Okay, there was one piece of news this weekend involving NFL teams threatening to move to L.A. that wasn’t just blowing leverage smoke: The details of the St. Louis Rams stadium bill were revealed on Friday. Here’s what we know:
- The city would redirect $6 million a year worth of hotel taxes that are currently being used to pay off the Edward Jones Dome, as has been part of the plan all along. The dome debt would be refinanced, meaning it wouldn’t be paid off until much later, and the hotel tax surcharge would be extended well past its original sunset date.
- To replace the additional “city event day taxes” that everyone hated — which itself would be replacing money that the county balked at putting in — there would be this Rube Goldberg device: The state authority that owns the Jones Dome would put in $75 million by taking it from the stadium’s recently announced naming rights deal — but since that’s money that Rams owner Stan Kroenke wants to use to pay off his own share of the stadium costs, the city would then reimburse Kroenke with … kicked-back game day tax money! Betcha didn’t expect that surprise twist, huh?
- The Rams ownership state-run stadium authority [EDIT: Sorry, misread a reference] would cover all construction cost overruns, and the Rams would agree to a “binding and enforceable non-relocation agreement.”
All this would be enough to pay off about $145 million in stadium costs, which is a rather low number considering the annual payments. So either a large chunk of it would still be needed for existing dome costs, or the city is anticipating a lousy interest rate.
The controversial part of this, obviously, is keeping in the bit about kicking back taxes on anything sold at the stadium, which could come to a huge chunk of change — Mayor Francis Slay’s chief of staff, Mary Ellen Ponder, said the exact amount of the rebate is still being negotiated, so it’s hard to say how huge. Not only have members of the St. Louis board of aldermen have already been complaining about the price tag of tax kickbacks, but NFL VP for stadium grubbing Eric Grubman was out on the hustings on Friday, trying to move the goalposts on what exactly is a subsidy:
Generally, the NFL considers naming rights and even game-day taxes — on tickets, hot dogs, parking and beer, for instance — revenue that belongs to team owners, not to the public, said NFL Executive Vice President Eric Grubman.
Grubman said he had not seen the city bill. But if such money was bonded to pay for construction costs, he said, it should be credited toward the team’s portion, not the public’s.
“It’s an NFL asset in the way we view the world,” Grubman said. “Whether on tickets or parking, that tax wouldn’t exist but for the activities of the team.”
Laying claim to taxes on everything spent by your fans at the stadium is pretty ballsy — not only is this something that literally every other human who pays taxes on anything could claim (“Yes, Mr. IRS Auditor, but don’t you understand that my income tax bill wouldn’t exist if I hadn’t worked?”), but keep in mind the Rams would only be moving a few hundred feet, so it’s all tax money that’s currently being collected by the city and kept for public uses. But it’s even ballsier than that: Grubman is apparently trying to insist not only that tax kickbacks get used to pay stadium costs, but that they be used to pay the team owner’s share of stadium costs, and the city needs to come up with some other source for its own half of the tab.
This upset even Dave Peacock, the main booster of the Rams deal, who replied to Grubman’s remarks: “We’ve been discussing these taxes as a source of funding with the league since mid-July. I’m surprised they’re becoming an issue in late October.” Maybe this is just an example of Grubman playing bad cop, so that city officials are more willing to accept the game-day tax thing so long as it counts for their side of the ledger. (“Hooray, we get to give our tax revenues to the rich football team owner and count it as money we’re giving him rather than money he already has!”) On second thought, maybe this is a story about blowing leverage smoke after all.