By Mike Kaszuba
In April of last year, city officials entered into a series of agreements that paved the way for a privately-built stadium that would host a Major League Soccer team in St. Paul.
The city and the team, Minnesota United, made their first major public announcement about the project in October of 2015. Since that time, details about the ownership structure of the team have remained elusive, even as the city has entered into development agreements with the organization, and committed to give the project public subsidies.
While former UnitedHealth Group chief executive Bill McGuire has been the public face of Minnesota United (the team’s website refers to him as its owner) the site also states that other prominent Minnesotans – including Minnesota Twins owner Jim Pohlad and Minnesota Timberwolves owner Glen Taylor – are investors as well.
Roles of investors in Minnesota United
With stadium construction due to start this year, the level of financial commitment from the team’s investors remains vague, and there are indications the team is still seeking additional partners. Minnesota United did not respond to several recent requests for details from Public Record Media (PRM), a St. Paul non-profit.
A spokesman for one reported investor also had little to say. “These are questions that should be answered by the Minnesota United, given it is in regard to their organization and their stadium,” Brad Ruiter, the Timberwolves’ vice president of communications, told PRM in response to questions about Taylor’s involvement with the soccer team.
A spokesman for the Minnesota Twins went further, saying that a member of the Pohlad family is sitting on the soccer team’s board. “Yes, the Pohlad family are investors with the MN United franchise,” Dustin Morse, the Twins’ senior communications director, told PRM by e-mail. “Bob Pohlad represents the Pohlad family on soccer matters including sitting on the team’s board.”
The owners represent some of the wealthiest people in Minnesota. In the early 2000s, McGuire himself was routinely the highest compensated CEO of any Minnesota-based public company.
More investors reportedly sought
St. Paul Port Authority officials have told PRM that in recent months, the team has indicated that it may be looking for more investors beyond those already announced. The port authority, an economic development arm of the city, has been involved in the negotiations to have the team build a privately-financed, 20,000-seat stadium on land that is partly owned by the public.
“[Bill McGuire] has only hinted that there will be [other owners]; no names have been discussed,” stated Andrea Novak, the port authority’s senior vice president for marketing. In a December, 2016 e-mail to PRM, she noted that so far “only Dr. McGuire and his legal representatives have represented the team.”
As for any ownership roles for Taylor and Pohlad, Novak wrote that, “This information has not yet been disclosed.”
Laurie Siever, the port authority’s senior vice president for administration, agreed. “We do not have a list of the [other] MLS owners,” she stated in a November, 2016 e-mail. “The last we heard, McGuire was working on investors.”
When asked in late October whether the St. Paul mayor’s office had a document listing who the owners might be, or whether the office had requested a list of the team’s owners, Coleman’s communications director Tonya Tennessen replied that the city did not.
In December, Tennessen elaborated further. “As this is a privately financed stadium, we treat this as we would other privately financed development projects,” she told PRM via e-mail. “Of course, we have development and use agreements, as you know. In terms of the ownership group’s finances, you really need to direct that question to them.”
“In meetings between the city and the team, the team has been represented by Dr. McGuire, Minnesota United staff and/or various consultants or contractors working on behalf of the team,” Tennessen added. She also noted that, “Dr. McGuire signed the documents with the city as the Managing Member and Manager of MUSC Holdings, LLC.”
When the city and Minnesota United announced in October 2015 that the team would build its stadium in St. Paul, city and team officials jointly crafted a press release. In the editing of the press release, wording that referred to McGuire as the team’s “owner” was deleted from one version of the release obtained by PRM.
Tennessen referred further ownership questions to Eric Durkee, the team spokesman. But Durkee did not reply to multiple requests from PRM for details on the ownership structure for Minnesota United, including whether McGuire would be the majority owner, the level of investment by Pohlad and Taylor, or whether other investors were still being sought.
The team’s website states that after acquiring the team, McGuire, “brought together an ownership group made up of Twins owner Jim Pohlad, Timberwolves owner Glen Taylor and Carlson [Cos.] board member Wendy Carlson Nelson.”
St. Paul’s role in soccer project
While the team has stated that the $150 million stadium will be privately financed, the City of St. Paul is a substantial partner in the project.
Under agreements signed between the city and Minnesota United, the team will pay $556,624.00 in annual rent for the stadium. According to the agreements, the city will own the stadium when it is complete. And the city has publicly endorsed Minnesota United’s request at the Legislature for a series of tax breaks that – while relatively minor – the team has characterized as necessary in order for the project to proceed. In addition, an estimated $18 million in public infrastructure costs for the project will also be needed, team officials have stated.
“The ownership group of Minnesota United has committed to paying for the $150 million soccer stadium at Midway privately without any taxpayer-supported subsidies,” the team’s website says. “Minnesota United will be the first professional team in Minnesota to construct a stadium without a direct public subsidy.”
Agreements signed by St. Paul
City officials have so far signed three major documents for the team’s new stadium: A development agreement, a playing and use agreement, and an environmental project management agreement.
Under the three agreements, the team will get all revenue from selling naming rights for the stadium, as well as the stadium’s plaza area, promenade, green spaces, and a projection tower. Minnesota United will also receive all revenue from advertising sold at the stadium.
Although the city is paying for infrastructure work related to the stadium, the agreements state that the city and team have “collaborated” on the public infrastructure budget, but that “the city has requested, and the team is willing to take on the responsibility” for the work.
The agreements, in addition, allow the team in certain instances to “reallocate amounts within the line items of the City Public Infrastructure Budget to pay for the hard costs and soft costs related to the design and construction of the Stadium Site Infrastructure.”
The playing and use agreement allows the city to inspect the team’s books related to expenses and capital expenditures for the project, but limits the ability of others to see the documents.
The agreement says that the team, by law, is allowed to mark any of its stadium financial data related to expenses and construction as “protected”. Should a third party request “protected” data, the agreement states that the city shall “provide the [team] a reasonable opportunity to initiate action to prevent or limit the disclosure of such protected data.”
Although a groundbreaking ceremony was held in December, the stadium’s actual construction start is still uncertain. This year, the team will play at the University of Minnesota’s TCF Bank Stadium while the stadium in St. Paul is being built.
Revised March 6, 2017