Transcripts

text | pdf |

---

SPEAKER 1: Last year, the Twin Cities was one of the only Metropolitan areas in the nation with four big-time pro sports teams. Now, some cities have a baseball team, or a football, or a basketball team, but only a handful of cities have a baseball, football, basketball, and hockey team.

That was last year, though. This year, with the North Stars hockey team now in Dallas, there are only three teams left, and by this time next year, we could be down to two. Marv Wolfenson and Harvey Ratner, the owners of the Minnesota Timberwolves basketball team, say they may move the team to another city next year, unless someone is willing to buy the Target Center Arena that they built to serve as the home of the Timberwolves.

The team, they say, is profitable. The arena, though, has fallen far short of expected revenues. The question at this point is whether public money should be used to buy the Target Center, and thus save the Timberwolves. The issue will probably be resolved one way or the other within the next few weeks. The National Basketball Association has set a deadline of April 1 for the Timberwolves to announce whether they plan to stay or go.

The proposed public buyout, of course, has generated so much controversy, and we thought we would spend the hour today trying to sort out some of the issues, discuss the question, and get your thoughts on the issue. Joining us here in the studio is Richard D'Amico, the president of D'Amico and Partners, which operates five well-known restaurants in Downtown Minneapolis, including D'Amico Cucina and Linguine and Bob, both located right next door to the Target Center.

Mr. D'Amico is a member of the Target Center task force, a group of community and business leaders who commissioned a study on the economic impact of the team in the arena. And also joining us is Jim Niland, the DFL Majority Leader of the Minneapolis City Council, who opposes the idea of spending public money for the arena and the Timberwolves.

Mr. D'Amico, now, presumably, Timberwolves fans care a lot about this issue, but why should anybody else? Why should the rest of us be concerned about keeping the Target Center open and keeping the Timberwolves in town?

RICHARD D'AMICO: I think what it really comes down to is a jobs issue, and I think legislation has been passed in the state of Minnesota to handle major plant closings. And the effect of the Target Center going dark and losing all these jobs will have the equivalent effect of a plant closing in Downtown Minneapolis.

SPEAKER 1: Jim Niland, task force study does indicate that the Target Center and the Timberwolves team generate an immense amount of money for Minneapolis and the state of Minnesota. Why is this not a good investment?

JIM NILAND: Well, the first point I want to make is that the Target Center is not going to go dark. If the Timberwolves leave, they play about 40 nights out of the year at the Target Center. Harv and Marv are still going to be on the hook for the property taxes, the mortgage payments on the property. So clearly, they're just going to fill up those other 40 nights with other events. So we're not talking about the Target Center going dark.

The real question has not been answered, which is, what is the economic impact if the Timberwolves leave? The task force report doesn't answer that question. Certainly, there would be some hit to Minneapolis, but not the sort of hit that justifies spending $90 million of our dollars to bail out Marv and Harv.

SPEAKER 1: Who would own the Target Center?

RICHARD D'AMICO: Well, I think there's a couple misconceptions here. I don't know if Mr. Niland spoken to Dana [? Roehrig ?] or anybody at the Target Center to discuss how this whole booking process goes for events. But I've spent quite a bit of time talking to Dana [? Roehrig, ?] and it's not a simple matter of somebody sitting at a desk and booking events. It's a matter of having the connections.

And when they book the Davis Cup into the Twin Cities, when they're talking to the Tennis Association, they're negotiating for five or six locations that Ogden has a management contract on. And that powerful negotiation and the connections in the industry is why we get events like the Davis Cup.

And same thing goes with major concerts. When they're booking for Billy Joel, they're also booking for five or six other arenas that they have throughout the country. And according to Joe Pettirossi, the CFO for the Target Center and for the Timberwolves, if the Timberwolves were to leave, they would show operating losses trying to operate the center, huge operating losses, trying to operate the center without a basketball tenant. And there's not enough revenue coming in from the other events to make up that.

SPEAKER 1: Mr. Niland.

JIM NILAND: But those operating losses would be even greater if they closed the Target Center. Clearly, with no revenue coming in, how are they going to make their mortgage and property tax payments? They have to have some events there in order to be able to pay the bills.

SPEAKER 1: What was the condition of Downtown Minneapolis, specifically the warehouse district, before the Target Center opened? I mean, was everything dark down there? Was there a nice, lively nightlife? In other words, what can we actually attribute to the presence of the Target Center and the Timberwolves in terms of growth of that part of Downtown?

RICHARD D'AMICO: Well, I headed up a warehouse district economic study of our own, along with Mike Andrews of the Loon and Mike Jennings from Rosen's. And currently, the warehouse district is home to 34 restaurants, 20 of which opened since the Target Center became an anchor for the district. This represents 143% increase in the number of restaurants and bars in the area over the past three and a half years.

These new operations represent $27 million in new revenues and 1,100 new jobs. Now, 100% of this can't be attributed to the Target Center, but the area was on the decline before the Timberwolves came. And since the Target Center opened, there has been a significant amount of growth.

Aside from that, these 20 new businesses invested more than $14 million to start up their operations, improving 135,000 square feet over the last three and a half years. And in total, the warehouse district generates about $53 million in annual revenues and employs in excess of 1,600 people.

SPEAKER 1: So it's given the area quite a boost?

RICHARD D'AMICO: Yes.

SPEAKER 1: Would you agree with that, Jim?

JIM NILAND: I think the Target Center's had an impact on the area, but I think there's a number of other things you can point to that have changed the area, too. For example, it's the city's renovation of the state and orpheum theaters, the building of the large parking garages around there. So I think there's a number of factors that have led to the improved economic health of that area.

But if we're going to say, for example, that all the new restaurants are directly tied to the Target Center going in, we should also make the argument that the new sex businesses down there are tied to the Target Center going in. Some people, restaurant owners I've talked to, have said the Target Center has actually had a negative impact and changed the atmosphere of the Warehouse District from the funky, gallery-dominated atmosphere it had before to one that's dominated by sports fans and sports bars.

So I think we have to look at the fact that there's a number of other factors in terms of the improvements in the area, and that there's certainly some downsides to the target center's impact in the area, too.

SPEAKER 1: If the Target Center does close or basically is black much of the year, has Downtown Minneapolis gotten to the point, the Warehouse District, gotten to a point where it can thrive quite nicely from here on out? Forgetting about what impact the Timberwolves and the Target Center may have had so far, have you gotten to the point now that critical mass where things are going to perk right along anyway?

JIM NILAND: Well, the Timberwolves only play roughly one-quarter of the nights that the Target Center is open. So we're only talking about roughly 25% of the events at the Target Center being affected by the Timberwolves leaving. Clearly, they would be able to replace some of those events. So there would be some impact in terms of payroll and sales taxes and employment and the health of restaurants in the area, though, but I don't think the Timberwolves leaving is going to drive restaurants out of business.

In fact, a lot of the restaurateurs who have been asked to respond and come to us in defense of the Target Center have been fairly tepid in their response.

SPEAKER 1: Mr. D'Amico, is that true?

RICHARD D'AMICO: Well, I've spoken to almost every restaurant owner in the warehouse district, and there's only three or four that are against it or in the tepid category. And I think a lot more negative things have happened to influence overall retail activity in downtown Minneapolis. The two big ones being the Mall of America and the gambling casinos, have really put a lot of pressure on people's entertainment dollar.

And there was definitely a decline. And I know firsthand. I've been down there. I saw the effects of gaming and the Mall of America. And the positives that have happened are the convention center, the state and the Orpheum, and the Target Center. And as far as the Target Center representing 25% of the dates, as far as our industry in that area, those 25% of the Target Center total dates translate into 60% of the revenue that we get from events on Target Center nights. So clearly, the Timberwolves customers are the ones that are spending all the money downtown.

SPEAKER 1: Our guest today, Richard D'Amico, who is a well-known Minneapolis businessman who has been active in trying to move the public buyout along, and Jim Niland, who is a member of the Minneapolis City Council, who is opposed to the idea. Let's go to our first caller. Hi.

AUDIENCE: Good afternoon. Actually, I think my initial question has been addressed, which is if Harv and Marv sell the team, they're still going to have to pay off the debt, and I'm kind of wondering, why would they kill their cash cow? But the other question I have is if it seems to be primarily some of the business people in the Downtown area and basketball fanatics who are interested in putting up money for this, why not create some type of public corporation and sell shares?

That way, if businesses or individuals, or for that matter, the city of Minneapolis, wish to invest, they could invest in a little more standard fashion rather than putting taxpayer dollars at risk.

SPEAKER 1: This has come up before, the idea of community ownership of the major sports teams. Mr. D'Amico.

RICHARD D'AMICO: I think there's a big misconception out there that if the public gets involved in the purchase of the Target Center, that it's going to equate directly to people's tax dollars going up when that's truly not the case. What they're looking for is enabling legislation to allow general obligation bonds to be sold. And in that case, the people that would be investing the money are people that are interested in buying these bonds, and it's not coming directly out of the taxpayer's pocket.

SPEAKER 1: But if there is a buyout ultimately, aren't the taxpayers on the hook for this come at the end of the day?

RICHARD D'AMICO: I'm not sure. I don't know how the financing plans are shaping up, and I really can't speak directly to that. I know that there are a couple methods that they could guarantee the bonds, one being some sort of a sales tax. I suppose another one could be the property taxes.

But what everybody is intimating is that if the state and the city go ahead and make the Target Center deal, that it's directly going to affect people's taxes immediately, and that's not the case at all.

SPEAKER 1: Isn't there a way to do this, Jim Niland, without loading this on the taxpayers?

JIM NILAND: I wanted to say that public ownership of the Timberwolves would certainly make a bailout more politically palatable. But Harv and Marv have told us that they're not interested in that. They're willing to sell it to a group of private investors, but aren't willing to sell it to the public, for example, the way the Green Bay Packers are owned publicly, or they won't do that.

That's right. That's what they've told us. And I think that the fact that they're willing to sell it to private investors shows that what they want the city to do is to buy their loss leader, the Target Center, while they want to hang onto their most profitable asset, the Timberwolves.

SPEAKER 1: Did they say why they wouldn't? Because I know Carl Pohlad has talked about maybe selling the Twins to a community organization.

JIM NILAND: I read that same article.

SPEAKER 1: But no word on why the Timberwolves couldn't be purchased unless [INAUDIBLE].

JIM NILAND: No. They just made it clear to us that they're not interested in selling the Timberwolves to the city.

SPEAKER 1: Is there a way, though, to structure this so that the taxpayers don't get stuck if this doesn't work out the way it's supposed to?

JIM NILAND: I don't believe so, because if you have any kind of refinancing or bonds being issued, they're going to have to be backed by the full faith and credit of someone, whether it's the city, the state. So I really don't see any way to avoid the taxpayers being put on the line if there's a bailout of the Target Center.

SPEAKER 1: But you could structure it in such a way that only in the most remote circumstance with the taxpayer be tapped, right?

JIM NILAND: I'm not sure if you can because what Harv and Marv are asking for is to be let off the hook for their $70 million mortgage and $20 million in property taxes that are due to the city. So we're talking $90 million. It's very hard for me to see how you're going to structure a deal. When you see so little support from the private sector in terms of coming forward with their own dollars, that's not going to tap the taxpayer in one way or another.

SPEAKER 1: Let's take another caller with a question. Hi.

AUDIENCE: Good afternoon. I live in Southwest Minneapolis. And to comment, first off, I'm not in favor of doing this. But from a philosophical point, if I could ask the question, it seems like using public money or having public money available raises the fair market value of the Target Center.

And wouldn't it be better, since they don't seem to have the revenues to support the price, to arrive at a private purchase, where somebody figures out how much they can afford for the building based on what monies are going through it?

JIM NILAND: Absolutely. I think a private purchase is preferable to a public bailout.

RICHARD D'AMICO: I think the process that's going on right now is the Target Center is being valued more on what the cash flow from the Target Center is producing right now. And I don't think, and I wouldn't recommend that the city or the state cut a bad deal for themselves. I mean, that's not the point. We want to get the best deal that we can.

But as far as private and publicly-owned sports facilities, right now, there is 111 professional sports teams throughout the country. They play in 92 arenas. 88 of those arenas are publicly owned. And out of the four arenas that are privately owned, only the Target Center is fully burdened with property taxes.

Now, if everybody can go back in their memory bank and remember when the Metrodome deal was being put together, everyone in the city was outraged. There were people picketing. And as it turns out, right now, I believe the Metrodome has a $34 million surplus.

I think there's a reason why most arenas throughout the country are publicly owned. One of the reasons is that they can get the interest rates that make it work, where private individuals can't. And I think that's one of the major reasons why most of the successful arenas are publicly owned.

SPEAKER 1: Why is it such a bad investment for the city, though, Jim? Because I mean, it is a nice building. It sits right in the heart of Downtown Minneapolis. As Mr. D'Amico notes, I mean, we have already the dome down there, which is making money. It's not costing taxpayers anymore. Why should we not be willing to step forward and operate the Target Center?

JIM NILAND: Sure, I'd point out that the Metrodome has proven itself to be a moneymaker, but the Target Center has proven itself to be a money loser. I think it's true that most cities have assisted arenas to be built, in other words, a lot of them are publicly owned. Harv and Marv were asked by the city if they wanted city assistance when they started building the Target Center. They said no.

They had the opportunity to have city assistance in building that arena. Because that arena is now losing money, I don't buy that it's a good deal for the city to come in and own it.

RICHARD D'AMICO: I don't want to go back in time and what happened when they were originally doing the deal, and I don't think Harv and Marv are the issue at all. I think if you can't see beyond keeping Downtown vibrant and keeping jobs Downtown-- I mean, even the police department, internal police department studies, showed that on Target Center event nights, the crime actually goes down.

I mean, we're talking about jobs and crime. I don't think there's any two more important issues facing any government right now.

SPEAKER 1: I don't want to get bogged down in numbers here, but is there any indication that Marv and Harv would sell that arena for the amount that it actually generates, as opposed to what they own on it? That is to say, it's clearly not making as much revenue as they need to pay their debt. Would they sell it for the amount that it's taking?

RICHARD D'AMICO: Well, they're in negotiations right now, and I don't think any of us could speak accurately over what is occurring in those negotiations. And I think when they're ready to tell us, when the city and Harv and Marv are ready to fill us in and the Sports Commission, what's going on with their negotiations, we'll know when the time is right.

JIM NILAND: I would point out, though, that Marv and Harv said publicly a number of times and told the city that they won't settle, unless they get completely off the hook for their $70 million mortgage and $20 million in property taxes that are still due to the city. Another problem with public ownership is that it would then take the Target Center off the tax rolls.

Right now, the city is counting on $20 million in tax increment revenue from the Target center, plus the base property taxes that they're paying. So that's a real problem with public ownership of the Target Center. It really impacts the city's bottom line, its budget.

RICHARD D'AMICO: I mean, nobody's going to go into negotiations for a building and say, well, we'd like to take $72 million, but we're open. Everybody's going to state their position, just like the city and the Sports Facilities Commission is going to state their position. And they're going to say, this position isn't negotiable. Harv and Marv have done the same thing, but you can bet behind closed doors that they're both talking hard and fast about how to make this deal work.

SPEAKER 1: Let's go back to the phones. Another caller is on the line. Hi.

AUDIENCE: Hi. I just want to recall some things that have happened in the past. Let's just take Canterbury Downs. The politicians and the government officials that sold us that goods were not held accountable for that. Look what happened to Northwest. The politicians sold us that bill of goods, and we were stuck with that. Nobody's been held accountable.

So now, I think the voters have gotten a little fed up with getting stuck for-- Irving Jacobs is probably going to end up buying the Target Center in four or five years for probably $9 million if the public buys it.

SPEAKER 1: I gather you're not in favor of this buyout. I guess--

AUDIENCE: I'm not paying Minnesota taxes anymore. This is my last-- I'm not filing. I'm not even going to file because I'm fed up with putting synthetic drugs in our milk to feed the children. I mean, it's just getting out of hand. They want us to take the nuclear war.

SPEAKER 1: Well, that's a little far afield on the Target Center business. Let me ask you this, sir. What about-- you always hear this argument, with the pro sports teams, by golly, it polishes the city and the state's image across the country, and it really makes us a more attractive place for people to invest, to visit, to hold conventions and so on. So do you buy any of that?

AUDIENCE: No.

SPEAKER 1: OK, thanks for your call.

RICHARD D'AMICO: Well, maybe Irwin could bring horse racing to the Target Center.

[LAUGHTER]

SPEAKER 1: Let's take another caller. Hi.

AUDIENCE: Hi. My question is concerning the economic impact upon the whole Metropolitan area of the wolves. The question would be, isn't this just discretionary money that would be spent elsewhere on other restaurants in the area, other hotels? I mean, isn't this just basically just spreading the same money into different areas?

SPEAKER 1: What did the Arthur Andersen study find about that?

RICHARD D'AMICO: They didn't really delve into that deeply. What they did find out was that, I believe, around 30% of that spending would for sure be lost to other areas. About 30% of the spending comes from outside of the state.

SPEAKER 1: Councilmember Niland, obviously, though, the major impact is in Minneapolis. I mean, Minneapolis seems to be the primary beneficiary here. And so is there any reason whatsoever to expect taxpayers in the rest of the Metropolitan area, state taxpayers, anybody else, to contribute to this deal, since Minneapolis really does stand to gain or lose the most?

JIM NILAND: Yeah, I think the caller raises the biggest unanswered question in the economic impact report. And that's what would happen to that bundle of discretionary income that we know is in people's pockets. If the Target Center of the Timberwolves weren't there, clearly, a lot of that would still be spent Downtown.

SPEAKER 1: Do you think it would still come down to Minneapolis or go elsewhere in the Metro Area?

JIM NILAND: I think a lot of it would still be spent Downtown. Obviously, people come to downtown. Minneapolis for a number of reasons, not just because the Timberwolves are there. In terms of how much Minneapolis benefits from the Target Center, one interesting figure from the economic impact report is that 85% of the direct revenue benefit from the Target Center goes to the state of Minnesota.

Of course, they pick up all the payroll taxes and they pick up the bulk of the sales taxes. And that's a question I and a number of people on the council have raised is, why is the city being stampeded into the position of being the ones that have to lead a bailout when the state of Minnesota is actually reaping the lion's share of the benefit from the Target Center?

SPEAKER 1: But hasn't Minneapolis, Downtown Minneapolis, really gained from the presence of this pro sports team? Seems to me that you used to think about the 494 strip as the entertainment area, and now, it's really not that anymore. Downtown Minneapolis is. And is it pure coincidence that all the sports teams have moved Downtown?

JIM NILAND: I think it's a myth that sports teams are a big economic generator. For example, the Super Bowl was held in my ward, in the dome in Elliott Park. That neighborhood didn't reap any benefits from the Super Bowl being there. I think it's a real myth that pro sports teams are bringing lots of jobs and income Downtown.

If you look, for example, at arts and culture, many more jobs are created through that, through the Guthrie, through the various arts things that are happening in the city, than through pro sports. So I think that's a real myth that pro sports are a big economic generator in Minneapolis or any city.

RICHARD D'AMICO: I'd like to have Jim come and talk to all my employees and see if they agree with him.

SPEAKER 1: Our guests today are Richard D'Amico, who runs several restaurants in Downtown Minneapolis, and Jim Niland, who is a member of the Minneapolis City Council. We're talking about a public bailout or buyout of the Target Center. Back to the phones. You're next.

AUDIENCE: Hello.

SPEAKER 1: Hi.

AUDIENCE: I'd like to raise a question that seems to never get any discussion. Correct me on certain things if I'm wrong. I believe that the structure, the asset, and the team are two entirely separate and independent entities. They happen to be owned by the same people.

Now, if I'm not mistaken, commercial property is evaluated by the city assessor and probably by a bankruptcy judge on the basis of capitalization of income. If the city should not cough in, could not-- Harv and Marv retain full control and full profitability of their team, and either go into reorganization, if their net worth permits it, if the judge accepts it, then they would be forced to stay.

The bankruptcy judge would decide what portion of the current taxes the city would receive. The bankruptcy judge would govern the scene. And if we would have a hook if they decided to move on the basis of income, the valuation of the property would sink much more, and their losses would be greater.

SPEAKER 1: OK, I got lost, but you fellas know a lot more about finances than I do.

JIM NILAND: The premise is essentially correct, that they're two separate entities, and that the value of the Target Center is determined by the city assessor. I believe I'm not sure to what extent capitalization of income enters into that. But you're right, that's a real unanswered question is, why can't Harv and Marv restructure their debt themselves? Because that's clearly what's causing the Target Center to lose money, is the enormous debt load that they're carrying.

And to me, why can't they just simply go to a bank, refinance that loan, and lower the debt burden to such a level that the Target Center wouldn't be a loss leader anymore? I don't see the need for public involvement in making that happen.

SPEAKER 1: Do you know why that is, Mr. D'Amico? It does seem to make common sense. It's like everybody else who needs to refinance.

RICHARD D'AMICO: Well, I think what everybody's missing here is that Harv and Marv, I think, basically, are taking care of their financial problem. They can go to Nashville or they can go to San Diego. And it's my understanding that those deals are so sweet, and they would come out with enough cash that they could pay down their Target Center debt to a point where they could handle it out of the cash flow of the operations and still show a profit.

SPEAKER 1: So would they sell the team, then, or they would just move it to another city and get goodies from that city, and then they'd take that money and use it to pay down the Target Center debt?

RICHARD D'AMICO: It's my understanding that the San Diego deal, for instance, some of the basic points are they'll build them a new arena, rent-free. They'll pay them a $50 million relocation fee. And with that $50 million relocation fee, they could take care of a big part of their arena problem. And with the rent deal that they have, they could service that quite nicely.

JIM NILAND: And that's my fundamental problem with the bailout, because what's happening is that cities are being forced into a bidding war against each other for pro sports teams, and squandering the taxpayers' money and the very limited resources that city have to bring sports teams in there. And the only one who's profiting from this is the owners of those pro sports teams. Clearly, the cities aren't benefiting from bidding against each other for sports teams.

RICHARD D'AMICO: I think one of the reasons why Minneapolis is such a highly regarded city is because of the quality of life here. And certainly, the Guthrie and the Institute of Art and the state and the Orpheum come into the picture, but also the professional sports teams add to the quality of life here.

And it's part of the big picture. Do we want to be considered a big-league town or do we want to become, what was that, a cold Omaha?

SPEAKER 1: What about that image issue, Jim? I mean, we hear that over s over again, and you do get a lot of free publicity for the city every time, in this case, the Timberwolves are on TV around the country.

JIM NILAND: No, I think everyone agrees it would be nice for the Timberwolves to be here and to have as many pro sports teams as possible. I think it's a question of what the price is, and I think most of the people in the city of Minneapolis are not willing to pay $90 million to keep the Timberwolves here.

I think the big point I would make is, are we really so unsure of our status as a city, that it's determined by the number of pro sports teams that we have in Minneapolis, especially when, essentially, we have no control over where those sports teams locate? If we're really that much the victim of the vagaries over the owners of sports teams, then why are we bothering with economic redevelopment or other things that we're doing in the city?

There's a lot of great things about Minneapolis. Sure, having a number of sports teams is part of that, but we can't let the economic future of the city be dictated by a couple of pro sports owners.

SPEAKER 1: Let's go back to the phones and hear from another caller. Hi.

RICHARD BREITMAN: Yeah, Hi. My name is Richard Breitman, and I started a group called Don't Target Us. And I had a point and a question or a comment. One is that people should go to their caucuses tomorrow night and put up a resolution, and let's see what the citizens of Minneapolis think, and even St. Paul and outlying communities, either for buyout or against it.

And let's see what the people think because so far, the St. Paul papers survey seems to reflect 65% are against it. And the city leaders seem to be-- or many of them, not Mr. Niland nor Dory Mead, but seem to be ignoring that fact. Right now, it seems to me that we've got a building that's gone from $100 million to $50 million in value, and a team that's gone from $30 million to $125 million.

And the owners of want to give us the red ink, and they don't want us to share in the profit of that. And I think that if they want us to share the pain, we should share the gain. But frankly, I don't see that the Target Center owners need to separate the two since that building was a place where their team grew in appreciation. If it wasn't for that building, they wouldn't have a much more valuable team.

Of course, right now, they would love to separate the two, and they want to give us the loser. And I think that's just not fair.

SPEAKER 1: How do you respond to that, Mr. D'Amico? I mean, really, the big picture over there, I think-- again, I'm not sure of the numbers, but it seems to me that Marv and Harv, if you took into account the Timberwolves, the arena, the health club as a package deal, I would guess at least they're breaking even, if not making money, are they not?

RICHARD D'AMICO: I don't have any idea. We're talking about benefit to the city. And, of course, we can talk about the intangibles, but you're also talking about the amount of tax revenues that are generated. You're talking about the jobs that are generated.

And we don't even need to get into using the multipliers that economists use when we talk about how many jobs, potentially, could be lost. But I know, talking to people in the Warehouse District, of the 20 new restaurants that opened in the last three and a half years without the Target Center, we're going to have a significant amount of those closing.

You add that to the jobs that will be lost from the staff at the Timberwolves in the arena, add them to the Warehouse District jobs, and you're talking a significant amount of new unemployment, which is going to affect the taxpayers.

SPEAKER 1: Isn't there a danger, Mr. Niland, if you let the Timberwolves go, if you let the Target Center, essentially, operate as a sometime, part-time arena? What if you're wrong? What if it really does have a major impact on Downtown and things start to dry up? You'd have this who lost China debate underway here in about five years, would you not?

JIM NILAND: Sure, I recognize that there would be some impact if the Timberwolves leave, though, but that the economic impact report really doesn't address that question. And like I said, a lot of that spending would still occur in Downtown if the Timberwolves weren't there. So the real question is, what's the real hit to the restaurants, to the other business owners down there?

Mr. D'Amico has tried to enlist business owners down there to chip in to a lobbying fund to lobby the city council. And there was a front page story, I believe, on the metro section of the Star Tribune a couple of weeks ago, saying that very few of those businesses had contributed to that lobbying fund. If it's indeed so critical to their economic health, why aren't they contributing to D'Amico's efforts to lobby the city council?

RICHARD D'AMICO: That's probably one of the big problems with this whole process, was the media's approach to handling the whole thing. With the bailout language, they were calling the Arthur Andersen economic impact study a rubber stamp study before it was ever published. I don't think Arthur Andersen is that kind of company. They're a very highly regarded accounting firm.

I'm also surprised that Mr. Niland would even bring this up, since I just sent everybody to city council, a letter stating that-- there was a correction to that article in the newspaper the following day, saying that aside from the headline and the facts of the story, everything else was pretty accurate. In actuality, the Target Center task force asked me to raise $5,000 in the Warehouse District. We have raised over $6,000 and have pledges that will approach $8,000.

That was the principal effort that was undertaken in the Warehouse District. What the Star Tribune focused on was our effort to raise some money to underwrite the expenses of the study and of our own Warehouse District study and just administrative overhead that our warehouse group had expensed.

SPEAKER 1: So is support strong, medium, or weak?

RICHARD D'AMICO: I would say that you could typify-- I would think the headline in the Star Tribune should have read, neighboring businesses rallied to rally to support Target Center buyout.

SPEAKER 1: Would you agree with that, Mr. Niland?

JIM NILAND: Well, I think obviously, the fact we've been arguing about it shows there's a question to the level of Downtown support for a Target Center bailout.

SPEAKER 1: OK, let's take another-- go ahead, quickly.

RICHARD D'AMICO: I think when the top 32 CEOs in the state of Minnesota that employ over 500,000 people get together to fund this economic impact study, I think it shows that business is behind this.

SPEAKER 1: Do you think business is willing to put some money into the whole package here, a significant amount of money, some accumulation of business people Downtown? You hear that a lot. Well, gee, if you folks downtown Minneapolis are the ones who benefit from this, throw some money at it.

RICHARD D'AMICO: Well, I think everybody benefits by it. When we talk about property taxes, the property taxes in the Warehouse District is the only area in Downtown that have had any strength over the years. If the Target Center should leave and values go down again, that's when the taxpayers can count on having their property taxes go up.

SPEAKER 1: OK. Let's take another caller with a question. Hi.

AUDIENCE: Hi. A couple of questions for you. Just to clarify, did you say that they can move the team to another city, make more money, and get $50 million to pay off the Target Center loan? I mean, if that's true, they'd be crazy not to just do it. What's the debate about?

RICHARD D'AMICO: Well, the debate is that they want to keep the team here. They brought the team here. They're loyal to Minneapolis and Minnesota.

AUDIENCE: I question their loyalty. At any rate--

SPEAKER 1: Why?

AUDIENCE: Because they're bringing the whole thing up. I mean, everything that they've done and this threat to move the team, it just doesn't smack of very much loyalty at all. I don't think loyalty comes into it at all. They've got millions and millions of dollars.

SPEAKER 1: Yeah, I don't want to argue their position because they're not here. But I mean, at least publicly, they've said, well, gee, we've not threatened anybody. We've just said we need some help on this, and we're in the business not to lose money, but to make money, and we can make money more somewhere else if we can't get some relief.

AUDIENCE: Did they--

SPEAKER 1: Pardon me.

AUDIENCE: Was the money borrowed to build the Target Center or was it out of their pocket? Because if they borrowed it, why don't they just default on the loan?

RICHARD D'AMICO: They borrowed it.

AUDIENCE: They did borrow it. Then why can't they just default on the loan, let whoever lent them the money take over, and then they can get a nice deal?

RICHARD D'AMICO: Get a nice deal for what tenant?

AUDIENCE: For the Timberwolves.

RICHARD D'AMICO: Timberwolves would be gone.

SPEAKER 1: Well, I guess this gentleman's point, though, is that they could just stay here with their team, continue to own the team, and just default on the loans of the Target Center. And presumably, whoever would then take over the Target Center would still want somebody in there anyway, and why not the Timberwolves? That make some sense?

JIM NILAND: Right, Why don't they just why aren't they just negotiating with their bank, Sumitomo, to restructure the debt?

RICHARD D'AMICO: I think we're getting to areas where we don't know enough of the facts of how everything was structured. But I believe that they have a lot of their other businesses tied up in this. And the fact of the matter is they've poured $30 million of their own money into this project so far. And they're not going to let their life's work go down the drain.

They want to keep the team here. I think moving it to San Diego or Nashville is a last resort. I don't think it's something they want to do. I don't know them personally extremely well. I know a lot of people that do. And when we talk to them about them being loyal to this town, I keep hearing that they really are loyal to here. They really do want to stay in Minneapolis.

SPEAKER 1: Does it make a difference that this Bill Sexton and Farley and some other people are talking about buying the team from Marv and Harv and then keeping it here, contingent, again, on a public buyout? Does that color this debate in any way?

JIM NILAND: I don't think it makes much difference because Sexton's offer is still contingent on a public bailout of Marv and Harv. So it really doesn't change the big picture. Back to the point about Marv and Harv putting up $30 million of their own money, sure, they might have done that, but now, they've got a building that's worth $40 or $50 million. Plus, they've had a team that's appreciated in value from $30 million to over $125 million, probably.

So I don't know that they've really lost an enormous amount of money on this deal. In fact, I think that they've made out pretty well. And now, what they want to do is they want to give us the money-losing part of the deal, the Target Center, while they hang on to the profitable asset, the Timberwolves. I'm not sure if that's loyalty.

SPEAKER 1: OK, well let's take some more calls here. Hi, your turn.

AUDIENCE: Hi. My name is Clark. I own a cab in Minneapolis, and I think Marv and Harv should be made to settle their own debts, just like I have to with my cab. My debts are pretty high. In the past, we paid for the Metrodome. I think since the teams have so much money, they should pay for the building themselves.

I don't understand why the public needs to bail them out. If Timberwolves want to leave, let them leave.

SPEAKER 1: You don't think it would be that big of a loss to the city?

AUDIENCE: No, I don't. I've been driving cab for near 19 years now, and they haven't done that much to improve my own personal business. I know some of my colleagues, excuse me, tend to get a few loads, but they play the Target Center a little harder. And bartenders and waitresses that I pick up in the Warehouse District, they don't see a whole lot extra, either. People come Downtown for the game, then they leave Downtown.

SPEAKER 1: What about other events at the Target Center? What's your experience with them? Do people stay Downtown and spend a lot of money on those, circuses and concerts and the like?

AUDIENCE: It depends on the concert and the event. The circuses and the concerts, there's more people from the actual city itself attending those things, but like the Metrodome, with the football games and stuff, most of those people come in from the suburbs. Most of those people have the money to come in.

SPEAKER 1: OK.

JIM NILAND: I think the caller makes a real important point. In my ward, I've got lots of businesses, lots of homeowners in trouble. They're not coming to the city and asking for a bailout. And that's what I think is so outrageous about this, is that Harv and Marv, private business owners, are coming to the city for assistance when there's plenty of other people with problems, for example, this cab driver, who aren't there asking for the city to write them a blank check.

SPEAKER 1: What about the precedent that this seems to set, Mr. D'Amico?

RICHARD D'AMICO: I don't really think it's a precedent. I think we did it for the Metrodome, and we're doing the same thing here to keep Downtown vibrant and to keep it growing. And I don't see as it's a huge precedent. And the Sports Commission has done an excellent job.

They've proved that it can work. There's a surplus of funds in that account, and there's no reason why if this isn't structured correctly, that it can work even without a hockey team. If a hockey team comes in, I think it'd be an excellent investment.

SPEAKER 1: Do you think another major employer in Minneapolis, if they got into financial difficulty, should the city, the state, take a look at helping them out, too?

RICHARD D'AMICO: Well, this is a whole different scenario. I mean, I think Harvey and MacKay relayed this story to someone that he's approached all the time moving his company out of state. And he could actually probably, with the taxes and workman's comp, probably do better out of state. And people are always soliciting him. And why should-- he wants to stay here because he likes Minneapolis, and he's committed to this area.

He said, I would never ask for outside help. He said, I don't have that-- that's not the kind of business I'm in. I'm not in the kind of business where millions of people watch my people work every day. The community doesn't own-- is not a part of his business. And with the Timberwolves and professional sports, the community participates in this whole activity.

SPEAKER 1: It does seem different, Mr. Niland, does it not? Or do you lump them all together?

JIM NILAND: I want to say I think it sets a very bad precedent. This reminds me again and again of the Northwest deal that one of the callers brought up. I think the Northwest deal was another example of a major corporation blackmailing the state into bailing them out.

And what's happened? The jobs haven't been saved. The maintenance bases haven't been built. And again, here, we have another corporation trying to stampede and blackmail the city into bailing them out or else they're going to say they're going to take their jobs and leave.

What's going to happen in a couple of years when the Twins lease is up? If we bend over for the Timberwolves, what sort of terms are we going to have to give to the Twins to keep them here? We're on a slippery slope, I think. Once we start making concessions to the Timberwolves owners, then we're going to have to make concessions to the Twins, and again, we're back to this bidding war between cities that doesn't benefit any cities apart from the owners of the pro sports teams.

SPEAKER 1: Are we in a position where we could lose all of our sports teams here by the end of this decade?

RICHARD D'AMICO: I don't think so. I don't think so. I think the Twins-- I think Carl will make every effort to sell his portion of the team to a local owner. He wants to keep the team here. Actually, the Twins have a pretty decent deal at the Metrodome. The Vikings probably don't have quite as good a deal. But with a $34 million surplus, I think they're in a situation to be able to keep both of those teams happy.

SPEAKER 1: Let's go back to the phones, hear from another caller. Hi.

AUDIENCE: Hi. I just have a couple of comments, and I'm hoping maybe you can comment on those for me. I can understand theoretically, how it would be a nice idea if we could keep the team here and keep everything intact. In theory, ideally that's nice, but I have to tell you that the whole thing really reeks of the SNL bailout to me.

And you can say it's different, but it's really not. It strikes me as a bunch of greedy people who come in and then they got in over their heads. And when it didn't work out, they expect us to bail them out, and they just fall back on us, the taxpayers or whoever, as if that's our job to bail them out. And it really reeks of that to me.

And I have difficulty having too much sympathy for people with $30 million loans out or however much money it is. These are not people that didn't have money, that didn't have the capacity to be looking at this. And they're just in over their heads, and now, they want us to save them.

SPEAKER 1: Right. Setting aside the issue of sympathy for Marv and Harv, though, do you think there's any--

AUDIENCE: It's the same thing. They could have looked at it better. It's not our job to play backup to people who are looking to be making a lot of money, and when it doesn't work out, we're supposed to bail them out. That's how I view it.

SPEAKER 1: So you don't see the city or the state as having a self-interest here in terms of trying to keep the team here or keep the thing moving along?

AUDIENCE: Well, I mean, I can understand that point, but I've been a restaurant employee in the Warehouse District, but I'm also involved in a theater that's in the Warehouse District. And I'm always very annoyed when the focus of everything-- people get all excited when you're talking about sports, but there's a lot more to the city, there's a lot more to the economy, there's a lot more to the people than just these sports events there.

There is theater that's trying to be going on in the Warehouse District. There's all sorts of artistic development that's trying to get a foothold there and really wants to in that district. And there's a lot of potential there, and it seems to get ignored. The Target Center is supposed to be the one and only thing. It's as if that's the only thing that people could care about just because it's a large sports event, and it's really very narrow-minded and it's unfortunate.

SPEAKER 1: Mr. D'Amico, what about that? What if we spent as much time and energy and even money trying to keep these other things going and promote the arts and so on and so forth down there in the Warehouse District? Wouldn't we be just as well off?

RICHARD D'AMICO: Well, I think Minneapolis as a whole and the business community as a whole supports the arts. And I'm excited to hear that there's as much activity on the theater side trying to occur in the Warehouse District. I think the more diverse and the more active it is, the better it is. And the more options there are for your entertainment dollars, the more exciting the city becomes.

And I hope the galleries and theaters that are struggling in the Warehouse District, because that's kind of what I picked up from that call, I hope they are successful. And I think there will be more successful-- the more vibrant the Warehouse District is, the more opportunity everybody has to be successful.

SPEAKER 1: Let's take another caller with a question. Hi.

AUDIENCE: Hello.

SPEAKER 1: Yes.

AUDIENCE: Oh, yes. Well, I just want to make two points. I'm very much against any public entity bailing out this organization. As a matter of principle, I don't think private individuals should expect that they can just fold their tents and walk away when things aren't emerging the way they want them to.

Then my second point is, if they want, then, threaten to take the Timberwolves away, let them. I don't care a bit. I think there's too much emphasis on pro sports here anyway. That's why I'm so thrilled over the Vikings' wonderful win. That's all I want to say.

SPEAKER 1: I kind of lost the tail end of that, but let's take another caller with a question. Hi.

AUDIENCE: Hi. I'm calling from Cannon Falls, although I happen to live in Minneapolis.

SPEAKER 1: Yes.

AUDIENCE: My concern is the study concerning the economic impact. Many of the numbers were somewhat skewed, but the one that was the most obvious was the property tax number used in this study, which showed millions of dollars in property taxes, which would all be gone if it was publicly owned.

SPEAKER 1: I think we touched on that earlier, didn't we not, Jim? That's one of your concerns about public ownership of the building, right?

JIM NILAND: Yeah, that's a real problem, is that the city is counting on the tax increment revenue and the base property taxes from the Target Center, and those would be gone if there was a bailout, and that would have a very significant impact on the city budget. And you're right that there's a number of holes in the economic impact report like that.

RICHARD D'AMICO: I don't see how anybody could say those would be gone if there was public involvement in the buyout because nobody's seen this deal. So to prejudge the deal that the taxpayers right from the get go are going to be screwed, I think, is jumping the gun here. Until there's a solid proposal on the table, I think it's like throwing darts.

SPEAKER 1: We have time for at least one more caller. Hi.

AUDIENCE: Hello. I'm wondering-- presumably when they originally built it, they expected the finances to work out so that they were going to make money on the Target Center. I'm wondering what went wrong, what changed, what didn't happen that got them into this circumstance?

SPEAKER 1: Good question.

RICHARD D'AMICO: I think it was a combination of several things. They spent a lot more money than they intended. I think their original budget for building the building was around $75 million, and they ended up spending $115 or $120, I believe. That caused a lot of the problems. Aside from that, I'm not sure. I can't answer to that directly.

SPEAKER 1: I understand there's been-- I think there's been a turn down in the concert business, among other things. Is there not? Things like that, they--

RICHARD D'AMICO: Oh, huge, yes.

SPEAKER 1: Yeah. Let's see if we can get one more caller on. Hi.

AUDIENCE: Hello. Hi. Could someone explain to me why the Downtown businesses feel that there's money in the state of Minnesota and the city of Minneapolis to pay $90 million to save the Target Center when the same downtown business organizations opposed a $10 million school bond issue two years ago. And why this can't be put as a referendum and let people vote on it, much like the Metrodome was voted on, versus having something crammed down by a bunch of lobbyists. Thank you.

SPEAKER 1: OK. What about the idea of putting this up for a public vote? Does it make sense?

JIM NILAND: I think that'd be great because I think it would get voted down overwhelmingly.

SPEAKER 1: Do you think it could be-- what do you think about that, Mr. D'Amico? Would it make sense to hold a referendum on it?

RICHARD D'AMICO: I don't think there's enough time to do it, for one thing. And I think the media's handling of this has tainted everybody's view of the whole process so badly that-- I think they've painted a bad picture from the beginning. However, in our talks with people throughout the community, we found far more support than we thought we were going to.

And it's just like-- nobody knows the facts. It's just like this gentleman said, buy the Target Center for $95 million. Where do you get that number? There is no number. There is no $95 million. That's the price that the Sexton group has offered Harv and Marv for their team.

I think everybody has all the facts confused. Everybody thinks that if this deal is done, they're going to immediately have to start paying higher taxes. It's not the case.

SPEAKER 1: Jim Niland, before we go, what is your best guess as to-- when this deal is put together, what's your best guess as to the public portion of any kind of a Target Center purchase? What do you think it will be?

JIM NILAND: I think it's going to be the lion's share because I've seen a great reluctance on the part of the private sector to come forward with any dollars. So I think it's going to be the taxpayer that's going to be on the hook for the vast majority of the deal.

SPEAKER 1: What is that? $10 million, $20, $30? What do you say?

JIM NILAND: Well, the $90 million figure comes from $70 million mortgage outstanding and $20 million in property taxes outstanding. Given where things are now, I think Harv and Marv are asking for the public sector to kick in almost all of that $90 million.

SPEAKER 1: And will that come to a vote? Will this deal be voted on ultimately by some public body, or will one day either be rejected or accepted without a vote by somebody?

RICHARD D'AMICO: I think there's going to be-- they're going to vote on legislation to enable general obligation bonds to be sold.

JIM NILAND: There's a possibility that a deal might never come together, though, because there's so many hurdles to a deal coming together. But if it does, at a certain point, it probably would come before the city council, as well as the Minnesota State Legislature.