The city of Inglewood still hasn’t posted details of St. Louis Rams owner Stan Kroenke’s proposed stadium deal to its website, though there is a statement from Mayor James Butts promising that “no tax dollars have been requested or will be used for this project if approved.” The Associated Press, however, reports this morning that this isn’t true at all: Kroenke would be looking for at least $100 million in kickbacks of property taxes, ticket taxes, and other city revenues:
By the developers’ estimate, in its first 25 years the project will produce more than $1 billion in local taxes — on property, tickets, parking, utilities and other sources. The first $25 million each year would be guaranteed for Inglewood, and once developers are reimbursed for eligible costs, any surplus would stay with the city.
“Eligible costs,” according to AP, would include “sidewalks and road work, landscaping, water mains and utility lines,” as well as “costs on event days for police, emergency medical crews and shuttle bus services from off-site parking.” Kroenke’s proposal estimates that these would total about $100 million and would be paid back within five years, at which point the city would presumably get to keep all of its tax revenue. (Though police, EMTs and shuttle buses sound more like ongoing expenses, which if carried forward over 30 years would boost the tax subsidy to $300 million over time, or about $180 million in present value.)
Peacock and Blitz outlined funding sources, including $200 million from the National Football League’s loan program, most of which would likely be paid back by the team; as much as $250 million from Rams owner Stan Kroenke; and as much as $55 million in state tax credits.
The funding includes two streams of money from the region’s residents:
• About $130 million in the sale of personal seat licenses, which reserve specific seats for fans and are often necessary to buy season tickets.
• As much as $350 million from the extension of the bonds at the Edward Jones Dome, where the Rams now play.
That $350 million is the big piece, obviously, but what exactly “extension of the Jones Dome bonds” means remains a bit of a mystery. The Post-Dispatch describes it as like refinancing your house: You go to the bank, take out a new loan, use it to pay off the old one, and sink whatever’s left over into a new project. (For you, maybe new cabinets for your kitchen; for St. Louis, a whole new stadium.)
The new loan still has to be paid off, though, which makes the claim by Gov. Jay Nixon’s stadium negotiator, David Peacock, that “the new stadium will impose no new tax burden on taxpayers in the local region and the state of Missouri” a bit of an untruth. Either the hotel taxes that fund the Dome would have to be extended longer than otherwise, or the money would have to be taken out of the Jones Dome fund and replenished by some other new taxes, each of which would mean a new tax burden. (Unless you don’t count taxes paid by hotel visitors as a local tax burden, in which case you’re crazy: Not only are many hotel stays by in-state residents, but money is fungible, so hotel tax revenue could be used to pay for other services or reduce other taxes if not used on a stadium.) The P-D estimates that it would cost $24 million a year to pay off the remaining Jones Dome debt while also paying $300 million toward a new stadium, and the Jones Dome bonds currently run $18 million a year — so in all likelihood this would require both extending existing taxes for another 20 years and adding $6 million a year in new ones.
That’s all an awful lot of who-the-hell-knows, in both St. Louis and L.A., but then, that’s the stage of the stadium game that we’re in: Announce the pretty pictures, and let the bothersome financing facts fall where they may later.
Another wild card in the Rams situation remains the NFL’s position — has the league okayed a Rams move, as some rumors have it, or is it seeking to block him because all his fellow owners hate him, as others have suggested? There’s an interesting tea leaf to read here in the position of NFL stadium consultant Marc Ganis, who invariably pushes the league line, and who is suddenly all over the press reports talking up the St. Louis plan (if it’s sweetened further) and bad-mouthing Inglewood’s:
Chicago-based sports finance consultant Marc Ganis said claiming no tax money would be used in the [Inglewood] project is “hyper-spin” and could damage the project’s credibility. “It’s not an outright lie … but there will be people who think it is,” Ganis said. “They might be prospective tax dollars, and it might make sense for Inglewood to contribute them to the project, but they are tax dollars.”
Ganis said St. Louis has a leg up. Leaders have done this before, when the Rams first arrived two decades ago from Los Angeles. And the region has “an outsized number of corporate headquarters relative to its size of market,” he said. Besides, he said, it’s a myth that the owners of big-market teams make far more money than those in smaller markets. “An NFL team can be very well supported in Green Bay, Wis., which has far fewer corporations and economic activity than St. Louis,” Ganis said. “The beauty of the NFL is the large markets end up subsidizing the small markets.”
“I see [the St. Louis proposal] as a plan that should be discussed. It’s not such a no-brainer that it should be accepted yesterday,” said Marc Ganis, a stadium consultant who sat on the negotiating teams that brought the Rams to St. Louis and sent the Raiders back to Oakland. “It’s a reasonable starting point for meaningful discussion.”
That sure sounds like “NFL to St. Louis: Put your money on the table, and we’ll see what we can do for you.” But at this point, there’s such a huge pile of known unknowns (the St. Louis stadium would require knocking down a good chunk of a warehouse district that may be protected by historic designation) that it’s tough to see very far into the future. Except that one way or another, Stan Kroenke is likely to be getting a nine-figure check from somebody’s public treasury