ST. PAUL (AP) -- A proposed interest-free state loan to help build a new stadium for the Minnesota Twins probably would cost taxpayers at least $40 million, according to a Saint Paul Pioneer Press analysis published Wednesday.
A stadium plan unveiled by lawmakers Monday proposes a 20-year interest-free loan of $100 million to help pay for a $300 million publicly owned ballpark.
"We're giving them $100 million in cash," said Dave Vang, the chairman of St. Thomas University's finance department. "That's worth $100 million. The $100 million they give us back with no interest on it is really worth only $60 million."
Vang, acting at the request of the Pioneer Press, estimated the investment earnings the state otherwise would receive on that $100 million over 20 years. Then he discounted the total to put the cost to the state of the loan in present-day dollars at $40 million.
"There's really no such thing as an interest-free loan because somebody has to pay the difference," he said. "The state of Minnesota would be paying the difference because they would have to borrow the money or tax somebody else to pay for it."
Two lawmakers who helped sink a ballpark drive in 1997 -- Sen. John Marty and Rep. Phil Krinkie -- put the lost investment earnings at $66.4 million. Vic Moore, a top aide to Senate Majority Leader Roger Moe, disputed their numbers. Twins owner Carl Pohlad and other private sources would have to contribute at least $150 million under the new plan. Money for the loan would come from a workers' compensation account, not directly from state taxes.
Brainerd Dispatch ©2013. All Rights Reserved.