Live from watching the St. Louis how-we’re-gonna-keep-the-Rams press conference on the interwebs:
Tuned in to STL stadium press conf just in time to hear: "You're talking $900m and $450m of public money…" Yikes. http://t.co/Twea2qlAJi
— Field of Schemes (@fieldofschemes) January 9, 2015
That was a question to Gov. Jay Nixon’s stadium negotiator (and Anheuser-Busch exec) Dave Peacock, who presented his proposal for a new stadium to make Rams owner Stan Kroenke re-up his lease in St. Louis. And yes, that’s a $900 million price tag, with $450 million of it coming from the public. More from the St. Louis Post-Dispatch:
The facility would feature 64,000 seats, with 7,500 club seats. Financing the project, he said, would involve public and private money, as well as seat licenses paid by fans.
“There are ways to source public financing and do it with the same or less burden on the taxpayers,” Peacock said.
And:
The current Edward Jones Dome would become “a competitive asset to use” to attract conventions, Peacock said.
I will endeavor to get Heywood Sanders in here to comment on that one, if he ever stops laughing.
Anyway: 450 million smackeroos. That is a hell of a lot of money to keep a team that you just spent $600 million to lure to town 20 years ago, so either Peacock knows something we don’t know about the seriousness of Stan Kroenke’s threat to go to L.A., or he’s ignoring my advice about not bidding against yourself. Or he just figured most new stadiums cost around $900 million and thought, “Enh, let’s offer to go halfsies and see what they say. That sounds fair, right?” Dumber things have been done for dumber reasons.
I am indeed laughing… lots.
It is so absolutely dumb, and yet so totally predictable.
They started with an underperforming convention center in 1984.
So they expanded the center, based on a consultant study.
Added the “TransWorld Dome,” arguing it would bring a “net fiscal benefit.”
Then the city got another consultant study that said they needed a big new hotel next door.
So they financed a 1,083 room hotel next door.
Which flopped and got foreclosed, and finally sold–cheap.
So now they can use the Dome they can’t use for football to “get more conventions.”
There’s a reason I called the book “Follies.”
How in the world did they screw this up so badly?
“An additional $460 million to $535 million [b]would come from public sources, including[/b] extending current bonds, brownfield tax credits and [b]up to $130 million in seat licenses.”[/b]
They didn’t bother to read the NFL’s G-4 rules. SMH, what an unbelievable fail. PSL sales are the private contribution that allows for a team’s NFL loan.
Neil, can you verify this?
Sort of. If they want more than $100m in G-4 money, the team has to put up either equity or private PSL revenue. So that wouldn’t be available to be both the private contribution and the public one.
However, there’s an interpretation of this that makes a lot more sense than that the Missouri negotiators screwed up: This could be an attempt to claim, “Hey, we’re offering to go halfsies,” but by changing whose side of the ledger the PSL money is counted on. So if Kroenke says, “We need that as part of our share,” the state can respond, “Cool, whatever, but you’re still not getting more than another $320 million aside from that.
Or, Peacock could be an idiot. It’s really hard to say what anyone’s true motivations are right now, as opposed to what they want you to think. Never go up against an NFL stadium negotiator when death is on the line.
Awesome, incompetence or lying was difficult to discern, but I like more of an effort, woo us with their lies.
Anybody want a peanut?
So Neil, now that everything is out in the open and everyone has laid their cards on the table, what do you think? What do you think Mr Kroenke is going to do?
You call this cards on the table? This is, if anything, seven-card stud with two hole cards and one up.
Ok ok, having said that and knowing what we know now, how do you think this unfolds? Or do you need the dealer to show more cards??
I can see two likely scenarios, depending on what’s going on in Kroenke’s head right now:
1) His L.A. threat having successfully gotten St. Louis to up their ante substantially, Kroenke starts opening the door to further negotiations. Not very far, certainly — he still needs to play hard to get if he’s going to get the city and state to provide as many subsidies as possible — but a crack. The negotiations, possibly mediated through the NFL, continue for much of the year, as do battles in the legislature over how the hell to pay for all this. Assuming the legislature okays the cash (they usually do), then eventually, just before next February’s relocation deadline for 2016, Kroenke stops answering his phone again and waits to see St. Louis’s last, best offer. Then he takes it, and never has to turn up his hole cards to show whether he actually had a real Inglewood stadium finance plan, or if it was totally a bluff.
2) Kroenke has no interest in a measly $450 million (or $320 million, or whatever it really comes to) for a new St. Louis stadium, because he genuinely thinks he can make more money in L.A., even if he has to build a stadium with his own bare hands out of toothpicks and Elmer’s glue. While he goes off and does that, Missouri officials wave their stadium offer in the face of the league office, saying, “Look, we tried, he wouldn’t listen to reason, what more do you expect of us?” Then the NFL either tries to order Kroenke to go and take Missouri’s money, or tells St. Louis, “Sorry, you can’t have your team back. But thanks for offering all that money, we’ll make sure you get another team just as soon as we have one to offer. And you know, it might speed us up a bit if you throw another hundred million or two on top of the pile there, hint hint.”
There are other scenarios I could spin, but those seem like the two most likely. Either way, Kroenke and the NFL win, and St. Louis is stuck throwing good money after bad. But then, Kroenke had won the minute his predecessor signed that sweetheart lease 20 years ago — now he’s just waiting to find out what exact payout he’s going to get in exchange for playing his “get out of lease free” card.
Do people not learn. Again over stating what you willing to pay. Never heard of open low and work your way up to the middle. St Louis didn’t they get took in 1995?
Pretty much, I agree with your potential outcomes. However, I’m leaning strongly with your # 2 scenario. Why else would he of purchased those 60 acres of prime Inglewood real estate unless he had an ulterior motive?! Can you think of any other NFL owner with an unpleasant stadium situation who’s done anything close to what Kroenke did? Hypothetically, I understand the theory behind using that inglewood plot of land as a threat to move but……. That’s a pretty expensive theory, wouldn’t you say??
Nah — the guy’s a developer, he can build something else in Inglewood if not a stadium. Or he can sell it to the folks who own the racetrack. Even if he ends up taking a small loss on the transaction, he can pay for it with a few bills off the top of the $450 million he’d be getting from St. Louis.
As for other NFL owners, Robert Kraft went as far as negotiating an entire stadium deal in Hartford before going back to the NFL, saying, “If you want me to stay in Boston, help me do it,” then sitting down and creating the G-3 program. (Which, don’t forget, was originally limited to teams staying put in Top 6 media markets — Boston conveniently being #6.) It’s not a typical move, but it does happen.
Ahhhh, that’s right….. I forgot about Mr Krafts’ strategy, it worked to perfection. However, I have a weird gut feeling that Kroenke has been angling to have a sports franchise in L.A for awhile now. Remember, he was one of the finalists to purchase the Dodgers and he also saw what the Clippers sold for(without an arena)!
Hey Neil, congratulations on coming out in todays issue of the L.A Times.
No,no,no… you have it all wrong… the Inglewood property was purchased solely for an MLS development. I mean, come on, Stan was up front and totally honest about that from the get go….
Coming out as what now? I may need to be more careful about what I say to reporters…
85 days until Cardinals opening day, St Louis!! (that’s what’s really important).
“But then, Kroenke had won the minute his predecessor signed that sweetheart lease 20 years ago”…
That’s about the only thing any of Kroenke’s teams have ever won. And like the Avs’ Stanley Cup (they won the year he bought the team), he probably can’t even take any credit for it.
I’m sending Stan some Cuban cigars and a 100 year old bottle of scotch to uncork when the S.S. Public Stadium Cash finally docks in the port of St. Louis. Of course the grand strategy is playing out slowly and has only just begun. His beautiful land acquisition in SoCal was a master stroke, as it makes the smoke and mirrors seem so real that now he’s got the major pols in Missouri eating out of his hand, and the little fish can all be bought up when necessary. That, Mr. DeMaus, is why legislatures “usually” o.k. the cash, hehe. If they don’t o.k. it I always blame the bagman myself.