As one round of incentives reaches Mayor Slay's desk, work starts on tax money for soccer stadium
Updated Dec. 19 with Greitens opposition to public stadium funding - The St. Louis Board of Aldermen considered millions of dollars in economic development incentives Friday, sending some to Mayor Francis Slay while setting others up for approval in the New Year.
At a meeting that stretched over three hours, aldermen gave final approval to $56 million in incentives for the second phase of Ballpark Village and to an agreement with Saint Louis University that gives the school control over the development around its planned new hospital.
Aldermen also gave the initial thumbs-up to another $37 million in incentives for the proposed City Foundry project in Midtown.
New SLU hospital
By approving what's known as a Chapter 353 development deal, aldermen have basically put SLU in the driver's seat when it comes to awarding incentives and demolishing buildings.
As the chair of the Housing, Urban Development and Zoning committee, Alderman Joe Roddy, D-17th Ward, has been studying economic development incentives. He said that inspired some of the checks that are including in the agreement with SLU.
"There are a variety of areas where we've actually limited the amount of tax abatement they can grant as a 353 holder," Roddy said. "And after 15 years, we are going to review the deal, and make sure that they're granting those benefits in accordance with our vision of a citywide plan." He said the city's Land Clearance Redevelopment Authority would also have a larger voice in how the incentives are awarded.
Also going to Mayor Francis Slay on Friday was $56 million in city incentives for the second phase of Ballpark Village. The St. Louis Cardinals are also asking for about $9 million in state incentives.
“We appreciate the city’s willingness to work with us to help make our shared vision of a world-class, mixed-use neighborhood next Busch Stadium a reality," Cardinals president Bill DeWitt III in a statement emailed to reporters.
Plans for the $220 million project include a Class A office building, more retail space and parking, and a 29-story luxury apartment building. That particular part of the project drew the ire of Alderman Scott Ogilvie, D-24th Ward.
"I don't know what the moral argument is for subsidizing the housing of the wealthy. I think we're going to look long and hard, and we're not going to find it," he said.
The development package squeaked through by 16-7 vote. Fifteen are needed to give a measure final approval, and many aldermen had left what was by then a three-hour meeting.
Aldermen gave their initial OK on Friday to $37 million in incentives to the first phase of the City Foundry project at the old Federal-Mogul site in Midtown. The $134 million project calls for renovating the foundry that the company closed in 2007. Developers want to turn it into a food hall with up to 20 food stalls and unique retail.
Many aldermen were dismayed that small businesses in their wards had been contacted to move to the Foundry site.
"It's with heavy heart that I would have to consider not supporting a project that could be so beautiful and would be so instrumental to development," said Alderman Cara Spencer, whose ward includes half of Cherokee Street. "But I'm here to represent the 20th Ward. I have to very clearly state that I don't believe this is in the best interest of the residents of the 20th Ward."
Roddy, whose ward includes the Foundry site, acknowledged that his colleagues had raised very good concerns.
"But we as a city have had our pockets picked by our suburban neighbors with regard to retailing," he said."So the question is, do we just let them take it all? The project that is competing with this one in terms of retailers is in Brentwood across from the Galleria."
Aldermen officially started the ball rolling on a proposed soccer stadium on Friday. Bills that boost the sales tax for economic development by a half percent, and direct revenue from a corresponding increase in the use tax to the stadium, were introduced.
It's up to the board president, Lewis Reed, to assign bills to committee for their initial hearings. By the end of the day on Friday, he had yet to do so. Aldermanic rules give him until Jan. 6 to make that decision, though there is nothing stopping him from doing so while the board is on its holiday break. Any real delay means it could be difficult to approve the bills in time for the April ballot, which may jeopardize the chance of getting a professional soccer team.
The bills were introduced the day after Major League Soccer outlined its next steps for league expansion. One of the key developments on Thursday came when MLS Commissioner Don Garber revealed that the expansion fee for the next two teams in the league would be $150 million. That’s $50 million less than what SC STL estimated in documents with the Missouri Development Finance Board.
That brought up an obvious question: If the expansion fee, which SC STL promised to pay for with private sources of money, is $50 million less than expected, could it result in a reduction of public money the ownership group needs?
SC STL’s Jim Kavanaugh told reporters on Thursday that the answer was no. He said MLS gave the ownership group that the expansion fee would range from $150 million to $200 million, adding “we were always budgeting a number that would need to be closer to the lower end of that range.”
“If the stadium’s approximately $200 million and all the public funding comes through, there’s another $80 million from a private investment perspective – plus what I would consider another $25 to $50 million to operate the team and to make sure that all the contingencies that go into that operation,” Kavanaugh said. “So you net it out, our commitment is minimally $250 to $300 million from a debt and equity perspective, which will be in the largest from a MLS perspective and investor perspective.”
Kavanaugh went onto say that the ownership group doesn’t “anticipate making any money for at least 10 years.”
“So this is a longer-term investment,” Kavanaugh said. “This is something that we think through the appreciation of a franchise over 10 to 15 to 20 years, we would expect to get potentially some time type of return on investment. But this is a really a significant investment and a long term one.”
Gov.-elect Eric Greitens weighed in on that investment Monday, reiterating a point he made during the campaign:
"I'm opposed to spending taxpayer money to build a soccer stadium in St. Louis," Greitens said in a statement. "This project is nothing more than welfare for millionaires. Right now, because of reckless spending by career politicians, we can't even afford the core functions of government, let alone spend millions on soccer stadiums. This back-room wheeling and dealing is exactly what frustrates Missourians. This type of politics as usual is coming to an end."
This article was originally published on Dec. 16.
Jason Rosenbaum contributed to this report.
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