Among the many things that Missourians will vote on in November is Amendment 6, which if passed would reinstitute a fee on court filings in Missouri to fund a larger pension for sheriffs and prosecutors in Missouri. (The fee was previously $3 before it was overturned by Missouri courts.) There are many troubling aspects of Amendment 6 that I hope Missourians consider before they vote, because the proposed amendment would have effects that go beyond the understandable desire to support law enforcement.

Locally, this amendment is especially bad public policy for St. Louis County residents. St. Louis County has by far the largest number of court filings due to its status as the largest county by population in Missouri and the presence of CT Corporation Systems in Clayton, which is the largest registered agent company in Missouri. What’s more, the St. Louis County sheriff is not a law enforcement agent and is therefore the only sheriff in Missouri who does not participate in the Missouri Sheriff’s Retirement System in the first place. So, to be clear, St. Louis County residents would pay the largest amount of fees into the fund—probably several hundred thousand dollars a year—while at the same time receiving the least benefit of any county. Coincidence? Perhaps. Fair? Definitely not.

Every person in St. Louis County who seeks redress in court, who files for a domestic order of protection, who has to pay a traffic fine, or is in court for any other reason, would have to pay this reinstituted fee to increase the pensions of primarily rural sheriffs and prosecutors. (The St. Louis County prosecutor might be included in this plan, so that’s one person in a million, for a position that is already well-compensated with a generous pension.)

The ballot language for Amendment 6, as is so often the case, is highly misleading. A typical voter will read the language proposing to “levy costs and fees to support salaries and benefits for current and former sheriffs, prosecuting attorneys . . .” and understand that to include the many dedicated deputy sheriffs and assistant prosecutors around the state. It doesn’t. This new fee will only benefit the elected sheriff and prosecutor in each county (and not even the sheriff in St. Louis County). That’s two people per county. Deputy sheriffs and assistant prosecutors have their pensions funded separately and are not affected by this proposal.

As if the misleading language and targeting of one county wasn’t enough to object to, the fact is that funding pensions by court fees is a bad policy. That is why previous attempts to fund a sheriff’s pension in this manner were thrown out as unconstitutional by the Missouri Supreme Court. Imposing court fees that make it harder to seek justice in court, or harder to pay fines ordered by court—especially when those fees financially benefit the law enforcement officials who impose some of them—creates a perverse incentive. Funding for the salaries and benefits of sheriffs and prosecutors should come from general local taxation, and there should be no financial incentive for increased fines, arrests, and so on. But instead of trying change their proposals to address these constitutional objections by judges and others, supporters of Amendment 6 are attempting to do an end-run around the law by changing the constitution. Supporting law enforcement by going around the law is an ironic way to accomplish their goals.

Furthermore, any increase in the retirement benefits of elected sheriffs and prosecutors should be accomplished by an expansion of defined-contribution plans available to them rather than an increase in their defined-benefit pensions. Expanding the opportunities for these well-compensated elected officials to participate in 457 retirement plans [which are like 401(k) accounts but for public employees] or similar alternatives is a better way to allow them to save for retirement without further burdening taxpayers.

Missouri sheriffs and prosecutors deserve our support, but Amendment 6 is not the way to show it. There are several good reasons for all Missourians to reconsider their typical support for law enforcement in this case, and for the people of St. Louis County, this choice should be easier than rooting against Stan Kroenke’s Rams in the Super Bowl.

The post Court Fee Increase Would Negatively Impact St. Louis County appeared first on Show-Me Institute.

Back in July, my colleague Graham Renz wasn’t thrilled with the proposed deal, but conceded that it was better than what taxpayers had been offered in 2017. That deal involved public subsidies and set-asides worth $120 million; the current deal’s public cost was about $40 million in local subsidies plus the $30 million in state-issued tax credits. If the tax credits are reduced as the St. Louis Post-Dispatch suggests, the total value of all the incentives may be closer to $52 million. That is a lot, but less than what has been considered previously.

Both deals were promoted at the time as the best deal taxpayers could get. We know now that wasn’t true. The owners of the new franchise stand to make a lot of money from this deal. While city and state officials should welcome investment in the area, they don’t need to put public funds at stake. Just ask Stan Kroenke, who is investing about $1.6 billion of his own money to build a sports complex in Los Angeles using only privately raised funds.

The lesson here for public officials at every level is that there is almost always a better deal to be had. In fact, if you want to protect taxpayers, the best deal might be no deal at all.

The post The MLS Deal Keeps Getting Better for Taxpayers appeared first on Show-Me Institute.

The rest of the piece catalogues the standard objections to special taxing districts, which in this case is a Community Improvement District (CID). They include: unfair taxation, developer subsidies, a blight finding so that the developer is even less constrained in spending the CID funds, and the lack of transparency in the tax collection and spending.

While everything in the Post-Dispatch story is true, none of it is unique. Kroenke’s involvement may make it even less palatable, but special taxing districts such as these are common and becoming more so. My colleague Graham Renz and I wrote about it in this essay, which includes some especially odious examples and ideas for reform. It would be a wonderful irony if a man like Kroenke, who has profited so handsomely from such subsidies, was himself a cause for their reform. One can hope.

The post It Might Take Stan Kroenke to Reform Missouri’s Special Taxing Districts appeared first on Show-Me Institute.

Let me tell you why this reform is so needed.

The main thrust of House Bill 1434 is to curb the rampant TIF abuse that residents in the Saint Louis area have seen recently, including the plan to subsidize a Stan Kroenke development only weeks after Kroenke moved the Saint Louis Rams out of town. With that incident in mind, most of the bill's language deals with three counties in particular—Saint Charles, Jefferson, and Saint Louis counties—and the manner in which TIFs can be enacted and administered. For those reasons alone, the bill has merit.

But there's another element that also deserves to be highlighted. Tucked a little deeper into the legislation is language that would make TIF committee activities more transparent to the public. More specifically:

It shall be the policy of the state [emphasis mine] that each redevelopment plan or project of a municipality be carried out with full transparency to the public. The records of the tax increment financing commission including, but not limited to, commission votes and actions, meeting minutes, summaries of witness testimony, data, and reports submitted to the commission, shall be retained by the governing body of the municipality that created the commission and shall be made available to the public in accordance with chapter 610.

For those wondering, Chapter 610 of the Missouri revised statutes contains the state's "Sunshine Law," and you'll find a parallel "policy of the state" language there as well.

It is the public policy of this state that meetings, records, votes, actions, and deliberations of public governmental bodies be open to the public unless otherwise provided by law. Sections 610.010 to 610.200 shall be liberally construed and their exceptions strictly construed to promote this public policy.

Transparency is an effective disinfectant, and for that reason alone this TIF bill is important. TIF reform been a long-standing priority here at the Show-Me Institute; that the legislature may finally take a substantive step in the right direction is both exciting and gratifying. I'm keeping my fingers crossed.

The post TIF Reform Legislation Races Into the Homestretch, But the Clock Is Ticking appeared first on Show-Me Institute.

But now that future might not include the Dome. It seems that some members of the CVC think  the Dome is more of a liability than an asset, and demolishing it may be the best option moving forward.

Readers of this blog will not be surprised at the sudden reversal in attitude toward the now-empty Dome. Just last week, we noted:

In 2015, only nine conventions had more than 10,000 participants (accounting for 80,000 room nights). The CVC often blames the NFL schedule for holding down the number of conventions the city can compete for, but in the six months when no games were held at the Dome, nine large conventions was a far cry from busy.

Some members of the CVC are apparently coming around to our position on the ability of Dome to attract many new conventions. They point out that the Dome is outdated compared to new competition from other regional convention centers in Denver and Nashville. The most poignant criticism was from the president of the CVC, who the Post-Dispatch reports as saying, “The Dome itself is too high—it feels like a stadium, not convention space.”

The idea of demolishing part or the entire Dome may prove politically or financially unfeasible. However, it’s becoming clear that the Dome is not much better at attracting large conventions that it has been at attracting Stan Kroenke. Twenty years after that stadium opened as a stadium/convention center, it is functionally obsolete for both purposes.

When Dome advocates pushed for state funding more than 20 years ago, they told the state legislature that we couldn’t afford not to build the stadium. Now, it seems like we really could have. 

The post Jones Dome Headed for Demolition? appeared first on Show-Me Institute.

First, after the Regional Convention and Sports Complex Authority (RSA) got a judge to throw out the city’s ordinance requiring a vote before public money could go to a stadium, the mayor’s office promised that city officials and the Board of Aldermen would craft a new, legally defensible ordinance in the same spirit. The mayor’s office claimed this couldn’t be done for the riverfront stadium, because time was of the essence. Now the Rams are moving, and there would appear to be plenty of time for ordinance-writing.

Second, at the state level, most legislators were indignant that the governor and the RSA would extend bonds without their approval. Senate leadership threatened to withhold bond payments for a new stadium. They claimed that the RSA was not created with the intent of becoming a permanent stadium-building authority. Now the state legislature has time to close that loophole, assuming that their opposition was more than grandstanding.

Finally, just about every public official and the leadership of the governor’s stadium task force told the public that if there is no commitment from an NFL team, there will not be a stadium. Last time Saint Louis lost a team, the city built a stadium on spec. After failing to land an expansion team, the city and state scrambled to lure an existing team—which turned out to be the Rams—to Saint Louis. To lure them, the region signed the terrible lease that is the cause of our present troubles. Let’s not repeat past mistakes. The RSA has already spent more than $16 million of public money (equivalent to about two years of maintenance on the Dome) planning a stadium (and suing the city) for a Rams organization that was not interested in staying here. It’s not time for the regional leaders to try to buy another football team or build a soccer stadium. It’s time to stop.

The criticism being leveled at the NFL and Stan Kroenke at this moment is understandable. But it is worth remembering that Mr. Kroenke did not attempt to extort money from Saint Louis. He did not ask for a publicly funded stadium. He did not ignore state legislators, cut the county out of the funding scheme, threaten to use eminent domain, or throw out the city’s vote. He did not ask us to grovel. We did it to ourselves. Now it’s time for policymakers to follow through on their promises and make sure this does not happen again. 

The post Regional Leaders Should Keep Their Word over Stadium Plan appeared first on Show-Me Institute.

The Edward Jones Dome in downtown Saint Louis is another story. Praised as state-of-the-art when it opened in 1995, the 100 percent publicly financed dome is on the verge of abandonment several months shy of its 21st birthday.

The future of the St. Louis Rams – the dome’s current occupants – will be decided in the next couple of days as the NFL owners club considers two competing plans for new stadiums in the Los Angeles area – one of them put forward by Stan Kroenke, the owner of the Rams, who wants out of Saint Louis.

Whatever happens, the Saint Louis dome’s playing days as a football stadium are probably over. It stands as a monument to wishful thinking – a telling example of the fallacy that public officials can accelerate a city’s growth or reverse its decline by “investing” large sums of money in a giant sports complex.

When the dome was first proposed and developed, its backers – including two Saint Louis mayors, business and civic leaders from the city and county, Missouri legislators, and the editorial board of the St. Louis Post-Dispatch – described the project as a much-needed shot in the arm for downtown Saint Louis. They claimed it would create thousands of jobs, generate hundreds of millions of dollars in new business activity, and more than pay for itself through the additional tax revenues it would create for St. Louis City and County and the state of Missouri.

In a 1993 editorial, the Post predicted a “downtown resurgence” and only worried that the riverfront might become “a gridlock of automobiles overlooked by a garish strip replete with pulsating electric signs and the amplified voices of barkers luring people aboard (casino) boats.”

Today the St. Louis riverfront is emptier than ever.  Over the last two decades, the city has continued to lose both population and jobs, while St. Louis County and the state as a whole have also experienced subpar economic growth. There is no sign of any dome-centered economic growth.

The Edward Jones Dome was desperation’s child.  In 1988, after the St. Louis Football Cardinals took flight for Phoenix, Arizona, leading figures in the city became serious about building the new stadium that the departing owner Bill Bidwill (not wanting to share space with the baseball Cardinals) had craved.  Enlisting the help of Saint Louis County and the state of Missouri as partners, they gambled on building a stadium entirely on spec – not knowing when, or even if, they would be able to attract another NFL franchise to replace the Cardinals.

Surely, the thinking went, a metro area of our size (two and half million people) and with our willingness to open the public purse strings, should have no trouble attracting one of two NFL expansion franchises then coming up for grabs.

That was a big mistake. In late 1993, the NFL awarded the new franchises to Charlotte, North Carolina (with the now #1 seeded Panthers in this year’s NFL playoff), and to Jacksonville, Florida.

Thus, there was great joy in Mudville when Georgia Frontiere, the widow of longtime L.A. Rams owner Carroll Rosenbloom, elected to move the Rams franchise from an aging stadium in Anaheim to a new one in her old hometown of St. Louis.  As the dome was nearing completion, she saved political and civic leaders from the embarrassment of having a football stadium but no team.

Corralling the Rams was hailed as a great victory for the city and state – but was it a good deal for taxpayers?

Plainly it was not.  The Rams shared no part of the cost of building the dome, yet they have paid an annual rent of $250,000, or just 1 percent of the $24 million that the city, county, and state have paid to service the debt on its construction . . . and will continue to pay ($12 million from the state and $6 million each from the city and county) for another five years. That means taxpayers are still on the hook for another $120 million – money that would otherwise be available for public services ranging from fire and police protection to education, roads, and infrastructure.

In addition, the lease agreement allowed the freeloading tenant to demand major improvements at public expense, and gave the team the right to opt out of the lease ten years early – in 2015 – if the city and state failed in their contractual duty to keep the dome in the top tier of NFL stadiums.

That is the option that Mr. Kroenke deployed at the beginning of last year when he announced his intention of moving to Los Angeles.  For a while, the response from city and state officials was déjà vu all over again.  St. Louis Mayor Francis Slay and Missouri Gov. Jay Nixon joined forces in trying to raise some $400 million in public assistance to go toward the building of a new $1 billion-plus riverfront stadium to keep the Rams in St. Louis.

But now it seems the air has gone out of that spheroid. There seems to be a growing realization (even in St. Louis) that if a team thinks it can make a whole lot more money in one city – with no subsidies – than it can in another – even with copious subsidies – it probably makes sense for all concerned to let the team go where it wants.

The post Deflate-gate in Saint Louis: Air goes out of a plan for a new subsidized football stadium appeared first on Show-Me Institute.

No joke. The Saint Louis media was not always as harsh on the Kroenke as they are now. Back when he was part of a task force to get an NFL team in the early 90s, many in the Saint Louis press tried their best to praise Kroenke. When he was pushing for an expansion team, Kroneke’s now-derided woodenness was described thusly:

He seems to be that rare individual who is comfortable with himself, and that makes us feel comfortable with him. After all the recent noise pollution, Kroenke's confident, understated manner is pleasing to the ears.

The very act of finding Kroenke, a Missouri native prepared to shell out tens of millions to attract a new team, was praised as a deft maneuver. Any possible faults were then overlooked . . . because football. As one Post-Dispatch writer put it:

"He wants to buy us a football team," I said to my kids. "He wants to bring the Lambs to St. Louis. I sure like him."

When Saint Louis finally bought the Rams, Kroenke was hailed as a victorious warrior. When the NFL voted (21 to 3) to block the Rams’ move to Saint Louis, the newspapers eagerly (and now very ironically) lapped up Kroenke’s promise to get the team here anyway, with litigation if necessary. After enough side deals were cut and the lease, now universally derided, was inked, the Post-Dispatch praised Kroenke as a “quiet source of steady strength.” The praise was so lavish that when the Cardinals faced an ownership crisis in 1995, Post-Dispatch columnist Bernie Miklasz wrote:

The good news is that maybe Cardinals fans will get what they deserve, when all of the brokering is completed: a caring, interactive owner. That person is out there. (HELLO, STAN KROENKE?)

If Saint Louis’s media had spent less time heaping praise on any attempt to get an NFL team, and more time looking critically at of the final deal’s merits, maybe we wouldn’t be in the mess we’re in now. 

The post On Rams Relocation, Saint Louis Media Is as Fickle as Stan Kroenke appeared first on Show-Me Institute.

However, as hard as it may be for Saint Louisans to hear, the report had a lot of truth in it, especially regarding Saint Louis’s economic situation. The statement rightfully points out (as we at the Show-Me Institute have written) that, when it comes to population and jobs, Saint Louis really has fallen behind and has yet to turn things around. Saint Louis City has lost much of its population; the city had around 750,000 residents in 1960, and today it’s close to 300,000. From 2000 to 2010, Saint Louis City lost population and Saint Louis County essentially stagnated.

Most of the population growth during that time was in the far suburbs and downtown (which received significant subsidies), and overall, population was stagnant.

The story is equally depressing when it comes to job growth. Saint Louis had anemic employment growth before the recession, and the economy has limped along since then. Despite claims of becoming a tech center, Saint Louis (and especially Saint Louis City) has seen nearly all its employment growth in education and medical services. For these and other reasons, economists (and not just those cited in the statement) forecast continued slow growth in the future for Saint Louis.

The Rams’ statement also claims that the other teams trying to move to L.A. (the Oakland Raiders and San Diego Chargers) would leave healthier economic markets. In this, the team is not wrong. Income and GDP of both Oakland and San Diego are much greater than in Saint Louis. They have more money to spend on tickets, jerseys, and NFL cable packages:

In addition to how things stand today, one has to factor in growth. Even accounting for the deindustrialization of the late 20^th century, Saint Louis is growing much more slowly than San Diego and Oakland.

 While Saint Louis aspires toward building a tech industry, Oakland is a rapidly gentrifying part of the tech-dominated Bay Area economy, and San Diego has the one of nation’s most important bio-tech clusters.

There are many possible culprits for Saint Louis’s lackluster growth, and few easy answers. However, it’s time for Saint Louis to be honest and acknowledge that, yes, of the four markets in play, Saint Louis is the least attractive for the NFL. We also have to acknowledge that without significant public financial “support,” no existing NFL team would consider locating to Saint Louis. But the city’s economy— not Stan Kroenke—is  the real problem. It’s that problem, which affects so much more than sports, that policymakers need to address.  

The post The Unfortunate Truths Behind Rams’ Relocation Statement 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.

                Before diving into the numbers, it is important to note once again that the proposal before city leadership is not the end result of a negotiation with the Rams or Stan Kroenke. The Rams organization has remained completely silent on what, if anything, the city can do to keep the team in Saint Louis. The NFL, which could possibly block a move, has also failed to make firm commitments to the city. With the caveat that nothing is final, if the stadium funding plan goes through the city will likely be financially worse off than it is now, for the following reasons:

1.       It will cost the city more than last time. In building the Dome, the city agreed to make $6 million a year in bond payments for 30 years. For the new stadium, Saint Louis will add remaining Dome debt to new stadium debt, to make payments that start at $4.5 million and escalate to $9 million over the course of 36 years. That does not include the millions that city residents have paid already through sub-municipal governmental bodies.

2.       It has hidden, unaccounted-for costs. Stadiums cost millions of dollars every year to maintain and operate, little or none of which is covered by NFL teams. The current plan does not account for these costs, aside from proposing adding new taxing districts. But if the future stadium costs and Ram’s tax revenue is anything like it is now, those districts will be wholly unable to cover costs. And speaking of revenue…

3.       It means less tax revenue than before. The city plans to give the vast majority of taxes (sales and otherwise) collected at the new stadium, which the city would normally collect, back to the Rams. Saint Louis City only collects about $4.2 million in total from the Rams right now, and this plan would likely mean the city gets even less in the future.

4.       It diverts needed money from the Dome. For the Edward Jones Dome to operate into the future, it reportedly needs about $100 million in capital improvements and continued maintenance. The revenue stream that currently funds the Dome would be diverted to pay for a new stadium, with nothing to take its place.

The bottom line for the city is that with this deal, to which the Rams have not agreed, the city is likely to pay more and earn less than it has for the last 20 years. Worse yet, maintenance for the new stadium and on the Dome are not accounted for, virtually guaranteeing that someone (not the Rams) will need to pay more later on. Is football so important to Saint Louis residents that they would mortgage their city’s future to give millions of dollars to an uninterested billionaire?

Unfortunately, the government sued itself to prevent a public vote, so we have no way of knowing the answer to that question.

The post Riverfront Stadium Deal May Be Worse for City than Dome Lease appeared first on Show-Me Institute.

In reading reports of Tuesday’s NFL “hearing” at the Peabody Opera House, I was reminded of that old nursery song, which is really a parable about scarce resources.

In the nursery song, there are four woolly sheep of different colors (black, white, grey, and brown), plus a fifth sheep that has already been fleeced. Beginning with the black sheep, the four sheep all give “three bags full” of wool for others to use:

One for the master,
one for the dame,
and one for the little boy
who lives down the lane.

But then, of course, you come to the last sheep, and there’s the problem:

Baa, baa, bare sheep,
have you any wool?
No sir, no sir, no bags full.
None for the master,
none for the dame,
and none for the little boy
who lives down the lane.

Alternately rowdy and tearful, some 1,000 Saint Louis Rams fans showed up to plead with NFL officials to keep the team in Saint Louis. The passionate fans who wore NFL jerseys featuring the names of their favorite players see themselves in the role of the sheep that has been fleeced – or are about to be – assuming the owner Stan Kroenke succeeds in moving the team to the Los Angeles area. That is an understandable reaction to the disappointment of losing a favorite team.

However, from an economic viewpoint, it is really the taxpayers in the state of Missouri who were fleeced once – and are about to be fleeced again – if the plan to build a new $1 billion public/private downtown stadium along with the riverfront goes ahead – with the expenditure of some $400 million in public money through issuance of bonds, state tax credits, and infrastructure grants.

The Edward Jones Dome (or TWA Dome, as it was formerly called) was a 100 percent publicly financed project. The Rams pay an annual rent of just $240,000, which is just 1 percent of the $24 million annual cost that taxpayers have paid (and will continue to pay until 2022) to service the debt on its construction.

There is no legitimate reason to subsidize professional football, which is a hugely profitable business in its own right. Saint Louis and the state of Missouri shouldn’t have to sweeten the pot at public expense to keep the Rams in the St. Louis. It would be better to let them go.

The post Keeping the Rams – Lessons from a Nursery Song 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.

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.

The battle for the L.A. market is joined! According to NBCSanDiego, the Chargers are working with the Oakland Raiders. Their goal: a new stadium in the L.A. area (Carson, California, to be precise). Of course, their home cities can talk them out of it, for the right price.

It’s not shocking that teams other than the Rams might want to move to Los Angeles. L.A. is the country’s second largest media market, and with that comes a lot of TV money. However, still color me skeptical about the whole thing. I think (and I’m not alone) this is more of a ruse for the Chargers and the Raiders to extract sweetheart stadium deals from their home cities. The Chargers have been trying to get a workable proposal from San Diego for the past 14 years. They’ve even recently published some remarks to the San Diego stadium task force regarding what it wants in any new proposal. Needless to say, it’s quite a lot.

I think the Rams’ L.A. proposal is more serious. Why? Because of Stan Kroenke’s silence regarding the Rams’ latest proposal, or anything for that matter on what exactly he wants in order to stay in Saint Louis. The Chargers are giving San Diego an idea of what it is they’re looking for in a new stadium, Mr. Kroenke isn’t.

No matter the likelihood of the Chargers’ or the Rams’ proposals succeeding, I think that neither team should receive public subsidies. If billionaires want new stadiums, they should pay for them themselves. I don’t think taxpayers should get the bill, especially since there won’t be any economic return to them for doing so.

L.A. seems to be the place to go to for teams that can’t get a new stadium. Will policymakers be scared into throwing more money at teams in an attempt to prevent them from leaving? Maybe, but that doesn’t make it a good idea.

The post The Great L.A. Gambit appeared first on Show-Me Institute.

Don’t look now, but there’s a land rush for the Los Angeles pro football market. Saint Louisans will already be familiar with Stan Kroenke’s plan to move the Rams to a stadium in Inglewood. But now the San Diego Chargers and Oakland Raiders, unhappy that their localities are not coughing up public funds for new stadiums, are also publicizing a plan to move to L.A.

Three teams will not be playing in the Los Angeles metropolitan area, but it allows all three franchises to simultaneously frighten local politicians into spending public dollars on a stadium. From an owner like Stan Kroenke’s point of view, it’s a win-win scenario. If the NFL allows him to move the Rams, his team will instantly gain $1.5 to $2.5 billion in value. And if he can’t (or never wanted to), Missouri has already planned to fund half the costs of a new stadium without any negotiation at all.

For Missourians, local officials have essentially locked residents into two possibilities: 1) approve around $400 million in public dollars for a new stadium, or 2) lose the Rams. Of course, the Rams might move regardless and Kroenke might demand more than $400 million to stay, but that’s what comes from committing the state to half the costs as the opening offer.

This situation is a perfect example of how poorly local officials fare when they bargain for taxpayers against billionaire-owned sports franchises. Where Stan Kroenke can credibly appear ready to leave the Saint Louis market without firm public subsidies, local officials declare how necessary the Rams are to the state. While Kroenke can strengthen his position and fail to negotiate, local officials need to be seen as trying their hardest to make sure Saint Louis is an “NFL city,” even when that means negotiating against themselves.

In essence, Stan Kroenke can look at this like a business negotiation. But local politicians are not spending their own money and have to be concerned about portraying an image of effectiveness and bolstering civic pride, making them poor bargaining agents for regional economies.

Even when there is no threat of a team leaving a lucrative market, pro teams can still reap public subsidies by threatening to move to different municipalities in the metro area. While it might not hurt the Chicago regional economy one bit if the Bears played in Rosemont (a nearby suburb), it would hurt the city’s tax revenue as recreation dollars flow to a different part of the region. Whether the team’s option is moving across the country or the county, pro franchises almost always have the best alternative to a negotiated agreement vis-à-vis local governments.

The best bargaining tool local officials can have is a skeptical voter base that understands that pro franchises do not create economic development or urban regeneration. Residents can vote against public dollars for entertainment venues. That constrains the local officials and sends a clear message to the NFL that Saint Louis is a great sports market, not a great mark.

The post Why Cities Are Bad at Bargaining With Sports Teams appeared first on Show-Me Institute.

Yesterday, Gov. Nixon announced that Ameren and Terminal Railroad have agreed to make adjustments to their assets (moving power lines and rail lines) so that the proposed new stadium on the riverfront can be built. I guess he thinks that’s good news, and it would be if it was the only thing standing in the way of a private developer wanting to build a new stadium on the riverfront, but that’s not the only thing.

The key ingredient to this project moving forward is that we are going to have to cough up more of our money ($405 million to be exact) to help finance this thing. Now it’s possible that such an investment could be worth the price tag if it will lead to redevelopment of the surrounding area. That’s what the governor believes. What’s the evidence that there will be redevelopment? It didn’t happen when we financed construction of the Edward Jones Dome. Why is this time different?

Gov. Nixon also stressed that if we did nothing, the city and state would lose out on millions in income tax revenue. It’s true, players do pay earnings taxes, but how much more money will we have to spend in order to make sure we still get those income taxes? Overall, will taxpayers see more in added tax revenue than the amount they had to pay in subsidies? It’s possible, but it’s also equally (if not more) likely that taxpayers would lose money. That’s why this whole thing feels like gambling, but at least at the casino you know the odds before you play. That’s not the case here. How much will players’ salaries grow (which influence income tax revenue)? How many people from out of state will visit the region to watch the Rams (this affects how much new sales taxes we get)? These questions and many more will affect the amount of added revenue the region will receive. It’s an awfully big risk to be taking with public money, and honestly we shouldn’t be giving a billionaire (Rams owner Stan Kroenke) taxpayer money on the hope that we MIGHT see a positive return.

Yesterday’s press conference was supposed to be an encouraging sign for those who want to keep the Rams here in Saint Louis. For me, it looked like someone was putting down a big marker on the roulette table with our money on the line. No matter if the project lands in the red or the black, in the end Stan Kroenke is going to be getting green.

The post The Big Bad Bet 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.

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• 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.

The post Thoughts on the Latest Rams Press Conference appeared first on Show-Me Institute.

According to the L.A. Times, Rams owner Stan Kroenke plans to build a new football stadium in Inglewood, California. If the plan is approved by local voters, it would clear one major hurdle for moving the Rams to Los Angeles. The mayor’s office in Saint Louis maintains that it will not get into a bidding war with Los Angeles over the Rams (the proposed stadium in Los Angeles would be built without tax dollars).

The sentiment coming from the mayor’s office is encouraging. Cities should not be spending public money in order to keep/lure professional sports teams. Now don’t get me wrong, I don’t want the Rams to move. However, Mr. Kroenke obviously feels that Los Angeles is a better venue for his team than Saint Louis. Considering that new stadiums tend to cost more than a billion dollars, the amount of public subsidies needed in order to change Mr. Kroenke’s mind probably would be astronomical. If subsidies were provided, what would taxpayers get in return, an economic adrenaline shot? Not really. Would keeping the Rams here do wonders for the city’s brand, as some have argued? I doubt it. Even when Mayor Slay brags about Saint Louis to the rest of the country, I don’t see the Rams mentioned anywhere (the Cardinals are a different story).

Sports often binds people, families, and communities together. There is no more popular sport in the United States than football, and I enjoy looking back to the time when I was a kid and I went with my father to watch Rams games (believe it or not, there was a time when the Rams were worth watching). Unfortunately, it appears that Saint Louis could end up losing yet another pro football sports franchise. That’s not an appealing prospect, but if public officials hold the line and refuse to grant any more taxpayer support to the Rams, then they should be commended and we should be thankful for their discipline.

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