MN Hospitality Advocate

What Role do We Play in New Vikings Stadium?

Posted in General Advocacy, Lodging Issues, Restaurant Issues, State Laws, Tourism Issues by hospitalityminnesota on February 18, 2010

Governor Pawlenty today in comments to Star Tribune Columnist Sid Hartman mentions several possible solutions for funding a Vikings stadium. These include capturing additional tax revenue a new stadium would generate, as well as a new Minnesota lottery game that could generate up to $12 million annually.

Pawlenty also mentioned that a local partner (i.e. Minneapolis or Hennepin County) must come with some revenues to be part of the solution. That sounds to us like a tax on the hospitality industry. One other way in which a city or county might generate dollars would be through a sales tax, but we see that as unlikely given recent sales and gas tax increases.

The Minnesota Restaurant, Lodging and Resort & Campground Associations have a long-standing policy that we expect to be part of the solution, as that’s in part how stadiums are funded across the country. But we do not feel the burden should fall unfairly on our hotels and restaurants, already suffering from a terrible economy. For our position paper, see our website at www.hospitalitymn.org under Government Affairs.

The overarching funding philosophy from the perspective of key legislators we’ve spoken with is this: those who benefit should pay. And in the minds of most legislators, the hospitality industry is one of the significant benefactors from a new stadium. There is clearly an overall value to having a top NFL team in Minnesota from a tourism perspective. And our hotel industry in the Twin Cities acknowledges a benefit from the Vikings.

The Vikings need between $29 million and $42 million annually to service the debt on bonds issued to build a new stadium. The higher number reflects a retractable roof. This assumes an owner contribution of approximately one-third of the cost of a new stadium (without a roof), which has been typical of most NFL stadiums.

The Vikings have compiled a list of the various funding mechanisms stadiums have used in the past. They include items such as lottery proceeds, hotel taxes, liquor taxes, restaurant taxes, sales taxes, memorabilia taxes and car rental taxes.

We’ve begun conversations within our industry, with the Vikings and with key legislators in regard to the industry’s position. In fact, two key legislators engaged in this process recently asked us to visit on the issue.

We certainly feel that the proposed owner’s commitment needs to increase. But nonetheless, roughly two-thirds of the funding will probably be from public sources. My questions for the industry are designed to generate feedback. Should we take an absolute positi0n against any lodging, food and beverage or liquor tax increases? What about one but not the others? If we did agree to any kind of tax, should a tax be statewide because the whole state benefits from the Vikings, or should it be more local because that’s what can pass politically? If we did agree to any kind of tax, what percentages should we consider? What are your thoughts on the hospitality industry’s participation in this Vikings stadium?

Whatever the solution, it’s going to be difficult to bring unity to our massive and varied industry. But leadership will be required to get this job done and as the statewide associations in the hospitality industry, we’re expected to play a role. We do agree that keeping the Vikings is important to our industry and our state. Undoubtedly, any decision our Legislative Committees and Boards of Directors reach will bring criticism. Such is the nature of leadership. It starts with feedback from you.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations and Hospitality Minnesota

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One Response

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  1. Barbara said, on April 29, 2010 at 2:25 pm

    You folks are comparing apples to oranges. An infrequent rental of a private cabin to a small family is a little different than an ongoing concern of a resort with dozens or hundreds of guests over a month. Leave the private sector alone, it is really none of your business to create issues where none should exist.


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