The Scottrade Center, originally Kiel Auditorium, cost $135 million to build and first opened its doors in 1994. While private interests covered most of the price tag, the city of Saint Louis provided $15 million in construction subsidies (the city also built the stadium’s western parking lot at a cost of nearly $10 million). Aside from direct handouts, Saint Louis worked to reduce the stadium’s tax liabilities. Like Busch Stadium and the Dome formerly known as Edward Jones, the Scottrade Center sits on public land, shielding the Blues’ ownership from standard tax rates. In addition, the LCRA (a city body), and not the stadium’s owners, issued all the bonds for the stadium’s construction, making those bonds tax-exempt.

Now, a little over two decades after the Scottrade Center opened, the Blues no longer find their accommodations adequate. They want a larger scoreboard, better seating, and an expanded team store. Perhaps with a jealous eye toward Ballpark Village, the Blues hope to build a year-round beer garden at the stadium. They estimate that these upgrades will cost $160 million, which, adjusting for inflation, is slightly more than the original cost estimate of the Scottrade Center when financing got underway in 1990 (yet more evidence that cities should only expect about 20 years out of their stadiums before they have to pay for them all over again). But who will pay this time around?

All we know right now is that, like in the ‘90s, the Blues expect the city to issue the bonds for the stadium’s construction so they can avoid taxation. But for the city’s bottom line, who will pay those bonds back is the most important question. Last time around, the city covered about 10% of those costs and stadium owners paid 90%. There’s no guarantee that the Blues won’t ask for more support this time, especially after the city last year showed itself willing to spend well over $100 million to keep the Rams in town. Of course the Blues could pay the whole cost themselves, although the fact they are negotiating with the city to come up with a financing deal likely means that’s out of the question.

Still, it will be better for Saint Louis residents if the Blues pay for the costly upgrades themselves. The proposed improvements, from a larger team store to a “Blues-park Village,” are clear examples of nice-to-have amenities that would greatly add to the Blue’s assets. The impact of the improvements on city’s bottom line or its economy is difficult to determine, but given the evidence, it’s likely negligible.  It’s time the city focused on getting the basics of civic governance right instead of involving itself once more in how Saint Louisans spend their spare time.

The post Who’s Paying for $160 Million in Blues Upgrades? appeared first on Show-Me Institute.

Consider what that focus, mostly from the Governor’s and Mayor’s offices, accomplished. The plan to spend some $400 million on another stadium in downtown Saint Louis faced significant opposition. Most state legislators were not in favor of state support for the plan. Both the city and county had ordinances requiring votes before public money could be used on a stadium, and the public’s support was anything but guaranteed. The Saint Louis City Board of Aldermen was divided.

But that didn’t stop the committed leadership. The governor and the RSA moved to unilaterally extend state support, cutting out the antagonistic legislature. The RSA sued the city and succeeded in getting the ordinance requiring a public vote struck down. When the county executive said they’d have a vote with or without an ordinance, the Governor’s stadium task force dropped Saint Louis County out of the funding scheme. After lengthy negotiations, the Saint Louis City Board of Aldermen signed off on the stadium financing plan.

The only obstacle stadium backers did not overcome was the resolve of Rams’ ownership to move the team, which was ultimately decisive. If Saint Louis’s regional leadership had had their way, taxpayers would be handing hundreds of millions of dollars to Stan Kroenke. The only thing that saved Saint Louis residents from making a terrible investment of public dollars were the votes of thirty NFL team owners.

The “accomplishments” of the stadium task force expose what’s broken in Saint Louis regional governance. Common-sense reforms, like simplifying the city’s business code, languish in the Board of Aldermen. The sewer system is so out of date that city streets have a habit of collapsing. Fire and police departments are so broke they are using duct tape to fix equipment. No one has answers for a continuing lack of safety throughout the metropolitan area. With these problems, there is little will to push through change, and there is never enough money.

But when the NFL might leave town, suddenly regional leaders found $400 million between the seat cushions for yet another big-bang development project. And the political will was there too, no matter how the public felt about it—and regardless of the sad history of similar projects in the city, and all the economic evidence saying it was a bad idea. That’s how the region’s policymaking process played out, with misplaced priorities and half-hearted respect for the democratic process. With that kind of leadership, is it any wonder Saint Louis has a lagging economy?

The post Rams Move Exposes Broken Policymaking Process in Saint Louis appeared first on Show-Me Institute.

Nixon and Kroenke are two squires cut from the same cloth – a trophy-hunting governor who thinks he can pick winners and losers and a super-rich developer with a long history of currying favor from government entities.

In this situation, we may debate the question of whether it is worse (i.e., more “unspeakable”) to give or to receive. Here we are talking about the award of hundreds of millions of dollars of taxpayers’ assistance to a hugely profitable sports business that does nothing to advance the public good.

It is at least appropriate that the object of the hunt is made largely of concrete.  Along with the unwarranted subsidies, that makes it doubly indigestible – both from a gastronomic and an economic viewpoint.

The post The Unspeakable in Full Pursuit of – a Football Stadium appeared first on Show-Me Institute.

20150710 – Testimony – Rams Stadium – Miller.pdf

The post Testimony Regarding the Use of City Funds for Professional Sports Stadiums appeared first on Show-Me Institute.

Click on the link below to read the full testimony.

20150710 – Testimony – Rams Stadium – Miller.pdf

The post Testimony Regarding the Use of City Funds for Professional Sports Stadiums appeared first on Show-Me Institute.

This post will not discuss the timing of the proposed ordinance. We can only note that the city could have scheduled a vote on public funding for a new stadium months ago. If the city had actually sought public approval, instead of trying to make an end run around democracy, timing would not be an issue.

However, in its effort to justify opposition to a public vote, the mayor’s representatives have again made claims about the stadium’s impact that fly in the face of economic evidence. According to city representatives, the stadium project will create an amazing 3,000 new construction jobs. But academic economists have studied the impact of stadium projects on the construction industry, and found that they have little or no positive effect.

In fact, a paper from an economist at the University of Missouri studied the impact of the Edwards Jones Dome and the Kiel Center (now the Scottrade Center) in Saint Louis specifically. The author found:

“By econometrically modeling construction employment during the 1970’s, 1980’s and 1990’s, it was found that there was no more nor no less construction employment within the St. Louis MSA during the time the Kiel Center and the Trans World Dome [Edward Jones Dome] were being constructed…”

This perhaps counter-intuitive result happened because:

“…instead of creating new construction jobs, jobs were shifted from projects that would otherwise have been undertaken, resulting in no net new job creation in the construction industry.”

The author concluded:

“These results, coupled with the more extensive analysis given in the article on construction employment, suggest that the net impact of stadium construction on construction employment and worker incomes is zero.”

This finding is in line with the bulk of the economic literature: stadiums do not boost economic growth, greatly increase tax revenue, or spur revitalization. A new football stadium is an expensive want, not a need, in Saint Louis City. With its lack of economic merits, civic leaders should reject the public funding for the stadium. If they cannot bring themselves to do so, they should at least allow residents to accept or reject a plan to use public funds for football.     

The post Riverfront Stadium Unlikely to Increase Construction Jobs in Saint Louis appeared first on Show-Me Institute.

With the stadium expected to cost the public around $400 million, one might have hoped that planners would dedicate the $158 million to paying off the public portion of stadium debt. After all, economists agree that stadiums do not generate much return in terms of development of tax revenue, so the lower the public subsidy, the better. Unfortunately, the benefits from the sale of naming rights, like the benefits of the stadium in general, will likely redound to the NFL and Rams ownership, not Missouri residents.

Stadium backers fear that $400 million in public dollars might not be enough to keep the Rams in town, so the stadium task force wants to sweeten the deal for the Rams, or whatever team is willing to play in Saint Louis. As the Post-Dispatch reported:

“Regional leaders here expect it could be an enticing carrot for a team owner seeking to defray his own portion of stadium construction costs…It doesn’t mean the state or city will have to pay less for the stadium, Peacock [the head of the stadium task force] emphasized. “It provides certainty around the project, more than anything…”

This is what happened when Saint Louis lured the Rams two decades ago, turning over 75% of naming rights proceeds to the Rams (along with personal seat licenses, the relocation fee, etc.), even though the Edward Jones Dome was built entirely at the public’s expense.

The use of naming rights revenue to placate the NFL, rather than Missouri residents, makes some sense. After all, the governor and the Missouri Development Finance Board plan to unilaterally spend around $300 million in state funds on the stadium, without the vote of the legislature or the people. As for the city, an ordinance requiring a vote on public financing for stadium projects was struck down in court (but the mayor says they’ll get a vote on the next stadium). The only group left that might vote no, and can vote no, is NFL ownership.

 As University of Chicago economist Allen Sanderson said, talking about the riverfront stadium plan:

“The NFL, first of all, is a monopolist. And monopolists don’t leave much money on table.”

 Missourians might soon have the disadvantage of rediscovering just how little money that will be. 

The post Stadium Planners Sweeten the Deal . . . for Billionaires appeared first on Show-Me Institute.

The number of events matter because it factors into how the authors calculate additional sales taxes a new stadium would generate. They estimate that the new stadium development would host 123 events, including professional soccer and high-school sports. For the sake of discussion, let’s grant that a new stadium will keep the Rams here. What of these other events?

It is no sure thing that Major League Soccer (MLS) will locate a soccer team here. This is important because MLS spending makes up a quarter of the authors’ calculation. The authors should not be counting on soccer revenue without a guarantee that a new team will actually exist.

Beyond the MLS, how many concerts, high-school/college sports, and other events do the authors think are available for the stadium to host? Saint Louis is not lacking in venues. The Scottrade Center, Chaifetz Arena, and the Edward Jones Dome can all serve as hosts. How many net new events will this stadium attract? This study doesn’t say. Based on the authors’ other calculations, it’s possible that they would count any event as a net gain for the city, regardless of whether it came at the expense of another local venue.

Determining the number of events the proposed stadium development would attract is a difficult task. However, given the hundreds of millions in taxpayer dollars on the line, it would be more prudent to have conservative estimates. The region doesn’t need another development to fall short of expectations. 

The post Where Did All of These Events Come From? appeared first on Show-Me Institute.

Last week, Student Life, a WashU college paper, published a story about the Rams stadium. For the story, the author interviewed five WashU faculty from different disciplines. The faculty spoke nearly unanimously against using public money to fund the stadium. Here are some of the faculty’s comments, as reported in the article, the Longest Con:

“It’s really hard to see this as overall a good idea. It’s going to be very expensive…That’s not a very good way to spend government money.”—Glenn MacDonald, an economics professor in the Olin Business School

“We’ve known since the mid-’70s that sports teams don’t bring fast economic benefits, certainly nothing that offsets the kinds of credits they’re getting…Ten times a year, 12 times a year, you get a huge influx of people in, [but] that’s it.”—Sunita Parikh, an associate professor of political science

“What it does is it destroys the area so it vanquishes the blight that it identifies by just knocking everything down,” and “decimates the existing urban character.”—Michael Allen, a University College coordinator and American culture studies lecturer

“I think it’s pretty clear to anyone that spends any time here…that this town’s civic sporting identity is Cardinals first, second, third, fourth, fifth, down through 10, then Blues probably and then Rams. So they’re already the low man on the totem pole… I think it’s kind of silly that some people in cities feel like they need to measure their city by how many teams from the Big 4 leagues they have”—Noah Cohan, a recent Ph.D. and adjunct instructor in English who studies the relation of sports fandom to identity and politics,

The only WashU faculty member interviewed who supported the stadium plan, Rich Ryffel (senior lecturer of finance in the business school who helped finance the Edward Jones Dome), admitted a stadium was “not a good public investment. In other words, if the public puts in a dollar, they’re not going to get a dollar out of it.”

In other news, stadium proponents are touting the final initial design (which I guess is kind of like jumbo shrimp?) of a planned stadium. It will even have a new brew pub. Will policymakers heed the advice of experts or opt for beer and circuses? 

The post Washington University Faculty Oppose Public Dollars for Stadium; Planners Promise Brew Pub appeared first on Show-Me Institute.

Those interested in reading the ruling can read it here (http://bloximages.newyork1.vip.townnews.com/stltoday.com/content/tncms/assets/v3/editorial/a/71/a7116828-ac39-5c13-ab82-0a558fb68353/55bfaef6e79eb.pdf.pdf). I’m no lawyer so I’m not equipped to discuss the merits of the judge’s decision. However, it is interesting that there has been such an effort by the St. Louis Regional Complex and Sports Authority to block (http://www.latimes.com/sports/sportsnow/la-sp-sn-st-louis-nfl-stadium-lawsuit-civic-vote-20150410-story.html) a vote. One wonders why.

Is it because the new stadium cannot be justified economically (https://showmeinstitute.org/sites/default/files/20150323%20-%20Rams%20Testimony%20-%20Miller%20_0.pdf)? Is it because they know that a new stadium won’t lead to downtown redevelopment (https://showmeinstitute.org/blog/corporate-welfare/show-me-now-new-stadium-rams)? Could it be because they know taxpayers won’t see a positive return on the subsidies that would go into stadium construction (https://showmeinstitute.org/blog/local-government/no-post-dispatch-rams-dont-pay-their-way)?

It’s also not like the Authority didn’t have time to get this issue on the ballot. The stadium taskforce unveiled their plans in January (https://showmeinstitute.org/blog/transparency/thoughts-latest-rams-press-conference. If the April ballot was too soon they could have gotten it on the August ballot (i.e. today’s ballot). What was holding them up?

Whatever the Authority’s reasons might be, it got its wish. The project can move ahead without a public vote. That doesn’t make this project a good idea though, at least economically speaking. Hopefully, policymakers will come to realize that.

The post Why NOT let the public vote? appeared first on Show-Me Institute.

According to the article, the stadium will now require less money from bond extensions (mostly due to Saint Louis County dropping out), but more in the form of tax credits, state infrastructure fund credits, and unnamed state and city incentives. The stadium task force also increased its expected personal seat license (PSL) revenue by $30 million. And $450 million will still have to come from a team owner, presumably Stan Kroenke, who may have a personal interest in not supporting such a plan.

Fortunately, the plan reduced the total public support that would go to the stadium. Unfortunately, that support would still total $388 million, only a $17 million reduction. What’s more, that relief is bought by an increase in estimated PSL revenue. There should be little doubt on who would be left holding the bag, the Rams or the taxpayers, if actual revenue is less than expected.

More than anything else, the new funding plan is just another hand motion in a drawn-out shell game. Lower the amount coming from the Saint Louis area, increase the amount coming from the state. Decrease bond revenue, increase tax credits. Throw in undisclosed funding sources to cover the difference. Keep everything in motion and hope no one notices that none of the important questions have been answered:

1. 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? (I’m looking at you, Saint Louis County, whose bond payments will “retire.”)
2. What are the “additional state and local incentives” that will fund the dome?
3. Will a team owner actually pay $450 million for a stadium in Saint Louis? And finally,
4. Should Saint Louis City and the state of Missouri pay hundreds of millions for a billionaire’s stadium, even when economists agree that these stadiums do not create development or increase tax revenue?

The post More Shell Games from Riverfront Stadium Planners appeared first on Show-Me Institute.

Myth 1: Professional sports teams generate development and boost regional economies.

The consensus among economists is that this is not the case. Nearly every study on stadiums finds no tangible impact on job creation or economic activity. As for redevelopment, economists Dennis Coates of the University of Maryland and Brad Humphreys of West Virginia University wrote:

“. . . strategically placed stadiums and arenas can sometimes ride existing redevelopment trends, but they are never the cause of these trends.”

Myth 2: A riverfront stadium plan will pay for itself.

Total subsidies to the riverfront stadium in Saint Louis will likely exceed $400 million, no small sum. Even so, public officials and respected news outlets like the Post-Dispatch claim that the stadium will pay for itself through increased tax revenue. The mass of scholarly literature rebuts this assumption. Most economists find that sports stadiums have very little impact on tax revenue and do not recoup large public subsidies.

A review of the literature suggests that the optimistic assumptions of stadium backers and local newspapers tend to rest on overestimated direct tax revenue from sports teams and underestimated opportunity costs for government expenditures. However they go wrong, when politicians claim an NFL stadium will pay for itself, they are ignoring clear economic evidence to the contrary.

Myth 3: The stadium will be built with no new taxes.

First, extending bonds (and the taxes that back those bonds) is an increase in taxation when those taxes would otherwise expire. Beyond that, the existing stadium plan does not account for the following costs:

1. New stadium maintenance

2. Renovations to the Edward Jones Dome

3. $150 million in state tax credits

Someone will pay for these policies, and it’s unlikely to be the Rams. Furthermore, according to the lawsuit the Regional Convention and Sports Complex Authority (RSA) filed against the city, officials plan to use other methods of funding that will result in more taxpayer dollars getting spent (or diverted). These include using public dollars to purchase land (which is already underway), setting up new downtown taxing districts (more TDDs and CIDs), and tax increment financing.

Missouri residents should understand that if they subsidize a stadium, they may get an NFL team, but they aren’t likely to make their money back. There also isn’t any reason to think that it will create significant economic benefits for the region. The plan’s high costs and limited public benefit should make some sort of public approval a necessity. Unfortunately, depending on how the courts rule, public involvement might be sidestepped altogether.

The post Top Misconceptions About the Riverfront Stadium Plan appeared first on Show-Me Institute.

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.

The post If the Riverfront Stadium Plan Had Two Wheels, It’d Be a Bicycle appeared first on Show-Me Institute.

First, we’ll address the substitution effect, or the idea that money spent on the Rams does not necessarily mean new economic activity. Our critic claims that if the Rams leave, he and many others would not be spending their dollars downtown. The problem with that reasoning is that it conceptualizes the Saint Louis region as municipally balkanized, and not as part of a regional or state economy, which in fact they are. Thus, if he and other county residents stay in the county on Sunday and spend money there, the regional and state economy is unaffected, along with the regional and state tax base.

Addressing the second point, if our critic does not believe Show-Me Institute’s numbers, why not the Brookings Institution, which wrote:

A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. . . . No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus . . . most tax collections inside a stadium are substitutes: as other entertainment businesses decline, tax collections from them fall.

Or our critic could also read a review of the economic literature, which finds:

Because sports facilities are not expected to generate additional net output in a metropolitan area and no systematic empirical analysis ever finds evidence that they do, sports facilities cannot be counted on to augment tax collections.

Put simply, the evidence on whether sports stadiums generate economic growth or sufficient tax revenue to justify large subsidies is overwhelmingly in the negative. Our findings accord with these prior results, the governor’s and Post-Dispatch’s do not. I’ll leave it to the reader to decide whose heart is leading whose head.

The post Of Stadiums and Economic Spillovers appeared first on Show-Me Institute.

The ordinance in question is Chapter 3.91 of the Revised Code of the City, which requires a vote on any public assistance for a professional sports stadium. Assistance is defined as:

. . . any City assistance of value, direct or indirect, whether or not channeled through an intermediary entity, including, but not limited to, tax reduction, exemption, credit, or guarantee against or deferral of increase; dedication of tax or other revenues; tax increment financing; issuance, authorization, or guarantee of bonds; purchase or procurement of land or site preparation; loans or loan guarantees; sale or donation or loan of any City resource or service; deferral, payment, assumption or guarantee of obligations, and all other forms of assistance of value.

Banning both direct and indirect assistance may seem broad, but cities too often spend large amounts of public dollars planning, and then publicizing, controversial projects. For example, Kansas City spent almost $2 million planning a streetcar expansion that was ultimately defeated at the ballot box.

Far from being vague and overly cautious, the ordinance’s language seems prescient, as the RSA plans to use just about everything the ordinance describes as assistance, including:

1. Extension of the $6 million annual bonds that currently fund the Edward Jones Dome. How the dome, which is in need of expensive rehab regardless of what happens with the Rams, will be funded is anyone’s guess.
2. Providing land, which presumably would be bought with public dollars. This would include the Bottle District, which is currently owned by Paul McKee’s Northside Redevelopment Project, to be redeveloped as a parking lot.
3. Transportation Development Districts and Community Improvement Districts. These districts, of indeterminate size, would levy additional sales or property taxes. The larger the size of the district, the greater the revenue.
4. Tax Increment Financing. Sales taxes, earnings taxes, and utility taxes that would otherwise have gone back to the city to fund regular services would instead pay for the new stadium.

It seems obvious the situation here is not that of a badly written ordinance restricting reasonable city planning, but rather an ordinance that blocks, and was designed to block, exactly what the RSA is trying to do: get city dollars for a stadium, no matter the source, without a public vote.

The post Stadium Planners Move to Block City Vote appeared first on Show-Me Institute.

The crux of his argument is that taxes on growing NFL salaries (starting at $10 million in 2017 and growing at 3 percent thereafter) would help raise about $300 million. However, if we assume that the total income taxes from the Rams is $10 million a year growing at a rate of 3 percent, the actual present value of 30 years of state income taxes would be less than $200 million, assuming the recently passed tax cuts take effect. Even if the economic development director’s number is accurate, $300 million is still less than the total public cost of the stadium plan ($405 million).

The economic development director likely meant that the state, as in just the political entity of the state of Missouri, could make millions on a new stadium. But only half of the cost is the state’s, with the other half coming from the Saint Louis area. Saint Louis City has an earnings tax, but, even accounting for that income tax, revenue is most likely to remain between $250 and $300 million, well under the public cost of the stadium.

Stating that the stadium plan would fall short of recovering tax subsidies and fail to promote economic growth is not an anti-Rams position, it is the opinion of most economists. As one researcher put it:

There are absolutely no publicly subsidized stadiums and arenas that generate enough direct or indirect tax increases to balance the initial (and ongoing) public outlay. . . . In fact, some research suggests that sports stadiums actually decrease economic activity and tax revenue in areas where they are built. . . . However, strategically placed stadiums and arenas can sometimes ride existing redevelopment trends, but they are never the cause of these trends.

The state of Missouri and the city of Saint Louis should be honest with residents. If we use public dollars to keep the Rams, it will be about pride, not tax revenue or development.

The post Rams to Make Missouri Millions? appeared first on Show-Me Institute.

In ancient Athens, the birthplace of democracy and human freedom, the richest citizens often paid for roads, bridges, theaters, and gymnasiums. They picked up the bill for athletic games and other public amusements. In times of peril, they built war ships and donated them to the city.

This voluntary giving of both time and money maximized freedom, reduced the need for government, and reinforced a powerful sense of Athenian exceptionalism. In his famous funeral oration in 431 BC, Pericles spoke of how the freedom and openness of their city did not weaken but only served to redouble the valor, resourcefulness, and generosity of the citizenry, enabling Athens to exceed all its neighbors in dedication to the common good, both in war and peace.

Charles W. Adams, author of the classic book For Good and Evil: The Impact of Taxes on the Course of Civilization, called this system of giving “the Greeks’ brilliant alternative” to government ownership and control. He described it as “private enterprise for public good.”

In our own time, sports-minded cities across the United States have stood this ancient ideal on its head. In trying to attract or to hold onto sports franchises, most U.S. cities have followed the model of public assistance for private gain, or what is also known as crony capitalism.

Political leaders in our cities and states have been all too willing to grovel at the feet of the wealthy owners of professional sports teams, saying, in effect: If you pick our stadium over competing venues, we will do everything in our power to use the public purse to swell your bottom line and multiply the value of your franchise.

Consider the astounding concessions that the city of Saint Louis made to get the then Los Angeles Rams to move to Saint Louis in 1995—and how the city has now landed in a situation in which it will have to agree to another roughly $400 million in taxpayer assistance to have any hope of holding onto the team.

Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit, calls the original deal that the city of Saint Louis struck with the Rams “the worst lease ever”—meaning the most one-sided in enriching the team’s owners at the expense of taxpayers . . . while doing far more to please deep-pocketed corporate clients than to control ticket prices or provide better seating for ordinary fans.

The Rams paid no part of the $480 million in construction costs in building the Edward Jones Dome, and they have paid almost nothing in rent (just $250,000 a year). They received all luxury box and concession revenues, took 75 percent of advertising and name rights, and pocketed a $46 million relocation fee.

Still more, political and civic leaders signed on to a deal that gave the team the right to opt out of a 30-year lease after 20 years—if the stadium no longer ranked in the “top tier” of NFL stadiums. As a result, the Rams may move as soon as 2016, but Saint Louis City and County and the state of Missouri are still on the hook for $120 million in remaining bond payments falling due between 2016 and 2021.

According to Forbes, the St. Louis Rams football team is now worth about $930 million. Experts say that the value of the franchise will jump to between $2.5 billion and $3.5 billion if the team moves to Los Angeles. Any such increase in value would more than offset the cost of building a new stadium in Los Angeles. Rams owner Stan Kroenke—a billionaire developer and the husband of Ann Walton Kroenke, daughter of Wal-Mart co-founder Bud Walton—has acquired a prime site in the city’s Inglewood neighborhood.

The city of Saint Louis and the state of Missouri are considering a brand-new publicly owned riverfront stadium, with still more luxury suites, high-priced club seats, scoreboard, and other amenities, aimed at meeting the most exacting NFL specs. It would cost close to a billion dollars, with local and state taxpayers picking up about 40 percent of the bill through publicly financed debt, state tax credits, and other means that would deplete local and state treasuries and leave less money for police, roads, schools, and other public needs.

However, there seems to be little public or political support for the project. A recent poll commissioned by the Missouri Alliance for Freedom shows that 70 percent of Missouri voters are opposed to public funding for the stadium.

In waving good-bye to the Rams, many Saint Louisans (this writer included) are therefore inclined to say “thanks for the memories.” We had “the greatest show on turf” for three years—with the 1999 Super Bowl champion, a playoff contender in 2000, and losing only in the final seconds of another thrilling Super Bowl in 2001.

Thirteen out of 32 NFL teams have never won the ultimate prize, and four have never made a Super Bowl appearance.

But as for public funding of a new stadium built mainly for the benefit of a billionaire owner and wealthy patrons, enough is enough.

Andrew B. Wilson is resident fellow and senior writer at the Show-Me Institute.

The post Super Bowls and the Super Rich: A Tale of Two Cities appeared first on Show-Me Institute.

Talk about pouring taxpayer money down a rat hole. How about having to pay out $120 million in retiring the debt on a domed and doomed stadium – whose principal tenant has flown the coup for a new home in a faraway city?

That will happen if the St. Louis Rams decide to move to new digs in Los Angeles in 2016 – taking full advantage of the escape clause open to the team through the original lease agreement.

By the end of this calendar year, Saint Louis City and County and the state of Missouri will have paid off $360 million out of the $480 million in bonds that financed the construction of the Edward Jones Dome, which opened in 1995.

That still leaves another $120 million in bond payments due between 2016 and 2021 ($60 million from the state and $30 million each from the city and county).

Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit, has examined dozens of cases in recent decades of cities that have ponied up hundreds of millions of dollars for the construction of new stadiums for professional sports teams. He calls the deal that the city of Saint Louis struck with the Rams “the worst lease ever” – meaning the most one-sided in enriching the team’s owners at the expense of taxpayers . . . and in opting to please deep-pocketed corporate clients (conducting partially tax-deductible “business entertainment” in their luxury suites) more than to control ticket prices or provide better seating for ordinary fans.

The Edward Jones Dome (formerly the TWA Dome) was a 100 percent publicly financed project. The Rams paid no part of the construction costs, and they have paid almost nothing in rent (just $250,000 a year) while receiving all luxury-box and concession revenues, claiming 75 percent of advertising and naming rights, and pocketing a $46 million relocation fee.

Still more, political and civic leaders signed on to a deal that gave the team the right to opt out of the original arrangement 10 years early – in 2015 – if the stadium did not rank in “the top 25 percent of NFL stadiums” – even if that meant having to build a whole new stadium, once again at taxpayer expense.

Jim Nagourney, an ad marketer for Anaheim Stadium who was hired away by the then L.A. Rams as a consultant on their relocation plans, made this comment as quoted in a recent article by San Diego Union-Tribune columnist Tim Sullivan:

I went to a meeting in Los Angeles one morning. We had a whiteboard, and we’re putting stuff down (to demand from cities). I couldn’t believe some of the stuff. I said, “Guys, some of this is crazy.” And John Shaw, who was president of the Rams at the time – brilliant, brilliant guy – said, “They can always say no; let’s ask for it.”

Twenty some years ago, local and state official made a big mistake in not saying no. Are today’s officials about to repeat the same mistake all over again?

Now the call has gone out for building a new open-air stadium in downtown Saint Louis at a cost of almost a billion dollars, with taxpayers bearing about half the cost – through new publicly financed debt, state tax credits, and other means that will deplete local and state treasuries and leave less money for other public needs, such as police, roads, and schools.

Some people say that Saint Louis needs a world-class stadium in order to be a world-class city. But that is an emotional argument, not an economic argument. Despite the rosy claims of local chambers of commerce, there is broad agreement among academic economists that the proliferation of new publicly financed stadiums over the past few decades has done little or nothing to underpin economic growth or employment in their host cities. In some cases, stadium projects may actually undermine growth – by diverting scarce resources to less productive use.

In the Coliseum in ancient Rome, the crowds signaled with a thumbs up for sparing the life of a game’s losing contestant or a thumbs down for showing no mercy.

We have seen that publicly financed stadiums are a misuse of public funds. It is time to turn two thumbs down on a bad idea of no redeeming merit.

Andrew B. Wilson is resident fellow and senior writer at the Show-Me Institute.

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The post Show-Me Now! A New Stadium for the Rams? appeared first on Show-Me Institute.

• Plans are for a new stadium located on the riverfront, north of Lumiere Casino and northeast of the Edward Jones Dome.

• The stadium also would be available for professional soccer.
• It would be a public asset owned by a public entity and leased to the team. Also, the new stadium would come with a new lease, 30 years or more.
• Cost estimate: $860-$985 million, at least half of which would be privately financed (minimum $200 million from Stan Kroenke and another $200 million from the NFL).
• No new tax burden, although there would be public money involved.
• Estimated completion date: 2020.

After listening to the press conference and going over some of the points raised here, I have my misgivings about this project. First, I would like to know specifically where the money is coming from to pay for this new stadium. During the press conference, Peacock said that the sources of public financing would not be ascertained until there was a commitment from the NFL and from the Rams on moving forward with this project. Second, the $860-$985 million price tag would only be for the new stadium. Additional money (it wasn’t said how much) would be needed to upgrade the current Dome so it will be a full-time convention center. How are we going to pay for that as well?

My biggest misgiving is the fact that we will be publicly subsidizing this thing at all. Kroenke’s proposal in Los Angeles would be completely privately financed. Why should the public put up money when Kroenke can afford to pay for the costs himself? The most recent trend in stadium construction is toward private investment. That’s what happened in San Francisco and New York, so why should Saint Louis be different?

I know it is easy to be wowed by beautiful pictures of sparkling developments like the one above. Yet, nice pictures aside, these kinds of plans do not produce the economic benefits that would make these developments worthwhile. I want Saint Louis to remain an NFL town, but I don’t want to spend taxpayer dollars to do it.

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