The Vikings stadium comparison keeps coming up in connection with the Destination Medical Center proposal, so I took a trip down memory lane and looked at what the Vikings claim as their economic impact, and the value of the stadium.
Not that it really matters: comparing an NFL team to a health care giant just doesn't quite work. But both promoters and critics keep referring to the stadium issue, which was only resolved last year, so it's interesting to look at how much the state committed, after years of ferocious debate, and what the projected economic benefits will be.
To recap, the stadium will cost $975 million, the team will pay about $477 million, the state about $348 million (if those pesky electronic pull-tabs will just catch on) and the city hospitality tax will generate $150 million.
So, the clinic proposes to put about seven times as much money into DMC as Zygi Wilf and family will put into the Vikings stadium. (The stadium, it should be noted, will be publicly owned and serve other purposes than just Vikings games.)
The clinic says its own investment, plus $2 billion more in private development that it says will be spun off, will create 35,000 to 45,000 jobs, thousands more than the Vikings or anyone else claimed for the new stadium.
Here are some links. First of all, the Vikings' claim:
Not only will a Vikings stadium keep one of Minnesota’s biggest assets in the State, but building a new facility will also support thousands of jobs and generate significant economic activity at a time when the State desperately needs it.
According to Mortenson Construction, 1,600 construction workers will work over 900,000 hours in just the first year of construction. Along with the immediate jobs, an analysis completed by Conventions, Sports & Leisure, International (CSL) and Mortenson Construction in 2009 showed the construction and operation of a new stadium and the Minnesota Vikings franchise would provide the following significant economic benefits.
The construction of a new stadium will support approximately 13,000 jobs, including 7,500 construction and trades workers who will be employed during the three-year building process.
Nearly 4.3 million work hours with almost $300 million in wages for construction workers will be required for this project.
In addition, the fabrication of project materials will create a separate substantial number of jobs and wages.
Upon completion of the stadium, 3,400 full and part-time jobs will be supported by the economic activity generated by a new stadium.
Over 90% of the total materials and labor subcontract value will go to Minnesotans. The Building & Construction Trades Council is experiencing nearly 20% unemployment this project will have a significant impact on putting these construction workers back to work.
According to CSL, the economic activity from a new stadium will generate over $26 million per year in tax revenue and over $145 million in direct spending by Vikings fans inside the State of Minnesota.
Doing the math, $26 million per year in tax revenue over 20 years (the DMC window) would be $520 million.
That $145 million in direct spending is an annual estimate, according to the report on which those claims are based, "The Economic and Jobs Impact of 'Metrodome Next' Multipurpose Facility," by consultant CS&L in February 2009.
Here's more from that report:
As shown, the $734 million of construction spending taking place in the State of Minnesota is estimated to generate approximately $1.4 billion in total output during the construction period. This level of economic activity is estimated to support 13,400 jobs with total personal earnings of approximately $577 million. These jobs and related earnings represent construction jobs as well as jobs supported in other industries as a result of construction-related spending. A total of $33.2 million in personal income taxes and State and local sales taxes are estimated to be generated by the construction project. This estimate does not include sales taxes on direct construction expenditures, which are assumed to be tax-exempt.
To provide an additional understanding of the potential jobs impact during the construction phase, an estimate of the number of on-site construction jobs that would be created by the stadium reconstruction project was developed by representatives of Mortenson Construction. The estimate was prepared specifically for the proposed Metrodome Next project based on the firm’s previous experience with major stadium construction projects, including Target Field and TCF Bank Stadium. Mortenson estimates that approximately 8,000 tradespeople would be utilized during the construction phase...
The level of adjusted direct spending and resulting economic activity related to the presence of the reconstructed stadium and the Vikings is estimated to generate approximately $32.2 million annually in tax revenues to the State and local jurisdictions. The net present values of these tax streams over the first 30 years of stadium and Team operations are estimated to approximate $831 million. Approximately $29.4 million in tax revenues, or 91 percent of total tax revenues, are estimated to be attributable to Vikings-related activities, with the remainder generated by other events assumed to be held at the stadium.
There's plenty more to chew on in the report, which again was from 2009 -- not the final economic analysis.
Another way of looking at the Vikings analogy, though, is that the economic benefit of that project begins with construction and of course begins generating tax revenue with Season 1 in the new stadium. You could argue that's as much "pay-as-you-go" as DMC.
There were plenty of naysayers about the potential economic impact of the Vikings stadium -- here's one that's fairly sketchy from Forbes magazine, which is hardly an impartial news source when it comes to public sector spending -- just as there are naysayers about DMC.
Here's one more fact sheet from the Vikings, also based on the 2009 study but dusted off for the 2012 legislative session, which passed the bill and sent it to the governor for approval. The key points: