The St. Louis Board of Aldermen voted 26-2 on Friday to give preliminary approval to tax breaks and free land for a new MLS soccer stadium, with final approval to come when and if the city actually lands a team. Which means it’s a perfect time for me to help throw some cold water on the board’s enthusiasm, via column by St. Louis Post-Dispatch columnist Tony Messenger (which he spoke to me for before the vote, but which ran this morning).
My only actual quote should be pretty uncontroversial:
“The latest plan is arguably less onerous for the public than lots of other stadium projects out there — and certainly better than the previous soccer proposal for St. Louis,” deMause says. “But that’s damning with faint praise, because the median in stadium deals is ‘pretty awful.’”
Most stadium deals are terrible, and this one is better than most! But it’s not the best, either, which Messenger notes by pointing to my recent Deadspin article on stadium deals that don’t suck, citing in particular the Orlando S.C. deal where the team owner paid for construction, land, and property taxes like a normal land developer. St. Louis mayoral chief of staff Stephen Conway retorts that Orlando’s situation is an “outlier,” which is true, but when you’re giving your own plan five stars out of five, by definition you’re saying it’s as good as any outliers. (What would an Orlando-style plan get, six out of five stars?)
Anyway, to recap and update what the prospective St. Louis MLS owners will get as part of the tax and land break package, with some numbers via city documents helpfully provided by Messenger:
- A 3% sales tax surcharge on goods sold at the stadium. The present value of future taxes is estimated by the city at $21.3 million, but since the higher sales taxes which arguably would just force the team to charge lower face-value prices, it’s not fair to consider this entirely a city cost.
- An exemption from half of city ticket taxes, with the other half funneled into a stadium upgrade fund. Project supporters say that all the other St. Louis sports teams get an exemption on this, so the soccer team should too; still, that makes it less “not a subsidy” than “a subsidy, but one that the city hands out like candy.” The city analysis estimates the value of this exemption at $11.6 million in present value.
- An exemption of sales taxes on construction materials, which is estimated to cost the city $1 million in present value while saving the developers $4-5 million; no explanation is given in city documents how this bookkeeping magic occurs (the city sales tax rate is about equal to the state’s), so just roll with it.
- Free state highway department land and an exemption on property taxes for it. This is the big unknown, since the city apparently threw up its hands and said, “Well, we’re not getting any money from the land now, so may as well give it away for free,” which is not how assets work. (Not that it’s stopped far bigger developers from trying the same argument.) Here’s a vacant lot in the same general vicinity selling for a little under $23 a square foot; if you figure at minimum about 500,000 square feet for a soccer stadium, then you’re looking at $10 million in forgone land value, plus whatever the city would be giving up in forgone future property taxes.
- The state has already approved $30 million in tax credits, though since it doesn’t appear to be a rebate of any specific taxes, this is probably better thought of as “cash.” (Really, all tax rebates are better thought of as cash, since there’s no functional distinction between the two.)
Add it all up, and we’re looking at maybe $60 million in public subsidies, whereas the previous soccer stadium plan that was rejected by voters in 2017 would have provided … $60 million in city subsidies, plus $40 million from the state. So, yeah, this would be somewhat better, but not all that dramatically so. Probably the most honest way to present this to the public would be “We want a soccer team, and at least this way we’d get one at a mild discount over what some other cities are spending,” but maybe that’s just what “FIVE STARS!!!!!” translates into in the politician-to-English dictionary.