New year brings new stadium tax for Hennepin County shoppersby Brian Bakst, Associated Press
On Monday, Jan. 1, 2007, shoppers in Hennepin County will have to pay an additional 0.15 percent sales tax -- three cents per $20 purchase. The revenue will be used to pay for a new Twins stadium in downtown Minneapolis.
St. Paul, Minn. — (AP) - Work on the planned Minnesota Twins ballpark enters a hectic phase early next year as officials scramble to secure land deals, sign off on schematic designs and let crews start moving dirt.
The goal is to complete all of that before the baseball team opens its 2007 regular season.
Hennepin County shoppers, meanwhile, will begin feeling the weight of the $522 million stadium on their wallets much sooner. On Monday, an additional 0.15 percent sales tax - three cents per $20 purchase - kicks in. Over time, it is expected to generate enough money to pay for three quarters of the stadium.
Hennepin County commissioner Mike Opat, who helped steer the stadium plan through the Legislature, said he hears complaints "from time to time" about the new tax. The county won permission to enact it without a voter referendum.
"I'd imagine there are people who are going to see that appear on sales receipts and continue to gripe about it," Opat said.
In the first year, the tax is due to raise $28.5 million, according to state Department of Revenue projections. The surcharge will be levied in 47 communities and raise the county's sales tax rate to 6.65 percent. In Minneapolis, which already has a rate above the state's base, the total will be 7.15 percent.
Jason Flohrs, director of government affairs for the 1,000-member TwinWest Chamber of Commerce, said the group plans to remind businesses of the tax change in an upcoming newsletter. The Revenue Department has sent out 40,000 letters doing the same.
Some businesses are miffed about the new tax because it could cause customers to shop elsewhere and because it will mean higher costs when they buy their own goods.
"A little bit here and there adds up," Flohrs said.
Even as the money starts rolling in, officials like Opat stress that there are big obstacles to clear.
Chief among them is reaching purchase agreements for land at the stadium site, currently a parking lot on the western edge of downtown Minneapolis. The county is struggling to come to terms with Houston real-estate firm Hines Interests Ltd. and local developers Land Partners II.
A court hearing is set for Jan. 22 if the county needs to pursue condemnation. Opat said commissioners are hoping to get a negotiated deal sooner.
"It's going to be a challenge. We're not in this to pay any price," Opat said. "The land needs to be purchased at a fair and not unreasonable price because the public is in for a defined amount and that's as far as we go."
The legislation authorizing the ballpark limited the county's spending on infrastructure, such as land purchases, to roughly $90 million.
Dan Kenney, executive director of the Minnesota Ballpark Authority, a panel set up to run the stadium, said the land price will have a big bearing on the environment outside the stadium walls.
"The higher the land cost, the lower the amenities you create around the ballpark," Kenney said. "There is only so much public money available."
Developer Rich Pogin of Land Partners II said the county wants more than 8 acres the partnership now owns.
"It's fairly clear that they are going to use eminent domain to acquire the property," Pogin said.
"Eminent domain allows the government to pay fair market value for the land," he added. "If they don't want to pay fair market value for the land, then that's a problem."
Bob Pfefferle, an official with Hines, said the land group believes that the county intends to pursue condemnation - but under that scenario, the owners will expect to be paid the fair market value.
"If they are feeling that's the best way for them to go, we respect that and realize that's the route we have to follow as well," Pfefferle said.
For its part, the Twins franchise is putting up $45 million in the early stages of construction, part of $130 million required of owner Carl Pohlad.
The winter months will be busy for the franchise, too. Team president Dave St. Peter said the Twins plan to unveil a building design by late February that will provide the most detailed glimpse yet at the proposed exterior, expected seating arrangements and concession area plans.
Sometime in March - when crews are scheduled to begin clearing the site - the team plans to open a suite and marketing sales center that overlooks the site. There, agents will be selling private suites. Already, roughly 2,000 new full season tickets attributable to the new stadium have been sold, St. Peter said.
A ceremonial groundbreaking is shaping up for June.
"So far so good," St. Peter said, "but much work is ahead."
(Copyright 2006 by The Associated Press. All Rights Reserved.)