Sen. Sandy Pappas, DFL-St. Paul, is one of the most prominent advocates in the Legislature for a property tax exemption on the St. Paul site where a Major League Soccer stadium is planned. The Senate heard the measure Wednesday as part of its omnibus tax bill. (Staff photo: Bill Klotz)
A property tax break for the Major League Soccer stadium planned in St. Paul won approval from the Senate on Wednesday, providing a much-needed boost for the project as the clock ticks down on this legislative session.
The provision is part of a trio of requests tied to the stadium, alongside proposals for a liquor license at the site and a sales tax break on construction materials. The other items were not rolled into tax legislation heard by the full Senate on Wednesday, but will likely surface in floor discussions soon.
A vote on the liquor rule is expected in the House on Thursday. The sales tax exemption is in the works, and a spokesperson for St. Paul Mayor Chris Coleman confirmed Wednesday that stadium advocates are meeting with legislators to make their case.
Though the owners of Minnesota United FC soccer club agreed to pick up the facility’s $150 million-plus construction tab plus ongoing operating expenses, they say they need tax relief to justify their investment.
Bill McGuire, the former CEO of UnitedHealth Group who leads the owners, warned legislators last month that the project could collapse without tax concessions from the Legislature. With less than two weeks left this session, stadium advocates this week revived calls for fast-tracked approvals.
“They’re all crucial to make the deal work,” Sen. Sandy Pappas, DFL-St. Paul, told reporters earlier this week. The senator has been a key supporter of the stadium, slated to rise in her district roughly between Snelling and University avenues and Interstate 94.
Several other sports projects nailed down similar tax breaks in recent years, including the $1.1 billion Minnesota Vikings stadium and the $545 million Minnesota Twins ballpark. Particularly in the House, some lawmakers complaining of “stadium fatigue” have questioned doling out more tax benefits.
But a bipartisan group of lawmakers and other officials, including Coleman, say the soccer stadium offers more upside. The other facilities scored sizable – and controversial — state investments, unlike the privately financed project proposed this time around.
Senators on Wednesday did not debate the property tax provision. The measure also sailed through the Senate Tax Committee on Tuesday.
“What we’re asking for is, give us the baseline that everybody asks for and the ownership group is going to pay for the rest of the stadium,” Coleman said this week.
Proponents tried to cement tax relief last legislative session, but last-minute wrangling over other issues sidelined their campaign.
The stadium would sit on about 10 acres, replacing a former bus maintenance facility that has been off the tax rolls for decades. On 24.5 surrounding acres, St. Paul planners expect the facility to spur massive redevelopment that would exponentially increase the area’s tax base.
New York-based RK Midway owns that surrounding land, and earlier this year outlined a framework for transforming the aging Midway Shopping Center and large parking lots into new housing, offices and retail. The effort would add significant public green space to the long-stagnant stretch.
On the public side, St. Paul officials approved plans to channel $18.4 million from the city’s coffers into stadium-related infrastructure improvements, including upgrades to roadways, sidewalks and nearly a dozen other features nearby.
If lawmakers approve the team owners’ requests, stadium construction will start this summer. The facility is set to open in 2018.
That timetable theoretically leaves a wider window – potentially into next year’s session – to firm up the liquor license piece. But team owners say they want action this session, given that liquor sales at the stadium are part of their cash flow calculus for the facility.
“The team needs certainty,” Coleman said. “They need to know what the playing field is going to look like.”
House proves a tougher sell for stadium tax breaks
McGuire warns soccer stadium in trouble without tax breaks
St. Paul soccer stadium design revealed
St. Paul to cover $18.4M in upgrades near soccer stadium
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