Aldermanic committee approves MLS financial plan and Scottrade Center upgrades
An aldermanic committee backed a financial plan spelling out how St. Louis would help pay for a professional soccer stadium – if it comes to fruition.
The Board of Aldermen’s Ways and Means Committee approved the financial plan on Wednesday evening. Many of the details have already been publicly laid out: If two ballot initiatives are placed on a ballot by a judge and pass, about $50 million in a use tax increase could go toward the stadium. The city would also contribute up to $10 million from 50 percent of the sales tax revenues generated in the project site.
The proposal also takes into consideration two key changes made last week. Originally, the ownership group SC STL had asked the city to not charge its 5 percent amusement tax on tickets sold. They have agreed to charge half the rate, with the money going to the city's general fund. The plan also requires that half of the economic activity that usually would have gone to developer Paul McKee’s tax increment financing area to go to the city instead.
(Alderman Jack Coatar, 7th Ward, said the 2.5 percent ticket tax would bring in anywhere from $7 to $12 million over the life of the project. And the changes to the McKee TIF parameters, he said, could bring in $5 million.)
“We believe that based on the taxes that we will generate in the income for the city, we’ll generate approximately $78 million,” said Jim Kavanaugh, who is with SC STL. “You look at that, compared to what the city is going to pay out … it’s not only something that they’ll get the money back, but they’ll actually get a return on their investment based on a number of other ancillary things that would happen bringing a professional team to St. Louis.”
To be sure, the proposed stadium still requires a lot of steps to become a reality. In addition to getting voters to approve the two ballot initiatives, the MLS would have to award one of four expansion slots to St. Louis. And the state would have to agree to participate in the project.
But Kavanaugh said he feels backers of the stadium plan can make a compelling case to voters.
“You have different people who are interested in the project,” Kavanaugh said. “Some are very passionate soccer fans. And other ones are looking at just making financial investments, a good investment, on behalf of the city and the voters. And I think we’re doing both.”
Still, not everybody at Wednesday’s hearing agreed with possibly directing city funds for the stadium. Aldermen Terry Kennedy, D-18th Ward, Sam Moore, D-4th Ward, and Chris Carter, D-27th Ward, voted against the plan, contending that city funds could go to more vital needs than just sports.
And during the committee’s public forum section, Glenn Burleigh noted that the use tax typically goes to fund affordable housing, public safety and public health. He says those are better uses of public funds than trying to lure a soccer team to St. Louis.
“Even if the financial plans in front of you say that there will be no net negative out of the revenue, it’s not saying where the money would have gone – which is the police department, the fire department, affordable housing construction, and public health,” Burleigh said.
Aldermen approve Scottrade Center plan
Meanwhile, the Ways and Means Committee also approved city financial assistance to renovate the Scottrade Center.
Board of Aldermen President Lewis Reed’s legislation had been tied up in committee for several weeks. It had actually failed in committee, but was brought back to life when Alderman Stephen Conway, D-8th Ward, moved successfully to reconsider the bill.
The bill would direct about $105 million in city funds over roughly 30 years for the project. But the amended bill made several big changes: Once the city is finished paying off other bonds, it would redirect yearly payments toward refurbishing the Scottrade Center. That includes a 5 percent tax on tickets that’s being used to pay off debt on the Peabody Opera House.
Chris Zimmerman is president of the Scottrade Center, Peabody Opera House and St. Louis Blues. He said the city-owned facility needs upgrades to make it attractive for lucrative events.
“I think the fact that the Blues and the various private ownership has carried a city-owned building on its back and really contributed so much at a time when, compared to the bigger sports like baseball or football, the Blues have been losing a lot of money,” Zimmerman said. “But that whole time over that 23 years, they’ve continued to help drive the building forward.”
Before aldermen approved the bill, Jim Garavalia, city deputy comptroller, said that Comptroller Darlene Green still opposes the proposal. He said he was concerned about the project's impact on the city's general fund.
“With the renovations that are being contemplated and the testimony that we heard earlier about the potential to gain business that we don’t currently have, that’s certainly out there to get,” Garavalia said. “But if there is a difference, that would come directly from the general fund.”
Both the MLS financial plan and the Scottrade Center proposal now go to the full Board for consideration.