by Neil deMause
At hearings to determine the viability of another massive publicly supported project, Allen and other new-stadium proponents rallied busloads of supporters to the state capital to express their enthusiasm. Shawn Newman, whose law offices are just down the street, took a stroll to the hearing to check out the scene and get his own two cents in. “They’ve got all these people drooling on themselves, testifying what a great deal it is,” Newman recalls. “They never even read the damn bill, they don’t know what they’re talking about.”
This was an emotional issue, pure and simple, and new-stadium proponents had brought in the heavy artillery. “And I don’t mean to criticize these people,” Newman explains, his frustration evident. “They talk about how their sons or daughters are so enamored, that the Seahawks mean so much to them, that my little boy [has] leukemia and [is on] life support and that it was because the Seahawks had done something that had got him out of death’s grip, or some bullshit.”
Of course, Allen’s call wasn’t just for a facility to make the sick children of Seattle happy. Instead, the team’s massive PR campaign emphasized the many uses of the new stadium. They brought in representatives from the U.S. Olympic Committee to argue that such a venue would be ideal for hosting future Olympic soccer matches, quoting the commissioner of Major League Soccer to the same end.
When it was Newman’s turn to speak, he told those gathered that “the real question you have to ask yourself is one of priorities, and whether or not the voters are going to respect you in the morning after you get done with another stadium shuffle. Because you want priorities.” A bigger concern is that “forty thousand legal residents of Washington State are going to lose their food stamps this summer. About eight thousand are going to lose social security benefits. Legal residents. That’s an emergency, not building a new stadium for a billionaire.”
By February 1997 Washington governor Gary Locke had called for a statewide vote on the creation of a 10 percent tax on licensed sports apparel and memorabilia in order to fund the public’s share of the proposed $402 million new stadium. When that proved controversial (as well it might, with apparel giant Nike based in neighboring Oregon) politicians agreed that the funding would instead come from an extension on the state’s hotel–motel tax and a tax on Seahawks tickets and parking.
Allen himself had pledged at least $100 million toward stadium construction, and he now took the unheard-of step of single-handedly financing the statewide referendum—which ran him $4.2 million. Allen’s supporters said that he did so only because state politicians had insisted that if there was to be another statewide vote, taxpayers would not be made to pay for it. But the step was an alarming one for many. “I just don’t recall ever seeing someone pick up a total tab for an election,” North Carolina political science professor Thad Beyle told the New York Times. “It bumps up against questions about just how far you can let democracy go.”
Paying for the election was a bold step for the billionaire in another way as well. “Paul Allen never voted in an election,” claims Van Dyk. “The first election there’s any public record of him having voted in is the election he purchased.”
That vote, and those dollars, would be key in what would be the most expensive initiative campaign in state history. In June 1997, voters narrowly approved the new stadium for the Seahawks. For kicking in some $3 million, Allen got his $300 million-plus public contribution, and years of luxury-box revenue from this new stadium. It apparently was money well spent. Seattle is getting its two new facilities, and its taxpayers are going to be paying for them for a long time to come.
Minneapolis: Win a Few…
In the early ’90s, Minnesota would have seemed an unlikely target for teams seeking new facilities, if only because it had two of the newest buildings around. The Target Center, built in 1990 with minimal public money, was home to the new Timberwolves basketball team. Just blocks away in downtown Minneapolis sat the Hubert Humphrey Metrodome, a fabric-roofed sixty-four-thousand-seat stadium that housed both baseball’s Twins and football’s Vikings.
The Metrodome itself was built mostly at public expense—$55 million of it, financed largely by hotel, motel, food, alcohol, and beverage taxes. The pitched battle between community activists and local business interests that surrounded its construction presaged some of the public-stadium fights of the late ’80s and ’90s. Particularly at issue, remembers neighborhood activist Carla Bruenig, were the questions of housing because many buildings were torn down to make way for parking for the new stadium, and traffic, which suddenly flooded into the local streets on game days.
The Metrodome was never a thing of beauty. During daytime baseball games the translucent Teflon roof made every fly ball an adventure, and the Twins never did seem able to find the right artificial turf to prevent balls from bouncing twenty feet over outfielders’ heads. But it quickly felt like home to the Twins and Vikings, especially during the Twins’ two world championship seasons of 1987 and 1991, when fan noise inside the dome out-decibeled a jet taking off. With a new stadium firmly in place, Minnesotans could at least consider sports-subsidy battles a thing of the past—doubly so when NBA expansion team owners Marv Wolfenson and Harvey Ratner spent $81 million of their own money (along with $23 million in public funds) to build the Target Center in 1990 for their new Timberwolves basketball team. Minneapolis–St. Paul was sitting pretty: one of only six metropolitan areas with franchises in all four pro sports leagues, and the only one with state-of-the-art facilities for each to play in. Throw in a generally strong, diversified state economy, and Minnesota’s largest urban center had reason to brag.
Until the North Stars packed up and left town.
Minneapolis’s hockey team had been playing in the Met Center in nearby Bloomington, and that suburban arena was suffering in both attendance and revenue because of competition from the new Target Center. The team’s owners considered relocating to share the newer building with the Timberwolves but instead opted to find an arena where they would collect a greater share of the revenue streams. They found one in Dallas, becoming the Dallas Stars in 1993, and leaving the publicly owned Met Center empty.
Meanwhile, the Target Center was facing a sudden cash crisis. Wolfenson and Ratner had counted on paying off the $35 million in construction costs with revenue from ticket and suite sales, but the building ultimately came in at $104 million, leaving “Harv and Marv,” as they were universally known, with $10 million in debt payments and property taxes due each year on the arena and no way to pay it off. After the failed attempt to get the North Stars to relocate to the Target Center, the pair took a hard look at the sea of red ink and turned to the city government for a bailout.
To get the city’s attention, Harv and Marv announced in the spring of 1994 that they were moving the Timberwolves to New Orleans for the upcoming season. The NBA rejected the move but only on the condition that Minneapolis agree to spend $74 million to purchase the arena, financed largely by sales and property taxes at the building—money that previously went directly into general city revenues. Wolfenson and Ratner, as part of the deal, sold the team to a local millionaire for $88.5 million, turning a 172 percent five-year profit on their original $32.5 million investment. And despite promises by proponents that the buyout would help lure a new hockey team to Minneapolis, when the NHL announced its intent to expand to the Twin Cities in 1997, it was to a proposed new arena across the river in St. Paul, which would replace the twenty-five-year-old Civic Center Arena. The seven-year-old Target Center, Minnesota Sports Facilities commissioner Henry Savelkoul explained, no longer had the “provisions,” in the form of revenue from luxury suites, advertising, and concessions, to support pro hockey.
The Target Center bailout left the Minnesota populace wary of “economic development” subsidies—all the more so because it came on the heels of another notorious corporate giveaway involving Northwest Airlines: In 1992 the state legislature had granted Northwest Airlines an astounding $761 million in loans, tax breaks, a
nd cash in exchange for a promise to build two maintenance bases in the northern part of the state. But as the legislators soon discovered, Northwest was in no position to build anything. Its new owners had severely overextended their finances in their leveraged buyout of the company, and Northwest had already lost $1 billion in the two years since. The company—which was “very close to bankruptcy,” according to the Minneapolis Federal Reserve’s Art Rolnick—promptly canceled the planned bases but kept the no-strings-attached state loans to help pay off their debts. “The [bases were] bogus,” says Rolnick. “It was just a ploy to say, I’m going to give you jobs up north, an economically depressed area, if you loan me this money.” Only after years of public outcry did Northwest finally agree to a scaled-back version of the plan that would create just 954 jobs, less than a quarter the number originally promised.
For a state with a long liberal and union tradition—Minnesota’s state Democratic Party is known as the Democratic-Farmer-Labor Party—the Northwest deal was an expensive lesson in the costs of corporate welfare. The state responded by passing the Minnesota Corporate Welfare Reform Law in 1995, requiring that businesses that receive state or local economic aid must show net job growth for the state within two years, or else refund the money.
Deals like these may have soured the public on subsidizing local business leaders with nine-figure expenditures, but it only whetted the appetite of Twins owner Carl Pohlad for the riches available via corporate welfare. Pohlad, despite a team that broke attendance records at the new dome, had often complained of feeling like a second-class citizen there. Seating in the multipurpose stadium was arranged more for football than for baseball, and, perhaps more important, the Vikings controlled all the luxury-suite revenue, leaving the Twins to survive on ticket sales and concessions revenue alone.
In September 1996 Pohlad went public with his request for a new ballpark, hinting that he would activate an escape clause in his Metrodome lease if a new stadium were not in the works by 1998. Pohlad, the billionaire head of a banking empire, had a checkered business history in the Twin Cities, including experience with profiting from the public till: After he was tapped by the state in 1959 to head up a bus company that had been brought to the brink of bankruptcy under the control of local mobsters, Pohlad wound up cutting bus maintenance and pension-fund payments, demanding a fare increase despite turning profits—and siphoning off at least $4 million in interest-free loans to help buy the Tropicana Casino in Las Vegas. Pohlad was later part of Frank Lorenzo’s scandal-plagued management of Eastern and Continental Airlines in the 1980s. Through all this, his family fortune, which began when he took control of a local bank in the 1940s, soared to more than $1 billion.
The opposition to a new Twins ballpark was unusually well organized from the start. Jon Commers, a former state legislative aide, launched Fans Advocating Intelligent Spending out of the offices of a local progressive activist group. Along with Ricky Rask’s Fund Kids First, Commers set out to muster public opposition to Pohlad’s demands, focusing particular attention on the eighteen state legislators who had sworn during the 1996 election campaign not to spend public money on a new stadium.
On the Twins’ side, meanwhile, was only one prominent politician: Governor Arne Carlson.
Proclaiming himself the state’s “number one fan,” Carlson was an unabashed rooter for all of Minnesota’s sports teams and expressed an interest in becoming a sports booster when he retired from public office; he once called a press conference to criticize the officiating at a college basketball game. So when the Twins came looking for an ally, the state’s highest public official was more than happy to jump on board. Once asked why Pohlad couldn’t spend his own money on a stadium, Carlson snapped, “That’s irrelevant,” and accused people opposed to subsidizing billionaires of promulgating “class warfare.”
In January, Pohlad and Henry Savelkoul of the Metropolitan Sports Facilities Commission proudly announced that they had a plan that would satisfy everyone. The state would spend $277.5 million toward a $360 million stadium with a retractable dome; in exchange, Pohlad would give the people of Minnesota ownership of 49 percent of the team. At the time, Major League Baseball had a stated policy against public ownership of any portion of a franchise, which would mean opening their secret bookkeeping to public scrutiny, but this didn’t stop the plan from being hailed by Star Tribune sports columnist Sid Hartman as a marvel of generosity: “Never has the owner of a football or baseball team offered a package such as the $158 million gift and 49 percent interest in the team that Twins owner Carl Pohlad has offered the state.”
On January 26 the first polls came in—and they gave Carlson’s plan a resounding thumbs-down. Fully 69 percent of Minnesotans said they opposed the deal; even self-identified Twins fans were slightly inclined toward opposition. When asked to list public spending priorities in order of importance, those polled ranked pro sports dead last. Worse yet for the Twins, the St. Paul Pioneer-Press reported that Pohlad’s $82.5 million “contribution” to the stadium—not $158 million, as Hartman had erroneously reported—would in fact be a loan, not a gift, one that he expected to be paid back should he sell the team. The Twins quickly backpedaled, claiming that calling it a gift had been a “miscommunication,” but the damage was done.
From there, the Twins quickly stepped up their campaign. The consulting firm Arthur Anderson was hired to produce a glowing report on the economic benefits of a new ballpark. Pohlad began to make more-overt threats to move the team elsewhere if his demands weren’t met, though skeptics wondered if the cities rumored as destinations for the ballclub—which included such metropolises as Charlotte, North Carolina, and Portland, Oregon, the home of the Twins’ top minor-league team—would bring him any more revenue than he was already getting in Minnesota.
The team also tried to leverage the star power of its players, parading Kirby Puckett, a local hero whose Hall of Fame career was cut short by glaucoma, around the state to stump for a new ballpark. Although some Minnesotans resented what they considered Puckett’s prostituting himself for a new baseball stadium, one state senator who Puckett and other Twins stars had lobbied defended the visits, asserting that “it’s not unlike when you want to pass the victim’s rights bill; you bring in the victim.”
He paused, then added, “That’s not a good analogy.”
… Lose a Few
Meanwhile, the Twins and state couldn’t even agree on a price tag. The cost of the new ballpark—with retractable roof, of course—fluctuated wildly between $300 million and $500 million over the course of the winter.
Public opinion remained unenthusiastic—a citizen’s panel brought together by the Star Tribune and a local TV station unanimously panned the deal. “If I invest two thirds of the money, I want more than 49 percent,” said retired lab technician Bob Koebele. And Deb McNeill, a store manager who supported the stadium before the forum, announced that she had changed her mind: “I grew up thinking of the Twins not as a business, but more as a public entity. But the team isn’t. They are a business. I’m not able to defend public funding. I have nothing to defend it with.”
With the public ownership option going nowhere—one sports commission member declared it “dead as a smelt”—Carlson turned to more likely prospects for revenue. First, the governor suggested a ten-cents-a-pack cigarette tax, earmarking nine cents for stadium construction and one cent for antismoking programs; that bombed with public health advocates, who asked why all ten cents shouldn’t be devoted to public health. Finally, a bill was introduced to place slot machines at a local racetrack, which its legislative sponsor optimistically predicted would generate $50 million a year for the state—raising an outcry from the state Indian reservations that relied on casino revenue to fund their own budgets. “If ever someone gets around to writing a brochure on ‘How a Bill Doesn’t Become Law,’” the Star Tribune concluded, “the author might use the proposed Twins stadium as a case study.”
The clock finally ran out on May 19,
as the state legislature closed its session without voting on a stadium bill. Six months later, it reconvened in special session to once again consider stadium options. This time, there was an immediate threat on the table: In October, Pohlad had signed a deal to sell the Twins to North Carolina businessman Don Beaver, who would move it to that state’s Triad region (Greensboro, High Point, and Winston-Salem). The deal would be called off only if the legislature approved a stadium-funding bill by November 30.
The bill that was finally submitted for legislative approval was a bizarre hodgepodge of different proposals. Under this plan, Pohlad would give the team to a nonprofit foundation, which would pay off his $86 million in accrued debts by selling it to another local owner within five years; Pohlad would also earn a substantial tax break on the “charitable contribution” of his team, valued at $140 million, to the foundation. The state, meanwhile, would pay the entire cost of building a $404 million stadium, this time via an all-new funding scheme: redirecting income taxes and sales taxes from the stadium to pay off the construction bonds. (A similar mechanism, known as “tax-increment financing,” is commonly granted by cities to private developers in other industries.) Proponents argued that this was no different from other fees, such as hunting licenses, that were earmarked for specific purposes; critics pointed out that as these funds would otherwise go into the state’s general fund, this was as direct a subsidy as there could be. “The financing of the thing is too screwy,” one Star Tribune reader wrote to the paper’s Web site, noting that if players’ income taxes could be used to pay for a stadium, “I think my income tax should go towards improving the place I work.”