things Considered shortly, I think. one alternative is due to the lack of the testimony of mr. Possum. Mr. Drucker that does not prohibit the the committee from acting there could be a motion that the bill be referred to the floor of the Senate without recommendation. So that if there is new evidence. That they can bring that has not been brought. The opportunity will then be on the floor to present that the process will not be delayed. The other alternative I suppose is merely to delay until Wednesday. I don't know how the committee on Bill scheduling all those things work whether or not there's anyone here to guarantee us that if this committee acts at that bill in fact will be on the floor of the Senate on Thursday. I think that's the problem. I don't think anyone can guarantee us that the other problem is there's always the technique of someone wanting to object-- to a committee report. And that then could refer the bill automatically. I'm not saying those things are going to happen. But those things all can happen the point is that there there are reasons for me to be concerned that delay would be harmful or a final decision by the entire (02:51:35) Senate there Keith. Mr. Chairman. We don't have crowds of well-wishers or pom poms. (02:51:43) And I said Senator Steve keighley supporter of the stadium bill (02:51:48) and I am prepared to give Center Channel with my Assurance that I will do absolutely nothing to to delay his bill. And in fact, Senator Coleman has told me that he's that he's determined that this issue should come to a vote on the floor of the Senate one way or the other and I intend to support that too. What I would like though. If it goes to the floor as the members of this committee know we can all talk on the floor. But mr. Brett Brett, your can't mr. Potts can't and if if that happens and we're going to About about a debate that continues either by press release or by lobbying and people's offices and we would prefer to have the facts and to answer the questions that are raised by the members of the tax committee on the record in front of the public and then once that's once that's been accomplished. I'm prepared to cooperate with Senator General with in every way to see that this issue comes to a vote on the on the floor. The other thing I would like to say is that if for any reason mr. Brett GE or mr. Paws or anybody else doesn't show up on Wednesday, I will be the first to urge this committee to take action on the spot. (02:52:55) Once again, I (02:52:58) have (02:53:00) nothing but confidence in his good will my only problem is that I don't think anyone can guarantee anything. (02:53:07) That's one thing the stadium bill has taught me. (02:53:11) I think that there's no reason why this committee cannot have its hearing on Wednesday with mr. Parson. Mr. Brett Kirk here. And if in fact mr. Poston, mr. Brecker and produce any new answers that no one else has been able to produce that evidence can still be heard by the members of this committee still will get the benefit of it and if the bill goes out of here with no recommendation today that evidence can be forwarded to the senate floor. So I think that the goals of sender Keith the chairman and myself could all be accommodated under those circumstances if I were to make a request and I don't make them often it would be that you schedule your hearing you here. Mr. Poston. Mr. Brett Kirk, but you act now send the bill to the floor without recommendation so that we could move this thing on as quickly as possible not to delay it. (02:54:10) The committee will stand adjourned until 3:00 Wednesday nights (02:54:16) and thus a comment I guess on the authority of the senate committee chairman Senator McCutcheon adjourned the meeting and they'll be no vote in the tax committee on this issue until Thursday when the committee members will have a chance to hear from the two folks from the Metropolitan sports facilities commission will be able to answer some of the questions about specific facts and figures Revenue projections estimated attendance and things like that. All of which were the subject of some some serious challenge by Senator Robert Ash back earlier in the afternoon, Senator Ash back indicating that Stadium Revenue projections are unrealistic given a past performance and that the stadium proposal is not a sound one and suggested that the bond sale Simply Be withheld until construction plans were very firm and contracts were actually signed. During the past 15 20 minutes or so. You've been hearing a little bit from Senator John Shannon with the chief author of the bill the majority of the testimony today. John merly was by people who oppose the bill by people who support the downtown dome stadium Chief among them the main author of the Senate bill in the 1977 session Senator Steve Keefe John your impressions of his remarks this afternoon. Well Bob as Senator Keith himself mentioned at the beginning of his testimony. Pardon me which began the testimony for the proponents of the stadium. He has made the same place several times before this and other Senate committees at the play the request for a dome stadium and for the financing and he said in many ways that would be a repeat of it. He said that at one point it was like deja vu is coming back again it to say the same thing. He he seemed to take a very pragmatic view of the entire thing as I think Lou to Mars did. Into the Minneapolis city council that is we are in competition. We meaning Minnesota the Twin Cities and competition with other cities other states around the country for professional sports teams for revenue from those sports teams and spin-offs from events, which I guess at the top would be the World Series with the Super Bowl and that to compete with other cities a city and its people State Legislature. Perhaps has to make well he seemed to characterize a certain sacrifices are certain certain. What would you call it extensions of benefits to these teams and it's his contention that if something is not done right now Senator Keefe that if sports team should leave the state and we ever won sports teams back again, we would have to negotiate with the team's what he referred to as what is widely referred to as a sweetheart contract for the team's give them just about anything. They wanted to get professional sports back in Minnesota is Major point being that the contracts that can be obtained from the twins in the Vikings and so on right now are a lot firmer and a lot harder and contain a lot more guarantees for the taxpayers than would be the case with contracts. That would be negotiated in the future if those teams were to leave that's right. And of course one of the keeps problems right now are is the fact that the contracts have not been signed and they don't have the twins the Vikings the kicks in firm hold right now. So that is that is kind of a perhaps a weak point for the proponents of the stadium that a lot of loose ends have yet to be tied up even though they're preparing to sell the bonds right now because my understanding John that the NFL was supposed to reach some agreement today or make some decision today on whether to guarantee that the franchise would stay in Minnesota. I think that meeting was being held out on the west coast somewhere and yes, and I was with no word on what they might have done. There's a problem with the NFL and the Minneapolis proposed stadium with the blackout ruled. A lot of people who never go to Vikings games concern. Will they see it on television? The Vikings had that 72-hour the NFL weather has that seventy two-hour blackout rule, you have to have all seats sold and the stadium proponents are pushing for the ninety percent rule. There's really probably no way that the sports commission from the state of Minnesota is going to break a president or in any way overrule the NFL National stipulations on blackouts whether they can come up with some type of compromise is still to be seen Luda Mars Minneapolis city council as we mentioned talked about he had no specifics really on the financing and and what may or may not be a result of higher or lower projections on revenues, but he was the city council the city official coming forward and saying we want the stadium they heard from several private citizens who have been Civic leaders in the past who talked about quality. Life pole Guild the director of men's Intercollegiate Athletics at the University of Minnesota. Perhaps one of the best known sports figures of Minnesota cave a rather impassioned plea for building a dome downtown Stadium. The one that has been proposed by the commission now, he had the option of course of going along with one idea, which is in fact in the form of a Senate bill by minority leader Bob Ash back to renovate and cover the Memorial Stadium, which is over 50 years old at the University and under some questioning. Gil said that he he was not in favor of that right now. He was a few years ago right now. He wants the dome stadium in Minneapolis and he went as far as to say that as far as important recruiting is concerned. He thinks that if the Gophers the University of Minnesota Gophers actually could play their games and a domed multimillion-dollar brand new stadium Minneapolis that would help recruiting which I probably would I think that's that's pretty obvious. But also you said it could actually produce winning teams once again, and that's been questioned in the past by several other people who are into this issue John Cowles Junior of the Minneapolis Star Tribune company who is from a stadium task force from the Minneapolis Chamber of Commerce gave a very detailed kind of a very drawn out little talk, which I produced almost no response from the committee about some of the interest rates involved some of some of the financial rewards that have been read by other what he thought in a way we're similar programs in the City of Minneapolis, and he talked a lot about the business community support for the stadium. In fact that they have contributed 14 and a half million dollars and wind are very briefly by saying this Bob. I think it's extremely unusual that unless they were deliberately going for a stall tactic that there were no officials here from the sports Commission. They knew about the meeting I guess is all of us could at least five days ago, even though the meeting was originally scheduled for Friday. And the fact that none of them were here to talk about it. I think several of the Senators here was quite obvious took that as a as a personal affront to them and to the committee and what they're trying to do and I think Senator Chenoweth was pushing the repeal tried to make that point and perhaps got a little bit closer with each word. He said about taking some action today in then of course McCutchen chairman McCutchen wrap the gavel in that was it but I think that's going to hurt them and and the Senate the fact that they did not come to me and John the only final comment that I would have is to repeat what John Bolton the chairman of the Metropolitan Council said before a house committee today that if the liquor tax is repealed that will essentially kill the deal that will make it impossible to sell the 55 million dollars in stadium bonds. The council is trying to get this done by about the middle of March. The interest rate is limited. I lost seven and a half percent. John Bolton said that the council's bond Consultants now say that the market rate is seven point fifteen percent. So they feel that they're under a certain time crunch as far as that interest rate goes in order to get the bond sold. That concludes our live coverage from the Minnesota state senate hearing room the Senate tax committee John merly and Bob Potter reporting the technical director Linda Marie and I will return to All Things Considered. Okay. Thank you very much. Bob (03:02:42) Potter and John murli and we will have more on the stadium issue a bit later in all.

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