St. Louis development agency gives self “five stars” for soccer plan because it won’t lose as much money as last one

The St. Louis Development Corporation released a financial impact report on the city’s proposed new stadium for a proposed MLS expansion team yesterday, and because the city development agency apparently bases its economic methodology on Yelp, it gave the plan “five stars”:

“You’re not going to see a proposal this good anywhere, any place in the country,” said Steve Conway, chief of staff to Mayor Lyda Krewson.

The analysis, which Conway called conservative, predicts a new stadium would send the city $1.4 million in tax revenue every year.

It also shares a litany of new information with aldermen hungry for details: The present values of tax incentives for this proposal add up to $39.7 million, in comparison to $123 million offered to the effort that failed to land a team last year. The proposed stadium improvement fund, fed by a 2.5 percent ticket tax, would add up to $28.7 million over 30 years.

Wait, so the tax incentives and siphoning off half of the city’s ticket tax money would add up to $68.4 million over 30 years, and the new tax revenue would add up to $42 million over 30 years? I don’t know what kind of curve the St. Louis Development Corporation grades on, but that sounds like three stars at best, maybe two if the waiters didn’t promptly refill water glasses.

Normally at this point I would dive into the text of the report itself, but as the St. Louis Dispatch didn’t bother to include a link and the SLDC apparently hasn’t gotten around to posting it on its website, that’ll have to wait. (I’ve requested a copy from the SLDC, but it’s a little early in the morning yet for them to reply.) For now, it looks like the most we can say about the public cost of the soccer plan is it’s not as bad as the last one, and we already said that a couple of months ago, and besides that’s not saying much considering how awful the previous plan was. Further updates as they become available, I guess.


7 comments on “St. Louis development agency gives self “five stars” for soccer plan because it won’t lose as much money as last one

  1. #MLS4TheLou is the actual hashtag chosen for this latest effort to salvage STL self-esteem through getting a team. Write your own jokes.

  2. An extreme positive that helps the grade is zero general fund revenue being used, zero tax dollars from the non-ticket buying general public, and actually using some of the ticket tax to go into an escrow fund to help with future upgrades/demo.

    Also taking into consideration who all actually pays the ticket tax in STL right now…. which is nobody. Sports, entertainment, etc. I’m not expecting you to have watched the entire presentation (even though it’s easily available online), but having been in the room, they spent a good amount of time presenting that this not only puts it in line with other STL city venues, but they’re actually going to collect half the ticket tax. More than you can say for what everyone else is currently doing.

    Aside from even that, your article comes extremely close to portraying it like the city is wasting away 68.4 mil and are comparing it to *only* getting 42 mil…. even discussing opportunity cost, that wouldn’t be accurate either, as you haven’t had a revenue generating tenant on that property for 50+ and wouldn’t for any foreseeable future.

    A lot of local politics and negotiations specific to STL are in play… but again, without watching the actual presentation from yesterday, you’re likely to miss all that and paint with broad strokes.

    • I’m well aware that all the other sports teams in St. Louis have gotten exemptions from the ticket tax. But that doesn’t make an exemption leas of a subsidy – it’s just a subsidy that all the other kids have gotten.

      As for “wasting $68.4m and only getting $42m,” that is indeed what the study seems to show, albeit with happier verbs than “wasting.” (From what I can tell without them actually releasing the report itself, anyway.) If you choose not to count the ticket tax kickback because everybody does it, then the city ends up on the black, but not hugely so.

      And as for “it’s not generating any tax revenue now,” I don’t know what to tell you. Traditionally developers of long-vacant land still pay property taxes when they build on it, because that’s how property taxes work. Do we need to revisit the “if I weren’t hungry I wouldn’t even be at your restaurant, so I should get my food for free” metaphor?

      • The ticket tax It’s just sports, again. Though your site is about sports, the STL one is actually an amusement tax that is abated by all amusements in the city except essentially haunted houses.

        To your last point – this is a blighted piece of land that the state of Missouri owns. The aldermen of the ward it’s in have publicly stated (as recently as yesterday) that they can’t get developers to develop the land and put business there. It’s been vacant for 50+ years and will continue to be. Those are the facts.

        Your painting in broad strokes often has issues, but your lack of local knowledge here really undercuts your point.

          • My point was that if you’re going to give away land that you can’t find a buyer for (and its future property taxes), you’re never going to have any buyers. If you want to argue it’s a worthwhile giveaway, that’s fine — but it’s still a giveaway. I appreciate the concern trolling about what I don’t understand, though, thanks!

        • The arguments for the tax breaks involved in this St. Louis soccer deal — “without this project you’ll get nothing,” “it’s the same money that we lavish on other developers anyway,” “it’s not as bad as some other deals” — are the exact same ones that every developer and its elected supporters makes. Including Amazon:

          http://gothamist.com/2018/11/20/cuomo_amazon_tax_subsidies.php

          So while, no, I have not been to see this particular plot of vacant land, I have been to see an awful lot of other plots of vacant land in similar cities, and have evaluated the economics behind them. And the math doesn’t come out well, especially not for a sports project that would cannibalize a lot of its economic impact from other entertainment spending. (If people buy more soccer tickets and fewer Blues tickets, that’s a net zero gain.) The proposed soccer deal in St. Louis is hardly the worst, but it does involve significant subsidies — if it’s “five star,” then Orlando’s stadium must be, like, 20 or 30 stars.