McGuire warns soccer stadium in trouble without tax breaks

The team owner planning to build a $150 million-plus professional soccer stadium in St. Paul’s Midway neighborhood told lawmakers on Thursday that the project could collapse if they don’t approve a property tax exemption on the site.
Bill McGuire, who leads the Minnesota United FC ownership group, talks Thursday during the meeting of the Minnesota Senate Tax Committee as Sen. Sandy Pappas, DFL-St. Paul, looks on. Staff photo: Bill Klotz
Bill McGuire, who leads the Minnesota United FC team ownership group bankrolling the stadium, told the Senate Tax Committee the provision – along with a sales tax break on construction materials – were vital components of the project. Thursday’s hearing marked lawmakers’ first review of the proposal.
“It would be very problematic and a high possibility, if not a probability, that a franchise would be lost without this,” he said, addressing criticism that the wealthy owners could pay more. “What some might say are small dollars are actually meaningful dollars with us. It would be a significant ongoing operating strength.”
Senators voiced strong early support for the measure, whose companion bill in the House has yet to face its first hearing. The Senate committee tweaked the proposed bill, introduced by Sen. Sandy Pappas, DFL-St. Paul, to include a June 30 effective date.
Going forward, lawmakers in both chambers will continue to vet the proposed legislation and could potentially include it in a larger tax bill. Stadium backers tried to finesse similar tax relief last session, but those efforts crumbled amid a flurry of late-session wrangling over other issues.
McGuire has said he doesn’t expect roadblocks, though some lawmakers have complained of “stadium fatigue” after hefty state investments in the $1.1 billion Minnesota Vikings stadium and the Minnesota Twins’ $545 million Target Field.
Pappas said the tax relief measures are “frequently considered standard operating procedures by the Legislature for stadiums and other redevelopment opportunities.”
A pair of St. Paul residents spoke at the hearing, questioning whether the Major League Soccer facility would deliver benefits to the community.
For their part, soccer stadium proponents contrasted their project with others. Echoing the case they’ve made for months, they pointed to its private financing versus the other stadiums that relied on hundreds of millions of public dollars andreceived similar tax breaks to the ones McGuire is seeking.
St. Paul Mayor Chris Coleman also noted that the stadium site, a onetime bus maintenance facility that sits on 10 acres owned by Metropolitan Council, has been off the property tax rolls for 50 years. At the same time, he touted the project’s upside for the area near Snelling and University avenues, north of Interstate 94.
The long-stagnant stretch of University Avenue near the “bus barn” site is a longtime redevelopment priority for St. Paul, but the city has struggled before now to galvanize interest. But that all changed with the prospect of a 20,000-seat Major League Soccer stadium.
Thanks to that project, New York-based RK Midway – the owner of the 24.5 acres that hug the stadium site – plans to transform its aging Midway Shopping Center and parking lots over time into new commercial and residential uses.
The city pledged to invest $18.4 million in public infrastructure, including a contribution to an $8 million environmental cleanup effort.
Calling the stadium “one of the greatest opportunities the city of St. Paul has seen in a long time,” Coleman urged lawmakers to view the project as an economic engine for the city, building upon previous investments in the nearby Green Line light rail transit route and forthcoming bus rapid transit service.
“This is a great area, but absent this soccer facility, I don’t think we’ll see development on this corner for 10 to 20 years,” the mayor said. “It’s a really difficult corner to develop.”
The project has already begun to change the conversation around Midway development.
Multiple companies have expressed interest in setting up shop near the stadium, Coleman said, and RK Midway head Rick Birdoff confirmed in February that  Bloomington-based United Properties—run by the Pohlad family, a stadium backer – wants to build offices close by.
An ambitious development plan for the 34.5 acres at and around the stadium site shows massive office and residential development, plus green space and a new street grid. McGuire first considered a Midway facility three years ago.
“We believe [the stadium] is an architecturally important, aesthetically beautiful facility that fits well into what we believe will be an expanding neighborhood with a lot of activity,” McGuire said Thursday.
He brushed off questions during the hearing over what would happen if Major League Soccer flames out, or if Minnesota United FC didn’t live up to the hype. Team owners’ buy-in, including the stadium costs and a $100 million Major League Soccer franchise fee, signify a huge vote of confidence, McGuire said.
“The first thing that would happen [if the team floundered] is the ownership group would be out $250 million, so we don’t intend for that to actually occur,” he said. “We’re pretty comfortable.”
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