Against odds, public funding for soccer stadium still has a chance | St. Louis Public Radio

Against odds, public funding for soccer stadium still has a chance

Jan 26, 2017

Ballot items aimed at expanding MetroLink and building a professional soccer stadium passed out of a Board of Aldermen committee on Thursday. But the stadium measure required some downright harrowing procedural maneuvers to stay alive.

For several weeks, the Board’s Ways and Means Committee has considered two separate initiatives. The first would, upon voter approval, implement a half-cent sales tax increase for MetroLink expansion, neighborhood development projects and workforce training initiatives. The sales tax increase would trigger an increase in the city's use tax. A separate ballot initiative would, if approved by voters, direct the extra use tax revenue to the stadium near Union Station.

The second initiative in particular faced a torrent of criticism on a number of fronts, including a lack of participation from the state or St. Louis County. Others questioned the wisdom of sending city money to help build a stadium when St. Louis faces vexing economic and public safety issues. So when the stadium measure came up for a vote on Thursday, it initially failed by a 6-2 to margin. 

St. Louis Board of Aldermen President Lewis Reed ended up breaking the tie that sent the soccer stadium ballot item out of the Ways and Means Committee.
Credit File photo | Jason Rosenbaum I St. Louis Public Radio

Since Alderman Stephen Conway voted “no,” he could bring the bill back up for consideration – which he did after some behind-the-scenes negotiations. When the committee revived the bill, its sponsor, Alderman Christine Ingrassia, D-6th Ward, attached two big contingencies.

Originally, the ownership group SC STL had asked the city not to 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 second change requires 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 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.

“It’s a better deal simply because you’ve just lowered the amount of city participation,” said Coatar, a 7th Ward Democrat who is now co-sponsoring Ingrassia’s bills. "Now the city is still going to pledge the estimated $50 million from an increase in use tax. But, the city’s now going to be collecting in the general fund somewhere between $7 and $12 million over the life of this project from this 2.5 percent ticket tax.”

The changes convinced Alderman Scott Ogilvie, D-24th Ward, to change his vote. Board president Lewis Reed broke the resulting tie. 

"It's not my ideal plan, but it does satisfy the things I've been asking for for from the mayor's office from the beginning. It pushes it into the net benefit category for the city," Ogilvie said.

  • Ayes: Conway, Murphy, Vaccaro, Ogilvie, Reed
  • Nayes: Moore, French, Carter, Kennedy

St. Louis Alderman Antonio French voted against the soccer stadium ballot item.
Credit File photo | Jason Rosenbaum I St. Louis Public Radio

"Whatever package was put together, the residents still have to decide that it’s a good package for them and that it’s a good use of future dollars,” Conway said. “And sometimes we don’t know exactly what every concern everybody has until it’s actually out there and ready to be voted on. And so, they were able to address in some fashion those concerns.”

"I still think it’s a bad deal,” said Alderman Antonio French, D-21st Ward. “It stinks a little less. But, ultimately they were able to flip a vote – and get it out there.”

For her part, Ingrassia said after the vote: “I think it’s a great proposition to pass along at the ballot to voters, and a really exciting day for soccer fans.”

Long road forward

Still, the passage of the two tax ballot items out of committee doesn’t necessarily mean they’ll be implemented. 

Alderman Sam Moore, D-4th Ward, holds up pictures of abandoned houses during a meeting of the Board of Aldermen Ways and Means Committee.
Credit File photo | Jason Rosenbaum I St. Louis Public Radio

Both have to be passed out of the full Board of Aldermen and get signed by St. Louis Mayor Francis Slay. Then proponents will have to go to court so the items can be placed on the April ballot. And then, voters have to approve them.

And there’s another important caveat: The stadium proposal requires the State of Missouri to lease or transfer land to the city for the stadium and fund certain site clearing and infrastructure work. That site work will likely cost millions of dollars, and it’s unclear if that would run afoul of Gov. Eric Greitens’ stance against publicly funding stadiums.

Greitens hasn’t commented on whether he approves of the state commitment of this project. The Missouri Highways and Transportation Commission, which is not directly controlled by Greitens, would be responsible for deciding on the land transfer and site work payments.

“I think any number of things could put our deal in jeopardy given the stages we have to go through,” said Dave Peacock, an executive with SC STL. “I’m sure there will be discussions between the city and state as to what’s kind of the right solution. But the governor has also been clear about wanting to bring jobs to the region. And we have at least one economic impact study that indicates that we have over 400 jobs.”

SC STL's Dave Peacock speaks at Thursday's Ways and Means Committee hearing.
Credit Jason Rosenbaum I St. Louis Public Radio

During the hearing, Moore held up pictures of decaying buildings in his north St. Louis-based ward – which was aimed at showcasing how building stadiums amount to skewed priorities. And if the soccer stadium measure makes the ballot, proponents will have to convince residents skeptical of publicly-funding stadiums that it’s a worthwhile investment.

Peacock, though, said his ownership group is ready to try. SC STL has promised to pay for maintenance, cost overruns and a $150 million expansion fee to Major League Soccer.

“The majority of stadiums in Major League Soccer have had some public support,” Peacock said. “Even in instances that were reported as privately financed, they’re not always 100 percent privately financed. You’ll find land conveyances in some instances of over 100 acres – which is a lot of value in certain cities. In a market the size of St. Louis, these expansion fees are not sized by market. They’re the same everywhere.

“If you look at the other markets in this expansion process that are similar, like Charlotte and Nashville, they’re all pursuing public funding,” he added. 

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