Crunching the Inglewood numbers: Rams stadium would bring new revenues, but getting to $1.86B is tough

The Los Angeles Times’ Tim Logan, who has been doing excellent work on St. Louis Rams owner Stan Kroenke’s Inglewood stadium plan (and I don’t just say that because he usually seems to interview me), had a long story yesterday headlined “Stadium economics: How building a venue in Inglewood makes financial sense.” So how does it make sense, exactly?

  • Sports economist Rod Fort says it’s a good deal for Kroenke if he can make enough money on the associated non-stadium development: “It’s more like a real estate development than a stadium.”
  • Sports economist John Vrooman says the Rams could bring in an extra $100 million a year in “sponsorships, marketing and premium seating” in L.A. as compared to St. Louis, calling a move “an economic no-brainer.”
  • Sports economist Victor Matheson says Kroenke could rent out and Inglewood stadium for concerts and the like, but “there’s just not that many 60,000-plus person events.”
  • I call spending $1.86 billion just to get uncertain revenues “a huge, huge risk.”

Fort’s and Vrooman’s points are the most viable arguments for a privately funded Inglewood stadium making sense for Kroenke, so let’s take them one at a time. First off, the real estate development at Hollywood Park might well bring in enough revenue to make a stadium-plus-development deal turn a profit — but then, why saddle it with a potentially money-losing stadium when the rest of the development was already approved and ready to go? Kroenke had to pay his development partners (no one knows how much) to buy into the bigger plan, and it doesn’t make sense that they’d voluntarily give him a lot more in revenues than he’s paying them to buy in, since a stadium doesn’t especially help them any.

As for the extra $100 million a year from being in Los Angeles, that is the big question: Precisely how much value does the L.A. market have to an NFL owner? We’ve heard that number before, on the San Francisco 49ers‘ move to Santa Clara, but we’ll have to wait till the new Forbes numbers come out this summer to see if they agree. We can use the Forbes numbers another way, though, to see how reasonable this is: What are the Rams revenues right now, and what would adding $100 million a year mean?

According to Forbes, the Rams were dead last in the NFL in revenue in 2013, at $250 million. (Being dead last in the NFL in revenue is still a pretty lucrative gig.) Adding $100 million would mean they’d have to jump to 5th in the league in revenue, behind only the Dallas Cowboys, New England Patriots, Washington Unmentionables, and New York Giants. That’s conceivable, I suppose, but I’d still call it a huge risk, even if maybe the Forbes figures might make me willing to lop off one “huge.”

And then, would even $100 million a year be enough to make a $1.86 billion stadium a good investment? Kroenke could presumably knock off some of that price tag with PSL sales (figure $300-400 million), naming rights (about $200 million in present value), and possibly NFL G-4 money ($200 million max). That leaves only a little over a billion dollars to pay off, which $100 million a year would cover, but without much left over for a return on investment. At best, then, Kroenke would be putting up more than a billion dollars out of pocket, plus whatever he’s spending on stadium land and a share of the associated development, for a return that he could get by putting his money in a decent stock index fund. (Okay, and increasing the value of his asset, which admittedly could come to a bunch — the Giants are worth about a billion dollars more than the Rams right now, according to Forbes, though the Giants also aren’t saddled with $1.86 billion in stadium debt.) And if there’s any significant relocation fee required by the NFL, then forget it.

Add it all up, and I would just suggest that the Times’ headline writers should have made one tense change: “How building a stadium in Inglewood could make economic sense.” We’re talking hypotheticals here, and everything would have to go Kroenke’s way for a $1.86 billion stadium to pay off for him. Or to put it another way: It’s a huge, huge risk.

Inglewood approves stadium plan with no public vote, as construction cost nears record $1.9B

The Inglewood city council voted unanimously yesterday to approve an NFL stadium near the old Hollywood Park racetrack site, bypassing both the usual environmental review and the public referendum that would normally be required to bypass the environmental review. The project, spearheaded by St. Louis Rams owner Stan Kroenke, can now move ahead just as soon as—

An economic impact report commissioned by the city estimated the privately funded stadium with open-air sides and a clear retractable roof could be the most expensive in U.S. sports history: $1.86 billion.

Okay, so to paraphrase things Everett Dirksen never said, this Inglewood project is starting to get into some real money. I’m already on record as being skeptical of Kroenke being able to make an Inglewood stadium pencil out when we were talking about $1.5 billion; at $1.86 billion, which is more than half a billion more than the 49ers spent on their stadium in Santa Clara without needing to worry about any NFL relocation fees, it seems like madness. (Or leverage to extract more money from St. Louis.) But I guess we’re one step closer to finding out whether Kroenke is super-smart, super-crazy, or super-smart about appearing to be super-crazy.

There is still one other possible way the Inglewood stadium, even if it doesn’t collapse of its own weight could be blocked, which is that a petition drive could be launched for a referendum to block the deal from going through without a referendum. No word yet of anyone launching such a campaign, but I’m sure someone will do so eventually, because California.

Chargers and Raiders say they can copy 49ers’ private stadium financing, but it’s not quite that simple

More information is trickling out about the proposed $1.7 billion San Diego Chargers/Oakland Raiders stadium in Carson, and it adds up to — well, let’s just run it down first, then see what it adds up to:

  • The promised press conference in Carson happened on Friday, and tons of local officials showed up, but no representatives of either team took the stage. (Chargers stadium chief Mark Fabiani was in the audience, but didn’t speak.) No details of how the plan would work were revealed, with one elected official (SFGate didn’t say who) saying, “The financing will work with the revenue generated by the stadium itself. I don’t have all the details. This is about convincing a community that this is a good project.”
  • Fabiani was busy talking up the press elsewhere, telling ESPN’s Aaron Markazi that St. Louis Rams owner Stan Kroenke’s announced Inglewood stadium was what prompted the Chargers to immediately jump in on a stadium elsewhere in the L.A. area: “We deliberately changed our strategy in the wake of what Kroenke did. When this opportunity to create an alternative came along we decided to seize it.” Fabiani also told Markazi that the Raiders just officially came on board last week.
  • Fabiani told Markazi that the model for the stadium is the San Francisco 49ers‘ $1.3 billion stadium in Santa Clara: “We took the template of the Santa Clara funding mechanisms … so we basically took that and adjusted it for different costs here.” (A Goldman Sachs rep who’s been working on the plan echoed this at the press conference.) He also insisted that the Chargers are prepared to fund the stadium alone if necessary.
  • Regarding the use of NFL G-4 funds for a Carson stadium, NFL VP Eric Grubman told the OC Register, “A stadium project can be eligible for league financing provided the project and its sponsors meet certain criteria. A Carson project would be eligible and could apply if it met those criteria.” Of course, one of the criteria of the G-4 fund is that “the project must not involve any relocation of or change in an affected club’s ‘home territory,'” so either Grubman is saying that the league has changed the criteria, or coyly saying that Carson wouldn’t be eligible, or just ducking the question because he doesn’t want to mess with the teams’ leverage.
  • U-T San Diego reports that San Diego residents hope the team doesn’t move, and more surprisingly, that the newspaper’s headline writers think they’re called “San Diegians.”

So what do we have? Clearly the message the teams are trying to send (or at least Fabiani is trying to send — the Raiders seem to be merely along for the ride) is “the 49ers did this in Santa Clara, so we can do it too.” There are some significant differences, though: First off, the Carson stadium is projected to cost an extra $400 million, something that additional G-4 funding won’t come close to making up, assuming the NFL changes its rules and approves it. Second, L.A. is not Silicon Valley, and the Chargers and Raiders aren’t the 49ers, meaning selling $500 million worth of personal seat licenses to fans, as the 49ers did, is less of a sure thing. And third, the NFL hasn’t committed to waiving relocation fees for teams moving to L.A., which could blow as much as another $500 million hole in the budget.

Probably the best way of looking at the Carson stadium plan is the way this commenter suggested: It’s part negotiating ploy, part fallback plan, and both Chargers owner Dean Spanos and Raiders owner Mark Davis are hoping that it will shake loose stadium money in San Diego and Oakland and they’ll never have to decide whether to shoot the dog. (Fabiani also spent a fair bit of media time over the weekend shaming San Diego officials about not being as friendly-like as Carson ones.) Grubman’s statement seems calculated to support this tactic: He’s not going to commit to G-4 funding, but he’s not going to rule it out, either.

The big question, then, is: If one or both teams can’t use the Carson threat to get stadium money out of their current home cities, will they really pull the trigger and move? That, we simply don’t know, and won’t until there’s more details revealed about how the Carson stadium money would work, beyond “We’ll have what Santa Clara is having.”

Come to think of it, though, there’s one equally big question: If the Santa Clara stadium’s private financing can be picked up and relocated to Carson, how come it can’t be done in San Diego or Oakland? Yes, L.A. is a bigger market, but market size doesn’t matter that much in the NFL. And as noted above, it comes with a bigger price tag, in both construction cost and relocation fees, than a stadium in the teams’ current homes would.

Good questions for officials, and journalists, in San Diego and Oakland to be asking, anyway. It’s possible to take threats seriously without taking them at face value, and that’s what everybody should be focusing on now. If only to take their minds off of the horror that is this photo:

Chargers, Raiders team up for $1.7B Carson stadium announcement (actual stadium not necessarily included)

Well then:

On the field, the San Diego Chargers and Oakland Raiders have had as bitter a rivalry as any in the NFL but in a sense, they’re now partners.

The teams will officially announce Friday that, while they work on stadium deals in their current cities, they will jointly pursue a shared, $1.7-billion NFL stadium in Carson as an alternative…

The Chargers and Raiders will continue to seek public subsidies for new stadiums in their home markets, but they are developing a detailed proposal for a privately financed Los Angeles venue in the event they can’t get deals done in San Diego and Oakland by the end of this year, according to the teams.

In a statement given to The Times on Thursday, the Chargers and Raiders said: “We are pursuing this stadium option in Carson for one straightforward reason: If we cannot find a permanent solution in our home markets, we have no alternative but to preserve other options to guarantee the future economic viability of our franchises.”

There are two possibilities here: Either this is the biggest NFL stadium news in the history of ever, or Chargers owner Dean Spanos and Raiders owner Mark Davis just issued a mindbendingly huge bluff. Let’s examine each of the possibilities:

  • It’s for real: $1.7 billion is an awful lot of money to spend out of your own pocket for a stadium, but if you squint, it just might possibly work with two teams sharing the load. The New York Jets and Giants owners managed to build a stadium that cost almost as much on their own dime (mostly), and if Spanos and Davis can piece together, say, $400 million from naming rights, and $800 million from seat license sales (about what the New York teams managed) to fans who don’t notice what lousy investments seat licenses are, and $400 million in NFL G-4 fund money, then that’s … still not quite enough to break even, but it’s in the ballpark, as it were.
  • It’s a bluff: Both Spanos and Davis are having a bad time of it in stadiums talks in San Diego and Oakland, though much of that is their own doing. What better time to announce that you’re moving to L.A., really you are, any day now, if you can’t get a deal done in your hometown, and if the other team also can’t get a deal done in theirs? (The team statements didn’t say what happens to this “stadium option” if one team decides to bail on it.) Actually moving to L.A. would require huge risks: Not only might the PSLs not sell like hotcakes, but the NFL could demand as much as $250 million in relocation fees per team (Spanos and Davis could try to fight it, but that would involve a lawsuit, which again means risk), plus the G-4 fund stipulates that “the project must not involve any relocation of or change in an affected club’s ‘home territory.’” Suddenly you could be looking at a $1 billion funding hole, which ain’t pretty.

There is one other likely reason for Spanos and Davis to announce this now, whether bluff or for real: What with St. Louis Rams owner Stan Kroenke announcing his own maybe-a-bluff-maybe-not stadium in Inglewood last month, and the NFL unlikely to approve more than two teams in the L.A. market (not to mention the L.A. market not likely to support more than two teams at a level sufficient to pay off two stadiums), there’s a bit of a land rush going on now to be the first to stake a claim to the market just so no one else does. Spanos, in particular, really doesn’t want two teams that aren’t his on his Southern California doorstep, so this serves as a bit of a shot across Kroenke’s bow: We’re going to build a stadium but split the price, and we don’t have a stadium offer back home like you do, and do you really want to gamble that the league will approve your plan over ours?

That’s not the worst thing for California taxpayers, frankly, since it means the three owners are so busy trying to outmaneuver each other that they can’t spend as much time and energy trying to exact tribute from local governments. (Chargers and Raiders execs claim that the Carson stadium wouldn’t require any public funds, but we’ve heard that before.) Though the prospect of Spanos and Davis using this as leverage in San Diego and Oakland could be bad news for taxpayers there, of course.

We may know slightly more once the two teams and their Carson development partners hold a press conference this afternoon. (Friday afternoon, the traditional time for dumping news that you don’t want fact-checked too thoroughly: Add that to your conspiracy bucket.) In the meantime, just enjoy the fact that one side of the stadium would apparently look like a giant, translucent, luxury-box-filled shuttlecraft:

Ah, vaportecture, where would we be without you?

Inglewood stadium developers gave $118k to city officials, mayor calls this “free speech”

Inglewood Mayor James Butts has been an enthusiastic backer of Stan Kroenke’s Hollywood Park stadium-and-development project, even saying that “no tax dollars have been requested or will be used for this project if approved” when that’s not exactly true. Now it turns out that Kroenke’s development partners gave $118,500 in campaign contributions to Butts and two city councilmembers in recent years, and Butts may have turned around and given some of that cash to two more councilmembers:

Campaign finance records show that in 2013, Hollywood Park Land Co. contributed $42,500 to Butts’ 2015 campaign. Last year, the company contributed $15,000 to his 2014 campaign fund, according to campaign records…

Butts’ campaign lent about $160,000 to other candidates, including Councilmen George Dotson and Alex Padilla, finance records show. The development company contributed $5,000 to Councilman Ralph Franklin in 2011 and again last year, campaign records show. Councilman Eloy Morales Jr. received five donations totaling $18,500 from the developers between 2006 and 2014.

Butts and the councilmembers reported receiving the donations, and there’s no cap on campaign contributions in Inglewood, so there’s nothing illegal here. Still, it certainly doesn’t look good when city officials who are considering approving a major development deal while evading both a public vote and an environmental impact review got paid hundreds of thousands of dollars from the beneficiaries of such a vote. Or at least, it doesn’t look good unless you’re Butts, who defended such a system as just good politics, or good business, or something:

“Won’t it be unusual if somebody who had so many projects in a community that they won’t want to exercise their free speech to try and ensure that people are in government that have good governing sense and business skills?” Butts said. “I would find that unusual if they didn’t.”

The issue here, just to be clear, isn’t whether the Hollywood Park development would be a good one for Inglewood — that’s something that we simply don’t know yet, since both the public costs and the economic, traffic, and other impacts of such a project haven’t been determined. Which is exactly why an EIR, or at least a year-long public debate during an initiative campaign, could shed more light on the pros and cons of the deal than the council just voting to approve it, which they could do as early as next week.

Instead, we have people in elected office who apparently consider it “good governing sense” to approve development plans without due diligence — which just happens to be the position of the people giving money to their campaigns. That’s not unusual, no, but it is kind of a problem.

Missouri gov to announce railroad deal for Rams stadium land; NFL gives relocation committee new schmancy name

Buncha news, or “news,” today in the are-the-St.-Louis-Rams-moving-to-Los-Angeles saga:

  • Missouri Gov. Jay Nixon is expected to announce today that he’s reached agreement with local railroads to relocate tracks to make way for a new football stadium. (“We have yet to come up with anything that looks like a fatal flaw,” said Nixon, less than reassuringly.) It’s not immediately clear whether this is included in the original $900 million cost estimate for the stadium, but maybe the governor will spell that out in his announcement later today.
  • The NFL has officially formed a Committee on Los Angeles Opportunities consisting of … the same owners who were already serving as an L.A. relocation committee: the New England Patriots‘ Robert Kraft, the Kansas City Chiefs‘ Clark Hunt, the Pittsburgh Steelers‘ Art Rooney, the New York Giants‘ John Mara, the Carolina Panthers‘ Jerry Richardson, and the Houston Texans‘ Bob McNair. The league also sent a memo to teams reminding them that a three-quarters vote of owners is required before the league will give the thumbs up on any relocations.

I guess we’re going to be treated to dribs and drabs of information like this for the next few weeks or months, since journalists in multiple major cities have been scrambled to cover this story. For any of them reading this, all I ask is that occasionally you try to take a break from the scoop of the moment (they’re issuing new press releases!) to actually investigate the logistics of these multiple stadium plans, and how they’d be paid for. I am sympathetic to your time crunch, believe you I am, but there’s important work to be done here, and reduced resources or not, you’re still the ones best equipped to do it.

Inglewood council could vote to approve NFL stadium without public vote or environmental impact review

So it turns out that not only are Stan Kroenke and his fellow Inglewood stadium project developers trying to use a voter initiative to get around environmental impact laws, but the Inglewood city council can if it wants just vote to evade holding an initiative, too. No, seriously, I didn’t believe it either, but listen to the Los Angeles Times:

The Inglewood City Council, under initiative law, could bypass an election entirely and simply adopt the measure itself. City Council members would not discuss their intentions. They either did not return calls seeking comment or referred questions to Mayor James T. Butts Jr., a strong supporter of the stadium.

“I’m not prepared to make a commitment as to what way we are going to go,” he said…

The Inglewood council would be on solid legal ground if it decides not to call an election. The California Supreme Court in August ruled that the City Council in Sonora could bypass the environmental review for a planned Wal-Mart store without a vote of the public.

So California has some of the strictest environmental impact requirements on the books, but the populace can vote to skip that step, and city councils can vote to skip the whole “populace voting” part. That makes complete sense.

The project’s developers say they want an NFL stadium ready by the 2018 season, so you can see why they’d rather not wait for this whole “studying it to see if it would be an environmental disaster” thing to play out. It’s still probably unlikely that the council would skip going before voters, especially since the initiative campaign has already been started and it would look just terrible to say “Nah, we’ll just vote for you” now, but stranger things have happened.

And speaking of stranger things, Kroenke has actually spoken with St. Louis stadium czar Dave Peacock! No, he didn’t answer his phone or anything, but they did run into each other at the Super Bowl and talk for 20 minutes. “Stan was encouraging and appreciative, and really couldn’t have been nicer,” the Sporting News quoted Peacock as saying afterwards, which doesn’t really mean anything, but then, nothing anybody has said in this whole game of chicken has really meant anything. At some point, Kroenke, Peacock, the Inglewood developers, and city officials in both Inglewood and St. Louis are going to have to put their money where their mouths are, but that’s still a ways off yet. Until then, we get to follow this like it’s a Hollywood love triangle, which is probably more entertaining anyway, if not necessarily more informative.

Inglewood to hold public vote on NFL stadium this summer so Kroenke can evade environmental review

Citizens for Revitalizing the City of Champions — I swear, that is honest to god the name that St. Louis Rams owner Stan Kroenke and his development partners came up with for their astroturf citizens’ group to push for a new stadium in Inglewood, California — has delivered 20,000 petition signatures to put a vote on the ballot this summer to approve their development plan. That’s more than double what they needed, and nearly 20% of the entire city population, which bodes well for getting this thing actually passed.

As the L.A. Times’ Tim Logan explains it, approving the plan through a voter initiative “would avoid the need for time-consuming, costly and potentially legally-risky environmental review,” which would be required by the normal planning process. The exact finances of the plan are still a bit hazy — as you may recall, Kroenke is seeking tax kickbacks that could be worth anywhere between a few tens of millions of dollars and $180 million — but hopefully this will all be explained before the vote. Though not that that’s required or anything.

Meanwhile, Missouri Gov. Jay Nixon freaking out lawmakers in his state by asserting that he can sell stadium bonds without consulting them if he wants to. Not that he wants to:

At a state House budget hearing, Doug Nelson, Office of Administration commissioner, said a law passed more than 20 years ago allows the Nixon administration to issue such bonds. The law states that Missouri or any agency or department of the state can enter into a contract, agreement or lease to finance or develop a convention or sports facility.

“This is not an indication of what we’re going to do,” Nelson said. “This is an indication that we believe we have that authority.”

State Sen. Rob Schaaf immediately introduced a bill to say the governor does too have to ask the legislature’s permission before going and building a stadium. Today is truly a great day for democracy.

Secrets of the Inglewood stadium plan revealed! (Except for how much subsidy is worth, that’s still hazy)

I’ve finally gotten a peek at the documentation for St. Louis Rams owner Stan Kroenke’s proposed Inglewood NFL stadium (thanks, masked stranger!), and I can now share the two paragraphs governing the $100 million in tax-increment financing he’s looking for. They’re long and filled with legalese, so if you prefer, skip to the end and I’ll try to explain them in plain English there:

15.3 Reimbursement for Public Improvements. The 2009 Fiscal Analysis provided that, at stabilization of the Original Development Project, the City would receive approximately $14 million per year in gross new revenue to the City’s general fund. In the event that the Landowner elects to proceed with the Stadium Alternative Project, then it is estimated that at stabilization of the Stadium Alternative Project, the City will receive significantly greater general fund gross revenues, estimated to be at least $44 million per year. At the same time, implementation of the Stadium Alternative Project requires a significant expenditure of private monies for Public Improvements, including public roads and infrastructure, park construction and maintenance, as well as event day public safety costs of retaining City police, EMT, and other services and operating public shuttles from off-site public parking lots. Accordingly, if the total sales taxes under the laws of California from (i) taxable construction materials sales on the Property that have the City and the Property designated as the point of sale, (ii) ticket taxes, (iii) parking taxes, (iv) transient occupancy taxes, (v) franchise fees, (vi) property taxes, (vii) utility users taxes, and (viii) business license taxes, in each case generated by the Stadium Alternative Project during any fiscal year of the City meet or exceed a threshold of Twenty-Five Million Dollars ($25,000,000), excluding any gaming and card club tax revenue from the casino, and to be adjusted annually by the CPI Factor beginning in the first fiscal year following the later to occur of City’s issuance of the final certificate of occupancy for the Stadium and the Stadium opening for business to the public (the “City Revenue Hurdle”), then the Retail Property Landowner shall be entitled to receive reimbursements (“PI Reimbursements”) of amounts advanced and spent for Public Improvements set forth on Exhibit C-1, as well as amounts advanced and spent for event day public safety costs of retaining City police, EMT, and other services and operating public shuttles from off-site public parking lots and other expenditures of a public nature, in each case together with interest accruing on such amounts from the date of expenditure at a rate equal to the then-applicable rate available to municipalities (“PI Expenditures”), not to exceed the amount in any one fiscal year by which such new general fund revenues exceed the City Revenue Hurdle (the “Maximum Reimbursement Amount”). Landowner acknowledges that the City will utilize tax revenues generated by the Stadium Alternative Project solely to measure the City Revenue Hurdle, and that no provision of this Agreement is intended to or shall be deemed to be a designation or set-aside of any tax revenues generated by the Stadium Alternative Project for any purpose other than the deposit of such tax revenues into the City’s general fund.

Within sixty (60) days following the end of each fiscal year of the City during the Term, Retail Parcel Landowner shall submit to City written evidence of all PI Expenditures advanced during the preceding fiscal year. Within fifteen (15) days after submission of such written evidence, City shall notify Retail Property Landowner of any deficiencies in the evidence submitted by Retail Property Landowner and/or any need for additional information. Retail Property Landowner shall provide such information as is reasonably requested by City in response to any request therefor. Within sixty (60) days after receipt of reasonable documentation of the PI Expenditures that were advanced, City shall remit to Retail Property Landowner PI Reimbursements in respect of said PI Expenditures, up to the Maximum Reimbursement Amount. Notwithstanding anything to the contrary in this Agreement, Retail Property Landowner shall only be eligible for PI Reimbursements after it makes the election to proceed with the Stadium Alternative Project. In any given fiscal year, if PI Expenditures exceed the Maximum Reimbursement Amount, then such unreimbursed PI Expenditures shall accrue and be eligible for reimbursement in any subsequent fiscal year, provided that in no event shall the aggregate PI Reimbursements to Retail Property Landowner hereunder exceed the aggregate Maximum Reimbursement Amounts accruing over the Term of this Agreement. City and Retail Property Landowner expressly acknowledge and agree that the PI Reimbursements are not a subsidy, but rather a reimbursement of costs of a public character that, but for the Stadium Alternative Project, the City would not otherwise have the resources to fund and thus were advanced by a private party. PI Reimbursements may not be used to reimburse the construction costs for the Stadium or any other private improvements.

Translated: “As part of our development project, we’re going to build a bunch of things, like roads and shuttle buses for fans, that can be considered ‘public improvements.’ (Or at least we consider them as such.) So we’ll be wanting some of our tax money back to pay for those. Thanks!”

The big question isn’t whether these are things that would result from the development project — sure, there wouldn’t be new roads crossing the Hollywood Park site without new buildings there, but then, you also wouldn’t need any new roads then — but whether these are items that the city would normally pay for anyway, or if they’re something that would normally be on a developer’s tab but Kroenke’s group is looking to get out of paying for them.

That remains really hard to tell, unfortunately. The development plan includes a long laundry list of “public benefit” items, including job creation and “a minimum of 500,000 gross square feet of Hybrid Retail Center,” which are really more properly thought of as private business operations — the public might be happy that they’re there, but much as the IRS is no doubt happy when I earn a paycheck, it’s not about to pay me for it. Yes, city government is usually on the hook for infrastructure, but a lot of this would be built on and under the private land, and then there are the bits like shuttle buses that aren’t infrastructure at all, so … reply cloudy, ask again later.

If you want something we can say for sure, it’s that some of the kicked-back tax money would go for things that Kroenke and friends would normally be on the hook for. And, as covered here before, if the “public services” piece is calculated for 30 years instead of five — and it doesn’t appear that there’s a time limit on how long the developers could receive these TIF payments — then that could make the total tax break worth $180 million in present value.

So, Stan Kroenke is looking at somewhere between a few tens of millions of dollars and $180 million in public benefits. That is, as the Los Angeles Times’ Tim Logan and Angel Jennings write, “a relatively modest public tab in a world where upfront subsidies approaching $500 million are not unusual.” But it’s still a public tab, which isn’t quite what Kroenke and the mayor promised.

Rams seeking at least $100m in L.A. tax breaks; St. Louis offers $400m-plus in mystery money

The city of Inglewood still hasn’t posted details of St. Louis Rams owner Stan Kroenke’s proposed stadium deal to its website, though there is a statement from Mayor James Butts promising that “no tax dollars have been requested or will be used for this project if approved.” The Associated Press, however, reports this morning that this isn’t true at all: Kroenke would be looking for at least $100 million in kickbacks of property taxes, ticket taxes, and other city revenues:

By the developers’ estimate, in its first 25 years the project will produce more than $1 billion in local taxes — on property, tickets, parking, utilities and other sources. The first $25 million each year would be guaranteed for Inglewood, and once developers are reimbursed for eligible costs, any surplus would stay with the city.

“Eligible costs,” according to AP, would include “sidewalks and road work, landscaping, water mains and utility lines,” as well as “costs on event days for police, emergency medical crews and shuttle bus services from off-site parking.” Kroenke’s proposal estimates that these would total about $100 million and would be paid back within five years, at which point the city would presumably get to keep all of its tax revenue. (Though police, EMTs and shuttle buses sound more like ongoing expenses, which if carried forward over 30 years would boost the tax subsidy to $300 million over time, or about $180 million in present value.)

Meanwhile, more information is coming out about St. Louis’s stadium offer as well, which was announced to the world on Friday afternoon. As the St. Louis Post-Dispatch described it:

Peacock and Blitz outlined funding sources, including $200 million from the National Football League’s loan program, most of which would likely be paid back by the team; as much as $250 million from Rams owner Stan Kroenke; and as much as $55 million in state tax credits.

The funding includes two streams of money from the region’s residents:

• About $130 million in the sale of personal seat licenses, which reserve specific seats for fans and are often necessary to buy season tickets.

• As much as $350 million from the extension of the bonds at the Edward Jones Dome, where the Rams now play.

That $350 million is the big piece, obviously, but what exactly “extension of the Jones Dome bonds” means remains a bit of a mystery. The Post-Dispatch describes it as like refinancing your house: You go to the bank, take out a new loan, use it to pay off the old one, and sink whatever’s left over into a new project. (For you, maybe new cabinets for your kitchen; for St. Louis, a whole new stadium.)

The new loan still has to be paid off, though, which makes the claim by Gov. Jay Nixon’s stadium negotiator, David Peacock, that “the new stadium will impose no new tax burden on taxpayers in the local region and the state of Missouri” a bit of an untruth. Either the hotel taxes that fund the Dome would have to be extended longer than otherwise, or the money would have to be taken out of the Jones Dome fund and replenished by some other new taxes, each of which would mean a new tax burden. (Unless you don’t count taxes paid by hotel visitors as a local tax burden, in which case you’re crazy: Not only are many hotel stays by in-state residents, but money is fungible, so hotel tax revenue could be used to pay for other services or reduce other taxes if not used on a stadium.) The P-D estimates that it would cost $24 million a year to pay off the remaining Jones Dome debt while also paying $300 million toward a new stadium, and the Jones Dome bonds currently run $18 million a year — so in all likelihood this would require both extending existing taxes for another 20 years and adding $6 million a year in new ones.

That’s all an awful lot of who-the-hell-knows, in both St. Louis and L.A., but then, that’s the stage of the stadium game that we’re in: Announce the pretty pictures, and let the bothersome financing facts fall where they may later.

Another wild card in the Rams situation remains the NFL’s position — has the league okayed a Rams move, as some rumors have it, or is it seeking to block him because all his fellow owners hate him, as others have suggested? There’s an interesting tea leaf to read here in the position of NFL stadium consultant Marc Ganis, who invariably pushes the league line, and who is suddenly all over the press reports talking up the St. Louis plan (if it’s sweetened further) and bad-mouthing Inglewood’s:

Chicago-based sports finance consultant Marc Ganis said claiming no tax money would be used in the [Inglewood] project is “hyper-spin” and could damage the project’s credibility. “It’s not an outright lie … but there will be people who think it is,” Ganis said. “They might be prospective tax dollars, and it might make sense for Inglewood to contribute them to the project, but they are tax dollars.”


Ganis said St. Louis has a leg up. Leaders have done this before, when the Rams first arrived two decades ago from Los Angeles. And the region has “an outsized number of corporate headquarters relative to its size of market,” he said. Besides, he said, it’s a myth that the owners of big-market teams make far more money than those in smaller markets. “An NFL team can be very well supported in Green Bay, Wis., which has far fewer corporations and economic activity than St. Louis,” Ganis said. “The beauty of the NFL is the large markets end up subsidizing the small markets.”


“I see [the St. Louis proposal] as a plan that should be discussed. It’s not such a no-brainer that it should be accepted yesterday,” said Marc Ganis, a stadium consultant who sat on the negotiating teams that brought the Rams to St. Louis and sent the Raiders back to Oakland. “It’s a reasonable starting point for meaningful discussion.”

That sure sounds like “NFL to St. Louis: Put your money on the table, and we’ll see what we can do for you.” But at this point, there’s such a huge pile of known unknowns (the St. Louis stadium would require knocking down a good chunk of a warehouse district that may be protected by historic designation) that it’s tough to see very far into the future. Except that one way or another, Stan Kroenke is likely to be getting a nine-figure check from somebody’s public treasury