St. Louis council approves $127m for Blues, MLS venues, voters can still block the latter

St. Louis lawmakers took major steps last week toward throwing $127 million at upgrades for the Blues‘ hockey arena and construction of an MLS soccer stadium, though the latter will depend on the results of an April voter referendum:

  • The board of aldermen voted on Friday to approve $67 million in subsidies for Blues arena renovations. (It will add up to $105 million over time, but it’s worth $67 million in present value. And while it would mix sales taxes, ticket taxes, and other revenues, all those are all diversion of existing taxes, not new ones the team owners are agreeing to pay, so as discussed earlier, it’s all money that the city would otherwise be able to spend on other things if not being siphoned off for the Blues owners.) Alderman Steve Conway defended the subsidy as necessary to keep drawing NCAA events (“If we don’t make improvements, what comes into general revenue diminishes over time”), though he didn’t appear to provide numbers showing that any added revenue is worth the expense; Alderman Antonio French retorted, “We do not have $105 million to give to anybody. And we’re about to give money to some of the richest people in town because they want a new scoreboard.”
  • Circuit court judge Michael Mullen approved putting $60 million in funding for a new MLS stadium on the April ballot, despite the board of aldermen having approved it too late for the deadline after the initial bill was withdrawn and revised. There will actually be two votes: one to raise sales taxes by 0.5% to expand St. Louis’s light rail system, which would automatically cause use taxes on out-of-state purchases to rise by the same amount; the other would approve taking those use taxes and pouring them into paying off $60 million worth of stadium costs. If either fails to get a majority, the stadium subsidy wouldn’t happen.

The soccer stadium vote will be, unless I’m mistaken, the first time that St. Louis voters will actually be going to the polls under the law approved by a 2002 referendum requiring a public vote on any sports subsidies. (The Cardinals stadium had already been approved then, and the Rams stadium never happened.) The only poll on the subject that I can find is just of Democratic primary voters (though St. Louis is pretty overwhelmingly Democratic); it found respondents opposed to soccer subsidies by a 61-22 margin, so I think it’s fair to say the proposal faces an uphill battle. There’s still two months of campaign spending left, though, so open up those Jamba Juice (and Bain Capital) coffers, Paul Edgerley!

St. Louis committee approves more than $100m in subsidies for Blues, MLS, but who’s counting?

The St. Louis Board of Aldermen’s Ways and Means Committee approved bills this week to funnel public money into both renovations of the St. Louis Blues arena and a new MLS stadium. How much money? As is so often the case, that’s a complicated question:

  • In the Blues’ case, the original plan was to demand $67.5 million from the city, mostly in the form of kicked-back sales taxes. (It would add up to $112 million over time, but the present value would only be $67.5 million.) The committee amended the bill to include $55 million in ticket tax revenue — in place of some of the sales tax money, I think, maybe? — but that cash flow wouldn’t start arriving until 2034 since it’s currently being spent elsewhere. And since it’s not a new tax surcharge but just money that otherwise the city could start collecting for other uses in 2034, I’m not going to go through the trouble of firing up Excel to figure out the present value of that, because it’s a subsidy either way. (The Blues owners are still also demanding an additional $70.5 million from the state of Missouri, though given the new governor’s feelings about such things, that may not go so well.)
  • For the proposed St. Louis MLS team, the original plan was for the city to provide $80 million from mumble-mumble-hey-look-over-there, but that bill was withdrawn by its sponsor last month. In its place now is legislation to provide $60 million in city money, mostly from redirected property taxes, but also including a ticket tax surcharge (really payments in lieu of a ticket tax, for reasons not worth going into here) that would provide $7.5 million to $12 million over the next 30 years, and … okay, now I will fire up Excel, and that’s worth: somewhere between $4 million and $7 million now, so not really a big concession on a $60 million get.

The MLS stadium plan, if approved, would go before city voters in an April referendum. The hockey deal for some reason everyone thinks doesn’t require a public vote, though that’s not what the law passed in 2002 says. Hey, Jeanette Mott Oxford, if you’re reading this, any plans to file suit to intervene in this one?

Every concentration of humans on earth now bidding to build MLS stadiums

Nashville is looking to build a new MLS stadium, and Indianapolis is looking to build a new MLS stadium, and San Diego is looking to get a new MLS stadium, and Detroit is considering providing free land for an MLS stadium, and St. Louis is still looking to build an MLS stadium after rejecting it once, and a guy in Charlotte is still looking to have an MLS stadium built for him, and Tampa is looking to get an MLS franchise but already has a stadium.

These are mostly terrible ideas, notes the Guardian, at least where they involve public money. And if the newspaper slightly overstates the case that there’s growing pushback on MLS subsidies (truth is, they’ve never been an especially easy sell as sports subsidies go, mostly because MLS isn’t as popular yet as the Big Four sports), it does contain a classic defense of them from Peter Wilt, the Chicago Fire founder who now heads later headed the Indy Eleven NASL team and wannabe expansion franchise:

“It is about image and plays into making a city cool to live in, a good experience for young professionals, and reducing the brain drain on a community. Things like that are sometimes not taken into account. If Oakland loses the A’s and the Raiders, which is a possibility, then no one will hear about Oakland in any positive terms for the foreseeable future.”

Things like that actually are taken into account in economic studies of teams and stadiums, which overwhelmingly find that if sports teams make cities “cool,” it doesn’t show up in things like per-capita income or jobs or economic activity or tax receipts. Plus you’d then have to explain how a city like Portland, for example, which until recently had only basketball as a major-league sport and famously turned down a domed stadium in the 1960s that would have brought an NFL team, nonetheless became one of the hippest cities in America. (It has MLS now, but the hipness predated that.)

Anyway, with MLS set to announce four more expansion franchises in the next year or so, the league can probably count on some cities stepping up to throw money at new stadiums, so long as they’re not too picky about which ones. (Cincinnati, Raleigh/Durham, Sacramento, and San Antonio are also in the mix.) Bulk-mailing extortion notes is kind of a strange business model, but hey, whatever works.

Charlotte mayor tells council to email MLS stadium questions, because no time for hearings

Today in everybody and their sister wants to build a damn MLS stadium to get a damn expansion team news:

  • Charlotte’s plan for $100 million in city and county subsidies for a $175 million stadium could receive a Friday city council vote, just two weeks after the proposal first surfaced. If that seems rushed, you don’t know the half of it: Charlotte Mayor Jennifer Roberts said there isn’t time for a public council hearing on the plan, and that members should email their questions to city staff instead. Roberts later called for a council meeting on the subject at 4 p.m. on Friday, which should give plenty of time for everyone to process any testimony before a vote, right?
  • Something Charlotte council members might want to fire up their email clients about: WTF was the Charlotte Regional Visitors Authority smoking when it estimated a billion dollars in new visitor spending over 25 years and 600 new jobs as a result of building a soccer stadium? Not that $40 million a year in economic activity — which amounts to maybe a couple million a year in new tax receipts — would be any great shakes for $100 million in expense, nor is a cost of $166,000 per job. But still, substance abuse is a serious problem, and if you see something, you should say something.
  • Over in St. Louis, meanwhile, that city’s all but dead $129 million MLS stadium subsidy proposal has turned into a $60 million subsidy plus an entertainment-tax kickback of unknown value. The new plan still doesn’t have much support — the bill stalled in committee last week, after city budget director Paul Payne testified that he wasn’t confident the plan wouldn’t end up dipping into the city’s general fund — but supporters are still hoping to somehow get it approved by the council and a circuit court judge in the next four weeks to get it on the April ballot, at which point St. Louis voters can express how much they hate it.

St. Louis soccer stadium plan sponsor kills funding plan, ball’s in MLS’s court, uh, pitch

Looks like we can downgrade the St. Louis MLS stadium plan’s condition from critical to dead, after the sponsor of a city bill to fund $80 million of the cost said she’s withdrawing the legislation:

“That bill will not be moving forward,” Alderman Christine Ingrassia, 6th Ward, said at Tuesday’s meeting of the aldermanic Ways and Means Committee…

Ingrassia said she wanted SC STL to show a proposal that was at least “revenue neutral” on the city’s budget over time.

“It looked like to me, and in the conversations I had with people who have more expertise in the field of public financing, that they were basically just repackaging the same subsidies in different ways,” Ingrassia said. “So they were asking for way more than I feel like we could support here in the city.”

“Repackaging the same subsidies in different ways”? I’m sure I’ve never heard of anything like that before.

It’s not entirely clear what changed Ingrassia’s mind — you go and sponsor a bill to spend $80 million on a soccer stadium, then turn around and say that this is “way more” than you can support? — but it’s worth noting that after newly elected governor Eric Greitens ruled out state funding as “corporate welfare,” Ingrassia started backing away as well. Elected officials are just so susceptible to peer pressure, you know?

If the soccer stadium plan really is dead, at least in this iteration — Mayor Francis Slay held out hope of still getting a proposal on an April ballot, but time’s running out and there’s now no funding plan at all — it’s worth noting that this would be one of the largest MLS stadium subsidies in history, all for a team that doesn’t actually exist yet. Top-level pro soccer in St. Louis isn’t a bad idea — it’s not a bad idea most places, which is why the league is handing out franchises to just about anyone who asks — but providing a near-record subsidy just so that MLS can get away with charging $150 million expansion fees was a terrible one. This alone won’t change the league’s business model, but maybe if Greitens has started something and a few more prospective expansion cities push back against subsidy demands … friends, they’ll call it a movement?

New Missouri gov says no state stadium funding, no way, no how

Sorry for the radio silence of the last few days: I was traveling, and while intending to get back to the stadium grind yesterday, a red-eye flight proved to be incompatible with a regular morning posting schedule. (Though I did find time to finish up some music writing I’d been working on, if that interests you.)

Thankfully, Missouri governor-elect Eric Greitens didn’t take the holidays off, greeting us to 2017 by upping the ante on his comments that MLS stadium funding would be “welfare to millionaires” with a great big raised middle finger to plans for state tax breaks for a St. Louis soccer stadium, telling journalists on Monday: “To be very clear, I have completely ruled out state funding for stadiums.”

Greitens reiterated his description of state aid for stadiums as ”welfare for millionaires” but said he “looks forward to meeting with the leaders of the MLS project to see if there’s a way for them to bring private-sector funding to bring a soccer team to the state of Missouri.”

“We are not going to use money from the people of the state of Missouri for what I believe is corporate welfare,” Greitens said. “We’ve got far too many core priorities of government that have to be invested in.”

That’s about as clear as clear can be. Without the $40 million in state tax credits, the MLS proposal has a (wait for it) $40 million hole in its budget, one that neither the city of St. Louis (which would already be putting up $89 million of its own public cash) nor the team’s prospective owners (who would already be, uh, paying the league’s $150 million expansion fee, what do you want from them, blood?) seems eager to fill. Stadium bill sponsor Ald. Christine Ingrassia remarked following Greitens’ remarks, “I was hoping to get to the point where this proposal made sense for St. Louis, but I’m feeling that less and less,” while Mayor Francis Slay’s chief of staff said, “It will be tough to get this done without the state’s support.”

Not that this kills the St. Louis MLS plan dead: $40 million isn’t an insurmountable gap, and the team owners aren’t likely to just walk away from that $89 million in city subsidies without trying to make it work. But with only three weeks before the deadline to get a vote on the April ballot, there isn’t much time to go back to the drawing board if they’re hoping to get something approved this year. Time for everybody to watch Lewis Reed really, really closely.

Either St. Louis MLS stadium funding is in trouble, or democracy is

That proposed MLS stadium for St. Louis that may be about to lose its $40 million state tax kickback could be facing trouble for its planned city subsidies as well, as apparently nobody gave the board of aldermen time to actually discuss funding bills before putting them up for an April vote:

One measure would raise the city’s sales tax by a half percent, with the revenue going to mass transit, public safety and economic development. A second measure would direct the corresponding increase in the use tax to the new stadium…

If [St. Louis Board of Aldermen President Lewis] Reed waits until next year to make those [committee] assignments — something that he’s well within his rights to do — aldermen would have just two weeks to pass the bills if they want the measures on the April ballot.

“I received the bills an hour before they wanted me to assign them,” Reed said. “We should have gotten that information a little bit earlier to really have an opportunity to take a look at the bills, understand what they are, their total impact, and the best assignment for them.”

This could easily be a screwup by the stadium’s sponsors, or it could be intentional: Corporate subsidy advocates haven’t been above throwing bills at legislators at the last minute to avoid scrutiny (or even leaving time for legislators to read the damn things), after all. Reed steered carefully down the middle on the proposed St. Louis Rams stadium subsidy, so it’s probably unlikely he’ll use this as an excuse to throw roadblocks in the way of the MLS deal; whether he’ll use this as an excuse to ram it through with little debate, we’ll see — though the fact that he’s griping publicly about not having enough time doesn’t seem promising for stadium subsidy backers.

Gov. Nixon gets more wrong on St. Louis MLS deal in three sentences than most can in lifetime

Lame duck Missouri Gov. Jay Nixon opened his mouth about the proposed St. Louis MLS stadium on Friday at a meeting with reporters, and this poured out:

“Folks may want to anguish a little bit over all this sort of stuff, but it’s the price of doing business,” Nixon said in a meeting with Post-Dispatch reporters downtown. “And quite frankly, we’re getting in, relative to what other areas of have done, so much more cost-effectively here.”…

“If we’re going to sit around the table and complain about this little part of the deal or that little part of the deal, then the $250 million to $300 million in private money that’s going to be invested will go somewhere else,” Nixon said, “and that site will sit there looking the way it is.”

Nixon has never been known for being the most savvy sports subsidy negotiator, but that’s a whole lot of stupid packed into just three sentences. Let’s break it down:

  • “It’s the price of doing business.” This is mostly meaningless rhetoric, but to the extent it has any meaning, it’s “this is the best deal we’re going to get.” Except the $129 million in state and city spending being proposed is literally the team owners’ first ask, so there’s no way to know whether this is the price of doing business or just what a couple of wannabe MLS owners decided they can sucker the public into giving them.
  • “We’re getting in, relative to what other areas of have done, so much more cost-effectively here.” There could be a word missing here in the transcript (“of have”?), but regardless, Nixon is off his rocker here, since this would be the second-largest MLS-only stadium subsidy ever, meaning that by definition more than 20 other areas have gotten off most cost-effectively. Unless he just means “ha ha ha ha, we’re making the city foot most of the bill instead of the state,” which is true, but not exactly what most people mean by “cost-effective.”
  • “The $250 million to $300 million in private money that’s going to be invested will go somewhere else.” Of that private money, $150 million will go into the pockets of the other MLS owners as an expansion fee — and that will happen regardless of whether a team goes to St. Louis or some other city. (In fact, you could even argue that it would be better for the Missouri economy if the St. Louis-based prospective owners didn’t waste their money on an MLS team, and instead spent it on something else local.) The team would be putting about $71 million into actual construction, but since it would also be taking up a piece of land that then couldn’t be used for anything else ever, not to mention $129 million in public money that couldn’t be used for anything else, that’s not necessarily a plus even if you think the land would likely remain undeveloped for a while otherwise.

Nixon was, by all accounts, a successful litigator and popular state attorney general before becoming governor, so you’d think he might know a little bit more about haggling than he’s shown with his sports dealings. Guess there’s really no accounting for the effect of the toy department.

Missouri delays $40m soccer subsidy ruling, St. Louis team owners may grub for money elsewhere

Okay, didn’t see that coming: One day after Missouri governor-elect Eric Greitens called the local soccer team’s $129 million stadium subsidy request “nothing more than welfare for millionaires,” the team’s owners asked a state board to delay a meeting on $40 million in state tax credits for the project, saying they may look for another source of funding:

[SC STL vice chairman] Kavanaugh said the ownership group is working on contingencies in the event it can’t secure the $40 million in tax credits, but those ideas are in the early stages. He said losing out on the state contribution wouldn’t necessarily derail the group’s efforts at an MLS team.

“We are thinking of other options to fill in the potential hole,” Kavanaugh said.

(If you’re confused about the team name, by the way, that’s because it’s confusing: Kavanaugh currently owns the minor-league St. Louis F.C., but the larger group seeking an MLS team is called SC STL, which may or may not be the name that the MLS team goes by, if it ever comes into being.)

With the board meeting now delayed in 2017, it looks like Greitens will be overseeing any state share of the stadium deal after all, which explains why Kavanaugh is looking for a Plan B. If you’re hoping that it will be “ask the private investors who’d get the benefits of a stadium to cough up some more money, especially what with MLS reducing its expansion fee for its next two franchises from $200 million to $150 million,” Kavanaugh is already crying poor:

“Personally, growing up from a father who was a brick layer, I don’t come from money and any money I’ve made I’d say it has been earned,” Kavanaugh said by phone. “There’s a lot that personally speaking for myself and my partners we have given back in a number of ways and still plan on doing that in the community here.”

Kavanaugh had a brief career as a pro soccer player before co-founding a tech company with his friend David Steward, who likewise was born into wealth, so it’s true they’re not old-money millionaires. Still, he co-owns a company with $7.4 billion a year in annual revenues, so if he really needs $40 million, he has other places he can go other than the state of Missouri. Here’s guessing that he’ll end up asking the city of St. Louis instead, but there’s always hope that by “giving back to the community” Kavanaugh actually means “paying for my own stuff already.”

Missouri governor-elect calls St. Louis soccer stadium plan “welfare for millionaires”

I admittedly hadn’t noticed that Missouri elected Eric Greitens as governor until yesterday, but he’s sure on my radar now:

Missouri Gov.-elect Eric Greitens said he opposes public funding for a Major League Soccer stadium in downtown St. Louis, according to a statement released by his transition team Monday.

“This project is nothing more than welfare for millionaires,” Greitens said. “Right now, because of reckless spending by career politicians, we can’t even afford the core functions of government, let alone spend millions on soccer stadiums.

“This back-room wheeling and dealing is exactly what frustrates Missourians.”

The St. Louis MLS stadium project certainly qualifies as welfare for millionaires, involving $129 million in public cash, land, and tax credits to build a $200 million stadium. That’s not the sort of thing that governors usually say aloud, but Greitens has an unusual resumé, mixing altruism with serving in the Navy SEALs with hating on unions (he’s also the first-ever Jewish governor of Missouri), so maybe it’s not entirely unexpected.

Also, probably not entirely likely to do much, since the state Development Finance Board is set to vote on the city’s request for tax credits today, before Greitens takes office, and the rest of the stadium decision will be up to St. Louis city officials and voters. Still and all, it’s not going to help the soccer team’s ballot campaign to have the governor-elect publicly call them a bunch of rich guys with their hands out.