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OverviewofStadiumDevelopmentandOperatingTermsMinneapolisDowntownEastSite
3/01/2012
Theintentofthisdocumentistoprovideanoutlineoftermsagreedtobytheundersignedsetforthhereinforthestructuringofapublic/privateagreementrelatedtothedesign,development,constructionandoperationofafirstclassPeoplesStadium(Stadium)intheStateofMinnesota.ThetermssetforthhereinhavebeendevelopedtoprovideaframeworkforatransactionthatprotectsthepublicsinterestandinvestmentinsuchaprojectwhileprovidingtheNationalFootballLeaguesMinnesotaVikings(Vikings)withasuitablelongtermhome.Purpose:Toprovideasetofguidingprinciplesrelatedtothedesign,development,constructionandoperationofanewStadiumintheStateofMinnesotathatcanbeusedforabroadrangeofcommunity,civic,sportingandentertainmentevents.TheStadiumshouldbedesignedtomaximizethebreadthanddepthofeventsthattheStadiumcanreasonablyattracttomaximizetheeconomic,fiscalandsocialbenefitstotheStateanditscitizenswhileprovidingalongtermhomefortheVikings,therebyensuringthepresenceoftheTeamandtheirassociatedbenefitstotheStateofMinnesota,localjurisdictionsandtheStatescitizensforaminimumofthirty(30)years.Parties:Itiscontemplatedthatthepartiestothetransactioninclude(asapplicable)thefollowing:
StateofMinnesota(theState) CityofMinneapolis(theCity) TobeformedStadiumAuthority(theAuthority) MinnesotaVikingsFootball,LLC.andanyTeamAffiliatesand/orTeamStadiumCompany(theTeam) NationalFootballLeague(theNFL)
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StadiumLocation TheStadiumwillbelocatedat theDowntownEastsiteinMinneapolis,MN
StadiumDescription TheStadium willbeMultipurposewithaFixed roof (withanoptiontomodifyto aRetractableroof withoutanyincreasetothe fundingprovidedbyStateorCity). ThecurrentStadiumsitingplan isdepictedonScheduleA. During theDesignandDevelopmentPhase,theGroup(definedherein)willexploremovingtheStadiumasfareastonthesiteaspossible,withfullconsiderationofprojectcosts,safety,andothersuch issues, inorderto limitthetimethattheTeamwouldneedtoplayatanotherlocationandtocreateasignificantpublicplazaforyearroundactivities.
StadiumOwnership TheStadiumandtheStadiumsite willbeownedbytheStadiumAuthority.
Authority
TheAuthoritywillbecomprisedof:o 3membersappointedbytheGovernor,includingtheChairo 2membersappointedbytheMayoroftheCityofMinneapolisTheAuthoritywillbeappointedwithin30daysaftertheenactmentoftheStadiumlegislation.
AuthorityTransition TheMetropolitanSportsFacilitiesCommission (MSFC) willbeabolishedwithin90 days aftertheenactmentoftheStadiumlegislationwiththenewAuthorityassumingallremainingassetsandobligationsoftheMSFC.
Financing TheStatewouldprovide$398 million(netoffinancingcosts)totheproject.TheCityofMinneapolisConventionCenterTaxes(describedbelow)wouldprovide$150million(netoffinancingcosts).TheTeam/PrivateContributionwouldbe$427million(netoffinancingcosts).
Sources:StateofMinnesotaCityofMinneapolisTeam/PrivateTotalSourcesUses:StadiumSiteCost/RelocationTotalUses
$398.0150.0427.0$975.0
$828.0147.0$975.0
TheprojectbudgetisattachedonScheduleB.
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EstimatedLifeCycleStadiumFunding/OperatingCosts(Operating,GamedayandongoingCapitalNetPresentValue(NPV)isbasedon3%inflationanda4%discountrate)
State:UpfrontOps&Capital(NPV)Total(26.7%)City:UpfrontOps&Capital(NPV)Total(22.7%)Team/Private:UpfrontOps&Capital(NPV)Total(50.6%)
$398.00.0
$398.0
$150.0188.7$338.7
$427.0327.1$754.1
PublicFunding The State ofMinnesota (or designated intermediary) will issue appropriation bonds which combinedwith other fundingsourceswillbeintheamountof$548million(netoffinancingcosts).Thebondswillberepaidthroughacombinationoffundsprimarilygenerated through theCityofMinneapolis ConventionCenterTaxes identified in theConventionCenterTaxessectionbelow (supportingapproximately$150million in financing)andexpansionofStateauthorizedcharitablegaming toincludeelectronicPulltabandotherallowablegaming(supportingapproximately$398millioninfinancing).
ConventionCenterTaxesCapitalContributionAllocation
Beginning in 2021 through 2046, the Statewill encumber, on an annual basis, a portion of the Convention Center Taxesequivalenttothepresentvalueof$150million.Forcalculationpurposes,thepresentvaluedatewillbebasedonthedate(s)ofthebond(s)soldbytheState(ordesignatedintermediary)orotherStatefundingisinitiated.Thepresentvalueratewillbethegreaterofthetotalinterestcostofthebondissue(s)orequivalent30Yearbondindex.AproposedminimumscheduleofConventionCenterTaxencumbranceswillbedevelopedbytheCityandtheState.
PublicStadiumOperatingandCapitalReserveAllocation
Beginningin2016(orthefirstyearofoperation),theStatewilladvancetotheAuthority,onanannualbasis,theamountof$7.5millionadjustingbasedupontheprecedingyearsgrowthintheConventionCenterTaxes,butnotlessthanzeropercent(0%)andnomore than fivepercent (5%)annually thereafter (theadjustment factor), through2020. Beginning in2021through 2046, the State will encumber an amount, on an annual basis, equivalent to $7.5 million as adjusted by theadjustmentfactor. InorderfortheStatetorecoup itsadvancefortheperiod2016(orthefirstyearofStadiumoperation)through2020,theStatewill,beginningin2021,retainanadditionalportionoftheConventionCenterTaxesannuallyusingthesame present value discount rate and calculationmethod set forth Public Capital Contribution Allocation section aboveutilizingtheactualdatesoftheStateadvancestocalculatetheirpresentvalue.ThepresentvalueoftheStatesrecoupmentwillalsobecalculatedbasedontheactualrecoupmentdatesandthePublicCapitalContributionAllocationsection.
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Beginningin2013,theState willretainand paytotheAuthorityannually(i)onehalf(50%)ofanyamountabovethefirst$1.0million(inflatingattwopercentannually,thereafter)uptothefirst$3.0million(inflatingattwopercentannually,thereafter),and(ii)onequarter(25%)ofanyexcessamountsoverthepriorthreshold,ofthebaseConventionCenterTaxamountssetforthinascheduletobedevelopedbytheCityandtheState.
ConventionCenterTaxes Asapartofthefunding,thetaxessetoutbelow(theConventionCenterTaxes) will remainineffectthroughatleast2046 atcurrentlevelscoveringcurrentitemsincurrentgeographiclocations:
a. 0.5%generalsalestax;b. 3%downtownrestauranttax;c. 3%downtownliquortax;d. 2.625%lodgingtax.
Beginning in2012,theauthorizationfortheConventionCenterTaxeswillprovideforCityexpenditures insupportofcapitalprojectsorforothereconomicdevelopmentpurposes.
MSFCReserves TheMSFC Reserves, if any,will be transferred to the new Authority to fund the Authority activities during constructionincludingtheongoingoperationsoftheMetrodomeuntildemolished,andthenappliedtocapital/operatingreservesofthenewStadiumaftertheTeamhasfinishedplayingatMallofAmericaField,asdeterminedbytheAuthority.
TimingofContributions Fundingofprojectcosts,includingthedesignanddevelopmentphase,willbepaidfirstbytheTeamuntil$50million oftheTeam/Privatecommitmentisexpended,secondbytheAuthorityuntil$50millionofthePubliccommitmentisexpendedandthen sharedproportionatelyby theTeamandAuthorityuntilall costshavebeen funded. TheTeamwillprovide suitablesecurityfortheirfundingobligationsasapartofprojectfinancing.
State/CitySalesTaxExemption TheStateandCitywillprovidea sales taxexemptiononStadium andoffsite transportationconstructionmaterials,seweraccesschargefeeexemption,andpropertytaxexemptionontheStadiumproperty. TheTeammayoperatesomefacilitieson/asapartoftheStadiumsiteyearround(e.g.,retailstore(s),restaurant(s)),asagreedtobytheGroup(asdefinedbelow)aspartoftheDesignandDevelopmentPhase. Thepropertytaxexemptionwouldalsobeapplicabletothesefacilities,totheextentlegallypermissible.
Design&ConstructionManagement
ThedesignandconstructionoftheStadiumshallbeacollaborativeeffortbetweentheAuthority andtheTeam. TheAuthorityand the Teamwillwork together throughout the design and construction process to identify themost efficient projectprocurement and deliverymethods subject to the Authoritysmandated public process, and subject to the exemptionsgrantedtotheTargetFielddesignandconstructionprocess,asdescribed intheTargetField legislationMinnesotaStatutesSections473.756,Subd.12,asapplicable. Anynecessary landuseanddevelopmentreviewsandapprovalsshallbehandledconsistentwiththeproceduresandstandardsappliedtotheTargetFielddesignandconstructionprocess,asdescribedintheTargetFieldlegislationMinnesotaStatutesSec13.473.758,Subd2,asapplicable.
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AStadiumDesignandConstructionGroup(Group) shallbeestablishedtomanagethedesignoftheprojectandtoprovideoversightduringconstruction.TheAuthorityandTeamshalleachappointonemembertoserveastheleadrepresentativefor eachparty. Eachmember shall serve at thepleasureof the appointing entity. A4/5 voteof theAuthoritywillberequiredwith regard to theAuthority decisions related to zoning, landuse and exterior design of the Stadium, relatedParkingandthePlazaarea.
Groupwillhire,byunanimousdecision,anexperiencedOwnersRepresentativetoassistinthemanagementoftheproject.TheGroupOwnersrepresentativewillworkfortheGroupandbepaidoutofProjectfunds.Ifdesired,anymemberoftheGroup,at itsownexpense,mayalsohire theirownProjectRepresentative toparticipate in thedesignand constructionprocess.GroupwillmanagethefollowingaspectsoftheProject:
ProjectProgramdevelopment ProjectBudgetdevelopment ProjectScheduledevelopment SolicitationandSelectionofanarchitectandotherconsultants(DesignTeam) DirectionoftheDesignTeaminthepreparationofdesigndocuments Sitedevelopment,includingparkingandinfrastructure Transportationimprovements GuaranteedMaximumPrice(GMP)process,includingselectionofcontractorandnegotiationofGMPagreement AllotheraspectsoftheStadiumdesign&constructionuntilabindingandacceptableGMPagreementissigned
DesignandDevelopmentPhase
For the timeperiodupuntil theDesignandDevelopmentDrawingsarecompleted,and inanyeventnomore than14months after the Design Team has been engaged, the Group shall work together on all aspects of design anddevelopment.Tohelp theGroup carryout these tasksduring theDesignandDevelopmentPhase, theAuthorityand theTeam shallenterintoaDevelopmentAdministrationAgreement(DAA)inwhichtheAuthorityandtheTeamwillagreetoundertakeandpayforcertaindesignandotherdevelopmenttasksneededtodeveloptheStadium,asdescribedabove.TheTeamshallprovide the initial funding for theDesignandDevelopmentPhase inaccordancewith theTimingofContributionssectionabove,cappedat$50million,whichwillbereimbursedproportionaltoprojectfundingpercentagesintheeventtheprojectterminatesforwhateverreason(i.e.,Team44%;Public56%).
TheGroup shall establishminimum design standards to be incorporated into the construction of the Stadium. Suchminimum design standards shall be based on recentlybuilt, comparablemarketNFLmultipurpose Stadium programelements,includingbutnotlimitedtoIndianapolisLucasOilStadium,andbeconsistentwiththe2008stadiumprogramdevelopedbytheMSFC.TheGroupshallworktogethertominimizeprojectcostswhilemaintainingtheminimumdesign
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standards andconsideringtheimpactonoperations/operatingcosts. AnychangestotheminimumdesignstandardsmustbeapprovedbytheGroup.IftheGroupisunabletoagreeonanyaspectoftheDesignandDevelopmentPhase,oranyaspectoftheminimumdesignstandards,theGroupshallconsenttobindingarbitrationinordertoresolveanyitemsindispute.IfeithertheAuthorityortheTeamsubsequentlyrequestsanagreeduponchangetotheminimumdesignstandards,thatparty shall be responsible for the additional cost and for themitigation of any negative impact, if any, on the otherpreviouslyagreedtoprojectelements,unlesstheAuthorityandTeamagreetoshareinsuchcosts.ConstructionPhaseUponcompletionof theDesignandDevelopmentPhase, theGroupshall instruct theselectedcontractor toproposeaGMPintwoalternativeformats:
DesignBuildGMP, inwhichthecontractorshallassumeresponsibilitytocompletethedesignanddeliver finalconstructiondocuments and construct theproject for aGMP that includes all the required costsof finishingdesignandconstruction,or
ConstructionManageratRiskGMP,inwhichthecontractordoesnotassumeanydesignresponsibilitybutdoesagree to construct the project based on the applicableDesign andDevelopment documents for aGMP thatincludesalltherequiredcostsofconstruction.
TheGroupshallreviewthealternativeGMPproposalsandselecttheapproachdeterminedtobemostappropriateunderthe circumstances. Undereitheralternative, theGMP contract shall containprovisions for significantpenalties in theeventthecontractordeviatesfromtheminimumdesignstandardsordoesnotachievetimelycompletioninaccordancewith the project schedule. Further, goals for construction contracts to be awarded towomen andminority ownedbusinesseswillbe inapercentageat leastequaltotheminimumused forotherMinneapolisdevelopmentprojects,asshowninScheduleC,andtheconstructionworkforcewillestablishworkforceutilizationgoalsatleastequaltocurrentcitygoalsandincludeworkersfromMinneapoliszipcodesthathavehighratesofpovertyandunemployment.
After the GMP agreement is signed, the construction phase shall commence and the Authority will manage theconstructionoftheStadium.However,theAuthority:
WillconstructtheStadiuminamannerconsistentwiththeminimumdesignstandardsandGMPdesigndocuments
unlesstheGroupotherwiseagrees. Will furnish and equip the Stadiumwith furniture, fixtures and equipment (FF&E) consistentwith the approved
DesignandDevelopmentDrawingsandminimumdesignstandards. WillensurethecompletionandcommissioningoftheStadiumconsistentwiththeapprovedDesignandDevelopment
Drawingswithrespecttosustainabilityandefficientbuildingoperations.
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IfvalueengineeringisrequiredtoavoidanyincreasesintheGMPprice,theGroupwillparticipateinanyandallsuchdecisions.However,iftheGroupisunabletoagreeonmodificationstheAuthorityshallhavetherighttomakefinaldecisions except with respect to minimum design standards, which will include significant revenue generatingelements,astheAuthoritywillberesponsibleforcostoverruns.
ForanyaspectduringtheConstructionPhaseforwhichtheGroupisunabletoagree,thentheAuthorityshallhavetherighttomake the final decision, as the Authority is responsible for cost overruns, provided, however, that in no eventwill anydeviationfromtheminimumdesignstandardsbepermittedwithoutTeamconsent.
Notwithstandingtheabove,beforetheAuthorityentersintotheGMPAgreement/orlikecontract,theTeam,withtheconsentof theAuthority (such consent not to be unreasonablywithheld or delayed),may take the place of theAuthority in themanagementoftheConstructionPhase, inwhicheventtheTeamshallberesponsible forcostoverrunsandwillotherwiseassumeall rightsand responsibilitiesof theAuthority to complete construction inamanner consistentwith theminimumdesignstandardsandtheGMPdesigndocuments.IntheeventtheTeamexercisesthisoption,theTeamshallhavetherighttomake finaldecisionswithrespect toanyvalueengineeringdecisions thatmayberequiredtoavoidany increases to theGMP,withinthesameparametersregardingminimumdesignstandardsastheAuthoritywouldbesubjecttotheabove.
CostOverruns/Savings TheAuthority (or the Team,iftheTeamassumes allrightsandresponsibilitiesofthe Authority tocompleteconstruction perthetermssetforthintheDesign&ConstructionManagementSection)willberesponsibleforcostoverrunsassociatedwithdevelopmentoftheStadiumproject.Anycostsavingsoradditionalfundsobtainedbythepartiesforprojectcostsshallbe(1)usedtofundagreeduponadditionalprojectcosts,whichmayincludetheadditionofaretractableroofandoperableendwalls,stadiumtechnology,programmingofpublicplazaareasadjacent to theStadium,and landacquisition,or (2)used to fund theCapitalReserveoncethe itemsagreedtoin(1)abovehavebeenfunded.IfathirdpartyisengagedinanymannerduringtheDesignandDevelopmentPhaseorConstructionPhase(e.g.,aP3designandoperationgroupisengaged)theGroupmustbeinunanimousagreementtoengagesuchthirdparty.
Operations TheAuthority and Teamwill mutuallyagreeon anexperiencedprivatestadiummanagementcompany(orqualifiedindividual)tomanage the Stadium on behalf of theAuthority and Team (the Manager), andwillmutually agree on certainmajorvendors (e.g., concessionaire) who will be providing services to the Stadium on a longterm basis. The major vendorcategorieswillbedefinedinthedefinitiveagreements.TheAuthorityinconsultationwiththeTeamwillnegotiateafixedcostoperatingManagement/EmploymentAgreementwithoperatingcostprotection(s).TheAuthority(nottheCityortheTeam)willberesponsibleforoperatingcostoverruns.
TheManager would be responsible for developing initial and ongoing Operating Plan(s) and Operating Budget(s) to beapprovedbytheAuthority, inconsultationwiththeTeam. TheOperatingPlanwill identifythenumberandtypesofeventsplannedeachyearandwouldbeconsistentwiththegeneralframeworkoftheinitialOperatingPlanandBudgettobeagreed
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bytheAuthority, inconsultationwiththeTeam. TheOperatingPlanandOperatingBudgetshallaccommodatetheTeamsNFL operating and schedule requirements and be consistentwith historical standard operating practices of comparablemarketNFLmultipurposefacilities(includingbutnot limitedtoLucasOilStadium). NFL/MLSdatesanduptofive(5)otherNonNFL/MLSEventsasdescribedbelowwillhaveschedulingpriority.Teamshallhaveuptoten(10)nonNFL/MLSdatesperyearforevents(e.g.,NFLDraftParty,charitableevents,Teamsponsorevents; such events the Team NonNFL/MLS Events) including up to five (5) such dates with scheduling priority, inaccordancewith the scheduling process referenced below, in samemanner asNFL/MLS events. Any TeamNonNFL/MLSEventsmaynotbecompetitivewithanyAuthorityrevenuegeneratingevents.AllTeamNonNFL/MLSEventswillbeavailabletotheTeamatnoadditionalrent,however,allactual/eventexpensesforanyTeamNonNFL/MLSEventswillbepaidbytheTeam.TheAuthorityandTeamwillestablishaschedulingprocessfortheStadiumeachyear,includingappropriatedeadlinesforeachpartytoscheduleitsevents.AnyadditionaleventdaysrequestedbytheTeamforTeamNonNFL/MLSEventswillbeagreed upon between the Team and theAuthority considering theAuthoritys scheduling priority and the importance ofmaximizingpublicaccess.The Manager would be responsible for operating the Stadium and parking facilities in accordance with the approvedOperating Plan and Budget. Any significant changes to the Operating Plan and Budget would require approval by theAuthority,inconsultationwiththeTeam.
CapitalRepairsandImprovements
TheAuthority, with inputfromtheManagerandtheTeam,woulddevelopashorttermand longtermcapitalfundingplanthatprioritizesanddefinesthecapitalimprovementsonarollingcurrentyearandmultiyearbasisinordertomeettheneedsofthepublicandNFLstandards.TheAuthorityagreestomaintaintheStadiuminamannerthatisfirstclassandconsistentwithcomparableNFLstadiums,suchasbutnotlimitedtoLucasOilStadium.TheManager, at the direction of theAuthority,will be responsible formaking, or for causingothers tomake, all capitalrepairs,replacements,andimprovementsfortheStadium,plaza,andparkingfacilities.TheTeamwillcontribute$1.5millionannually(inflatingat3%annually)intotheCapitalReserveFund.Inaddition,20percent($1.5million,asadjustedannually)oftheoperatingallocationdescribedinthePublicStadiumOperatingandCapitalReserveAllocationsectionsetoutabovewillbeplacedintotheCapitalReserveFund.AnycapitalimprovementproposedbytheTeam(s)intendedprimarilytoproviderevenueenhancementstotheTeam(s)shallbe paid for by the Team(s)unless otherwise agreed towith theAuthority aspartof the Capital fundingplan, subject toAuthorityapproval.
Term TeamwillenterintoaStadiumleaseoruseagreementwiththeAuthorityfora termofthirty(30) years; withoptionsfortheTeamtoextendthetermforfour(4)additionalfive(5)yearperiods.TheagreementwillcontainassurancesandconditionsrequiringspecificperformanceandcommitmentfromtheTeamtoplay
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theirhomegamesattheStadiumthroughoutthetermoftheUseAgreement. TheTeamshallhavetheabilitytoplay alimitednumberofLeaguemandatedhomegamesoffsiteorspecialtyhomegamesoffsite,butnotmorethanone(1)gameperyearormorethanfour(4)regularseasongamesandtwo(2)preseasongamesoveranyten(10)yearperiod.
StadiumRevenues TheTeam shall retainallNFLandTeameventrelated revenues, includingbutnot limited to club seat and suite revenues(otherthangeneratedfromticketsalesfornonTeamrelatedevents)andconcessionrevenuesfromNFL/MLSdatesandTeamNonNFL/MLSEvents. IftheStateorCity imposesany incrementaltickettaxorticketsurcharge (excludinganygeneraltaxincrease(s))onTeamrelatedrevenuessources,suchpartywillbeobligatedtoreimbursetheTeamforanynegativefinancialimpacttotheTeamresultingfromsuchtaxorsurcharge,asagreedtobytheTeam,throughrentabatementsorotherwise.TeamacknowledgesthatNFL/MLSandotherTeameventswillbesubjecttotheCitysentertainmenttax,asapplicable.TeamwillhaveabilitytoofferSuiteholdersticketstoalleventsandtoofferClubpatronstherightoffirstrefusaltopurchaseticketsforallcommerciallysignificantStadiumevents.AlimitednumberofGeneralAdmissionticketswillalsobemadeavailabletotheTeamforallcommerciallysignificantStadiumevents. Notwithstandingtheabove,suiteholder,clubpatronandgeneraladmissionticketswillnotberequiredtobemadeavailable fortheNCAAFinalFour,majorpoliticalconventions,theSuperBowlandothersuchmajoreventsasmutuallyagreedtointhedefinitivedocuments,ifany.Teamshallserveassalesagentand collect revenues from all Stadium advertising within the Stadium site and all naming rights, including the stadiumcomplex,plaza,andrelatedareas(excludingthelightrailstation,ifapplicable),asdefinedfurtherinthedefinitivelongformagreement.TheAuthorityretainstherighttoapprovenamingrightsinordertoensurethatanysuchnamewouldnotbeinviolation of any Applicable Law or is a name that (a)could reasonably be expected to cause embarrassment to theAuthority/public,or (b)isrelatedorreferstoanysexuallyexplicitsubjectmatter,businessorenterpriseoranyfirearms,ortobaccocompany.TeamshallalsohaveacertainamountofspaceintheStadiumavailabletoTeamonayearroundbasisatnoadditionalrent,andwithnorestrictionsonaccess,forTeamoperations,salesandmarketingincludingaticketoffice,ownershipandvisitingownersuites,Teammeetingspace(e.g.,boardroom),lockerandtrainingrooms,sponsorshipspaceavailableforsponsorandothereventsduringtheyear,VikingsHallofFameandasmallamphitheatersupportingtheVikingsHallofFame,Teamretailstore(s), and restaurant(s). Any revenues collected from such spaceswill be retained by the Team. The Teamwill beresponsibleforallcostsrelatedtooperatingandmaintainingtheVikingsHallofFame,Teamretailstore(s),andrestaurant(s).TheTeamwillalsoberesponsibleforanyincrementalcosts,beyondthebaseoperatingandmaintenancecostsincludedintheStadiumbudget, forspaces related tootherTeamoperations. Thepubliccostswillnotbe increasedbeyond theamountsshowninScheduleB.AllothernonTeamrelatedrevenuesshallberetainedbytheStadiumAuthority.
Rent/OperatingExpenses The Authority will be responsible for all operating costs of the Stadium and plaza after payments received from theTeam/PublicStadiumOperatingAllocationandotherevents.WithregardtotheplazaareaassociatedwiththeStadium,iftheStadiumissitedinamannerthatsignificantlyincreasesthesize/functionbeyondthatsetforthinScheduleA,asapartofthedefinitivedocuments,theTeamandtheAuthoritywillmutuallyagreetodiscusstheoperationalimpactsofthePlaza.TheTeamwillpaytotheAuthority$8.5millionperannum(inflatingat3%annually)towardOperatingExpensesintheformof
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rentundera leaseorusefeesunderauseagreement foruse inoperatingexpenses. Inaddition,80percent($6million,asadjusted annually) of the operating allocation described in the Public Stadium Operating and Capital Reserve AllocationsectionsetoutabovewillbeappliedtowardOperatingExpenses.
NewMajorLeagueSoccer(MLS)andOtherTeamFranchises
IfanyoftheTeamsowners whosefamilyownsatleast3 percentoftheTeam purchasefull ownershiporpartialownershipinanMLSfranchise,suchfranchisewillplayintheStadiumunderthesameoperating,schedulingpriority,andrevenueandexpensetermsasapplicabletotheTeamsNFLfranchise,atnoadditionalrent.Notwithstanding,anyreasonablemarginalcostsincurredbytheAuthorityasaresultofthenewfranchise(s)willbepaidbytheTeam.Theassumptionisthatnoincrementalcostsforcapitalmodificationsorcapitalrepairsareexpected.However,anycapitalmodificationsrequiredtosupportthenewfranchise(s)willbefinancedbytheTeam,unlessotherwiseagreedtobytheAuthority.TheTeamhastheexclusiverighttobringMLSsoccertotheStadiumfor5yearsaftertheStadiumisopen.TheTeamintendstoactivelyevaluatepursuinganMLSfranchiseduringthisperiod.IftheTeamsownerspurchasefullownershiporpartialownershipoffranchisesotherthantheNFLorMLSteams,thetermsoftheagreementtoplayintheStadiumwillbenegotiatedingoodfaithatthattime.
Tailgating Asapartof thedefinitivedocuments,theCityand theTeamwillworktogethertoexpandthecurrenttailgatingboundariesonsurface parking lots generally East and South of the Stadium understanding that certain areas will not be practical fortailgating. Oncetailgatingareashavebeenspecifically identifiedandagreedupon,theCitywillamendCityOrdinanceTitle13,319.310to includesuchareas. Inaddition,theCityandTeamwillexploretailgatingareasalongcurrentandfutureLRTlines. It isexpected thatanycosts (e.g.,cleaning)associatedwith tailgatingonsurfaceparking lotswillbepaid forby theownersofsuchlots.
GamedayExpenses TheTeamshallpayallNFL/MLS gamedayandTeamNonNFL/MLSEventdayexpenses includinganyCityservices withintheStadiumorrelatedplazaareas.The City shall be responsible for all costs incurred forNFL/MLS gamedays and reasonable costs for up to ten (10)NonNFL/MLSEventdays (excludingany inStadiumorplaza related costs forwhich theTeamwillbe responsibleasdescribedabove),forCityservices(e.g.police/security,trafficcontrol,fireprevention,emergencymedical,streetcleaning/trashremovalandothersimilarservices).
TeamSale IftheTeam issoldoraninterestintheTeam issold,aportionofthesalepricemustbepaidtotheAuthorityanddepositedinareservefundforimprovementstotheStadiumorexpendedastheAuthoritymayotherwisedirect.TheportionrequiredtobesopaidtotheAuthorityshallbe18percentoftheamountinexcessoftheoriginalpurchasepriceoftheTeam,decliningtozerofifteenyearsafterthepassageofStadiumlegislationinincrementsof1.2percenteachyear.Theagreementmustprovideexceptionsfor(1)salestomembersoftheownersfamilyandentitiesandtrustsbeneficiallyownedbyfamilymembers,(2)salestoemployeesofequityinterestsaggregatingupto10percent,and(3)salesrelatedtocapitalinfusionsnotdistributedtotheowners.
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PublicAccess TheAuthority,TeamandManageroftheStadiumwillworktomaximizetheuseofthefacilitybyattractingeventsthatcreateeconomic,fiscalandsocialbenefitstotheStateandlocalcommunities.Examplesofsucheventsinclude:NCAAcompetitions,concerts,political,civic,community,MNHSLandnotforprofitevents.TheAuthorityshallactivelyseekoutcivic/community/notforprofiteventsconsistent(intypeandrent)withthehistoricoperationsoftheHubertH.HumphreyMetrodome.
StadiumBuildersLicenses(SBL)
TheAuthorityshallownandretain the exclusiverights tosellSBLstotheStadium.TheAuthorityshallretaintheTeamtoactastheAuthority'sagentinmarketingandsellingsuchlicenses.
MetropolitanCouncilReview WaiverofMetropolitanCouncilSignificanceReview.
SeatingCapacity Approximately65,000(expandableto72,000)
PremiumSeatingInventory Approximately150suitesand7,500clubseats
Parking/EventVenues Assumes the construction of onsite parking and the use of existing parking ramps and surface parking surrounding theDowntownEastSite. Team requires that2,000 spacesbeprovidedwithinone (1)blockof theStadiumwitha skywayortunnelconnectiontotheStadiumand500spacesbeprovidedwithintwo(2)blocksoftheStadiumwithadedicatedwalkwayongamedaysforpremiumticketholders.TheCitywillusebesteffortstosecuretheexclusiveuseoftheMinneapolisArmoryfortheTeamonTeamEventdays.
LEEDCertification TheStadium shouldbedesignedand constructed inamanner thatprovides forenvironmentalandenergyefficiency.TheAuthorityandtheTeamwillmakeanefforttobuildaStadiumthatiseligibletoreceiveLEEDcertification.
AffordableNFLGameTickets Thelease/useagreementorothertransactiondocumentsshallprovideforanagreeduponnumberofaffordabletickets.
PropertyAcquisition Totheextentlegallypermissible,theCity orAuthority willfacilitateor,ifnecessary,effectuatetheacquisitionofanyandallpropertyrequiredfortheStadiumdevelopmentprojectasprovidedforintheattachedbudget(SeeScheduleB).Ifforanyreasondespitetheforegoing,theCityorAuthorityisunabletofacilitateoreffectuatetheacquisitionoftheDowntownEastParkingproperty,theTeamorrelatedentitiesmaypurchasesuchproperty.IftheStadiumprojectdoesnotgoforward,theState/MSFCwillreimbursetheTeamorrelatedentitiesforthefullvalueofanylossincurredonthesubsequentresaleofthispropertywithin3yearsofpurchase,basedonaninitialpurchasepricebytheTeamorarelatedentityequaltothelesserof(1)theactualpurchaseprice,and(2)$8million.IntheeventthattheTeamorarelatedentityresellstheproperty,theTeamortherelatedentitywillmakecommerciallyreasonableeffortstoobtainfairmarketvalue.
GoverningLaw ThisAgreementshallbegovernedbyandconstruedinaccordancewiththelawsoftheStateofMinnesota.
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Headings TheheadingscontainedinthisAgreementareforconvenienceonly,donotformapartofthetermsofthisAgreement,andmaynotbeusedtoaidininterpretationofthisAgreement.
DraftingofAgreement TheundersignedagreethatthisAgreementwasandisjointlydraftedbetweenthem.Therefore,anyinterpretationofanyambiguityshallnotbeconstruedagainstoneortheother.
LimitedLiabilityAssets State,CityandAuthorityshalllookonlytothelimitedliabilityassetsofTeamandnottotheassetsofanypartnerorotherperson,includingwithoutlimitationTeamsgeneralpartnerandTeamowners,forthesatisfactionofanyobligationordebtunderthisAgreement.
SignaturePageFollows
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ZygiWilf ______________________________Owner/ChairmanMarkWilf ______________________________Owner/President
MarkDayton ______________________________GovernorStateofMinnesotaTedMondale ______________________________ChairofMetropolitanSportsFacilitiesCommissionR.T.Rybak ______________________________MayorCityofMinneapolisBarbaraJohnson ______________________________CityCouncilPresidentCityofMinneapolis
Mixed Use / Parking Ramp -
650 cars
Surface Lot
+/-9
00 Sp
aces
Entry Plaza
Linear Urban Plaza
Open SpaceGameday Tailgating
Gameday Plaza
Gameday PlazaTransit Station450 spaces below
Thro
ugh
Stre
et N
on-G
amed
ay
Future Development Opportunities
Future Development Opportunities
Dedicated Walkway
5th Street
4th Street
3rd Street
6th Street
7th Street
8th Street
Park
Ave
.
Portl
and
Ave.5
th A
ve.
Chic
ago
Ave.
Sout
h 11
th A
ve.
+/-5
00 Sp
aces
SCHEDULE A