The Morning Report
Get the news and information you need to take on the day.
Our reporting relies on your support. Contribute today!
Help us reach our goal of $250,000. The countdown is on!
Michele Kelm-Helgen, chair of the group that runs the new football stadium for the Minnesota Vikings, flew to San Diego recently to deliver the message that U.S. Bank Stadium, unlike so many of its NFL counterparts, already had run up the score on the economic field.
Out of deference to Midwesterners’ penchant for politeness, let’s just say she was being a bit fanciful when claiming to the Downtown San Diego Partnership that the stadium, open just two months, had stimulated downtown Minneapolis development and proven a big civic marketing hit. You might’ve even started to believe the stadium had displaced the public radio show “A Prairie Home Companion” as a cultural icon. After all, being the stadium’s chief rah-rah officer is part of Kelm-Helgen’s job description.
Much harder to understand, however, is why Chargers owner Dean Spanos and team adviser Mark Fabiani invited her to San Diego to join the campaign to support Measure C, the ballot measure that proposes hiking the city’s hotel-room tax to help fund the convadium. An obvious reason is that the Vikings actually built something, while Spanos and Fabiani have set the NFL record for futility in acquiring a new home field. In several critical respects, however, the Vikings went in the exact opposite direction of Spanos to get the job done. Had Spanos followed their template, Measure C might have emerged as something semi-plausible instead of the taxpayer nightmare now on the ballot.
For more than a decade, the Vikings looked at different sites around Minneapolis before finally agreeing to rebuild on the site of the old Metrodome. This held down the expense for land and infrastructure.
Last year, the mayor’s stadium task force offered Spanos essentially the same deal, but he and Fabiani thumbed their noses at it as they lusted for Los Angeles. At least publicly, Spanos has dug in his heels against rebuilding on the Qualcomm Stadium property and has become fixated on a part of downtown with none of the infrastructure needed for football, driving up the cost by hundreds of millions of dollars.
Yet, as Measure C calculates it, the stadium part of the convadium would cost less than the $1.2 billion the new Vikings stadium in Minneapolis cost, despite much less infrastructure. Huh?
The Vikings spent several years working with the Minnesota Legislature, including sitting through numerous public hearings, to craft the final deal signed by the governor in 2012. As we all know, Spanos, Fabiani and the team’s financial adviser, Goldman Sachs, wrote Measure C in private, without asking for input from anyone. Only when backed in a corner by weak poll numbers and the team’s weaker performance on the field did Spanos and Fabiani launch a political Hail Mary – the Sept. 29 letter to Mayor Kevin Faulconer acknowledging some of Measure C’s flaws. Even then, the letter’s validity is dubious.
When it came time to pay for its stadium, Minnesota chiseled two core principles into the stadium bill: the taxpayer exposure would be capped at $498 million and the Vikings would cover any cost overruns, which have plagued stadiums across the country. So when U.S. Bank Stadium’s price tag rose from the $975 million estimate four years ago to a final $1.2 billion, the Vikings owners had a clear legal obligation to write the extra checks.
Measure C, by contrast, fixes Spanos’s liability at $350 million and then opens the path to dump overruns on San Diego taxpayers. The initiative language commits Spanos to covering overruns on the stadium portion only. Not surprisingly, the line between the stadium and everything else will not get drawn until well after the election, since there is no design. We don’t know, for example, if moving the bus yard and a toxic waste cleanup is a stadium expense or an everything-else expense.
The contract dispute with top draft pick Joey Bosa this summer gave us a very public preview of how the overrun issues could play out. With Bosa, the NFL’s longest rookie holdout in nearly a decade, Spanos was unwilling to bend on a payment timetable of a couple million dollars of bonus money, even though the amount was fixed. What do you think will happen when the convadium amounts reach a couple hundred million, as they have in other cities, and Fabiani is involved?
The Sept. 29 letter contained a grunt about fixing the overrun issue, yet Spanos and Fabiani again ignored the Minnesota example.
The official summary of the Minnesota Vikings Stadium Act put it very clearly: “If the Minnesota Vikings agree to manage the construction of the stadium as anticipated, then they will be responsible for any cost overruns.” That’s exactly how it played out.
As long as they were handing out non-binding promises, Spanos and Fabiani could have at least told the mayor in simple terms that the taxpayer exposure would be capped at $1.15 billion and that Spanos would shoulder the overruns. Instead, they contrived this lawyerly gem: “The Chargers agree that the project will not move forward if the costs funded by TOT exceed the amount allocated in the Chargers estimate.”
Think about what happens if major design changes become necessary or big bids come in over budget after construction has started. Will the city walk away from an excavated hole with a partially complete foundation covering several blocks? Or will taxpayers be dragged in deeper and deeper to finish it?
Both the Vikings and Spanos agree that a new stadium generates new business. True, the Vikings will host the obligatory Super Bowl given to cities with new or upgraded stadiums, plus two years of X Games and an NCAA Final Four. But U.S. Bank Stadium lists only five non-football events in the coming year, including a high school soccer tournament, monster trucks and the Minneapolis Holiday Boutique. Between a Vikings game next Jan. 1 and the X Games in July, the calendar is blank. Spanos seems to believe that justifies a tax subsidy of more than $2 billion.
Clarification: A reference to “A Prairie Home Companion” has been clarified to make clear it was not said by Michele Kelm-Helgen.
Correction: An earlier version of this post referred to Goldman Sachs as the Chargers’ lender. The company is the Chargers’ financial adviser.
Tim O’Reiley is a retired newspaper reporter and native San Diegan living in Mission Hills. O’Reiley’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.