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Stadium financing revealed: City to pay $70 million, plus rebate some taxes

Stadium financing revealed: City to pay $70 million, plus rebate some taxes

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Proposed riverfront stadium gets a name: National Car Rental Field

Stadium task force co-chairs Bob Blitz (left) and Dave Peacock, at an Oct. 7 press conference to announce National Car Rental Field will be the name of the proposed riverfront stadium. Photo By David Carson, dcarson@post-dispatch.com

ST. LOUIS • The city will pay $6 million a year toward a new riverfront football stadium, plus rebate an undetermined portion of game-day taxes back to the team, according to a new aldermanic bill obtained by the Post-Dispatch.

The office of Mayor Francis Slay has committed to paying $150 million of the $1 billion construction and planning cost, in hopes of keeping St. Louis Rams owner Stan Kroenke from leaving the city — or enticing another owner to come.

The annual $6 million — the same amount now going to cover debt payments on the St. Louis Rams’ current stadium, the Edward Jones Dome — will cover about $70 million of the city’s commitment.

The second half of the money will not be paid by the city, but instead by the public authority that owns the Jones Dome, according to the legislation. That body will leverage a $158 million naming rights deal, recently announced by Enterprise Holdings, to create $75 million in cash, covering the rest of the city’s share of construction costs.

Game-day taxes will reimburse team owners for the naming-rights revenue, according to the bill, which the National Football League generally considers team money, not public dollars.

Slay’s chief of staff, Mary Ellen Ponder, confirmed on Friday the content of the legislation, which she anticipates will be introduced at next Friday’s meeting of the Board of Aldermen.

But she cautioned that the bill obtained by the Post-Dispatch is a draft, with important holes still being negotiated.

The percentage of game-day taxes rebated to the NFL team, for example, is a big deal, Ponder acknowledged. If the team gets all the taxes, the city could lose a large chunk of annual revenue.

Still, by day’s end Friday, even some critics were sending faint praise.

Scott Ogilvie, an alderman in the city’s Dogtown neighborhood, said he was happy to finally see “something tangible.” He pointed out that the real cost to the city is more than $200 million over the loan’s 35 years.

But he added: “Admittedly, it’s less than I thought it was going to be.”

Ponder called the bill a bargain.

“The best deal for the city can’t be looked at by direct revenues only,” Ponder said. “You have to look at the intangible benefits of keeping the NFL, and ideally the Rams, in the city.”

At the same time, the NFL sent the message that the details outlined in the legislation may not meet league approval.

Generally, the NFL considers naming rights and even game-day taxes — on tickets, hot dogs, parking and beer, for instance — revenue that belongs to team owners, not to the public, said NFL Executive Vice President Eric Grubman.

Grubman said he had not seen the city bill. But if such money was bonded to pay for construction costs, he said, it should be credited toward the team’s portion, not the public’s.

“It’s an NFL asset in the way we view the world,” Grubman said. “Whether on tickets or parking, that tax wouldn’t exist but for the activities of the team.”

He noted that corporations in a variety of industries often ask for such tax breaks.

Dave Peacock, co-chairman of Gov. Jay Nixon’s stadium task force, said negotiations with the city have been hard. The city has a tight budget and “challenged credit rating,” he said. “We’re here trying to balance what’s in the best interest of our community and at the same time beneficial for an NFL club,” he said.

But he bristled when hearing Grubman’s comments. “We’ve been discussing these taxes as a source of funding with the league since mid-July,” he said. “I’m surprised they’re becoming an issue in late October.”

News of the financing details also drew strong reaction among some aldermen, who said they have waited for such information for weeks.

“It is utterly ridiculous that Board of Aldermen gets stadium funding details via media leaks, rather than via an actual proposal,” tweeted Ogilvie.

Megan Green, alderman for Benton Park and parts of Tower Grove, said she wasn’t sure how the legislation would affect a bill she introduced at the board meeting Friday to bring stadium financing to city voters. She rejected the argument that her bill would so delay the process that it would kill the new stadium effort. “It’s difficult for us to know what’s a real date, and what’s artificially created” to build a sense of urgency, she said.

She declined to comment on the financing bill until she read it.

Some of the details of the legislation revealed Friday will draw intense aldermanic and public scrutiny:

For example, the bill contains no draft lease agreement. “The lease is equally important as the financing agreement,” Ogilvie said. Moreover, he pointed out, the aldermen will have no say in negotiating the lease. If aldermen don’t like the deal cut, can they bail out of the agreement?

Peacock responded later that the lease would adhere to details outlined in the aldermanic bills.

Other elements of the new plan depict a rosier deal for the city.

Some feared the city would have to cover construction cost overruns. The new bill assigns that responsibility to the stadium’s owner, the Jones Dome authority, a state agency funded jointly by the state, St. Louis County and St. Louis city.

It also requires a $250 million construction contribution from an NFL team, an irrevocable payment of $200 million from the NFL, and a signed team lease of not less than 30 years, including a “binding and enforceable non-relocation agreement.”

And the draft of a minority workforce inclusion plan promises to set aside nearly $3 million to train minority apprentices, monitor minority workforce targets and help minority businesses get and keep work on the project.

On Friday, aldermen called on their colleagues to scrutinize the details.

If the bill is introduced next Friday, it could see debate in committee, including public testimony, as early as the first week of November.

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