Members of the Board of Aldermen started deliberating in earnest today on a request for an effective $145 million in financing for a new NFL stadium on the North Riverfront of downtown St. Louis.
Although some aldermen have publicly expressed doubts about the proposal, I don’t think there’s all that much suspense about the outcome. Mayor Francis Slay, the most ardent of stadium backers, can ultimately be expected to deliver “yes” votes from at least 15 of the 28 aldermen on the strength of his political clout (and that of organized labor). That’s not to say that it has been easy—sources tell me there’s still some dealing going on—but it would be shocking if Slay came up short.
The new proposal differs slightly from the one that we reported on last month. At the end of the day, the city is going to have to fund a $145 million hole in the financing. Previously, Dave Peacock said it was going to be $150 million, but is was recently announced that the Regional Sports Authority had found $5 million to contribute.
Interestingly, the St. Louis Post-Dispatch used the outdated $150 million figure in its reporting on October 24. The story also reframed the narrative to make this seem like just a $70 million commitment, which would vaguely be supplemented by "event-day revenues." These, we're told, would be used to "rebate" the NFL and its team for the use of a naming-rights deal with National Car Rental, which would in turn provide debt-service for the issuance of $75 million in bonds.
Small omission: Event-day revenues are nothing new. It has always been assumed that they are justification for any of the project's funding. Here's the simple reality: The city needs to finance $145 million toward this project. How it defines the mechanism for getting there is a matter of semantics. At the end of the day, the city's tab will be enough revenue to retire $145 million, minus whatever tax proceeds are realized by having a new stadium.
It should be noted that stadium backers always presume that if the NFL leaves St. Louis and there is no new stadium, all of the revenues generated there will simply evaporate. There are no estimates as to how much the city would still reap in tax revenues if some of the dollars spent at Rams game were instead spent with other city businesses.
That's the sort of point that economists might raise if they were on the Board of Aldermen. But they are not. So I've included that point among the questions that it would be interesting to see raised today and in the coming weeks, before the aldermen decide it all suddenly makes sense.
Here are some questions worth asking the task force:
1. Why didn’t you present the current proposal to the Board of Aldermen in June or early July—after you won your court case invalidating the public-vote requirement—so that we would have time to review and possibly modify it?
2. Is there any possibility that the city would be asked for more funding if you fell short of your other revenue projections, such as $160 million in PSL sales and proposed tax credits?
3. Given that NFL officials have clearly stated that naming-rights revenues belong to their teams, is it not a safe assumption that any team playing in the stadium will expect to be wholly reimbursed for the $75 million that your proposal allocates to support the issuance of bonds, regardless of whether event-day revenues are sufficient to cover the $75 million?
4. In your proposed contract, you state that “the city reserves the right to use economic incentive programs.” Is it possible that you will seek city support beyond what the current proposal specifically provides?
5. If there are shortfalls in revenue projections, can you identify sources other than the city that would be willing and able to cover them?
6. Why wasn’t St. Louis County asked to support the new stadium on the same basis of regionalism that it supported the dome in the early 1990s, especially since there were two 2015 ballot dates easily available when you announced your initial plans in January?
7. In your assertions that the new stadium would represent no new tax burden on city taxpayers above what is currently spent on the dome, did you consider that beginning in the year 2022, there would be no debt-service payments remaining on it?
8. You have indicated that the RSA will cover any cost overruns. Given that these have sometimes exceeded $100 million in other markets, through what revenue source would the RSA be able to meet this obligation?
9. The justification for the original schedule of $6 million annual payments on the dome was that event-day revenues would pay for them, so isn't it an increase to city taxpayers to replace that with a new $6 million annual schedule that isn't covered by event-day revenues?
10. In your presentation to NFL team owners, did you represent this project as having widespread support from St. Louis residents, despite having no public vote or official governmental processes?
