Enterprise rental car family proposes new St. Louis MLS stadium plan that sucks less than the last one, probably

There are new owners hoping to bring an MLS expansion franchise (and MLS stadium) to St. Louis, and the Post-Dispatch is reporting on it with typically dispassionate hometown newspaper skepticism:

For those who thought the city’s ambitions of becoming a Major League Soccer town died at the ballot box last year, there is hope — and its name is Taylor.

Taylor is the family behind Enterprise rental cars, which is based in the St. Louis suburb of Clayton. The Post-Dispatch goes on to pick up such press release soundbites as that this would be the first MLS team majority-owned by women, and that Enterprise has lots of ties with local nonprofits, and okay okay, we get it, what about the damn stadium that was the stumbling block the last time somebody tried to get a soccer expansion team for St. Louis?

A roughly $250 million stadium dedicated to the soccer franchise would be “overwhelmingly” privately financed, the Taylors say. Public help would likely come from dedicated sales taxes on concessions and other merchandise sold to patrons, a property tax break from a city agency owning the stadium site and leasing it to the group, state tax credits and a break on the city’s 5 percent ticket tax.

That “overwhelmingly” sounds good; that longish list of tax breaks sounds less good. Let’s take them one at a time:

  • Those “dedicated sales taxes on concessions and merchandise” would apparently mean an extra 3% sales tax surcharge within the stadium. That would mostly come out of the team’s pockets — the economics gets a bit complicated, but suffice to say that as with ticket taxes, sports teams tend to lower concessions prices to eat the surcharge themselves, since they are already trying to charge fans as much as the market will bear for hot dogs — so probably wouldn’t be a significant public subsidy.
  • The size of the proposed property tax break is unknown — here’s the site under consideration if somebody wants to dig through St. Louis tax records to estimate how much it would normally be expected to pay.
  • Actual MLS ticket sales and prices are famously hard to calculate thanks to teams’ policies of goosing the gate by giving away tickets for free or cheap, but if we guesstimate 300,000 tickets a year at an average of $30 a pop, then eliminating the 5% ticket tax would cost the city about $450,000 a year.

So all told, yeah, that all sounds preferable to the $60 million from sales tax hikes and kicked-back property taxes on adjacent land that would have gone into the previous soccer stadium plan. Though of course right now we’re just taking the word of the prospective team owners for it, so let’s see what the fully fleshed-out proposal looks like. Hopefully the Post-Dispatch will remove its rose-colored glasses long enough to report on that, once it’s available.


23 comments on “Enterprise rental car family proposes new St. Louis MLS stadium plan that sucks less than the last one, probably

  1. Thant link takes you to a Cincinnati FC link. Basically it’s the same piece of land near the more or less empty Union Station.

    https://www.stltoday.com/business/local/soccer-gets-another-shot-in-st-louis-as-family-that/article_f77a29a7-9a97-577e-84ea-92107ace964c.html#tracking-source=home-top-story-2

    Not a bad site. Near transport. Parking. Blues/Cardinals axis of sports.

    • Anyone else get pissed off at being required to answer ten stupid survey questions and quit before even reaching the article linked?

      Thanks google ads, you’ve added four more companies to the list of annoying advertisers I will never support.

      • My favorite is when the popup box is taller than the window it’s in, so the button to make it go away is inaccessible.

        I understand that newspapers need revenue, but nagware has never really seemed like a viable business model here.

        • Almost like Diebold electronic voting machines do when non-whites under 60 enter the booth!

  2. Sorry, mispaste of the URL — here’s the correct link to the site location:

    https://www.google.com/maps/d/u/0/viewer?mid=1BWmq60kwM33mT9K6IqbLC-A3LrKmi89J&ll=38.62903101543439%2C-90.21182564999998&z=17

    Anyway, it seems like a fine enough site from a “where to put a sports venue” perspective. I’m more curious how much property taxes St. Louis would be giving up by exempting it.

    • Right now the land is highway ramps and grass so I’d venture to guess that the land isn’t currently generating any tax revenue for the city of St. Louis.

      • Sure, but that doesn’t mean it isn’t *worth* anything to the city of St. Louis. Otherwise everyone who built anything on vacant land could say “Well, it wasn’t paying property taxes before, why should we pay any now?”

        What would need to be done would be a comparison with other assessments in that area. I have a Property Shark account that I could use for this, but I don’t know the neighborhood well enough to say what’s a good comparable.

        • Rust Belt cities that have experience a lot of population loss have lots of vacant properties in need of development so making these kinds of deals makes sense. Economists can say all day long that the development would have happened anyway but in places like St Louis, Cleveland, and Detriot there are land and buildings that sat empty for decades until incentives were put on the table.

          • You did see the article linked earlier this week where more development is happening in Detroit away from the stadiums and arenas than near them, right?

            The problem is that the logic here — struggling cities can be successful, if only they provide enough incentives — requires believing that there’s enough demand for new housing/commercial/retail development that it will be successful if it’s built, but not so much demand that anyone is willing to give it a go without subsidies. I don’t doubt that there are cases like that — subsidies can make it far more tasty to take on a risky project, and sometimes risks pay off — but far more numerous are the cases where the subsidy just goes to sweeten a project that could have taken place anyway, or where it ends up building something that ends up sitting mostly empty.

          • Yeah but when you have cities that have been losing population for decades its hard to say that its just developers holding out for when the tax breaks finally arrive. Sure nationwide you would find a lot of cases where its an unnecessary giveaway but when you get to the middle part of the country and you’ve got cities that have seen their population drop by 40-50% over the last few decades its a bit of a leap to say that developers were holdout out until the city finally caved on tax breaks.

          • Have you actually looked at how development works in declining cities? In most cases, it’s something like Detroit — developers zero in on a certain section of the city that they expect can attract moneyed renters/shoppers/businesses, and try to turn that into an enclave walled off from the parts of the city that those people wouldn’t touch with a ten-foot pole.

            For all that developers like to talk about razor-thin margins of profitability, no amount of subsidies is going to make a hopeless site any more attractive. Which is why developers look for promising spots that are currently underutilized, and sell cities on “Hey, nothing’s going on there now, might as well give it to us for free!” But they’re never going to go after the truly hopeless properties, so in the end you end up subsidizing a little bit of stuff that needed the push and a whole lot that didn’t. That’s a terrible way to get bang for your buck.

          • I lived in Cleveland for 13 years and actually worked on financing development deals. So I saw first hand how a lot of deals only worked once a tax abatement of some sort. I live outside Toronto now and no one talks about tax breaks because in this market developers don’t need them

          • Can you provide some examples, with numbers? I believe you that developers presented these deals as only working with tax breaks — we know this happens all the time — but I’d love to see an example of what a project really looks like that is kicked over the cusp of profitability by subsidies.

        • Neil: Your line of questioning is spot-on. When the previous scheme to gouge STL city for $60M was still alive, it was revealed that the area in question has been zoned off from development, thus effectively precluding apples-to-apples comparisons. FWIW, methinks at bare minimum $10M of public coin will be needed just to deal with the I-64 ramp now there.

          • It’s not specific to Detroit necessarily, but when these ‘enclaves’ are targetted for redevelopment and, inevitably, gentrification, the BRZ/CRL/TIFF model often created to ‘spur development’ in that rigidly defined project area can and often does rob the general fund of money that should be spread more broadly across the entire municipality.

            So, sure, the walled/gated community created in the middle of an utter wasteland is a nice oasis. But the wasteland has been at least partially created (or made worse) by the very existence of the oasis itself.

            We live in an era when upside down Robin Hood like figures abound.

      • Maybe the site could be developed into something the produces real estate taxes and sales taxes.

  3. What is the traffic plan for this? It appears as though the stadium will require the demolition and rerouting of fairly significant road or accessways. Not from the area so just going by the google map posted…

    I take it that the entire parcel of land is presently owned by the city and no portion will have to be purchased to allow for a stadium of some sort?

    Economic details sketchy (as always), but at least they’ve provided something…

    If this is a land lease (at $1 p/a, I assume) and modest tax concessions on a $250m privately funded (which I assume means at least 80% private equity) stadium that will be gifted to the taxpayers on opening because it’s such a terrible economic idea as a standalone, it might not be that bad of a deal for taxpayers.

    But who pays for operations? The team or the taxpayers?

    Who pays for upgrades and maintenance over the life of the stadium? The team or taxpayers?

    Does the team pay any rent or is their (reduced) ticket tax payment intended to cover this?

    Finally… do people in St. Louis actually want MLS calibre soccer? The NASL team did not last long, let us not forget. This is not a clear indication that St. Louis won’t support MLS, but it is at least a worthy counterpoint to all the hype we’ve heard in the past about St. Louis being the spiritual “home” of American soccer.

    Finally, when Liga Mx and MLS merge post 2026 world cup (check news feeds), how will teams from either country get through the famous and impenetrable great and amazing border wall/fence/berm?

    • True, many STL minor soccer teams have failed, but I’m not sure they’re a good indicator. They have played in distant suburbs or across the river, and nothing says not major league like playing pro soccer in an Edwardsville cornfield.

      • Sorry about the two “finally” paragraphs…. this time travel business plays hell with tense and bullet numbering….

  4. St.L have the history and did support an indoor team for years after the the NASL died. However TV numbers show otherwise when compared to other Midwest cities which are the weakest in the nation. One bright spot is a high level of support for the national teams when in town. Garber loves the market and would be preferable to Detroit.

  5. I think what many of you who are not “local” to St Louis are missing here is the tremendous position of this site as it relates to the St. Louis “Arch to Park” ,”Chouteau Greenway”, and the “Cortex Innovation Community” initiatives. There are over $7B worth of projects either complete or announced in the St Louis Central Corridor. Try googling – “St Louis tech hub”.
    St Louis is one the top five tech entrepreneurial cities in the county and many young urban millennials prefer soccer over American football. From an urban planning and design perspective this site is a node along the Choteau Greenway which will link the Gateway Arch to Forest Park. This is a tremendous opportunity for St. Louis to continue to build momentum as well as obliterate an eyesore of concrete highway ramps and decrepit landscape.
    With respect to St Louis supporting soccer. We have hosted two international matches in the past five years, drawing 48,000 people to Busch stadium. This city has a long and rich tradition with the sport.
    I would urge all of you to research all of the momentum happening here in “flyover” country. The support in St Louis for this project is tremendous. The Taylor family has contributed billions of dollars to this community not only publicly, but more often privately. They are tremendous people and their partnership with Mr. Jim Kavanaugh will make this project tremendously successful.

    • So if the site is in such a tremendous location, doesn’t that imply that the city should look to get paid for it?

      This is the paradox of “but-for” development arguments all over: “This is a terrific location ripe for revitalization that will be a massive success, but anyway give us the land for free or else nothing will get built there ever.”

      • We are still waiting for the development promised by The Twa dome, by Savvis center, Busch and ball park village.

        We don’t need hypotheticals.

        Nothing is wrong with saying Soccer is cool and MLS is rad and we as StL and the region want to give money to have a team. And civic pride of a winner.