St. Paul, Minnesota Wild want state to cover half of $769M Xcel Energy Center renovation

The city of St. Paul slapped a hefty price tag on its long-awaited plan to reinvent a crucial swath of downtown, including the Minnesota Wild's Xcel Energy Center.

For $769 million, the city would overhaul the NHL arena as well as the neighboring Roy Wilkins Auditorium and St. Paul RiverCentre, creating a renovated destination for sports, concerts, conventions and more.

Under the proposal, the Wild, owned by Craig Leipold, would contribute nearly $216 million. The city — the owner of all three buildings — and Ramsey County intend to cover about $159 million, according to Mayor Melvin Carter.

What legislators will hear about Thursday, when the mayor presents the pitch to the House Capital Investment Committee, is the state's penciled-in responsibility: $394.6 million.

It's a big request for taxpayers, officials from St. Paul and the Wild acknowledged. But they frame the sum as an investment, arguing the renovations would boost the facilities' economic impact by more than $100 million per year.

Gutting and refurbishing the 25-year-old arena will cost nearly three-quarters of the total funding, as Carter said the facility is at the end of its competitive lifespan. Improvements would include upgraded seating options; security and accessibility enhancements; new HVAC and wiring; and the addition of public-facing restaurants attached to the building's exterior.

"It's not a question of whether taxpayers should be on the hook for this building. We are," Carter said. "It's a question of whether we want to facilitate, we want to set ourselves up, so that what we're on the hook for is a vibrant, thriving center of activity for the next generation."

A Wild request

Leipold said there is recent precedent for governments and teams sharing arena costs, both in the local market — like Target Field and U.S. Bank Stadium in downtown Minneapolis — and the sports industry as a whole.

A lack of financing for arena improvements was one of the reasons Minnesota lost its first NHL franchise, the North Stars, to Dallas in 1993. Though the Wild also has options to move out of St. Paul, Leipold said he "is not pursuing them in any way."

"We are a St. Paul team," Leipold said. "We're committed to this market. This is our home, and it will always be our home. We believe in the city, and we're going to stay here."

Proponents of the proposal acknowledged the financial request could be a challenge given the state's most recent budget forecast, which projected a shrinking surplus for the next two years and a growing deficit down the line.

"It's a significant amount of money," Carter said. "But it's a significant amount of return on the investment as well."

For the last quarter century, the arena complex has been the crown jewel of downtown St. Paul, drawing an estimated 2.1 million visitors and $383 million in spending each year, according to an economic impact study the Wild commissioned.

Since the pandemic, the X, as hockey fans call it, has been a bright spot, fueling a rebound in event traffic during an otherwise difficult moment for downtown. Like other cities around the country, St. Paul has struggled with the rise of remote work, homelessness and crime in the wake of the COVID-19 outbreak. But its urban core faced added difficulties as its largest downtown property owner, Madison Equities, attempted to offload its distressed real estate portfolio all at once.

Now the arena complex is at the heart of downtown's revitalization plans. City officials envision the area as an entertainment hub, with the hope these upgrades will spark private development of a hotel, apartments and other amenities nearby.

"That block — the Xcel Energy Center, that whole complex — ought to be and can be a center of commerce, a center of jobs, a center of social life," Carter said, "whether there's a game tonight or not."

Sales tax for local share

The 18,000-seat X, which opened in 2000, was key to winning one of the NHL's expansion franchises after the North Stars' departure.

The state, city and Wild each contributed to the roughly $170 million construction of the stadium. The city still owes $37 million of its original debt, which it refinanced in 2019 when interest rates were low and the Wild agreed to a 10-year lease extension through 2035.

Carter is proposing the city fund its portion of the renovations with bonds repaid by its existing half-cent sales tax. Nearly half of that revenue is already dedicated to economic development and the arena facilities. The city expects those collections, which are separate from St. Paul's neighborhood and cultural STAR programs, to total about $7.4 million in 2025.

The arena complex also receives $3 million for maintenance annually from a tax-increment financing district that encompasses several downtown blocks and expires in 2033.

Ramsey County leaders have been involved in discussions with St. Paul officials about the renovation plans but have not committed any money to the project so far.

County Board Chair Rafael Ortega said county leaders need assurances the updated arena would be part of a larger entertainment district that includes the RiversEdge redevelopment envisioned along the Mississippi River. They also want a transit hub included in the plans.

Only then would county officials consider helping to fund the renovation. Ortega emphasized it's an important project, and the county wants to help; but, he added, leaders also need to be "good stewards" of taxpayer dollars.

The mayor said the structure of the X remains in good condition. The city's request for state assistance would be a lot higher, Carter added, if it had to tear down the arena and build a new one.

"The crunch that we're feeling is a crunch that's created by a lot of external circumstances," Carter said. "I can't come up with a logic model that suggests that if we retreat and fail to invest in our state, fail to invest in our infrastructure, fail to invest in our downtowns, that crunch will get better over time."

'Project Wow'

Safety protocols, technology and consumer preferences have changed greatly since the arena's original design in the late 1990s, officials emphasized.

"That was pre-COVID, pre-9/11," Leipold said.

The adjacent facilities, which the Wild's parent company also manages, are even older. The $150 million proposed for Roy Wilkins Auditorium would cover substantial renovations for the nearly 100-year-old venue. An additional $50 million would pay for more minor work on the RiverCentre, which opened two years before the X, to help the convention center to host bigger groups.

The arena refurbishment would add a second escalator to improve crowd flow and deliver much-needed upgrades to the facility's bathrooms, kitchens and locker rooms. The Wild have also proposed moving the U.S. Hockey Hall of Fame from its current home in Eveleth to St. Paul.

City officials said if the Legislature grants their ask, construction could begin as soon as 2026, with work occurring in phases to keep the complex as open as possible for ongoing events.

The group behind the proposal has been referring to it as "Project Wow" as a nod to its high hopes for downtown St. Paul, Leipold said. Before engaging the city, he spoke with the CEOs of several area employers to gauge their commitment to the location.

"We walked away with goosebumps, honestly," Leipold said. "They were emphatically supportive of whatever we could do to make it work. They believed, as we do, that when there's people, there's energy, and there's safety."

After living downtown for 16 years, the team owner said it's easy to tell when there's a concert or hockey game happening at the X: the sidewalks are bustling, the restaurants are full.

"I think this is a project that five years from now, the legislators will be able to see — in their city, where they work — the benefits of what we do for the downtown area," he said.

Staff writer Christopher Magan contributed to this report.