ST. PAUL -- Peter Sausen joined the state finance department 20 years ago this month and has since sold billions of dollars in bonds and played a key role in restoring Minnesota's image on Wall Street.
But he'll be remembered for having the idea that saved the Minnesota Twins.
Sausen's funding plan for a new Twins stadium, embraced and publicized by Gov. Jesse Ventura last Friday, has become the centerpiece of a stadium bill moving through the Legislature.
"I'm happy that it's working and happy it's moving forward," said Sausen, a Twins fan since the team started playing here 41 years ago. "I don't want the Twins to go away. I don't want contraction."
During stadium debates in recent years, lawmakers occasionally called Sausen for information about bond rates and terms. As assistant state finance commissioner, Sausen oversees the twice-yearly sales of Minnesota's bonds to investors and keeps Wall Street bond analysts connected with top state officials.
Last fall, when his boss Finance Commissioner Pam Wheelock was serving on a tri-partisan stadium task force, Sausen told her he was thinking about ways a stadium could be built without using taxpayers' money.
His interest grew out of the financial contradiction of previous stadium debates: the Twins and legislators were concocting schemes that required millions more in debt payments than the team would generate in new revenue.
Sausen began playing on spreadsheets with ways the team could apply a common financial tactic called arbitrage, using the difference between borrowing at one interest rate and investing at a higher return rate.
After interest rates were cut 11 times by the Federal Reserve last year, Sausen's spreadsheet showed a place where the Twins, by taking advantage of the state's access to ultra-low rates, could get the stadium they wanted without public money.
The team would need to put aside a fairly substantial chunk of money, half of the $330 million the team estimated a new ballpark would cost, and invest it. The state, meanwhile, could issue bonds for the full amount to be repaid at a low rate. Wisely managed, the return on the team's investment fund along with a bit of extra money each year would cover the payments needed to repay the bonds.
Once the numbers clicked, Sausen said he had to work through what he called "the business case." One key: since the Twins need to assume the risk in the investment fund for tax reasons, Sausen reasoned they should be able to hire their own investment advisers to manage it.
Also, a periodic check would be needed to make sure the fund is performing as expected. If not, the team would have to put more money into the fund. The bill moving through the Legislature calls for a review every four years.
In January, Sausen told Wheelock about the idea and she told Ventura. After the Legislature finished most of its work on state budget and bonding measures, Ventura announced the stadium-funding idea at a news conference last week with Wheelock and Sausen standing beside him. Legislators and the Twins applauded and began hammering out details.
They're under pressure. If interest rates start to rise soon, the Twins won't get the low rate they need to make the scheme work. The Fed earlier this week signaled it was ready to raise interest rates if the economy strengthens quickly.
Sausen said he'll be by his telephone as the stadium legislation winds through the Legislature next week.
It's similar to the time in summer 1997 when he refused to leave his phone because he had a hunch a holdout Wall Street bond-rating firm would finally restore Minnesota to a Triple A rating, the best a state can get. Minnesota lost the top rating during the 1982 recession, shortly after Sausen began working in the finance department.
Getting it back was a huge achievement for Sausen and many others in state government. But he takes more personal pride in the baseball stadium idea. "The Triple A took 17 years and there was a lot of other people involved," Sausen said. "It's not the same situation."
With an office that looks out on the Capitol and the park below it, Sausen said he looks forward to spring. "This street gets crowded with school buses and kids here to see the Capitol," Sausen said. "It's the best time of year."
It's also when baseball season starts.
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