Finding: Wilfs capable of financing their portion of Vikings new stadium
SEP 13, 2013 4:17p ET
The Minnesota Sports Facilities Authority released its findings Friday in a due-diligence review of team owner Zygi Wilf and his family members whom a New Jersey judge says didn't live up to their end of agreements with two real estate partners. MSFA and its lawyers hired to execute the investigation came out fully satisfied the NFL team remains fully capable of financing its $477 million portion of the $975 replacement for the Metrodome.
The detailed probe, which began nearly a month ago, looked into potential damages that have yet to be awarded in the Wilfs' civil case, the owners' personal and financial background and the team's plan to foot its part of the stadium bill.
The report's most integral conclusion: "The significant holdings in cash and securities at July 31, 2013 by the Wilfs, buttressed by significant equity in investment properties also owned by the Wilfs, are considered to be reasonable and adequate to allow the Wilfs to meet their financial obligations under the planned Vikings stadium project, even if the worst-case scenario occurred in the New Jersey litigation and the Wilfs were required to satisfy a judgment to that amount."
In short, there's no doubt the Vikings can pay for their new digs.
It's what the team said all along through a lengthy and at times tense review process. The outcome didn't come as a shock after preliminary indications released last week pointed to a Vikings vindication.
"The results of the due diligence inquiry are consistent with the team's prior statements on this matter – the Vikings and the Wilf family have the financial ability to meet the private commitments to the stadium project," a team statement issued Friday read. "This report, combined with the NFL's unwavering support, make that clear."
The Vikings stepped away from negotiating the stadium's use and development agreements until they were satisfied the review had been completed and returned to the table Tuesday. Ground on the stadium can't be broken until both sides completely sign off on those two documents.
At one point, legal firm Dorsey and Whitney -- which carried out the due diligence -- stated publicly the Wilfs weren't providing all the necessary data to carry out their assignment.
But the authority in charge of stadium construction and operation and the planned palace's primary tenant can now move forward. If the sides agree to main principles in the use (lease) and development (construction) accords early next week and ratify them at the MSFA board's Sept. 27 meeting, the stadium's early November groundbreaking can take place as scheduled, MSFA chair Michele Kelm-Helgen said during a press conference Friday afternoon.
"We've got a lot of work to do," she cautioned. "We're not finished yet. Next week is gonna be a huge week. Assuming everybody can come together and be reasonable, we should be able to get through those agreements and have them done."
Led by attorney Peter Carter, Dorsey and Whitney came up with what they deemed the highest possible figure the Wilfs could end up owing when Wilson makes her final ruling, which is expected within the next two weeks. The real estate moguls' net worth, the litigators found, gives them "significant" room to take care of the Vikings' stadium pledge, Carter said.
Carter and the rest of the due diligence team also received assurance from NFL commissioner Roger Goodell that the league remains in support of the team and construction of the stadium. Of the Vikings' allotted responsibility, $200 million will come from an NFL loan.
"The NFL has repeatedly demonstrated its commitment to the Twin Cities community, most recently by making a substantial financial commitment to the stadium project," Goodell said in a letter to Kelm-Helgen. "We look forward to the prompt conclusion of the due diligence process, and to working with all parties in a timely manner."
Goodell also assured in the letter any transfer of team ownership would include whatever lease agreement the team and the MSFA come to in the coming days. That virtually guarantees the Vikings stay in Minneapolis for decades -- the whole point of building a new stadium in the first place.
With help of FTI Consulting, investigators spent the past month delving into the personal histories and finances of Zygi Wilf, his brother Mark and his cousin Leonard. They found no criminal history and no involvement in any other lawsuits of the New Jersey case's magnitude, though the family has been implicated in other legal matters.
But the excavation found that "none of them were material or resulted in determinations of the nature made by the New Jersey Court," the report says.
The MSFA's findings outlined three issues to decipher: if the New Jersey lawsuit would prevent the Wilfs from meeting their financial obligations for the stadium, if the case was "an anomaly or whether it reflected the Wilfs' general approach to business transactions," and "whether there is anything with respect to the Wilfs' background that could negatively impact the stadium project in Minnesota."
Those questions have been answered. The result, as originally planned before news of the case against the Wilfs broke, will be a pristine, glass-enveloped football cathedral where the Metrodome currently sits.
According to the timeline issued last month by Hammes Company, the MSFA's construction consultants, an early-November groundbreaking means a completion date in July 2016 and readiness for football season that fall. The Vikings will spend the next two seasons at the University of Minnesota's outdoor TCF Bank Stadium before moving into their new home venue.
The original deadline to sign the use and development agreements was Sept. 15. But Kelm-Helgen said negotiations this week have moved along rapidly, and achieving harmony on the overarching issues in those agreements early next week, then working to have them ready by Sept. 27, shouldn't set the schedule back any further.
For such progress to continue, two entities that have at times been at odds must collaborate at an expedited rate. Kelm-Helgen called the Wilfs good business partners but did allude to some frustration on the MSFA's part.
"They're business people, and we knew they were business people, and we knew that they drive a hard bargain," Kelm-Helgen said. "I think we saw that during the last session, and I think we continued to see that this last year. I think that we certainly have upheld, throughout this last year, and certainly in this last month, our side of the bargain, which is the protection of the public."
As outlined in legislation passed in May 2012, the state of Minnesota is responsible for $348 million of the stadium bill, and the city of Minneapolis is on the hook for $150 million. The building's construction is hoped to revitalize the area around the site and connect both sides of downtown Minneapolis.
"We look forward to continuing our collaborative efforts with the Minnesota Sports Facilities Authority to create thousands of jobs, generate significant economic development and deliver a great stadium for Vikings fans and the people of Minnesota," the Vikings statement said."
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