Eye of the Beholder
It may not have been the most eventful press conference of last year, but it was certainly the strangest. The mid-July gathering at the Crown Roller Mill building in downtown Minneapolis drew a handful of print and broadcast reporters, along with camera jocks from the local TV stations, to the second-floor atrium of the historic riverfront structure where some of the city's planning offices are located. The occasion was to have been a joint appearance by Mayor R.T. Rybak and Vikings owner Zygmunt Wilf to discuss—well, that wasn't exactly made clear in the mayor's press release, but everyone in attendance presumed there was a new Vikings stadium at the end of the PR rainbow. Not in Minneapolis, necessarily, but no matter: Wilf had already made clear that he was interested in redeveloping the downtown site of the Metrodome no matter where the new facility was built.
Rybak and Wilf finally emerged from a private meeting about 30 minutes late to greet the press. When the pair at last appeared, Wilf walked straight past the makeshift podium, past the row of television cameras, down the stairs, and out the door. He did not take questions from reporters. That left Rybak, along with Minneapolis City Council President Barb Johnson, to field a few awkward queries. For the most part, the mayor claimed, it was a chance to talk with the New Jersey real estate mogul about the development potential in the Downtown East neighborhood that has been home to the Metrodome for nearly a quarter-century, and now found itself the beneficiary of a fresh wave of development keyed by the new Guthrie Theater and a rash of high-end residential housing with views of the Mississippi River.
There was a reason the press conference started late. According to Barb Johnson's account, Zygi Wilf had shown up displaying a detailed knowledge of the land in downtown Minneapolis, down to the present-day valuation of particular parcels. "He came in and unfurled a map and started talking land," Johnson explained afterward. "He even knew about the upper Mississippi [riverfront]. It was clear that he was not taking this lightly, and that he had done his homework."
As a staged media event, the whole thing was a bust. The day's proceedings were forgotten almost as quickly as Wilf was out the door.
FOUR MONTHS LATER, IT BECAME clear that Wilf's diligence on development opportunities served him well. Just before Thanksgiving, after four years of work, the Anoka County Board of Commissioners pulled the plug on the presumptive favorite site for a new Vikings stadium, an area labeled the "Northern Lights in Blaine." The project as proposed in the spring of 2005 had grown more ambitious over time, eventually taking in some 740 acres of total development featuring a 68,500-seat retractable-roof stadium, at least 800,000 square feet of retail shops and restaurants, a hotel, and untold quantities of housing and office space.
The stadium itself was initially projected to cost $675 million, of which $280 million was proposed to come from a county sales tax, $115 million from sales tax revenue the complex would generate, and $280 million from Wilf and the team's six other owners. Wilf also verbally pledged to put $1 billion total of his own money into the sprawling complex if public subsidies for the stadium were guaranteed. Anoka County and Blaine officials were anxious to have an interested developer to complement the municipality's National Sports Center, which already featured a soccer complex, hockey rinks, and a nearby TPC golf course.
The Blaine deal ultimately collapsed for a variety of reasons, prominent among them the fact that the projected stadium price tag had crept up to $800 million by fall 2006. It probably didn't help the nerves of Anoka County officials to know that Wilf had expressed interest in putting together some kind of deal in Minneapolis, and reportedly had met with honchos at the Star Tribune, which owns a good hunk of land around the Metrodome site.
Anoka County Commissioner Scott LeDoux sounded a bitter tone in a November 20 press release from the county. "It doesn't benefit Anoka County taxpayers to negotiate against other communities to keep the Vikings in Minnesota," the former marquee boxer was quoted as saying, "or to be used as leverage for a better deal somewhere else."
The Vikings acted genuinely surprised that Anoka County took the stadium off the table, even while acknowledging that they were eyeing Minneapolis for development all along. As early as August 2005, Wilf had let it slip that he was interested in buying the Metrodome and the land outright for major development.
"The Anoka deal is disappointing to us," says Lester Bagley, the Vikings' vice president for public relations and the team's point man on stadium-related affairs. Still, he says, the Anoka deal offers insight into what Wilf is really seeking: "Our owners are developers who are not intimidated by putting significant dollars into development. And they're also bullish on the Twin Cities in terms of real estate development."
Having said that, Bagley and the team insist now that the "sole focus" for the stadium is the Downtown East neighborhood. Unlike his predecessor, Red McCombs, Wilf has repeatedly said he won't move the team. But there appears to be no real local option right now when the team's lease with the Metrodome expires five years hence, in 2012. If, in fact, downtown Minneapolis is the only option, then Wilf has his work cut out for him. The latest round of stadium games, and the looming legislative session in St. Paul, may be more interesting than anything the team did on the field this season.
For starters, the city of Minneapolis, by a 1997 referendum, cannot spend more than $10 million in public monies toward any stadium project. More than that, Hennepin County board members would likely not be as forthcoming as Anoka County on a new county-wide sales tax, having just foisted a similar tax on the backs of local taxpayers for the Twins. State money? At a November 29 press conference announcing Minnesota's projected budget surplus, Gov. Tim Pawlenty seemingly drove a stake through the heart of the idea: "We wouldn't be in a position, nor would I support, taking money out of the general fund for the Vikings stadium."
Further vexing for Wilf is the December 7 announcement that the NFL will pony up some $300 million from its so-called G3 fund for a new $1.2 billion Jets/Giants shared stadium in New Jersey, Wilf's home state. The fund, which has been widely used to help finance stadiums for NFL teams, is now essentially tapped out. In other words, if Wilf wants a stadium, he's probably looking at fronting a great deal of his own cash.
Bagley says flatly that a renovation of the Metrodome isn't economically feasible, and a 2001 proposal to do just that was turned down by the McCombs regime. But nonetheless, during the last week in November, the Metropolitan Sports Facilities Commission commissioned a plan for adding a retractable roof to the Dome, and is now fronting $225,000 for two architecture firms to study the feasibility of a new stadium in Downtown East.
And it is still possible, Wilf's assurances notwithstanding, that he could decide to move the team or sell it to someone who will. It's no secret that the NFL has been desperate to get a team in the Los Angeles market for more than a decade. In a meeting in southern California this past October, owners expressed sticker shock over two potential stadium sites, each with a price tag of $1 billion just for basic construction costs. While that news seemed to take some of the piss out of the NFL's lust for L.A., there are those observers who claim that the escalating price is only adding a sense of urgency to getting a team in the country's second-largest media market sooner rather than later.
One thing does seem clear, however: A stadium is not the extent of Zygi Wilf's dreams. Wilf is no football man by pedigree; he is a real estate developer. His two main family-run businesses, Garden Homes and Garden Commercial Properties, have constructed some 25,000 homes in 39 states across the country since 1955. Further, the two entities and their subsidiaries own and manage 25 million square feet in retail and business property.
"He doesn't know anything about first-round draft choices," offers state Sen. Don Betzold, a north metro lawmaker who's been involved in various stadium discussions at the Capitol. "But he can walk into a town and say, 'Here's where we'd put the Imax, here's where we'd put the specialty shops, here's an access road.' He's very good at it, and very good at getting [what he wants]."
Politically, however, there is no question that the Vikings are the key to his larger aspirations. Elected officials across the board say that they don't want to be responsible for losing the Vikings on their watch. "You ask people what is the number-one thing they associate with Minnesota culturally," says Barb Johnson, "and it's the Minnesota Vikings, hands down.... We don't want to see the team or his business walk out the door."
Tom Ryan, the mayor of Blaine, says he took upward of 100 meetings with Wilf before the Anoka deal fell through. "He told me he would never move the team," Ryan recalls, "and I looked him in the eye and said, 'Zygi, never is an awful long time.'"
THE TERMS OF THE VIKINGS' METRODOME lease are onerous even by the diminished-revenue standards of old-school multi-use stadiums, and they have made a new Vikings stadium a perennial issue for more than a decade now. Some aspects of the agreement between the Minnesota Vikings and the Metropolitan Sports Facilities Commission, as signed by both parties in August 1979:
• The commission owns the stadium, and the Vikings are locked into paying rent until the end of the 2011 season, which is usually around $3.5 million annually. If the Vikings fail to make rent—that is, leave the stadium—the commission can sue the team for that and other revenue lost.
• The Vikings also pay the MSFC 9.5 percent of its ticket sales.
• The commission "reserves all rights to sell or lease advertising in any part of the Stadium" and the team can't use the scoreboard for any ads, meaning there's no Vikings revenue there. Also, the Vikings do not control naming rights for the building.
• The commission controls the limited parking and its revenue.
• The commission pays the team 10 percent of all concession sales, which in 2004 and 2005, amounted to just over half a million for the team each year. Additionally, the MSFC takes roughly 35 percent of concessions sold during Vikings games.
"Suites and concession, we were making $5.5 million, but we had to pay back $3.5 million each year," says Roger Headrick, the team's president during the mid-1990s. "Back then, Jerry Jones of the Cowboys was making $70 million a year off his stadium alone," Headrick recalls. "An extra $70 million is a lot of money to play with when you're talking about signing the best players out there."
The Vikings do own and operate the suites at the Dome, but they still don't get all of that money. ("We had 107 suites, and Jerry Jones had 360," Headrick further points out.) Former Vikings GM Mike Lynn, in a fit to get the Dome deal done for his boss, Headrick predecessor Max Winter, managed a midnight-hour clause that guaranteed him 10 percent of suite revenues. To this day, Lynn collects a check each year that's estimated to be about half a million dollars based on suite sales. It's a minor sum in the world of sports finance, but one that indicates how antiquated and burdensome the Dome deal has grown.
The Vikings' revenues ranked 27th out of 28 teams when Headrick owned the team, and were 30th out of 32 NFL teams in local revenues in 2005. And a 1997 study by the Metropolitan Sports Facilities Commission shows that despite strong attendance, the team never cracked the top 20 in "local revenue" from 1990 to 1996.
MSFC records further indicate that net stadium revenue for the Vikings last year was $5.6 million, some $50 million below those of the league's top teams, and is projected to be $6.1 million for 2006. The Vikings don't reveal the team's total revenues, but estimates by Forbes say the team's operating income was $16.3 million, making it, according to the magazine, dead last in the NFL in "team value." (The team, valued at $720 million by Forbes, also received about $100 million in TV and other revenue-sharing mechanisms from the league. The Vikings dispute some of the magazine's accounting.) A new stadium can add as much as $30 million in operating revenues for a team.
In 1998, Headrick and his group of Vikings owners sold the team to Red McCombs, the radio and oil magnate from San Antonio who had a history of buying sagging sports teams and selling them for a profit. It just so happened that during the first year of McCombs's ownership, the Vikings assembled one of the greatest offenses in NFL history and went 15-1 in the regular season before losing the NFC title game and missing the Super Bowl. McCombs immediately set about lobbying for a new stadium, and in one September 1999 breakfast meeting, alluded to moving the team to Texas, according to those who were there. (McCombs denied making such a threat.) Over the years, McCombs played up Houston, San Antonio, and Los Angeles as possible homes for the team if he didn't get a new stadium, a stratagem that did not endear him to anyone.
By 2002, McCombs had asked NFL commissioner Paul Tagliabue if the league would be interested in having his franchise in Los Angeles. Tagliabue demurred, saying that L.A.'s stadium prospects were in the early stages, and that there was too much tradition tied up in the Vikings and Minnesota to suffer such a PR blow. McCombs then told Sports Illustrated in October 2004 that he "would love to be in L.A.," but that it was a "league issue" and "I can't just pick up and go to L.A."
While all of this was going on, the team had waved off a proposal by the MSFC to renovate the Dome. By that point, McCombs was essentially stuck. "Mr. McCombs threatened to move, and that didn't help him gain any leverage at the Capitol," says Lester Bagley, who started with the Vikings office under the McCombs regime. McCombs was left to wonder aloud to the media one day why there wasn't a suburban city that might want to partner on a new stadium.
Dan Erhart, an Anoka County commissioner, sent a letter to McCombs the very next day. In it, he proposed a multi-use facility with a retractable roof and 24,000 parking spaces, along with a training-camp quarters and corporate offices for the team. More importantly, the plan accounted for more than two-thirds of the cost of a stadium. "This was designed to keep the Vikings in the metro area," Erhart says now.
But that plan was plagued by complications from the start. The proposed site included some 260 acres of protected wetlands, meaning some very costly wetlands mitigation provisions in any deal. Second, Blaine and its surroundings lacked the highway infrastructure to support the influx of 70,000 fans to the area 10 times a year—and growing state budget troubles pointed to a lack of funding for the necessary roads. To make matters worse, says Ryan now, "Red's people were very difficult to work with. I'm not sure if Red McCombs ever intended to build a stadium."
Eventually, McCombs put the team up for sale. He found a buyer in Wilf, who bought the team for $600 million, some $350 million more than McCombs paid for it. According to Anoka County's Erhart, Wilf immediately set about reviving the Blaine stadium talks. "We felt he was sincere in wanting to own a football team," Erhart recalls. "But he also said that he saw Minnesota as a very stable market for real estate. He wanted a stadium, but he wanted the development and retail to go with it."
WHEN ZYGI WILF EMERGED AS the new face of Vikings' ownership in 2005, there was an oft-told story about how his father Joe, a real estate man himself, once bypassed a chance to buy the New York Titans for $100,000 before they became the Jets in the early 1960s. Beyond that, not much was known about the quiet man from New Jersey with the salt-and-pepper mustache and the funny name. In NFL circles, he was a virtual unknown.
The Vikings are actually owned by seven investors, four of whom are Wilfs: Zygi, his brother Mark, his cousin Leonard, and his nephew Jeffrey. (The limited partners are David Mandelbaum, Alan Landis, and Reggie Fowler, the man who originally tried to buy the team from McCombs.) The Wilfs made their fortune off what was once a small real estate company based in Short Hills, New Jersey, some 40 miles west of Manhattan. The company, Garden Homes, was started in 1955 by Zygi and Mark's father Joe, along with Leonard's father, Harry. Joe and Harry Wilf were Polish immigrants who survived the Holocaust.
Garden Homes and Garden Commercial Properties are still very much family affairs today; the New York Times has portrayed the Wilfs as a sort of quieter Rockefeller family, or the Mara family that has long owned the New York Giants. The paper has also covered the exploits of Orin Wilf, son of Leonard, as he has tried to win the family a stake in the high-end housing market of lower Manhattan, a move strategically akin to Zygi's reported designs on downtown Minneapolis.
Garden Homes specializes in town home developments, units that run from $250,000 to $2 million apiece, in 39 states. The commercial side of the company has annual revenues around $100 million and employs some 5,000 people. It is the 15th-largest owner of shopping malls in North America, according to the industry magazine Retail Traffic, owning 109 properties in states such as New Jersey, Florida, Georgia, and Wisconsin. Big-name tenants include Wal-Mart, Home Depot, and Lowe's.
"Everything we've developed, we've kept," Zygi Wilf once told Retail Traffic. "We're long-term players, and we're prepared to invest in the community."
Wilf ultimately encountered the same problems with the Blaine site that McCombs had stumbled over. And though he persisted in his rhetorical commitment to pursuing the site for some time, Lester Bagley notes that Wilf soon became attracted to the potential of downtown Minneapolis. "He's a student of development," Bagley says. "He likes that there is mass transit, he likes that there are available parcels, he liked the idea of connectivity to the Guthrie and the potential to connect to the skyway system." Indeed, though the land was scarcer and pricier in Minneapolis than in Blaine, the city had the added benefit of existing infrastructure. Wilf particularly liked what was happening with light rail—not just that Viking fans were using the Hiawatha line in great numbers, but also that the North Star Commuter Rail and the Central Corridor LRT line were slated to come downtown soon as well.
In September 2006, Wilf met with Star Tribune publisher J. Keith Moyer to talk about the land the newspaper owns around the Dome, some five blocks' worth, a total of 16 parcels valued on county tax rolls at $25 million. (The city of Minneapolis and Hennepin County also own as many as 15 parcels in the area.)
By the time Anoka County officials pulled the plug on the Blaine plan, they had spent around $850,000 on the project over four years' time.
"I still think it's the best deal for a stadium," Erhart insists. "I don't know where else in the state he's going to get land offered like that."
THE IRONY OF WILF LOOKING TOWARD development around the Metrodome site is that for years, people have waited in vain for the economic boom that was prophesied as a result of the Metrodome's presence there. Now, in the Dome's waning days, Downtown East has finally turned into hot property—no thanks to the Dome, which now stands as just another underutilized parcel there in the eyes of many. City leaders like Barb Johnson are now talking earnestly about expanding the downtown core for the first time in years, toward the riverfront, where high-end housing continues to go up. (In September 2003, the city adopted a new master plan for the area.)
"If you drive through the area, there's [still] quite a few surface parking lots, and it's not hard to imagine an expanded skyway system," notes developer Jim Stanton, who has done projects in both downtown and Anoka County. "It seems viable now that you could extend the business district east, around the Metrodome."
And Wilf, it would seem, is on the cutting edge of stadium development. "More and more, owners are looking to develop around stadiums themselves," offers David Carter of Sports Business Group, a consulting firm that has worked with Anaheim, Los Angeles, and Pasadena about bringing an NFL franchise to southern California. "That's part of how you get the stadium done, by creating revenue around it that you don't have to share."
Though Bagley admits that it's not entirely clear how the Wilfs would construct a Vikings stadium in Downtown East, it's clear that the potential for "collateral development" around any new stadium is the real prize the Wilfs are after.
But the fact remains that the stadium has to come first, and every stadium scenario floated to date has included an important public financing component. What is the standing of the Vikings in the eyes of lawmakers? Some, like Blaine's Tom Ryan, believe Wilf has sacrificed bargaining power by saying he won't move the team. Dan Erhart figures that Wilf lost the support of any number of north metro legislators because of bad feelings over Blaine. And state Sen. Don Betzold, who has carried the Vikings stadium bill in the Senate for the last three years, says there's not much will to do anything this session. "If the governor wants it to happen, he's got to make it happen," Betzold offers. "He has to lead on this. The Legislature isn't going to make it happen."
One theory has it that Wilf would be interested in building a stadium next to the Dome while the Vikings play out their lease there—a possibility Bagley doesn't rule out. But at least one person doesn't think it will work. "The footprint for that isn't necessarily there," says Bill Lester, who leads the Metropolitan Sports Facilities Commission. "Even with the Star Tribune lots—and I don't think you can build on those and cut off Park and Portland avenues—and even if you stretch from HCMC to the Dome, you've still only got 20 contiguous acres. That's not enough."
Lester, naturally enough, still holds out hope that the Metrodome will be renovated, but even with a retractable roof, that's not likely to entice Wilf. He would still be entangled in a lease agreement similar to the one the Vikings have long chafed at. While it's true that the Vikings could put just about any team on the field and still sell out every home game, Wilf is unlikely to settle for the same old site, same old money.
"This isn't just about money," Bagley offers. "This is about fan experience. This is about a large parking lot for tailgating, and wide concourses for concessions and spending the whole day at the game."
But the fact remains that there might not be enough land or public money to make downtown work for the Vikings. In November, NFL commissioner Roger Goodell came to visit Minneapolis. Sen. Betzold and MSFC chair Lester were there, and Goodell, who recently replaced Paul Tagliabue, made it clear that he wanted the Vikings to stay in Minnesota. Then again, when the subject of Los Angeles came up, according to Lester, Goodell said, "We very much still want a team in L.A., but not at any price." That hardly sounds as categorical as Tagliabue's words about keeping the Vikes in Minnesota.
The book on the NFL and L.A. as it stands goes something like this: The NFL wants the television market in southern California, while many in the community think the sports market has done just fine without football. In other words, the NFL wants L.A. much more than L.A. wants the NFL. At the same time, the league is loath to expand, preferring the symmetry that comes with having 32 teams in two conferences. "Expansion is off the table," says one NFL beat writer who asked not to be named. "So then you're looking at moving a team out there. Tagliabue understood the value of having a team in Minnesota, but it's not clear to me that Goodell cares that much."
Right now, the NFL is looking at two venues: an upgraded version of the Los Angeles Coliseum, or a new stadium in the lot next to the Angels' baseball park. (The Rose Bowl in Pasadena appears to be out of the running for now.) "The NFL doesn't want to get entangled with the Coliseum, because then the state is involved," offers the beat writer. "So it begins to look like a new stadium." As for the rising stadium costs out west, the beat writer says that one option the league is looking at is sending two teams to the market to defray costs by sharing a single new facility, as the Jets and Giants will do in New Jersey. The shortlist of teams to move, according to the writer? Jacksonville, New Orleans, San Diego, and Minnesota.
According to John Nicoletti, a spokesman for the city of Anaheim, the city put out an RFP on stadium development and recently received five proposals—none of them from the Wilfs. But he says the city is going to review options for the 50 acres of land again in January.
"It seems inconceivable that there would not be a team in Minnesota called the Vikings," says consultant David Carter, adding that the league "is very concerned about having the right teams in the right markets.... But if there's a stalemate on a site and money, Wilf's got no choice but to look westward or southward. He has to go where the money is to build the franchise value." And it's true that the NFL moves teams, even entrenched ones like the Cleveland Browns, pretty regularly. Still, Carter says, the whole process is expensive, complicated, and slow. Even so, the NFL still holds out hope that a team could move to L.A. by 2010.
Local developer Jim Stanton, however, sees an end game. "If he's thinking like a developer, and I'm sure he is, Wilf is going to go wherever he can get money, and we can't give him any," he notes. Despite repeated assurances from Wilf that the team is staying put, the other option lingers. "I've placed some bets that something will happen in downtown Minneapolis," Stanton adds. "Absent that, I don't know if you'll see the L.A. Vikings, but it will be the L.A. somethings."
Of course, lawmakers and fans have pretty much hit the burnout rate on stadium blackmail around here. Mark Stenglein, a Hennepin County commissioner who supported the Twins ballpark proposal, says the feeling on the county board is that there's no county money to pitch in for Wilf's development. "If anything's going to happen, we could look at a seven-county metro sales tax, and open that can of worms again," Stenglein says.
Stenglein admits that he's talked with Wilf about Downtown East development "to touch base," but adds that he's "not ready to stand up and say we have to bend over backwards for Zygi Wilf.
"He's going to go to the most viable spot, but beyond that there are no commitments as far as I know," Stenglein offers. "If he can make it and put it together, and he's savvy in real estate, then we'll work with him on that."
And if he can't? "Well, I was saying to him, 'You're an East Coast guy, you think the only thing west of the Poconos is L.A.,'" Stenglein recalls. "And he kind of laughed and said, 'Well, you know, that's right.'"
City Pages intern Mary O'Regan contributed research to this story.
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