While Major League Soccer and Minnesota United Football Club owner Dr. Bill McGuire were gearing up for a major announcement Wednesday, the Woodbury City Council scheduled a closed meeting later that same night to discuss its own dealings with the soccer club.

According to a March 23 post on the MLS website, a league advisory indicates that McGuire and MLS Commissioner Don Graber will “make an important announcement on the future of soccer in Minnesota.”

Also on March 23, the Woodbury City Council agenda for the March 25 regular meeting was updated to include a “closed session to review threatened or pending litigation.” The topics listed include the on-going Gartner Restaurant Holdings v. City of Woodbury; and Minnesota United Marketing LLC and Minnesota United Realty Holdings LLC.

A member of the North American Soccer League, the Minnesota United Football Club is being considered by Major League Soccer for a potential expansion club. The United had, up until last November, also planned to make Woodbury’s Bielenberg Sports Center its official practice facility.

However, as of March 18 – exactly four months since McGuire indicated the team’s intent to step out of the agreement -- negotiations over a termination agreement continue, and no official documents have been signed to release the United from its obligations in Woodbury.

Contract considerations

The United and Woodbury had two contracts in place for the Bielenberg Sports Center. Deemed a public-private partnership, the contracts set forth terms for the construction of a 5,600-square-foot locker room addition on the west side of BSC, and the terms for a marketing agreement that would enable United management to recoup the cost associated with building that facility.

The construction contract held the Minnesota United financially responsible for the construction of the exterior and interior of the training facility. To date, the United has paid $975,000 to the city of Woodbury for the exterior construction, but the club walked away from the project before the interior portion was complete.

While the United indicated it is no longer interested in using the BSC as its official training facility, team President Nick Rogers said in January that the club wants to continue its marketing agreement with the city.

The marketing agreement gives the United “exclusive naming, sponsorship, branding and advertising rights” for most of the outdoor fields at Bielenberg Sports Center, as well as the fieldhouse and ice arena. Funds from the sponsorships are meant to pay back the dollars spent by the United for construction of the now-vacant locker room addition, with the city receiving an annual payment, at this time, of 10 percent of the gross revenues.

The intent, McGuire explained in a Nov. 18, 2014, email to City Administrator Clint Gridley, was “that this will allow us to recoup at least part of the significant capital we have put into the project to date, and for which we will have no ongoing use or benefit.”

A closed meeting

The Woodbury Bulletin has questioned the legitimacy of part of this week’s proposed closed meeting. While the Bulletin concedes that Minnesota’s Open Meeting Law does allow public entities to close meetings for attorney-client privilege, the scope of the attorney-client privilege as it pertains to public bodies is narrow.

The city of Woodbury may go into closed session to discuss items relative to the on-going litigation against Gartner Restaurant Holdings. That litigation also relates to an arrangement that affects Bielenberg Sports Center, but is not directly involved in the Minnesota United matter. The Bulletin does not dispute this right.

Rather, the Bulletin directs question to the city’s implication of “threatened or pending litigation” in regards to the Minnesota United contracts.

The City Council has not publicly discussed any aspect of the termination agreement process since the United’s intentions became public in January. According to Gridley, multiple versions of the termination agreement have passed between city staff and the United staff, but no document had been signed as of March 18.

In a March 23 email to Gridley, the Woodbury Bulletin asked specifically if “the City of Woodbury is in a situation where litigation is pending in the matter of Woodbury and the Minnesota United Football Club.”

The Bulletin cited a 2002 Minnesota Supreme Court ruling in the Prior Lake American v. Mader case, which implies that meetings of public bodies may only be closed if there is pending litigation or an imminent threat of litigation. That decision, which set precedence in regards to attorney-client privilege and Minnesota’s Open Meeting Law, does not allow governmental bodies to close meetings to merely review information or get updates on contract negotiations.

Minnesota Newspaper Association attorney Mark Anfinson said the Woodbury Bulletin is right to question the specificity of the City of Woodbury’s intent to discuss the Minnesota United contracts behind closed doors, right after discussing the Gartner litigation.

“What they’re trying to do is move into the other issue, no fuss, no muss,” Anfinson said. “Convenience is not an exception to the Open Meeting Law.”

With that in mind, the Woodbury Bulletin has asked that the Woodbury City Council either hold its discussions regarding the status of negotiations with the Minnesota United FC in a public setting, or confirm that litigation is pending. The Bulletin had not received a reply as of 6 p.m. Monday.

All aspects of this story will be updated as new information becomes available.