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Ventura pitches Twins plan
by Aron Kahn


For the first time as governor, Jesse Ventura on Friday pitched a solution to the Minnesota Twins' ballpark dilemma, and surprisingly brought legislative combatants on both sides of the issue to their feet.

The governor, who's been at odds with the House and Senate over state budget matters, instantly won preliminary endorsement of the ballpark proposal, which allows the Twins to use the state's borrowing authority without creating new state taxes to help pay the loan.

But the plan for a $330 million ballpark likely will create more competition between St. Paul and Minneapolis, because the Twins surely will be asking them to help repay the loan. St. Paul Mayor Randy Kelly, an ardent supporter of a downtown ballpark, immediately volunteered St. Paul for the job.

A possible breakthrough in the seemingly endless ballpark fight, the Ventura plan works this way: Using the current low interest rates, the state would sell bonds worth $330 million to build the ballpark. The Twins would pay $165 million into an interest-bearing fund plus another $10 million a year to raise enough money to pay the debt over 30 years.

"I believe that this is a simple and safe way to use the state's ability to obtain low-interest debt but still maintain an arm's length from what is, for the most part, a private business deal," Ventura said.

Warring parties cozied up to the plan in a hurry, because it eliminates numerous special fees and taxes such as charges on car rentals and sports memorabilia that are part of the contentious ballpark bills at the Capitol.

"I'm very warm to it," said House Speaker Steve Sviggum, R-Kenyon, who's been pushing for the Twins to pay more of the ballpark cost.

"It looks pretty good to me," said Sen. John Marty, DFL-Roseville, one of the biggest critics of a publicly assisted ballpark.

"We're more optimistic this morning that a ballpark will be built," said Sen. Dean Johnson, DFL-Willmar, sponsor of a ballpark bill that was adopted by the Senate earlier this week.

Johnson said he'd be happy to substitute Ventura's plan for his own, and he encouraged the Twins to "take a good hard look at it."

The Twins started looking immediately, and while reserving final comment pending further study, they said one thing is clear: They will need the host community to help pay off the bonds.

"It's going to require a partnership with a governmental agency, either Hennepin County or Minneapolis or St. Paul," said Twins president Jerry Bell.

It's all about money. If Twins owner Carl Pohlad or a potential buyer doesn't get enough help, he could walk away. Major League Baseball has threatened to eliminate the Twins and pay Pohlad an estimated $150 million for his team.

The Twins have been hard negotiators at the legislative table, opposing many of the special taxes that populate bills in the House and Senate, because those taxes generally provide revenue for governmental units rather than the team. Ventura's plan is a plus for the team on that score, and a plus for legislators, who wouldn't have to cast tough votes on those taxes.

But the Twins have been most adamant about not having to pay as much as $165 million upfront for a new ballpark, as the bills require. The team said such a burden makes it impossible for Pohlad to sell the club, as he says he wants to do.

So if the Twins are asked by Ventura to pay $165 million upfront, plus $10 million a year, for the purpose of paying off the ballpark bonds, they are going to want help from those who want the ballpark in their town.

"We'll talk about all of those things," said Bell, referring to both the upfront and yearly payments.

Kelly said St. Paul definitely would help the Twins pay off the bonds. The mayor wouldn't comment specifically on the way in which the city would help, because St. Paul's share would be a negotiating matter with the Twins. But he said a 3 percent city sales tax on bars and restaurants, which he proposed as the city's portion of other ballpark plans, would clearly be one of his choices. The tax would generate $10 million to $12 million a year, he said.

It's unclear whether a city referendum on that tax would be required by the ultimate legislation, should a bill be passed in the image of the Ventura plan. The current House bill requires such a referendum, which is opposed by the Twins.

The matter will come up soon, Kelly predicted, because he thinks the Ventura plan will supplant the controversial bills now in the House and Senate.

"The Legislature will gravitate to this immediately, because they don't have to take tough votes on statewide taxes," said Kelly, who served in both the House and the Senate.

Minneapolis Mayor R.T. Rybak and City Council Member Paul Ostrow said they need more time to study the Ventura plan. Minneapolis is limited by charter to spending $10 million on a ballpark, so it would need the assistance of Hennepin County in helping the Twins. Calls to County Commissioners Mike Opat and Peter McLaughlin were not returned, but the county has been interested in helping Minneapolis provide an alternative to St. Paul.

The Ventura plan, crafted by Assistant Minnesota Finance Commissioner Peter Sausen, envisions selling the $330 million in taxable revenue bonds at today's low interest rates, or about 6.5 percent. Because $330 million multiplied by 6.5 percent is $21.5 million, the latter would be needed each year to pay the interest on the bonds.

Ultimately, the bonds are repaid this way: The $165 million initial Twins investment would generate an estimated 8.5 percent interest, or $14 million a year. An additional $10 million annual payment from the Twins brings the figure to $24 million, or $2.5 million more than needed. That difference would be put back into the investment fund, and at the end of 30 years, the $330 million principal on the bond would be paid off.

Because the $165 million payment would be made as a gift to the state, the investment earnings wouldn't be taxable. The plan allows the Twins to select the investment advisers, and the club would have to put in more money if the returns fell short. The team would also have to sign a 30-year lease and provide guarantees that it wouldn't default on payments.

As in all ballpark matters, the outcome will come after many refinements and negotiation sessions. And as legislators study the compromise, some potential supporters will disappear.

Marty, for example, said he might change his mind about supporting the plan, depending on what a community does to help the Twins.