Stadium authority chair has concerns about Vikes stadium, but Wilfs' finances isn't one [Q&A]
Crook or not, the NFL almost certainly has Zygi's back, Michele Kelm-Helgen suggested.
Yesterday, City Pages connected with Michele Kelm-Helgen, chairwoman of the Minnesota Sports Facilities Authority, to ask her some of the tough questions about the authority's ongoing "due diligence" investigation into the Wilfs' finances.
That review, of course, was triggered by a New Jersey courtroom decision that found the Wilfs bilked business partners out of roughly $50 million. And that made us wonder -- if the investigation uncovers serious problems with the Wilfs' finances, might the entire stadium deal be jeopardized?
Kelm-Helgen's answer to that question and others is below the jump.
City Pages: To what extent, before the stadium bill was signed into law, was there a due diligence investigation into the Wilfs' finances, or is [the current due diligence investigation] just something that was triggered by the litigation in New Jersey?
Kelm-Helgen: Well, prior to the legislation passing there was due diligence done as to the financial statements of the Wilfs related to the Vikings organization, and what the legislation required was that their personal finances would be looked at prior to the state bond sale, knowing at the time that it would probably be a year or more until we were looking at the state bond sale and until their financing went into effect.
But there was extensive work related to the team's financial statements for the organization prior to the legislation passing, including a requirement that [there] would be a more updated view of the financial information a year later knowing that things could change fairly dramatically, potentially, for the owners -- that it'd be looked at closer to the time of their financing and state bond sales.
City Pages: That seems to imply that the litigation in New Jersey actually had little to do with this most recent due diligence investigation.
Kelm-Helgen: Well, I wouldn't say that. What it did is, there was the financial due diligence that would have to be done one way or the other. What the New Jersey lawsuit did was brought the scope of our due diligence activities to include specifically a look at the New Jersey lawsuit and what potential impact that might have on the team's ability to finance. So we would have our [investigators] analyze that in order to draw conclusions as to whether it would impact their financing, and that's what's being done now.
City Pages: And what's the timeframe on that investigation?
Kelm-Helgen: Well, we originally said that we would target to have it completed by September 15, and we're now looking at having it done at the beginning of next week, so maybe the 9th or the 10th, which is close to a week ahead of schedule, potentially.
City Pages: If, hypothetically, the investigation reveals that there is a problem stemming from this litigation in New Jersey as far as the Wilfs' ability to pay their share of the stadium costs, could that potentially nullify the Vikings stadium deal, or what are the potential consequences of a finding of that sort?
Kelm-Helgen: Well, if the team did not have the ability to meet their financing commitments it certainly would affect the project from the standpoint we would not move forward with a state bond sale until they close on their financing. So we will know in advance of the state bond sale whether their financing is in place.
Part of the reason we've been talking with the NFL is originally, as we started this process, we wanted to know that should there be a problem, what was the NFL's commitment to the project? They've been very clear that they have a strong ongoing commitment, and if you look at other NFL projects where there have sometimes been problems with owners, the NFL works with them to step in and make them whole. But at this point we really haven't gone to that next step because we don't know yet if there is a problem. So we're just proceeding in a very organized fashion, looking first to see where we're at, making sure that all the information we have we follow it through, check it out, and then we'll have our [report ready and] we'll see what has to come from there.
But the good news for the state is the team is required to have their financing closed first, [so] it'll be very clear as to whether that's happening or not. And their close date is actually November 1 in order to keep the project on schedule.
(For more, click to page two.)
Kelm-Helgen: It would be a few weeks later. We're looking at anywhere from November 15 to November 30 for the state bonds to be let, but we would have the assurance at that point that the Vikings' financing had closed.
City Pages: There was some concern after news of this due diligence investigation went public that it could possibly affect the construction timetable, but it sounds as though, if you're right in expecting the investigation to be wrapped up next week, that probably wouldn't have an impact.
Kelm-Helgen: At this point, we're hopeful we can stay on schedule. There still are those other two agreements that we have to get back to the negotiating table with the team on -- the use agreement and the development agreement. At this point they are still refusing to discuss those until our due diligence is over with. So, we've got some fairly significant issues we disagree on. I am still concerned with the schedule from that standpoint. But as far as the due diligence is concerned, that itself will not cause a schedule delay.
City Pages: But if the timetable is pushed back, might taxpayers be on the hook to pay for any resulting cost overruns?
Kelm-Helgen: Well, from our standpoint we've been really clear with the team that any schedule delay will be basically their responsibility because by our keeping a timeframe on the due diligence work and the fact that they're the ones through their actions that caused this extra due diligence to have to be done -- even with that we're staying on track. Our biggest concern is their refusal to negotiate these agreements. If that does cause delays, we've been very clear that those delays will be on their cost side of the ledger, not ours. So, we don't know that there will be delays, but if there are, we certainly don't see that as being a public responsibility.
:::: UPDATE ::::
In a statement released this morning, Kelm-Helgen writes that the preliminary results of the due diligence investigation indicate the Wilfs shouldn't have trouble covering their share of the stadium.
While final conclusions haven't yet been drawn, Kelm-Helgen says that "based on the information received to date, we have indications that the team will have the financial capability to move forward with the stadium project."
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