Final St. Louis soccer stadium deal is better than previous one, but not so much as to be worth getting excited about

The St. Louis Post-Dispatch business section ran a long article on Sunday about how the city got a much better deal on its MLS stadium after voters rejected the original plan in 2017. Most of the article’s evidence is that local elected officials who expressed qualms about the earlier plan seem fine with this one — though it’s worth noting that the quote in the headline, “Clearly a better deal,” appears nowhere in the actual article — but it also includes this chart:

That’s not exactly apples-to-apples, so let’s unpack it a bit:

As for the new plan, it includes:

  • $30 million in state tax credits (okayed by Missouri’s now-governor).
  • A sales-tax surcharge on in-stadium purchases (which probably mostly comes out of the team owners’ pockets like a ticket tax)
  • An abatement of the city’s 5% ticket tax, with half the money going to the team directly and the other half going into a “stadium upkeep fund.” The Post-Dispatch estimates each half as worth $28.7 million over 30 years, which is a total of $57.4 million over 30 years, which in present value comes to around $29 million, probably less if ticket prices (and taxes) rise significantly over the next three decades and make the tax more backloaded.

Also, in both cases the stadium will be exempt from property tax, which still no one knows how much of a savings that’s worth to the team owners.

So is that really better? For the city, absolutely, as it’s managed to cut its costs from $60 million to less than half that. For St. Louis taxpayers overall, maybe not so much, as the revival of the state subsidy makes up for most of the difference in city subsidies. It’s way better than the very original plan that would have stuck taxpayers with a $100 million bill, yes, but that’s not what voters rejected in April 2017, as the state tax credits were dead at the time.

In any case, yes, it appears that voters did get a marginally better deal by rejecting the 2017 plan — yay, democracy! — but the emphasis is strongly on marginal: Mostly, the city and team regrouped to fob off half the public costs on the state, while converting the other half from a sales-tax subsidy to a ticket-tax kickback. So long as local pols and media outlets are willing to celebrate victories like these, sports team owners probably won’t mind too much failing to stick the public with outright defeats.

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8 comments on “Final St. Louis soccer stadium deal is better than previous one, but not so much as to be worth getting excited about

  1. The reason cities are indulging the MLS is because it is seen as a sport of the future. As I have stated before if MLB were to ask Nashville (whose mayor had said no and bankrupt), Montreal (who wants to build a stadium privately, )Portland(same as Montreal), Las Vegas (public official seem ho-hum about public spending), San Antonio (not Dallas-Ft. Worth public financing not popular here) build me a $1 billion stadium. The answer is you are not the NFL. When the Bucs asks for a new stadium in TB the bankrupt Hillsboro county, they will get it. The rays,…well, when that sweetheart development deal comes through on the land they are on, keep in touch

    1. You would have a better case if Arlington weren’t opening a new publicly funded stadium for the Rangers next spring. Also the Braves a couple of years back, and possibly the Diamondbacks next up.

      MLS is getting lots of deals approved quickly mostly because MLS is asking for stadiums pretty much everywhere, and just handing out teams to whoever bites. (It also helps that MLS stadiums don’t cost much to build, comparatively.) There’s no evidence that deals for one sport are easier to get through legislative approvals than another, all else being equal.

    2. Las Vegas officials are ho hum about public funding for stadia?

      Quick, someone call Mark Davis and let him know…

      1. There was an article in one of the LV publications about a year or so ago and a councilwomen was asked about it. It wasn’t a no for public financing but it didn’t sound like a strong yes either. They already built the 51s stadium recently and the group Stone Stone was in who is trying to bring it there indicated they wanted to build it privately, thus Ho-Hum. It would take me some time to find the article.

        1. Yet they are subsidizing the Raiders facility to the tune of, what, $750m while also building a practice facility for the 2 year old NHL team in Henderson?

          Doesn’t sound Ho Hum to me… Sounds like they are all in (just like Glendale was!)

          1. Since I am up all night working (month close)Ill see if I can catch a break and find the article. My gut tells me that the pols in Vegas fell like the market isn’t ready. Like Tampa, it has a service based economy with low disposable income and people work at night. Plus a poor TV market it won’t be successful. I think the pols know that and would rather bite what they can chew. Also with a poor education system, I think politically they are tapped out of public financing. I don’t know enough about the Henderson bid last month to talk about it.

            Regarding Neil’s point about Dallas and ATL. Those are economically prosperous cities with large populations. Remember, Nashville, Portland, Montreal, Tampa, San Antonio, aren’t them and don’t have the kind of sports fans to can make public financing politically salient. Charlotte is economically prosperous but has so many problems I would spend all night writing about them.

            Full disclosure: If I were younger and starting my career Nashville, Charlotte and Indy are the place to move. Hands down. But MLB, nope sorry

  2. It’s a bonus that the taxpayers end up with a slightly better deal. However, when any abatement or ‘redirection’ of tax revenues that would normally flow to public coffers is made for a specific project, the municipal government is effectively taxing OTHER entertainment businesses to subsidize the one for which the abatement etc has been authorized.

    This is not only a sports related phenomenon, of course. When special districts are created for commercial or housing “revitalization”, the new development is subsidized by any business or property owner present who is deemed to be within the district.

    Effectively, the owner(s) of the lands to be developed under the revitalization plan are being granted the power of taxation on their neighbours.

    What was the Boston Tea Party down to again?

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