Dough for the Dome
The St. Louis Convention & Visitors Commission (CVC) just released its proposal (estimated price tag: $124 million, with the St. Louis Rams football team paying $64 million) on how it will transform the Edward Jones Dome into a “first-tier” stadium. If it fails to reach an agreement with the St. Louis Rams, the Rams will have the option to break their lease with the city and relocate.
For those who may be wondering what exactly “first-tier” means, the Edward Jones Dome must be in the top 25 percent of all NFL facilities regarding some established criteria, such as: Fan amenities (box suites, club seats, lounges, etc.), technical areas (scoreboards, lighting, sound, etc.), and revenue-generating facilities (shops and concession stands). Considering that stadiums qualifying as top-tier include the newly-built Cowboys Stadium (price tag: $1.2 billion, with the Dallas Cowboys football team paying $875 million) and MetLife Stadium (price tag: $1.6 billion), the Edward Jones Dome has a long way to go to qualify. In fact, according to Patrick Rishe of Webster University, the cost of upgrading the Dome to “first-tier” status would be, at a minimum, $200 million-300 million (the cost of construction for the Edward Jones Dome was $280,000,000 in 1992 dollars). That is significantly more than the estimated $124 million in the CVC’s proposal.
Thus, officials for Saint Louis City, Saint Louis County, and Missouri have a decision on whether to pay up or face the prospect of the Rams leaving Saint Louis. I would urge the city, county, and state to forgo the use of any public money for upgrades to the Dome for several reasons. The first reason is on principle; the Rams are privately-owned and yet want public money for one of their facilities. If the Rams want a first-tier stadium, they should make a first-tier investment (and put a first-rate team on the field).
Second, even if city, county, and state officials wanted to pay for the upgrades, where are they going to get the money? The state is not exactly awash in cash, and the situation in the county is not much better. Both Missouri Gov. Jay Nixon and the state legislature have ruled out tax increases to help close the budget gap and I highly doubt they will go back on that in order to keep the Rams in Saint Louis. The city, county, and state could issue bonds (the state, at least, has a great credit rating), but they are still paying off ($12 million for the state and $6 million each for the city and county every year until 2021) the bonds issued to build the Edward Jones Dome. Does it make sense for the city, county, and/or state to go further into debt to keep the Rams in Saint Louis for another 10 years? Besides, when Kansas City and Jackson County helped fund renovations to Arrowhead Stadium, Jackson County struggled to keep up with the debt payments. Why put Saint Louis City and/or Saint Louis County in that kind of risky position?
Finally, even if the city, state, and/or county had the money, the use of public funds for sports stadiums does not generate much economic activity. According to a St. Louis Federal Reserve publication, the weight of economic evidence shows that the taxpayers do not get much of a return on their investment. In fact, the Federal Reserve study referred to another study:
Baade found that of the 30 metro areas where the stadium or arena was built or refurbished in the previous 10 years, only three areas showed a significant relationship between the presence of a stadium and real per-capita personal income growth. And in all three cases—St. Louis, San Francisco/Oakland and Washington, D.C.—the relationship was negative.
Considering these reasons, what justification can officials for the city, county, and/or state give for further expenditures on behalf of the Edward Jones Dome?