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Lack of action on Rams settlement is costing millions of dollars, Dome authority says

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Sunset in St. Louis

The sun sets behind the Downtown skyline in St. Louis on Tuesday, Jan. 11, 2022. At left is the Dome and America’s Center convention center complex. 

ST. LOUIS — The region is leaving at least $14,000 on the table every day — and likely thousands more than that — because St. Louis and St. Louis County leaders won’t sign off on moving NFL Rams settlement money to higher-yield accounts.

That’s the view of the Regional Convention and Sports Complex Authority (RSA), whose members voted unanimously Wednesday to urge the city and county to park the funds in accounts that pay more while settlement talks continue.

It was the second time since June that the RSA, which owns The Dome at America’s Center where the Rams once played, made that request of the city and county.

St. Louis, St. Louis County and the RSA have been negotiating behind closed doors for months over how to divide the $514.2 million received from Rams owner Stan Kroenke and the NFL to settle the lawsuit over the team’s relocation to Los Angeles.

In the less than five months the settlement money has sat in an account yielding 1.44%, it’s earned $1.5 million in interest. And in the current environment of rising interest rates, some board members believe the money could easily earn at least another 1% in safe investments.

The move needs only the approval of County Executive Sam Page and St. Louis Mayor Tishaura O. Jones. RSA board members weren’t clear why the city and county leaders hadn’t yet approved the move.

“All I can say is what we want to do,” Chrissy Nardini, an appointee of Gov. Mike Parson who sponsored the resolution to issue a request for proposals from new fund managers, said when asked why the city and county weren’t signing off.

Erv Switzer, the Greensfelder attorney hired by the RSA to represent it in negotiations with the city and county, told the Post-Dispatch “there’s been discussions,” about moving the money but declined to comment further.

Dave Spence, another Parson appointee, called the lack of action from city and county “paralysis by analysis.” He said while the three parties finish negotiating how to split the money, they could easily be earning another 2% on it, worth some $28,000 a day. He estimates the lack of action by city and county has already cost the region $3 million in unrealized gains.

“I don’t care who you are, that’s a lot of cheddar,” Spence said. “That pays a lot of bills. It would pay for overtime to get the trash off of city streets.”

The mayor and county executive each get three appointments to the commission, and those appointees joined with the governor’s picks to urge the city and county to quickly move the money.

“It’s just common sense,” said RSA Board Chairman Earl Nance, a city appointee. “We should have been doing this.”

Page spokesman Doug Moore said in a statement that “we expect to have an agreement soon” on a higher-yielding investment account.

“We may have a disagreement about the risk we should take in uncertain economic conditions,” Moore added.

In a statement, Jones spokesman Nick Desideri said the city hopes “to reach an agreement that will yield a high-interest investment while providing flexibility when negotiations are complete.”

The settlement was only put into the interest-bearing account in late April, and it was unclear if it had earned any interest in the nearly five previous months.

The NFL settlement — a total of $790 million with a third going to the attorneys who filed the lawsuit — was announced in late November, but there was no agreement on how much the city, the county and the RSA would receive. The three entities have been in negotiations, but the tenor and progress of those talks have been unclear.

“There needs to be more of a spirit of cooperation between to the three parties to come to a resolution,” Spence said.

Former Kansas City Mayor Sly James is helping to mediate the negotiations, and each side has cases to make about who was most harmed. The St. Louis Business Journal reported last month that the city was seeking as much as two-thirds of the settlement because the loss of game day revenue downtown. St. Louis County, for its part, was not part of financing plans for the ill-fated 2015 effort to build a new stadium to keep the Rams here, though it later was part of the lawsuit that ended in the settlement.

The RSA needs money to maintain the Dome and pay for capital improvements. It gets $4 million a year, half from the state and $1 million each from the city and county. But that agreement expires in 2024, and the settlement is seen as a way to continue maintaining the Dome for events and conventions in the coming years.

In the short term, the RSA is running out of operating cash, making a resolution for the entity more urgent than for the city and county. RSA Executive Director Marty Finn said “worst case scenario” is that the Dome authority burns through operating cash at the end of March.

The RSA board plans to meet monthly for the next six months as it pushes for a settlement in that time. The RSA’s share is likely to be less than one-third of the money, Nance, the RSA chair, acknowledged. His earlier comments about one-third being “fair” for the RSA was a “hopeful” early bargaining position, he said.

“We know exactly what we need and we know what we need to use it for, and once we reach that agreement we’ll of course be going public about how much it is and what it will be used for,” Nance said. “It’s all about pushing our way to a settlement right now.”

Idle funds: While three public entities debate how to divide $541 million from St. Louis' lawsuit against the Rams and the NFL, the money's earning just 1.4% interest. With interest rates rising, Jim Gallagher and David Nicklaus argue that it should be earning at least twice as much.

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