If the Riverfront Stadium Plan Had Two Wheels, It’d Be a Bicycle

Posted on by Joseph Miller

Recently, Dave Peacock, the head of Missouri’s stadium task force, spoke at a Commercial Real Estate Women of St. Louis breakfast. He discussed changes to how a riverfront stadium would be publicly funded. He also talked about how a new stadium could not only keep the Rams, but also transform the North Riverfront.

Originally, the plan was for the state, the city, and the county to extend bonds meant for the Edward Jones Dome to raise about $350 million to fund a new stadium, with an additional $50 million in state tax credits making up the rest of the public support. This changed when Saint Louis County, which was threatening a public vote on the issue, was dropped from the funding plan. Peacock confirmed that with the county out it will be left to taxpayers statewide to pick up the $100 million bill—a bill unlikely to be offset by any economic activity generated by the team.

In a sense, the new funding plan is just rearranging deck chairs on the Titanic; large public subsidies for sports stadiums do not make economic sense regardless of the city/state/county funding ratio. The growing list of contingencies—none of which local governments control—that Peacock’s plan relies on for everything from stadium funding to economic development is getting more preposterous. These include:

  1. Getting a team owner and the NFL to cover $450 million in costs for a new stadium. No team owner, especially the Rams’ owner, has expressed any inclination to do this.

  2. As things stand, a plan to fund a new stadium needs to go to a public vote in the city. Residents might vote no.

  3. Getting an MLS soccer team in Saint Louis.

  4. After getting an MLS soccer team, getting (and funding) a soccer hall of fame.

  5. Funding an entertainment center at the Union Electric Light and Power Company building.

  6. And finally, because Peacock thinks the Rams owner is committed to relocating to L.A., getting Kroenke to sell the Rams to another owner who will keep the team in Saint Louis.

You got all that? If city residents and the state government agree, against the advice of economists, to publicly fund a new stadium, and the Regional Convention and Sports Complex Authority (RSA) uses eminent domain to bulldoze the North Riverfront, we can then hope the NFL will force/convince Kroenke to sell the Rams to an owner who, along with the NFL, may decide to fund half the costs of a new stadium, which in turn might just convince an MLS team to move to Saint Louis, which then might prompt the MLS (no doubt with some tax dollars) to locate their hall of fame at a new entertainment complex (funded by…someone) at the old power building. That’s some plan.

Private Buses: The Once (and Future?) Transit Option

Posted on by Joseph Miller

Imagine you thought that there was a lot of demand for express bus service between two or three locations in Saint Louis or Kansas City, locations that were not currently well connected by transit. You think you could make good money charging people a shuttle service between these locations. But would the government allow you to run such a business?

If you are in Kansas City, probably not. According to the city’s for-hire vehicle code, jitneys (fixed-route buses not otherwise regulated by the government) are illegal. City ordinances do not describe a method for getting the government to approve a private bus route.

jitney

In Saint Louis, the Metropolitan Taxicab Commission’s (MTC) For-Hire Vehicle Code expressly allows for private shuttles, which can travel from one fixed point to another (although likely not more complex routes). Unfortunately, the regulatory hurdles toward getting a commercial service shuttle are formidable. It requires applying for certificate of need and necessity (which the MTC can refuse to grant at will), along with a plethora of other regulatory requirements. Getting permits to operate just one shuttle will cost you more than $3,000.

These regulatory roadblocks, along with competition from the heavily subsidized bus services (subsidies pay for more than 80 percent of costs in Saint Louis and Kansas City), likely have much to do with the absence of private bus routes in Missouri’s cities. But it was not always this way. In the early 20th century, jitneys took most American cities, including Kansas City and Saint Louis, by storm. They were faster, cheaper, and more flexible than incumbent streetcar competition. Hostility from streetcar owners and the nascent taxi industry pushed most cities to make jitneys illegal; but in Saint Louis they morphed into “Service Cars,” which served parts of North Saint Louis until the 1960s. At that time, Bi-State (Metro) moved to buy out the existing competition that was “skimming the cream” off its customer base.

Today, transit in Missouri’s cities is the exclusive domain of public monopolies, with limited competition from heavily regulated taxi markets. The resulting waste, inefficiency, and poor service are the predictable result. However, there is opportunity for improvement. In the United States, and especially internationally, private bus routes still exist. Reducing government control to only essential transit services, and allowing the private sector to provide the rest, could create space for competition and innovation in the transit market. Of course, a necessary first step toward that opportunity is to actually make private bus routes a legal possibility; that’s a change Kansas City and Saint Louis can and should make right away.

Collaboration and Competition

Posted on by Patrick Tuohey

On Friday afternoon, Ronald Garan Jr., a retired U.S. Air Force colonel and NASA astronaut, addressed about 40 students at a charter school in Kansas City, Mo. His talk featured plenty of pictures and videos of his time aboard the Space Shuttle Discovery and the International Space Station. Garan’s talk was about cooperation and collaboration to solve the world’s challenges.

Garan_v2I had the opportunity to visit briefly with Garan after the talk. I wanted to know how he squared the principles of collaboration and cooperation with competition. After all, everything that made his career in the space program possible was accomplished through competition—whether a space race between nations or a bidding process among companies seeking to sell products to the U.S. government. That is when Garan distinguished between proper competition and destructive competition.

Proper competition gets us better good and services. It comes from having an even playing field; the company with the best product wins. A destructive competition does not bring us those things because it often lacks the necessary rigor, data, and transparency.

Without rigor and data, good intentions fail. To make his point, he offered an example from his experience working with developing countries. An organization might have a splashy website and a compelling celebrity endorsement. The company may show off the new wells they put in place, but if no one is focusing on whether those are working properly the whole effort is wasted. Garan said, “Sometimes there is too much emphasis on the new and shiny and not the tried and true.” No one wants to watch a TED Talk on the same old ways of doing things, he suggested, even if those ways are the most effective.

Therein lies the real lesson: Open yourself to rigor, data, and transparency. For governments it means fostering the productive competition that leads to legitimate innovation and improvement. For the taxpayers it means not getting caught up in new things simply because they are new; value what works, even if it is less flashy. And always make sure that government is transparent.

Can Normandy Be Saved?

Posted on by Brittany Wagner

Normandy (2)

They say those who forget history are doomed to repeat it. To better understand the seemingly intractable problems in the Normandy Schools Collaborative, I decided to head to the St. Louis Public Library newspaper archives to see what folks had written about Normandy in the past. I found this:

Hire more minority teachers, revamp the high school curriculum, improve discipline.

Sound familiar? These suggestions are quite similar to the comments Normandy’s most recent superintendent, Ty McNichols, made in 2013. In fact, what I found in the archives was written by former Normandy Superintendent Bruce A. Smith in a 35-page report about the status of the school district in 1988.

“Everything here is fixable,” McNichols had said. “It takes time. It can’t happen overnight. But it can be fixed.”

Nearly 30 years after Smith’s report, we seem to be no closer to improving the Normandy School District. The same old tactics will not lead to a better result.

A recent report from the Thomas B. Fordham Institute points toward a more stark strategy—closing low-performing schools.

In School Closures and Student Achievement: An Analysis of Ohio’s Urban District and Charter Schools, researchers found that school closures have positive impacts on student achievement. Three years after schools closed, displaced students from urban districts, on average, gained 49 cumulative days of learning in reading and 34 cumulative days in math, relative to the comparison group.

The authors of the study also found that students who were displaced after a closure typically ended up in a higher-quality school. Fifty-nine percent of traditional public school students and 68 percent of charter school students transferred to higher-quality schools.

The evidence presented suggests that if policymakers are concerned about student achievement in low-performing schools, they should shut down those schools, instead of wasting more time, money, and patience trying to fix them. Resources then could be redirected toward starting new schools or expanding the capacity of existing higher-performing schools.

After decades of proposed “fixes,” are further attempts to improve Normandy Schools Collaborative misguided? Is closing down the district and allowing the students to be absorbed by neighboring districts the solution policymakers should really be thinking about?

These tough questions need answers. But one thing is certain, if we want to get serious about saving Normandy students, perhaps it’s time we stop trying to save Normandy schools.

Even AFSCME Opposes the Stadium “Boondoggle”

Posted on by John Wright

During an American Federation of State, County and Municipal Employees (AFSCME) lobbying event to push an across-the-board pay increase for state workers, I heard a good bit of rhetoric from the government union about “fighting for pay.” Fearful that AFSCME views their fight for pay as a fight with the taxpayers, I publicly asked who they are fighting against. The response surprised me:
maztwitter

Jeff Mazur, AFSCME executive, claims that the union’s fight is with politicians who would rather spend money on corporate welfare, such as tax credits and publicly funded stadiums. I’ve written favorably before about AFSCME’s opposition to corporate welfare, and a publicly funded football stadium is corporate welfare at its worst. I’m glad more people, including labor organizations, are seeing the stadium proposal for what it is.

Kansas City Embarks on New Bad Idea

Posted on by Patrick Tuohey

Kansas City government is going into the grocery store business near 31st Street and Prospect Avenue on the east side. According to the Kansas City Star:

City manager Troy Schulte said the city will spend $950,000 to buy the existing strip mall and parking lot from its current owners, then another $11,050,000 to demolish the empty grocery store that now sits on the site. The city will borrow the money for the project, then repay the loans with projected taxes generated by the development and a special one-cent sales tax collected at its stores.

The city will lease the property to Sun Fresh for $10 a year, but will not provide any subsidies for operating the store.

That last sentence made me laugh: The city will spend $12 million to buy and build the place and charge the tenant $10 a year—but there won’t be any operational subsidies, as if rent isn’t an operational cost.

The problem is that the people who make a living running grocery stores by investing their own money do not think this is a good idea. If they did, the original grocery store might not have remained vacant for 10 years and the proposed grocery store wouldn’t need such a steep subsidy. Taxpayers are underwriting it because it is not a good idea.

Even the Kansas City Star editorial board is skeptical, offering, “The project is a financial gamble for taxpayers.” They concluded, “History shows that a lone project can’t really lift up an entire community. It takes a much bigger effort to do that.” This is true, according to an NPR story last year:

“The presumption is, if you build a store, people are going to come,” says Stephen Matthews, professor in the departments of sociology, anthropology and demography at Penn State University. To check that notion, he and colleagues from the London School of Hygiene and Tropical Medicine recently surveyed residents of one low-income community in Philadelphia before and after the opening of a glistening new supermarket brimming with fresh produce.

What they’re finding, Matthews says, is a bit surprising: “We don’t find any difference at all. … We see no effect of the store on fruit and vegetable consumption.”

It really isn’t surprising. If there was a demand for fruits and vegetables, someone would be providing them. But the demand isn’t there, even when shiny new stores are built.

Once again, Kansas City leaders are embarking on an expensive and ill-considered campaign using public dollars that does not address the real underlying problems. When it fails, the city and its residents will be no better off than before, just poorer. And the infrastructure, crime, and education issues that really need to be addressed will be that much worse.

grocery

Lambert Officials Admit: Market for Cargo “Disappeared” Post-Aerotropolis

Posted on by Patrick Ishmael

lambert

Four years ago, the Show-Me Institute came out strongly against plans to spend upwards of a half-billion dollars to turn Lambert-St. Louis International Airport into an “Aerotropolis.” The plan revolved around the idea that Chinese cargo shipped through Saint Louis could be profitable—but only if the government subsidized it to the hilt. As our readers know, the project died not once but twice that year, and has died each year it has been introduced since.

It’s a good thing it kept dying too, as a story from the St. Louis Post-Dispatch showed last week.

In September 2011, a China Cargo flight carrying 80 tons of manufactured products landed at Lambert and was greeted by dignitaries from across the region. But airport officials said that market disappeared amid a downturn in international cargo. [Emphasis mine]

Imagine if Missouri had committed to the Aerotropolis project and then, poof, the market “disappeared”—which of course assumes it was ever really there. Taxpayers would have been left holding the bag.

The admission about Aerotropolis was part of a larger article about a lease just signed for a new “Mexico Hub” at Lambert, a story my colleague Joe Miller has already detailed. Lambert’s director, Rhonda Hamm-Niebruegge, says that the airport “is not paying a penny” for the new project, and if true, it’s a very good thing. At a time when its passenger traffic is down, the last thing Lambert should be doing is speculating on real estate, especially given its track record.

However, it’s not clear whether the Mexico Hub developer will try to draw on existing government subsidy programs to advance the project. An airport project at Lambert fully financed by the private sector seems very good; the concern is whether this project is too good to be true. One would hope that state and local officials would be chastened after the Aerotropolis debacle if they’re considering handing out tax incentives, whatever their scale.

I certainly hope the Mexico Hub project can move ahead on its own merits and without taxpayer money. Cargo markets have “disappeared” before, and taxpayers shouldn’t be on the hook if history repeats itself. We’ll keep you posted.

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