MINNEAPOLIS -- The new Vikings stadium project marked a major milestone Thursday, when the stadium authority board okayed a lease deal with the team.
With the pact in place, the Vikings officially became the tenants of the $975 million sports complex, which will be built at the site of the Metrodome, the team's current home. The agreement clears the way for the team to secure financing for its $477 million share of the cost.
"It involved months of hard-nosed negotiations on both sides, at times, but it was fair and respectful," Vikings Vice President Lester Bagley told reporters after the vote by board of the Minnesota Sports Facilities Authority, or MSFA.
The stadium use and development agreements, as the documents are formally known, spell out how the various cash streams generated by the stadium will flow to the team and the MSFA.
"The Vikings will pay us $8.5 million a year, and that is essentially their rent, plus $1.5 million for capital enhancements," MSFA board chair Michele Kelm-Helgen explained.
"So they will pay us $10 million a year; you could think about it similar to $1 million per game."
Personal Seat Licenses
The terms of the agreements, which were made public for the first time only one hour before the board's vote, answered the biggest unanswered question about the project, the price of the personal seat licenses.
The seat licenses, termed Stadium Builder Licenses in the agreement, are one-time fees charged to fans for the right to purchase season tickets. The deal would make 48,700 of the seats in the stadium subject to the licenses.
"The fewer seat licenses you do, the more expensive those seat licenses become," Kelm-Helgen said, explaining the decision to subject 75 percent of the stadium's seats to license fees.
The licenses would range from $500 to $10,000 per seat, with the average being $2,500. Season ticket holders would have up to eight years to pay the fees, with the first three years being interest free.
The deal calls for the authority to collect up to $125 million in personal seat license revenue, with $100 million going to the Vikings. The balance would be used for selling the licenses and helping to process the fans' installment payments.
"The team definitely came in with a request for a significantly higher number, and we really spent the time going through the numbers," Kelm-Helgen said.
"And I think in the end everybody believed it's a program that really does fit Minnesota."
Vikings executive Steve LaCroix said the team's own surveys of season ticket holders indicated fans would've been willing to pay more.
"We're happy with the result," LaCroix told reporters following the board's vote.
"Now that we know the parameters we feel we can fine-tune the program, find a lot of fair ways to treat our fan base."
Gov. Mark Dayton, expressing traditional Minnesota populism, said that he considered even a $1 licensing fee to be $1 too much. And yet, at the same time, he acknowledged those licenses are a standard revenue source for NFL teams.
"The stadium authority has negotiated a good deal for Minnesotans," Dayton said.
"It will look a lot better in a year when we got thousands of Minnesotans working to build it, and see the economic life it brings to that part of Minneapolis."
Dayton was a major supporter of getting a stadium deal done at the State Capitol, but recently called on the MSFA to keep the licensing revenue to a minimum.
By comparison, the San Francisco 49ers, New York Jets and New York Giants were able to extract $400 million from their seat licensing programs.
The NFL agreed to give the team a $50 million grant, plus a $150 million loan, to expedite construction of the stadium. And the naming rights could be worth a substantial figure, although the team is not required to divulge how much it makes on that transaction.
The agreements track along closely with financial provisions laid out in the original stadium bill passed by the state legislature in 2012 and signed into law by Dayton.
The team will get to sell stadium naming rights, suites, and collect concession, advertising and ticket revenue from NFL events. The MSFA will receive those proceeds on non-NFL events at the stadium, in addition to the rent the Vikings pay.
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