Ask the mayor about it!
Mayor R T Rybak will be hosting a Community Forum on Wednesday, Oct. 10, from 6 to 7 p.m. at Becketwood Cooperative Living, 4300 W. River Pkwy., to discuss his proposed 2013 budget. He will give a short presentation and it will be followed by a question and answer session.
The mayor is proposing a 1.7% property tax increase. He insists this tax increase is half what it would have been without the stadium deal. He says, “Starting in 2013, Minneapolis property taxpayers will be paying $5 million less per year for the Target Center, a facility used by more than 1 million people a year. We transferred the burden of that cost off of the backs of Minneapolis property taxpayers and onto everyone who pays sales or hospitality taxes in Minneapolis every year, which includes many people from outside Minneapolis.”
This sounds like a great plan until you read the fine print. The stadium deal the city agreed to means the city will pay $150 million of the initial construction costs and at least $7.5 million a year for 30 years for maintenance. Most analysts agree the total cost to the city could be $890 million. That’s $890 million of indebtedness for the city. At another part of his budget address, Rybak says, “The city has paid down or avoided $241 million in debt since 2002 and restored its AAA credit rating.” If reducing our debt by $241 million restored our AAA credit rating, what’s adding $890 million going to do to it?
But none of the stadium figures show up in the mayor’s budget. We borrow our share of the construction costs and maintenance from the state and begin paying them back in 2030, after we’re through paying off the Convention Center and assuming that the costs for Target Center actually decrease.
The Target Center defies reason. Why should the City of Minneapolis continue to give a $5 million a year operating subsidy to Glen Taylor? Earlier this year I wrote:
The State Integrity Investigation, sponsored by the Center for Public Integrity, Global Integrity and Public Radio International gave Minnesota an overall grade of D+. We ranked 25 out of 50 states with a score of 69%. We failed completely on Lobbying Disclosure and Ethics Enforcement. The extensive survey done by practicing journalists in the area asked, “Are lobbyists required to file a spending report?” We failed that question with a score of 25%. They asked, “Are lobbyists spending reports filed with reasonable frequency?” We failed that with a score of 0%. They asked, “Are lobbyists required to report compensation or salary on their spending reports?” We failed that with a score of 25%. They asked, “Are lobbyists required to disclose spending?” 37%. “Is there effective monitoring of lobbying disclosure statements?” 0%.
In all, it was a serious indictment of the clean politics Minnesotans claim as their tradition.
The City of Minneapolis is a creature of the state. The State of Minnesota grants Minneapolis a home rule charter that allows it to make its own rules of governance, so, as you would expect, the same potential for corruption exists at the city level.
The recent capitulation of seven City Council members to the mayor’s proposal to give almost $400 million [more recent estimates now say $890 million] of the city’s treasury to the building and maintenance of a new Vikings Stadium for the benefit of a New Jersey billionaire, in spite of widespread public disapproval, has the whiff of corruption about it. There is a stench. Something is rotten, but it is hard to put your finger on it. So many cozy relationships, so many new “best friends,” it would be hard to trace the connections even through a detailed examination of campaign contributions.
The corruption of a public official is a complicated process. They have to believe that serving a private vested interest is really in the public good. All the council members who have supported the mayor’s gift of $400 million to the New Jersey billionaire talk about all the good things this will bring about: construction jobs (for out of state construction workers, maybe, but no guarantees of resident preference or the hiring of minorities and women); permanent jobs (at little better than minimum wage working concession stands); a spur to development (no stadium anywhere has ever spurred any new development). There has also been the argument that the stadium bill (which doesn’t exist yet) would contain language to transfer the maintenance of the Target Center basketball arena over to the sales tax rather than keeping it dependent on the property taxes.
Let us examine that sweetheart arrangement a little more closely.
As I pointed out on these pages a few months ago when examining the mayor’s  budget proposals, “Target Center is another drain on the taxpayer. The section of the mayor’s recommended budget that deals with the funding for the Target Center is the most convoluted and confusing description of how one fund dips into another fund that merges into a new fund, etc.
But there are two statements about the Center that leap off the page:
‘Under the special legislation, tax increment from the new district could only be used to pay principal and interest on Target Center bonds or for “neighborhood revitalization purposes.”
2) ‘The Consolidated TIF District will generate approximately $5 million in annual net tax increment revenue in 2012 and 2013, all of which will be used for Target Center debt service.’
The total of $10 million could have been used for “neighborhood revitalization purposes” but instead is being used to renovate the home of Glen Taylor’s Timberwolves. According to the latest Forbes ranking, Glen Taylor is Number 242 on the list of the richest persons in America with a net worth of $1.8 billion, and the Neighborhood Revitalization Program has been starved out of existence. Is that the best deal we could get with Glen Taylor? Is this the best investment in Minneapolis’ future?
How could the City Council and the mayor come to believe that a subsidy to Glen Taylor of $10 million was more important than funding the Neighborhood Revitalization Program—a neighborhood democracy model for the entire nation? It must have been some super salesman who was able to convince our elected officials to defund popular democracy and give the money to a Mankato billionaire. Who could he be?
Andy Kozac of North State Advisers, the principal lobbyist for Glen Taylor and the Timberwolves, is the ‘new best friend’ to everyone in public life. Remember how Michelle Obama kept saying ‘No new best friends’ when she and Barack moved into the White House. Andy Kozac was one of the ‘new best friends’ she was talking about.
Developers help council members get their relatives jobs, and it’s not just Riverplace, City Center or Block E—it can be little stuff like StairStep and the Green Institute. Lobbyists give the maximum amount early to campaigns. After all, what are friends for? And loyalty breeds loyalty.
Normally, lobbyists like to work behind the scenes. Kozac is great at writing campaign literature, sketching out a campaign or raising money, but recently he got into the news in an unflattering way. Common Cause wrote a letter to the Redistricting Commission to complain that Kozac, as a lobbyist with an interest in representing the Timberwolves and Target Center, should recuse himself from the Commission because he would have an obvious conflict of interest in protecting incumbents and not the public interest. That seems most unfair. Kozac has been sitting on the Redistricting Commission every time they’ve re-drawn the ward lines for the past three decades. He’s always looked out for the incumbents, unless, like 10 years ago, they’re Green Party incumbents. Then he cuts a ward that leaves them in their house but moves the ward boundaries in such a way that they no longer represent their old constituencies. Ask Dean Zimmermann and Natalie Johnson Lee about that maneuver 10 years ago. Kozac, of course, refused to recuse himself and went about helping his best friends on the present City Council, and they will, in turn, scratch his back with a permanent slush fund for the hungry Timberwolves.”
Andy Kozac looked out for members of the City Council, and they looked out for his principal client, Glen Taylor and his Timberwolves. The tax increment subsidy Andy and Glen were milking was about to run dry so they got themselves included in the hospitality sales tax revenue along with the Vikings. And the politicians can say they stopped using property tax dollars to subsidize the Target Center. But it’s a fraud because those funds were about to dry up anyway, so there really wasn’t any savings.
And when the city has to start paying back the state for the construction and maintenance costs of the new Vikings Stadium in 2030, who can possibly guarantee that the Convention Center won’t need major renovation again, that the Convention Center will finally be paying for itself and not need an annual subsidy, and that the Timberwolves won’t be at the door asking for another handout?
These are some interesting questions people should ask the mayor at his Community Forum on Wednesday.