CORPORATE COUNSEL SYMPOSIUM XXIV OCTOBER 22, 2013 Building Minnesota through PPPs: The New Vikings/Multi-Purpose Stadium and Rochester s Destination Medical Center Initiative Jeff Anderson Lisa M. Clarke Michele Kelm-Helgen Tina Flint Smith Lynnette Slater Crandall Jay R. Lindgren Minnesota Vikings Football, LLC Director of Corporate Communications Minneapolis, Minnesota Mayo Clinic Public Affairs Division Chair Destination Medical Center Economic Development Agency Administrator Rochester, Minnesota Minnesota Sports Facilities Authority Chair Minneapolis, Minnesota Destination Medical Center Corporation Board Chair Chief of Staff to Governor Mark Dayton Minneapolis, Minnesota Dorsey & Whitney LLP (612) 343-8288 crandall.lynnette@dorsey.com Minneapolis, Minnesota Dorsey & Whitney LLP (612) 492-6875 lindgren.jay@dorsey.com Minneapolis, Minnesota Program Materials are available on www.dorsey.com at http://www.dorsey.com/mp_ccs_2013/ 1. PowerPoint
Building Minnesota through PPPs: The New Vikings/Multi-Purpose Stadium and Rochester s Destination Medical Center Initiative Jeff Anderson Director of Corporate Communications, Minnesota Vikings Football, LLC Lisa M. Clarke Division Chair, Mayo Clinic Public Affairs and Administrator for Destination Medical Center Economic Development Agency Michele Kelm-Helgen Chair, Minnesota Sports Facilities Authority Tina Flint Smith Board Chair, Destination Medical Center Corporation, and Chief of Staff to Governor Mark Dayton Lynnette Slater Crandall Jay R. Lindgren Dorsey & Whitney LLP 1 Building our Economy through Public-Private Partnerships (aka P3s ) Rochester s Destination Medical Center & Minnesota s Multi-Purpose/Vikings Stadium 2 1
In a time when state and local governments must balance shrinking revenue with deteriorating infrastructure, P3s have become a timely model for completing projects on time and on budget. P3: A long-term performance-based contract between public sector and private sector to deliver public infrastructure. 3 The Issue Not enough resources for current infrastructure needs Increasing Spending Levels: How Much is Enough? Local governmental units can t react quickly to adopt and implement new strategies for redevelopment Dillon s Rule Limited authority to act outside of jurisdiction 4 2
Increasing Spending Levels: How Much Is Enough? Many groups claim that we are not spending enough. Comparisons of need differ based on what is being counted, but overall numbers are relatively consistent. Transportation/Transit Example American Society of Civil Engineers Type $ billions annual spending Roads 126 Bridges 9 Transit 21 Rail 13 Total 169 Note: Total government spending American Association of State Highway and Transportation Officials Type $ billions annual spending Highways 63 Transit 16 Freight 7 Intercity 6 Passenger Rail Total 91 Note: Federal government spending only National Surface Transportation Revenue and Policy Study Commission Type Highways & Bridges $ billions annual spending 130-166 Transit 14-18 Freight 5-7 Intercity 7-9 Passenger Rail Total 156-200 Note: Federal aid eligible roads only 5 Jurisdictional Issues City A City B City C 6 3
One Tool: P3s Public-Private Partnerships Accelerates infrastructure projects deemed impractical under traditional funding Well-developed international tool Provides flexibility Transcends jurisdictional rules $200 billion capital available? 7 Key Considerations Proper Risk Allocation 8 4
Traditional Model Options Design Bid Build Design Build Design Build Operate Maintain Design Build Finance Operate Maintain 9 Intro to P3 Structure A traditional P3 Project has the following key elements: A long-term contract between a public-sector party and a private-sector party; For the design, construction, financing, and operations of a public infrastructure by the private-sector party; In exchange for payments over the life of the P3 Contract; With the facility remaining in public-sector ownership, or reverting to public-sector ownership at the end of the P3 Contract. 10 5
Rochester s Destination Medical Center 11 Securing Our Future Mayo Clinic is committed to providing the highest quality health care in the world. But it cannot support Rochester and Minnesota as a Destination Medical Center on its own. 12 6
Innovation & Partnership DMC has been developed through a never-seenbefore public-private partnership between Minnesota City of Rochester Olmsted County Southeast Minnesota Region Mayo Clinic 13 DMC Funding Structure Recognizing the importance of the competitive trends, the State of Minnesota, Mayo Clinic and the Rochester community have entered into an unprecedented public-private partnership. Over $5.5 billion in private investment in the market, realizing a ratio of approximately $10 to $1 in private to public investment. A public investment proposal of $585 million from State and local jurisdictions. The investment is not an upfront payment but instead structured over a 20-year period. NONE of the public dollars will be used to pay for Mayo buildings and/or programs. 14 7
Minnesota Multi- Purpose/Vikings Stadium 15 16 8
17 New Stadium Details: Exterior Bold, iconic design unique to Minnesota Fixed roof with largest span of ETFE in country-60% ETFE Lightest & most efficient roof structure in nation Connection to outdoors from a climatecontrolled environment LEED certification 18 9
New Stadium Details: Exterior Site 33 acre site Access points to city & stadium on all 4 sides Large plaza opening to city-2 acres on west side 1.6 million square feet Parking ramps with skyways connected to the downtown core Encourages connection to neighborhoods Spur economic development 19 New Stadium Details: Interior Open bowl design with 65,000 seats expandable to 73,000 for a Super Bowl Open concourses Large, public spaces 2 of the largest end zone video boards in an NFL stadium 7 levels-stairs, escalators & ramp Transparent, open structure connecting fans to inside experience & outdoors 20 10
21 Current Events Vikings: 10 Home Games 355 days for other programming Baseball Soccer Youth Football Marching band competitions Community Events 22 11
New Stadium Events New stadium will attract major national & international events including: Big 10 championships The Super Bowl The Final Four College Bowl games Major League Soccer National conventions Concerts World Cup matches 23 New Stadium Schedule Update The project is on track and will be built on time and on budget August 2013 100% schematic design approved by City of Minneapolis Fall 2013 Stadium Vision/Design Public Listening Sessions The Guaranteed Maximum Price (GMP) will be received Break Ground 2014-2015 seasons Vikings Play at TCF Bank Stadium at U of M July/August 2016 New Stadium opens 24 12
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