Eight months after agreeing on the financing plan for a
new $130M arena in St. Paul, city, state and Wild officials
"have worked out lease details that include enhanced
protections for the city's property tax payers," according
to Curt Brown of the Minneapolis STAR TRIBUNE. The new deal
will raise the city's debt by about $73M, 89% of which will
be paid back through the Wild's tax and rent payments.
Features added to the lease agreement include forming a
reserve fund backed "mainly" by a $7M annual letter of
credit from the team to guard against revenue shortfalls and
borrowing money by selling revenue bonds for the city's $65M
share of the project. This will prevent the issuance of
general obligation bonds. Despite these changes, "the basic
framework of the deal hasn't changed since April" when the
city, state and team "agreed to share the costs of the
arena." The arena will be built with $65M of city money and
$65M in state funds, while the Wild will be responsible for
93% of the total loan repayments. However, the city must
borrow $72.75M instead of $65M because team payments won't
start until 2000, and the arena is already under
construction. City Council has decided to hold a public
hearing January 6 before voting to accept the lease
agreement and financing plan (STAR TRIBUNE, 12/17).
