$100 Million Here, $400 Million There-Are We Talking Real Money Yet?
Recently, the Saint Louis Business Journal reported that the Saint Louis Convention and Visitors Commission (CVC) is pushing for a $100 million improvement and expansion of the city’s convention center. To be clear, that would be different from and additional to $100 million in refurbishment for the Edward Jones Dome. It is also completely separate from the plans to spend around $400 million on a riverfront stadium for the Rams. The CVC claims it needs the upgrades to keep up in an ever more expensive convention center arms race taking place across the country.
So who is going to pay to make the CVC’s vision a reality? The first thought would be the city of Saint Louis, which already sets aside a 7% hotel tax and a 1% restaurant tax to pay for the current convention center (including the Edward Jones Dome). The problem here is that the city has already spent lavishly on the CVC, and is on hook for between $17.7 and $22.6 million in annual debt service until 2039, which far outstrips the city’s hotel tax and restaurant tax revenue ($14 million this year). If the riverfront stadium plan becomes a reality, the city will have to add an additional $6 million in debt payments for the next 30 years. Adding another $200 million to the city’s debt would mean new debt payments of $11 million per year. Will the city want to double its hotel tax to pay for that?
With the city’s convention center and stadium funding already about as high (or higher) than the public will put up with, the buck looks to be heading to Saint Louis County, which has a 3.5% hotel tax (or $8.5 million) that goes to fund debt on the Edward Jones Dome. Those bond payments are set to retire in 2021, which makes the county the perfect candidate to pick up slack in convention spending created by the city’s financial commitments to a riverfront stadium. The county executive is currently in talks with the CVC concerning upgrades.
We at the Show-Me Institute could point out that if it weren’t for all the spending being diverted to the riverfront stadium plan at the state and city level, there would be plenty of funding for convention center upgrades. We could also discuss how the economic impact of new convention centers is likely overestimated, or how the city’s rapidly increasing bread-and-circus spending has achieved few tangible gains thus far. But why do that, when we can just end with a “told you so” moment! From July 20:
Who pays for the $100 million-plus refurbishment of the Edward Jones Dome, along with its continued maintenance needs, when state and local bonds are repurposed [for the riverfront stadium]? (I’m looking at you, Saint Louis County, whose bond payments will “retire.”)