St. Louis Magazine is reporting that it’s uncovered $215 million in hidden public costs for Gov. Jay Nixon’s new Rams stadium proposal, which is kind of a lot, even for a stadium that was already looking at a public subsidy of at least $388 million. This is now exploding all over the interweb, so, is it true?
So far we had two main taxpayer revenue sources for the Rams project: $201 million in projected proceeds from refinancing the bonds sold to fund the Jones Dome (the 20-year-old stadium that the Rams have now decided they want out of), plus $187 million in various state tax credits. The St. Louis Magazine piece asserts that by refinancing the Jones Dome bonds and extending the taxes that pay for them, this would tack on an extra $215 million in added taxpayer costs:
Documents obtained by St. Louis Magazine through a Sunshine Law request show that the city’s obligations to cover debt retirement would jump from about $6 million per year at present to $9,785,000 in 2020, then increase every year to a staggering $15,975,000 in 2051.
That $6 million a year we already knew about: It’s the city’s share of tax money that is currently being used to pay off the Jones Dome bonds, and was supposed to accompany $12 million a year from similar state taxes. Another $6 million a year from the county never materialized, though — or rather, the county told Nixon they’d sue his pants off if he tried — which left us in the scenario I described here:
The state just has to worry about how to finance $400 million for a new stadium plus $100 million left on the old one from the same taxes that were approved to build the Jones Dome — which seemed a mathematical impossibility back when it was first proposed, even before Gov. Jay Nixon said he’d skip using the $6 million a year in county tax money if it would require a public vote. … That would leave $18 million a year to pay off $500 million in expenses, which simply can’t be done — but at least if Nixon can conquer math, he no longer needs to worry about winning over St. Louis voters as well.
To fill that roughly $100 million gap, the state has come up with another city funding stream called the “City Event Day Tax Appropriation.” Without access to the documents that the magazine has, I can’t begin to say how it would be funded — kickbacks of stadium-related taxes, maybe, just from the name? — but it starts off slow in 2021 before climbing to much larger figures by 2051, for a total of $215 million.
Now, it should be immediately apparent that that $215 million in future payments isn’t really worth $215 million — it’s heavily backloaded to the middle of the 21st century, which isn’t worth nearly as much as money you have to spend now. (This isn’t due just to inflation, but to interest rates — any time banks will pay interest on your money, it’s better to have cash now than in a couple of decades.) Recalculating to present value would bring the actual cost down to, let’s see, probably something more in the $100 million range. And hey, wasn’t that a $100 million hole that was left when the county pulled out? What a coinky-dink!
The upshot, then, is that Nixon is still proposing to hand $400 million to Rams owner Stan Kroenke for a stadium, plus another $100 million in future taxes to be used to pay off the Jones Dome debt — but he’s identified where the missing $100 million would come from, and it’s city taxpayers, somehow. So, not quite an extra $215 million in costs like the headline promised, but still pretty bad — unless you’re Stan Kroenke, in which case it probably just made your day.