St. Louis Taxpayers to Vote on Rams Stadium Plan, Pols Promise

St. Louis Taxpayers to Vote on Rams Stadium Plan, Pols Promise
March 20, 2012

Sean Parnell

Sean Parnell (sean@impactpolicymanagement.com) is president of Impact Policy Management (IPM), a... (read full bio)

Pro football’s St. Louis Rams have rejected a proposal by the St. Louis Convention & Visitors Commission (CVC) for a $124 million renovation of the Edward Jones Dome, with approximately $60 million coming from taxpayers. The team is expected to submit an alternate proposal by May 1.

The rejection, announced in March, is fueling speculation the Rams may be maneuvering to leave St. Louis after the 2014 season, when the team may get out of its stadium lease.

After the Rams make their counteroffer, the CVC can either accept or reject it. If it rejects the offer, both parties would go to binding arbitration, where an arbitrator would establish the final deal.

Citizens Have a Say

Under either scenario, though, voters will have their say. The City of St. Louis passed an ordinance in 2002 requiring a public vote on future tax subsidies for stadium construction, and St. Louis County followed in 2004. Although renovations to the stadium technically don’t require a vote, the mayor and the county executive have both pledged to hold votes.

“New local public dollars spent to make the facility ‘top tier’ will be subject to the prior vote of the people,” Mayor Francis Slay wrote in a February 1 blog post. “If the CVC gets an agreement with the Rams, YOU will get the final say.”

‘Top Tier’ Promise

The lease between the Rams and CVC requires the stadium be kept “top tier” in comparison with other National Football League stadiums. Top tier refers to features such as luxury suites, high-priced club seats, scoreboard, and similar amenities. Most experts believe the Dome currently falls outside “top tier” status and would need substantial renovations to achieve it.

Opponents of taxpayer subsidies for sports stadiums were quick to criticize the CVC’s proposal.

Fred Lindecke, spokesperson for the local group Coalition Against Public Funding for Stadiums, said he was puzzled anybody would advocate more tax dollars for stadium renovations at this time.

“The city can’t afford to keep the dog pound open, and the firefighters’ pension is breaking the city budget,” Lindecke said.

Financial Difficulties

The Edward Jones Dome opened in 1995 at a cost of $300 million and was constructed entirely at taxpayer expense, with costs split between the State of Missouri, the City of St. Louis, and St. Louis County. These three government entities together provide $24 million each year to fund maintenance, improvements, and bond repayments. When it’s finally paid off in 2021, the stadium will have cost taxpayers approximately $720 million.

The request for a new taxpayer subsidy for the Dome renovation comes when both the City and the County of St. Louis are facing tight budgets. The city’s police department is looking at a $3.8 million shortfall. The county recently laid off workers or eliminated unfilled positions totaling more than 50 people as part of a plan to close a $24.5 million budget deficit.

Dubious Economic Benefits

A 2008 paper for the North American Association of Sports Economists by economics professors Dennis Coates of the University of Maryland and Brad Humphreys of the University of Alberta reviewed empirical studies on tax subsidies for sports stadiums and concluded, “The large and growing peer-reviewed economics literature on the economic impacts of stadiums, arenas, sports franchises, and sport mega-events has consistently found no substantial evidence of increased jobs, incomes, or tax revenues for a community associated with any of these things.”

Lindecke agrees the predicted economic benefits to St. Louis from the Dome’s construction never materialized. He notes two nearby locations that should have benefited from the stadium—the St. Louis Centre shopping mall and the Renaissance St. Louis Grand Hotel—both went bankrupt within a decade of the stadium’s opening.

When asked to comment on any expected benefits to the public of further taxpayer subsidies for the Dome, Rams officials stated only that they were following the process outlined in the lease and honoring the stipulation that talks between the team and CVC be kept confidential. The CVC did not respond to multiple requests for comment.

Sean Parnell

Sean Parnell (sean@impactpolicymanagement.com) is president of Impact Policy Management (IPM), a... (read full bio)