St. Louis mayor wants sales-tax hike to pay for MLS stadium so owner can drop $200m on expansion fee

Whole lotta news swirling around the proposed St. Louis MLS stadium (and team), as Mayor Francis Slay prepares for an April public vote on the team’s proposed $129 million subsidy:

  • While $40 million for the deal would come from state tax credits, and another $9 million from state land preparation funds, the source of the city’s $80 million in cash was unknown until now. Slay’s idea: Hike city sales taxes by half a percentage point (from 8.67% to 9.17%) and use the proceeds for a whole bunch of stuff, including light rail, job training, surveillance cameras to reduce crime — and an MLS stadium. (Technically the stadium money would come from a “use tax” on purchases of out-of-state products, but it’s essentially the same mechanism.) This is, needless to say, money that if raised could be spent on anything else — and the raising of which doesn’t come without a cost to the local economy, as the city across the state was warned a decade ago.
  • MLS commissioner Don Garber called the vote on stadium subsidies a “referendum” on whether they want an MLS stadium at all, which isn’t a take-it-or-leave-it blackmail threat at all, gosh no.
  • Prospective team owner (and former Bain Capital exec and Boston Celtics /AS Roma minority owner) Paul Edgerley continues to tout his “$400 million of private money” in the deal, which pointedly ignores that 1) half of that is for the expansion fee MLS is charging him for the team itself and 2) most of the rest would be covered by the public subsidy.
  • If Edgerley also wants to get property taxes from the blocks around the stadium kicked back to help pay his costs via a TIF — he’s not answering questions on the topic — then a previous city deal means even more tax money could be diverted to an unrelated private developer in the area.

The April vote — which, let’s be reminded, is only required because a bunch of community activists passed a law in the wake of the St. Louis Cardinals stadium subsidy 14 years ago — would come in two parts, one to raise the sales tax, and one to devote a portion of it to the stadium. No polling yet to indicate where voters stand, but as I noted to a St. Louis reporter yesterday, this is an awfully big ask for an MLS team, given that in contrast to more established sports, the response of most voters to the threat of “You’ll never get a pro soccer team if you don’t do this” is likely to be “Wait, there’s pro soccer now?”

That’s a big part of the reason why MLS subsidy demands tend to be more modest — I don’t have the full numbers, but I believe this would be the second-biggest subsidy request behind the $183 million D.C. United stadium deal. As such, this is looking more and more like a test case, not just for whether MLS can successfully demand $200 million apiece for one of its increasingly innumerable franchises, but whether the team owners can turn around and shake down a city bereft over the loss of its NFL franchise to cover a large chunk of the nut. This is going to be quite the 2017.

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6 comments on “St. Louis mayor wants sales-tax hike to pay for MLS stadium so owner can drop $200m on expansion fee

  1. According to this article in Sports Illustrated, the expansion fee will be 150 million, not 200 million:

  2. Yes, and (no link handy, sorry), Edgerley and friends immediately said that this wouldn’t reduce the amount of subsidy they were asking for, because (paraphrase) “$150 million is still a lot of money!”

  3. Pretty sure people in St. Louis are aware there is pro soccer “now,” given the top league just finished its 21st season.

    They might very well say they would rather not have their tax dollars spent on a stadium for a team in it, and that would not only be fair, but admirable. But I doubt the number one response in a city that has many soccer-savvy people in it would be amazement that there was a professional league.

  4. This would be the biggest subsidy ! The DC United subsidy was actually an NFL subsidy. Can’t get the Redskins back if you can’t tear down RFK down first. The soccer games were in the way.

  5. One would think the last city inclined to accede to a money grab for a sports stadium would be St. Louis. Unfortunately, our elected leaders and many of the voters who elected them fail to learn from history.

  6. This is the very definition of corporate welfare and subsidies, only this time a public official is cheerleading the effort. Again, if you can’t afford to play with the big boys then go home.

    I still don’t understand the rage in MLS. The ratings and attendance are pathetic, the quality of the product is sub-par, and now with the Premier League, La Liga, Liga MX, and Bundesliga all televised in the U.S. (Premier League on NBC); they can’t possibly compete for foreign players and pay them nearly enough. Yet from a business perspective I don’t blame MLS for extracting millions from wanna-be franchise owners since the other leagues’ franchises are spoken for.

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