Downtown East Stadium Term Sheet

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An overview of stadium development and operating terms for the Minneapolis downtown east Vikings stadium site.

Transcript of Downtown East Stadium Term Sheet

OverviewofStadiumDevelopmentandOperatingTerms MinneapolisDowntownEastSite 3/01/2012 Theintentofthisdocumentistoprovideanoutlineoftermsagreedtobytheundersignedsetforthhereinforthestructuringofapublic/privateagreement relatedtothedesign,development,constructionandoperationofafirstclassPeoplesStadium(Stadium)intheStateofMinnesota.Thetermssetforth hereinhavebeendevelopedtoprovideaframeworkforatransactionthatprotectsthepublicsinterestandinvestmentinsuchaprojectwhileprovidingthe NationalFootballLeaguesMinnesotaVikings(Vikings)withasuitablelongtermhome.

Purpose: Toprovideasetofguidingprinciplesrelatedtothedesign,development,constructionandoperationofanewStadiumintheStateofMinnesotathatcanbeused forabroadrangeofcommunity,civic,sportingandentertainmentevents.TheStadiumshouldbedesignedtomaximizethebreadthanddepthofeventsthatthe Stadiumcanreasonablyattracttomaximizetheeconomic,fiscalandsocialbenefitstotheStateanditscitizenswhileprovidingalongtermhomefortheVikings, therebyensuringthepresenceoftheTeamandtheirassociatedbenefitstotheStateofMinnesota,localjurisdictionsandtheStatescitizensforaminimumof thirty(30)years.

Parties: Itiscontemplatedthatthepartiestothetransactioninclude(asapplicable)thefollowing: StateofMinnesota(theState) CityofMinneapolis(theCity) TobeformedStadiumAuthority(theAuthority) MinnesotaVikingsFootball,LLC.andanyTeamAffiliatesand/orTeamStadiumCompany(theTeam) NationalFootballLeague(theNFL)

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StadiumLocation StadiumDescription

TheStadiumwillbelocatedat theDowntownEastsiteinMinneapolis,MN TheStadium willbeMultipurposewithaFixed roof (withanoptiontomodifyto aRetractableroof withoutanyincreaseto the funding provided by State or City). The current Stadium siting plan is depicted on Schedule A. During the Design and DevelopmentPhase,theGroup(definedherein)willexploremovingtheStadiumasfareastonthesiteaspossible,withfull considerationofprojectcosts,safety,andothersuchissues,inordertolimitthetimethattheTeamwouldneedtoplayat anotherlocationandtocreateasignificantpublicplazaforyearroundactivities. TheStadiumandtheStadiumsite willbeownedbytheStadiumAuthority. TheAuthoritywillbecomprisedof: o 3membersappointedbytheGovernor,includingtheChair o 2membersappointedbytheMayoroftheCityofMinneapolis TheAuthoritywillbeappointedwithin30daysaftertheenactmentoftheStadiumlegislation. The MetropolitanSportsFacilitiesCommission(MSFC) willbeabolishedwithin90 days aftertheenactmentoftheStadium legislationwiththenewAuthorityassumingallremainingassetsandobligationsoftheMSFC. TheStatewouldprovide$398 million(netoffinancingcosts)totheproject. TheCityofMinneapolisConventionCenterTaxes(describedbelow)wouldprovide$150million(netoffinancingcosts). TheTeam/PrivateContributionwouldbe$427million(netoffinancingcosts). Sources: StateofMinnesota CityofMinneapolis Team/Private TotalSources Uses: Stadium SiteCost/Relocation TotalUses

StadiumOwnership Authority

AuthorityTransition

Financing

$398.0 150.0 427.0 $975.0 $828.0 147.0 $975.0

TheprojectbudgetisattachedonScheduleB.

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EstimatedLifeCycleStadium Funding/OperatingCosts (Operating,Gamedayand ongoingCapitalNetPresent Value(NPV)isbasedon3% inflationanda4%discountrate) State: Upfront Ops&Capital(NPV) Total(26.7%) City: Upfront Ops&Capital(NPV) Total(22.7%) Team/Private: Upfront Ops&Capital(NPV) Total(50.6%)

$398.0 0.0 $398.0 $150.0 188.7 $338.7 $427.0 327.1 $754.1

PublicFunding

The State of Minnesota (or designated intermediary) will issue appropriation bonds which combined with other funding sourceswillbeintheamountof$548million(netoffinancingcosts).Thebondswillberepaidthroughacombinationoffunds primarily generated through the City of Minneapolis Convention Center Taxes identified in the Convention Center Taxes section below (supporting approximately $150 million in financing) and expansion of State authorized charitable gaming to includeelectronicPulltabandotherallowablegaming(supportingapproximately$398millioninfinancing). Beginning in 2021 through 2046, the State will encumber, on an annual basis, a portion of the Convention Center Taxes equivalenttothepresentvalueof$150million.Forcalculationpurposes,thepresentvaluedatewillbebasedonthedate(s) ofthebond(s)soldbytheState(ordesignatedintermediary)orotherStatefundingisinitiated.Thepresentvalueratewillbe thegreaterofthetotalinterestcostofthebondissue(s)orequivalent30Yearbondindex.Aproposedminimumscheduleof ConventionCenterTaxencumbranceswillbedevelopedbytheCityandtheState. Beginningin2016(orthefirstyearofoperation),theStatewilladvancetotheAuthority,onanannualbasis,theamountof $7.5millionadjustingbasedupontheprecedingyearsgrowthintheConventionCenterTaxes,butnotlessthanzeropercent (0%) and no more than five percent (5%) annually thereafter (the adjustment factor), through 2020. Beginning in 2021 through 2046, the State will encumber an amount, on an annual basis, equivalent to $7.5 million as adjusted by the adjustmentfactor.InorderfortheStatetorecoupitsadvancefortheperiod2016(orthefirstyearofStadiumoperation) through2020,theStatewill,beginningin2021,retainanadditionalportionoftheConventionCenterTaxesannuallyusingthe same present value discount rate and calculation method set forth Public Capital Contribution Allocation section above utilizingtheactualdatesoftheStateadvancestocalculatetheirpresentvalue.ThepresentvalueoftheStatesrecoupment willalsobecalculatedbasedontheactualrecoupmentdatesandthePublicCapitalContributionAllocationsection.

ConventionCenterTaxes CapitalContributionAllocation

PublicStadiumOperatingand CapitalReserveAllocation

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Beginningin2013,theState willretainand paytotheAuthorityannually(i)onehalf(50%)ofanyamountabovethefirst$1.0 million(inflatingattwopercentannually,thereafter)uptothefirst$3.0million(inflatingattwopercentannually,thereafter), and(ii)onequarter(25%)ofanyexcessamountsoverthepriorthreshold,ofthebaseConventionCenterTaxamountsset forthinascheduletobedevelopedbytheCityandtheState. ConventionCenterTaxes Asapartofthefunding,thetaxessetoutbelow(theConventionCenterTaxes) will remainineffectthroughatleast2046 at currentlevelscoveringcurrentitemsincurrentgeographiclocations: a. 0.5%generalsalestax; b. 3%downtownrestauranttax; c. 3%downtownliquortax; d. 2.625%lodgingtax. Beginningin2012,theauthorizationfortheConventionCenterTaxeswillprovideforCityexpendituresinsupportofcapital projectsorforothereconomicdevelopmentpurposes. The MSFC Reserves, if any, will be transferred to the new Authority to fund the Authority activities during construction includingtheongoingoperationsoftheMetrodomeuntildemolished,andthenappliedtocapital/operatingreservesofthe newStadiumaftertheTeamhasfinishedplayingatMallofAmericaField,asdeterminedbytheAuthority. Fundingofprojectcosts,includingthedesignanddevelopmentphase,willbepaidfirstbytheTeamuntil$50million ofthe Team/Privatecommitmentisexpended,secondbytheAuthorityuntil$50millionofthePubliccommitmentisexpendedand then shared proportionately by the Team and Authority until all costs have been funded. The Team will provide suitable securityfortheirfundingobligationsasapartofprojectfinancing. The State and City will provide a sales tax exemption on Stadium and offsite transportation construction materials, sewer accesschargefeeexemption,andpropertytaxexemptionontheStadiumproperty.TheTeammayoperatesomefacilities on/asapartoftheStadiumsiteyearround(e.g.,retailstore(s),restaurant(s)),asagreedtobytheGroup(asdefinedbelow)as partoftheDesignandDevelopmentPhase.Thepropertytaxexemptionwouldalsobeapplicabletothesefacilities,tothe extentlegallypermissible. ThedesignandconstructionoftheStadiumshallbeacollaborativeeffortbetweentheAuthority andtheTeam. TheAuthority and the Team will work together throughout the design and construction process to identify the most efficient project procurement and delivery methods subject to the Authoritys mandated public process, and subject to the exemptions grantedtotheTargetFielddesignandconstructionprocess,asdescribedintheTargetFieldlegislationMinnesotaStatutes Sections473.756,Subd.12,asapplicable.Anynecessarylanduseanddevelopmentreviewsandapprovalsshallbehandled consistentwiththeproceduresandstandardsappliedtotheTargetFielddesignandconstructionprocess,asdescribedinthe TargetFieldlegislationMinnesotaStatutesSec13.473.758,Subd2,asapplicable.

MSFCReserves

TimingofContributions

State/CitySalesTaxExemption

Design&Construction Management

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AStadiumDesignandConstructionGroup(Group) shallbeestablishedtomanagethedesignoftheprojectandtoprovide oversightduringconstruction.TheAuthorityandTeamshalleachappointonemembertoserveastheleadrepresentative for each party. Each member shall serve at the pleasure of the appointing entity. A 4/5 vote of the Authority will be required with regard to the Authority decisions related to zoning, landuse and exterior design of the Stadium, related ParkingandthePlazaarea. Groupwillhire,byunanimousdecision,anexperiencedOwnersRepresentativetoassistinthemanagementoftheproject. TheGroupOwnersrepresentativewillworkfortheGroupandbepaidoutofProjectfunds.Ifdesired,anymemberofthe Group, at its own expense, may also hire their own Project Representative to participate in the design and construction process. GroupwillmanagethefollowingaspectsoftheProject: ProjectProgramdevelopment ProjectBudgetdevelopment ProjectScheduledevelopment SolicitationandSelectionofanarchitectandotherconsultants(DesignTeam) DirectionoftheDesignTeaminthepreparationofdesigndocuments Sitedevelopment,includingparkingandinfrastructure Transportationimprovements GuaranteedMaximumPrice(GMP)process,includingselectionofcontractorandnegotiationofGMPagreement AllotheraspectsoftheStadiumdesign&constructionuntilabindingandacceptableGMPagreementissigned DesignandDevelopmentPhase For the time period up until the Design and Deve