Real estate developer buys real estate, everybody freaks out that Rams are moving to L.A.

Omigod omigod the owner of the St. Louis Rams bought a parking lot! A parking lot in Los Angeles! You know what this must mean!

Los Angeles has been without an NFL franchise since the Rams and Raiders left after the 1994 season. Although relocating a franchise would be fraught with challenges, and the L.A. market repeatedly has been used as leverage to get stadium deals done in other cities, this is the first time an NFL owner has bought a piece of land in the L.A. area capable of accommodating a stadium.

“Fraught with challenges” is a bit of an understatement. First off, getting land in L.A. isn’t a problem — at this point L.A. has more proposed stadium locations than you can shake a stick at — but rather the money to build a stadium, which has been a bit of a sticking point. Second, as the L.A. Times notes way down in its article (which is headlined, “A return of L.A. Rams? Owner is said to buy possible stadium site”), the 60-acre site that Kroenke bought “is probably too small to fit a stadium and the required parking.”
So what’s going on here? Kroenke, don’t forget, is now on a year-to-year lease in St. Louis after opting out of his old deal when it was ruled that the city wasn’t keeping the stadium state-of-the-art enough; the only reason to be on a year-to-year lease is to try to extort money for a new stadium by threatening to leave town, and buying land in another city is certainly a good way to rattle sabers. Or, it could just be that Kroenke, whose wife is a Wal-Mart heiress, saw that Wal-Mart was putting up some land for sale in an area that is hot (the L.A. Forum is on one side and wants to expand, and the old Hollywood Park racetrack site, marked for redevelopment, is on the other) and saw a chance to make a killing at an insider price. Or both. Or it could be omigod omigod the Rams are coming back to L.A., but don’t hold your breath on that one just yet.

Rams’ super-sweetheart lease is dead, talks begin on new stadium

If you’ve never been to Mendocino County, I can confirm that it is, in fact, in the precise middle of nowhere. Internet service is, from what I can tell, powered by a circling turkey vulture, attached to one of those kite tethers that are all the rage right now.

All of which is by way of apology for missing Friday’s announcement by the St. Louis Convention & Visitors Commission that it won’t be giving St. Louis Rams owner Stan Kroenke the arbitrator-approved $700 million he wanted to keep the Edward Jones Dome “top tier,” as required in his ridiculous stadium lease. And St. Louis Mayor Francis Slay’s office applauded the decision: “Everybody’s on the same page,” Slay’s chief of staff, Jeff Rainford, told the Associated Press. “It was a no-brainer. There was nobody in St. Louis who thought that the Rams proposal was a good idea, other than the Rams.”

This means that the Rams will now revert to a year-to-year lease starting in 2015, which has predictably started the OMG the Rams are going to move stories: The Denver Post’s Mike Klis suggests Los Angeles as a destination, while NBC Sports’ Mike Florio floats London. Neither of which is happening in 2015, clearly, since neither has an NFL-ready stadium or one in the works, but I’m sure Kroenke appreciates the help in raising fears that he’ll take the team elsewhere if he doesn’t get a new round of monetary aid from St. Louis taxpayers.

Because tough talk from Rainford aside, that’s what Friday’s announcement means: Not a “shut the door behind you when you leave,” but rather “$700 million to renovate an 18-year-old stadium isn’t going to work for us, what else you got?” Missouri Gov. Jay Nixon is reportedly already talking to Rams officials about a Plan B — possibly an entirely new stadium, as has been rumored in the past — now that the old lease terms are out the window.

This could potentially work out to St. Louis’ advantage, since the old lease was a complete disaster from the public’s perspective, and with a public referendum required for any city or state money to go to a Rams stadium, Nixon will have the backup to drive a tough bargain — or at least, a tougher bargain than $700 million in unmarked twenties. The NFL is the toughest league for cities to exert leverage with, since media market size doesn’t matter nearly so much as a lucrative stadium deal — that’s how St. Louis ended up grabbing the Rams from much-larger Los Angeles in the first place — but with few other cities even potentially offering new stadiums at the moment, and with Kroenke a local boy, this seems like an opportune time to test exactly how much leverage St. Louis has here.

 

Downtown L.A. stadium declared officially dead, unofficially

I’m not actually how to read this, as the official NFL position on AEG’s downtown Los Angeles stadium plan has been that they’ve hated it for a year and a half now, but: Yahoo! Sports is reporting that two “sources” (one of them a “league source”) are saying that the AEG plan is dead as far as the league is concerned, as “Unofficially, the NFL believes that the cost of the AEG plan, which the league believes will be at least $1.8 billion, will make it unworkable”:

“The numbers just don’t work, no matter how you look at the deal,” a league source said in February. “It’s either too hard for AEG to make money [and pay the debt on the stadium] or too hard for the team. I just can’t see a way for it to work.”

Again, nothing really new, except that the NFL is now sending off-the-record staffers to leak the word that really, it’s time to move on to other L.A. stadium proposals. Not to mention a decidedly on-the-record Marc Ganis, the NFL consultant who might as well be a league source, who pointedly told Yahoo!: “The focus on the sale of AEG has stalled the chance for people in the area to view potential other sites and opportunities. … If Los Angeles leaders don’t move on to look at other options it will only delay the return of the NFL to Los Angeles further, possibly even years longer.”

This might be a reasonable ploy to get L.A. moving on some other stadium possibilities — or at least vague rumors of possibilities — but it’s terrible timing for the Carolina Panthers, Miami Dolphins, Atlanta Falcons, Buffalo Bills, St. Louis Rams, San Diego Chargers, Oakland Raiders, and any other NFL teams I may have left out that are currently using the “L.A. has a stadium deal ready to go!” threat to try to extract money from their current hometowns for new or renovated stadiums. I was just telling a reporter yesterday that these teams are all scrambling for stadium funds now because they have a limited window to use the L.A. threat before it either falls apart or somebody else moves there first; it looks like that window may have just begun to slide shut.

 

UPDATE: New Rams stadium totally would require public vote

Fred Lindecke, who as one of the leaders of the Coalition Against Public Funding for Stadiums led the campaign for St. Louis’ requirement that any public money for new sports stadium be put to a public vote, has responded to my request for clarification on how the law would affect any proposed new Rams stadium. Lindecke writes:

In 2002 voters of the city of St. Louis passed through the initiative petition process a city ordinance requiring that before any taxpayer revenue can be spent on a new professional sports stadium, it must be approved in a citywide vote. In 2004 the same requirement was passed in St. Louis County in the form of a county charter amendment. The provisions apply to a tax increase or use of any taxpayer funds. Actually, any local tax increase to raise funds for a new stadium would require a referendum due to the Hancock amendment to the state constitution. The new Busch stadium was built without a tax increase, using other funds such as a bond issue, tax credits, repealing a city ticket tax the Cardinals used to pay. The only way a referendum could be avoided would be if the present Jones Dome was remodeled on the existing site.

So that’s pretty clear: Any use of city or county funds for a new stadium requires a public referendum. That doesn’t leave many options: The Rams would have to either run the gauntlet of a public vote, use all Missouri state money, get the state legislature to override the local law a la the Minnesota Vikings, or rebuild on the current site. Or build a new stadium without public subsidies — but that’s obviously crazy talk.

Any new Rams stadium could require public vote

The scuttlebutt continues over whether St. Louis will accept the Rams‘ arbitrator-approved $700 million stadium renovation plan (doubtful) or perhaps negotiate a plan to build an entirely new stadium instead (more likely), with KMOV-TV one of those doing the butt-scuttling. There not much solid to the report beyond speculation, but buried in it is an interesting quote:

Either way, if taxpayers are going to be asked to pitch in to pay for renovations or a new stadium for the Rams, city hall is promising you get to decide.

“If for some reason there are any general taxes or fees, and I can’t envision what they are, but if there are any, they’d have to go to a vote of the people,” said Jeff Rainford, St. Louis Mayor Slay’s chief of staff.

My first thought: Well, that’s nice, though “if for some reason there are any general taxes or fees” is a somewhat suspicious loophole Rainford left the city. My second thought: Wait, this isn’t a promise, it’s a legal requirement. And it should apply whether a stadium is funded via “general taxes” or any other kind of public money.

Let’s set the Wayback Machine for November 2004, when the St. Louis Cardinals had just pushed through public funding for their own new stadium, against the staunch opposition of St. Louis community activists:

A St. Louis County referendum to bar public funding of sports facilities without a voter referendum looks to be passing easily (72-28% with 65% of precincts reporting), according to the Associated Press.

Pass it did. And while it turned out to be too late to stop the Cardinals deal, it would absolutely require a new Rams stadium to be submitted to a vote, regardless of whether it used new taxes, old taxes, or strange taxes. And that could mean a much more difficult path for the Rams, since the general electorate is almost always a tougher crowd for stadium subsidy demands than a group of legislators, if only because they’re harder to lobby. (Yes, Rams fans would likely be mobilized by the threat of the team moving otherwise, but move threats tend to play even better with legislators than with the general public as well.)

If this becomes a major issue, I actually wonder if the Rams and St. Louis might end up looking to renovate the Edward Jones Dome, not because it’d be cheaper or a better idea, but because it would be easier to get approved. (Renovations aren’t covered by the 2004 referendum, only new stadiums.) Or maybe they could build a new stadium elsewhere and attach it via a mile-long piece of string to the Jones Dome, and call it an “improvement” of the old structure. You laugh now, but crazier things have happened.

Arbitrators rule for Rams: St. Louis must cough up $700m or let team walk

While the Phoenix Coyotes sale was collapsing in Arizona, an equally momentous event was taking place in St. Louis, where a panel of arbitrators officially ruled that the Rams$700 million plan for upgrades to the Edward Jones Dome would keep the dome a “first tier” facility, while the St. Louis Convention and Visitors Commission’s $124 million renovation option would not. Which means that according to the terms of the Rams lease — which, as Field of Schemes readers will recall, was the result of some of the most negotiating by a city in the history of stadium deals — either the city needs to spend $700 million to upgrade a stadium that only cost $280 million a year to build in the first place 17 years ago, or the team can bust out of its lease and move elsewhere in 2015.

This was probably inevitable, given that that godawful lease — as excerpted in the arbitrators’ ruling, available here — defined “first tier” as “the Facilities, taken as a whole, and each Component of the Facilities, respectively taken as a whole, must be among the ‘top’ twenty-five percent (25%) of all NFL football stadia and NFL football facilities, if such NFL football stadia and facilities were to be rated or ranked according to the matter sought to be measured.” In other words, the Jones Dome needed to be considered one of the top eight stadiums in the NFL, and every piece of the dome, from scoreboard to bathroom plumbing, needed to be in the top eight as well, or else the Rams could demand that it be upgraded and walk away from their lease if it wasn’t. What on earth the city negotiators thought they were doing — that hardly anybody would ever build another new NFL stadium after this one? that “state of the art” would only mean painting it new, trendy colors? that they’d be out of office long before anybody noticed what had happened? — isn’t clear, but the upshot is that St. Louis now faces a choice between spending $700 million to replace a 17-year-old stadium, or letting the team it spend big to lure to town walk after only 19 years.

The St. Louis CVC now has 30 days to decide whether to accept or reject the Rams’ plan, with most bets being on rejecting it, since holy crap, $700 million. That doesn’t necessarily mean the Rams will leave, though, just that this will likely be the start of a brutal stadium negotiation battle. As Newballpark.org sums up matters:

While the next decision is up to St. Louis pols, Rams owner Stan Kroenke has all the cards. Kroenke has repeatedly stated that he wants to keep the team in St. Louis, so an LA threat may not loom as large as it would for the Chargers, or even the Raiders. Still, AEG’s Farmers Field project should prove an effective stalking horse if Kroenke chooses to use it. Already there is some talk about the Rams moving to a new open air stadium, which could be located downtown or in the suburbs of St. Louis County. The Rams’ real goal may be to get a venue where they have control over all revenue streams, even if it means some sort of private contribution towards the stadium’s cost. In the end, a new stadium may be the only solution that works for both parties, since it wasn’t clear where the Rams would play while the renovations at the Dome happened (the project could take as long as three years).

I’m not sure if “works for both parties” is the best way of putting it, since building an entirely new stadium less than two decades after the last one isn’t likely what anyone in St. Louis had in mind as a “workable” plan. Both sides have leverage here — the Rams have the ability to move, thanks to the NFL’s national TV contract that makes market size for teams pretty much irrelevant, while St. Louis has the team’s proven fan base and the fact that no other cities have “first tier” stadiums ready to go or even in the works. Still, it’s almost impossible to see this whole thing ending without somebody, whether taxpayers in St. Louis or in another city, shelling out hundreds of millions of dollars. All we can really hope is that whoever negotiates the lease this time refuses to put in a state-of-the-art clause, or this could turn into one of those battles that repeats itself endlessly.

St. Louis offers Rams rejiggered stadium plan, but still no $700m

The St. Louis Convention & Visitors Commission abruptly revised its proposal for upgrades to the Rams‘ Edward Jones Dome yesterday, ditching the new stadium-side tailgating space while adding more club seats and more interior space. The not-quite-as-big-as-the-Dallas-Cowboys‘ scoreboard would also go from flat to four-sided, which is what would allow the CVC to rip out two existing scoreboards and replace them with club seating.

None of this is likely to have much impact on the CVC’s ongoing arbitration case with the Rams, since the team owner Stan Kroenke wants $700 million in upgrades, where the commission’s new plan would still only cost $124 million, with half of that coming from the team. How would Kroenke look his fellow owners in the eye at their annual brandy-snifting retreat if he only got an eight-figure payoff for his infamous state-of-the-art lease clause? How, I ask?

St. Louis agency rejects Rams’ $700m renovation request

That didn’t take long:

The agency that operates the Edward Jones Dome on Friday rejected an improvement plan for the 17-year-old stadium proposed by the St. Louis Rams.

The St. Louis Convention & Visitors Commission said in a brief statement that it believes it is in “the best interest of the community and the Rams to engage in meaningful dialogue over the next two weeks, and looks forward to the opportunity to do so at the earliest convenience of Rams management.”

If the Rams and the CVC can’t work out their differences in the next two weeks — and good luck with that, given that the Rams want a $700 million overhaul with sliding roof panels and the CVC is offering $60 million toward a new scoreboard — the fight over what a “top-tier” stadium means will head to binding arbitration. And then the real fun will begin.

Rams seeking $700m in upgrades to 17-year-old, $280m dome

St. Louis Rams owner Stan Kroenke has finally revealed his secret wish list for upgrades to the Edward Jones Dome, and they’re a doozy: Knocking down half the stadium and extending it outward to include larger concourses, two “party platforms,” and a glass curtain wall; adding a sliding roof panel to let in air and sunlight on days when you want those things; and reconfigured seating to make the dome more attractive to non-football sports like basketball and soccer. The Rams didn’t include an estimated price tag, but a construction company hired by the mayor’s office did: a cool $700 million, or nearly twice what the entire dome cost when it was built in 1995, even accounting for inflation.

That’s quite an ask, especially when it comes as a counter to a far more modest $124 million renovation plan offered by the St. Louis Convention and Visitors Commission, half of which would be paid for by the team. St. Louis Mayor Francis Slay’s chief of staff, Jeff Rainford, told the St. Louis Post-Dispatch that the mayor will ask the CVC to reject Kroenke’s plan by June 1.

All of this, really, is just posturing in advance of what everyone has known all along will be an inevitable arbitration hearing this summer to determine what’s a fair public contribution to keep the stadium “top tier,” as required in the Rams’ incredible sweetheart lease. (ESPN.com reports that if the CVC accepts the arbitrator’s decision, expected sometime in 2013, then the Rams would be bound by it.) Just as there’s no way the Rams were ever going to accept a plan that came down to “how about we buy a new scoreboard and split the cost?”, things like sliding roof panels are just begging to be bargained away first thing; it’s not like one-quarter of current NFL stadiums — or, in fact, any — have mini-sunroofs.

When all is said and done, then, it’s fair to guess that the final public cost of keeping Kroenke happy will be somewhere between $60 million and $700 million. That’s a lot of middle ground, and I don’t think anyone envies the arbitrator his job. But as the saying goes, at least now they can commence with haggling over the price.

Vikings stadium approved, Rams, Raiders line up to be next

And it’s official: The Minnesota senate yesterday passed the conference version of the Vikings stadium bill by a vote of 36-30, giving final legislative approval to the $1 billion project, which will receive $500 million in construction subsidies, plus about $300 million in public money for operating costs. (Or as the Los Angeles Times puts it: “The Vikings will pay $477 million of the stadium costs, the public $348 million and the city of Minneapolis $150 million.” That would be The City of Minneapolis, LLC, presumably.) The Minneapolis city council still needs to sign off on the deal, as does Gov. Mark Dayton, but those are considered formalities.

Stadium supporters celebrated at the capitol, while opponents warned of pending doom (“We know there are going to families who are going to lose their house, probably their marriages, their cars, their livelihoods so we can enjoy football,” said state senator John Howe of the expanded gambling that will help fund the project).

And, of course, everyone started focusing on the question of who’ll be next to get a new stadium, now that Minnesota has set the baseline at $1 billion (fourth-most expensive NFL stadium ever) and $500 million in public construction subsidies (second-most after the Indianapolis Colts), reversing a trend that had seen the New York Giants, New York Jets, Dallas Cowboys, and San Francisco 49ers pay for more than 50% of their new facilities. The San Jose Mercury News’ Mark Purdy wrote that “you can hear dominoes falling, all the way from Minnesota,” opining that with the Vikings off the table for an L.A. move, “the [Oakland] Raiders are in good position to stare down Oakland officials and not blink.” The St. Louis Rams, meanwhile, have upped the ante in their own stadium upgrade campaign, reportedly demanding that the Edward Jones Dome have its fixed roof replaced with a retractable one, something that 1) may not be feasible, 2) would come at an unknown cost, and 3) seems dubious how much benefit it would be for anyone, unless Rams fans are really steering clear of games because they can’t see a patch of blue sky.

Not to be a broken record (in case any readers are too young to have seen a record, perhaps this will help), but it’s important to remember in all this that Los Angeles currently has two new-stadium plans that have been officially designated by the NFL as unacceptable, thanks mostly to the fact that a team owner (or the league) would have to pay for most of the construction cost via either rent payments or a chunk of equity in the team. And maybe also because this not having a team in L.A. thing is just working great for the league’s existing franchises as a boogeyman to scare local elected officials with. NFL owners, start your airplane engines!