As if to prove that when one governmental subsidy door closes, a governmental subsidy window opens, the St. Louis city council followed up new Missouri Gov. Eric Greitens’ declaration that he won’t approve any state sports subsidies by announcing it would vote on spending $67.5 million in city tax money on upgrades to the Blues‘ arena. A funding bill, which would involve $4 million a year in kicked-back arena sales taxes and a new 1% arena sales tax surcharge over 28 years (yes, that’s $112 million total, but since much of it would be collected far in the future it’s only worth $67.5 million in present value), could be introduced as soon as this week in the city council, and council president Lewis Reed has said it won’t require a public vote, notwithstanding that disputed St. Louis law saying that all sports spending requires a voter referendum.
And why, exactly, does Blues owner Tom Stillman think the city should pay to upgrade his team’s 23-year-old arena with such items as new seating, a new scoreboard, sound and lighting upgrades, and renovated locker rooms and concessions stands? Glad you asked!
“The Scottrade Center is no longer competitive,” said Blues Chairman Tom Stillman, adding that NCAA and concert promoters have warned that they will stop coming to St. Louis without upgrades to compete with facilities in Indianapolis, Kansas City, Nashville, Tenn., and elsewhere.
Yeah, that is a concern — to whoever is in the business of operating the Scottrade Center, which would be Stillman. The only potential cost to the city would be the loss of some sales tax revenues if the NCAA or concert promoters actually cut back on events, and since even according to Stillman the city only earns $6 million a year in sales taxes from the arena currently, it’s pretty inconceivable that any loss would be worth $4 million a year, since the Blues would still be playing there 41 nights a year. But as we’ve seen before, the first refuge of a stadium-subsidy grubber is to declare the old place obsolete, so it’s not surprising to see Stillman making that claim, even if the numbers don’t quite add up.
And speaking of numbers, Stillman’s total subsidy demand could more than double, as he’s preparing to ask for a second round of money from the state, Greitens’ Monday announcement be damned:
City and Blues officials also are planning to ask state legislators for $70.5 million for further renovations in a second phase, the timeline for which is still being finalized.
That would come to $138 million in public money for upgrades to a 23-year-old arena, with the only public benefit in return being “maybe we’ll get more concerts and NCAA tournament games this way.” A sane city negotiator would say, “Okay, great, how about you give us a cut of the actual revenues from those events to help pay off the public’s costs, like you’ll be using them to pay off your own share of the renovation?” Instead, we get this:
Reed stressed that the facility has already paid for police officers and transportation needs but hasn’t had a major upgrade since it was opened. “We must stay competitive,” he said.
Greitens hasn’t publicly commented on the Blues subsidy proposal yet, but one newspaper columnist has already decried local officials’ “disunity” on sports funding as the reason why St. Louis is having trouble keeping up with the likes of Louisville. Yes, he said Louisville. Apparently they don’t teach irony in journalism school.
There would be no “loss” of sales tax, since virtually all revenue would be made up by spending elsewhere.
Yes, that too.
Do concert promoters seriously skip over a major market with a capable arena due to the seats being outdated?
And maybe my geography is off, but are KC, Nashville and Indianapolis so close that people would go to those cities for a concert?
Staggering.
I was thinking the same thing.
I imagine, since not every act is going into every arena in the US, concert promoters must make decisions about which cities/venues they will include or skip. So maybe there is some competition going on between venues.
But for Stillman’s argument to hold water, the upgrades would have to improve revenue for those type of events. To me, the list doesn’t pass the litmus test:
“….new seating throughout the stadium, a new scoreboard hung in the center of the stadium, sound system and lighting upgrades, renovated locker rooms, renovated concessions stands and new administrative offices. Various entryways and facades would also get makeovers.”
Sure, the NCAA might prefer shiny new locker rooms to old ones, but concerts don’t use scoreboards or in-house sound systems. Neither would care about the seats or the administrative offices.
This is all for the Blues and their comfort and pocketbook.
They say this is one of the reasons people want the Saddledome in Calgary replaced. The big shots like Rihanna have such a light show & giant stage that the roof is too low – so they skip over Calgary by playing Saskatoon, Edmonton, Vancouver
$138M in upgrades for a 23 year arena?
Jeez, they may want to just consider building a new one then.
(Isn’t that where this is going?)
Not that I think this is a good idea by any stretch, but at least it would be better spent here than on a soccer stadium. Then again they’ll probably just end up giving money to both.
Plus he’s lying about it not having a major upgrade since it was built. They turned a bunch of boxes into clubs and replaced all the purple seats with blue seats. Which you’d think they’d have done to begin with, I mean the only major tenant was called the Blues? Why wouldn’t they have blue seats? And the minor tenant was the college Billikens, who also wear blue. I can see the designers discussing it, “Blue seats for a team called Blues, hmm, it’s a little on the nose, lets go with purple.”
I believe the city of St Louis does hold some responsibility here to. The city owns the arena. The Blues are the major tenants with 60-65% of the events being Blues games. I wonder what the terms of their lease are? Probably a sweetheart deal with little or no payments. What has the city been doing with the revenue from the adjoining parking lot for the last 23 years? If cities are going to be in the business of building arenas they hold a responsibility to update them. Cities should not be in this business if they don’t want to do this.
“Hey, will you build us an arena, let us keep all the revenues, and then agree to own it so we don’t pay property taxes?”
“Uhhhh, okay.”
“Thanks! But don’t forget you’ll have a responsibility to update it when it’s not shiny anymore.”
OK Cardinals, it’s your turn.
We just funded the Cardinals a new stadium in 2006. And they still haven’t completed their end of the deal. Now the Cardinals are shutting down Mike Shannon’s. Still no more progress since building the over sized and over priced bar and grill called ballpark village. At least bring Scott trade center into the new millennium.
http://www.forbes.com/sites/prishe/2017/01/05/sports-entertainment-tourism-in-missouri-will-suffer-without-adequate-public-financing-support/#777183226b42
psychic income? wtf? how is this guy a department director at a major university?
It’s way past time that we got Forbes “contributors” flagged as fake news.
I live in Denver, and Denver gets skipped by major concerts all the time. They say it is because of “geographic isolation.”
Why not just build a giant arena in Wichita? Or somewhere in the middle of Nebraska. Then, all of the “artists” can hold their concerts there. Everyone can travel the same distance to get there. Kill two birds with one stone. No more geography/arena problems for anyone. They can build an airport, and a bullet train station next door.
I’m looking forward to the George Michael and Prince concerts, personally.
There’s already a giant new arena in Lincoln. It’s not going so well:
http://journalstar.com/news/local/govt-and-politics/arena-operations-pays-off-only-part-of-loan/article_4c0d1a10-1580-5fc8-b38d-6f35dcd73b13.html
You mean the same Louisville that isn’t building a Soccer stadium for a third tier soccer team and now that soccer team is considering moving across the river? That Louisville?
http://insiderlouisville.com/business/stadium-or-bust-loucity-fcs-future-hangs-on-construction/
Thank you for watchdogging this sort of thing, Neil. I was home in St. Louis for the holidays, and what’s striking about this latest owner appeal for public money is its _perfect_ alignment with the NHL “Winter Classic” and the 50th anniversary of the team. It was as if the team was saying “the NFL left a year ago, we just staged the greatest spectacle ever [as if it were a Stanley Cup victory], and it is as good as it will ever get unless the city and state pony up.” The chutzpah. I’m sure that it had been planned for some time, but the fact that the cash gouge came a _day_ after the Governor-elect reiterated his opposition was just breathtaking. Stay strong, Missouri.