It takes a subsidy to raise a (ballpark) village | St. Louis Public Radio

It takes a subsidy to raise a (ballpark) village

Aug 5, 2008

This article first appeared in the St. Louis Beacon: August 5, 2008 -  It's been a long and winding road to Ballpark Village, with still many miles to go. Eight years ago when the Cardinals owners first floated the idea of a new stadium, Ballpark Village was the carrot to win over a wary public. There was strong resistance to public assistance for a new stadium, and the Village offered the promise of a true economic boost to downtown.

After years of delays and frustrations, the owners announced a tentative new start, planting hope that the big dirt patch next to the stadium may prove fertile development ground after all.

The exciting news was that the city, the Cardinals and the developer, Cordish Co., reached an agreement in principle. Lawyers are still busily hammering out the fine print, but some preliminary grading of the site began this week.

The proposed development still has hurdles to overcome, not the least of which are political. Currently, with many details still under negotiations, handicapping the political receptivity is somewhat difficult. But the developers will be looking for support in two places: the city of St. Louis and the state of Missouri.

Will Ballpark Village strike out in legislature?

In 2002, when the first incarnation of Ballpark Village came before the state legislature, it faced deep resistance. A spontaneous coalition of fiscal conservatives and out-state, blatantly anti-St. Louis, legislators emerged. They were fueled by a grassroots effort from within the St. Louis area to prevent public funds from being used for the stadium.

An enormous vacant lot has not inspired confidence that Ballpark Village will be the economic boost that was promised.
Credit Rachel Heidenry | St. Louis Beacon archives

The issue never came to a vote.

Six years later, thanks to term limits, a lot of those legislators aren't around anymore. But although the majority party Republicans in general, and Speaker-elect Ron Richard in particular, are about as pro-business as can be, the climate in Jefferson City toward St. Louis hasn't become any more hospitable.

Creating a specialized tax incentive for a large-scale development is an arduous task. Consider last year's mega-projects tax credit, which was crafted to attract a manufacturing plant of an aerospace company, Bombardier.

It was a bruising battle that pitted Democrats and conservative Republicans against moderate pro-business Republicans. It ultimately passed but solely because of the muscle provided by Sen. Charlie Shields, the Senate majority floor leader, whose district would have benefited from the plant.

As an aside, when Sen. Jeff Smith, D-St. Louis, questioned Bombardier's viability, Shields responded by reading a list of tax credits projects that St. Louis city received on the floor of the Senate.

Some work started on the Ballpark Village site Aug. 4.
Credit Rachel Heidenry | St. Louis Beacon archives

For the city to come back with out-stretched hands would be a turn-around that Shields would likely relish.

And it begs the question, who would carry the legislation for the city? With Smith a target for Shields, that task would fall to whoever succeeds Sen. Maida Coleman, D-St. Louis. That'd be a tall order for a freshman senator.

That's why a more likely route is the one that the Ballpark team ended up traveling six years ago. They worked outside the legislative process through the Missouri Finance Development Board. MFDB is an unheralded but powerful board that uses several programs to provide subsidies and financing to large-scale developments.

In 2002 for the stadium construction, MFDB approved $29.5 million in tax credits.

MFDB was created in part to remove politics from development decisions, but since the state's lieutenant governor (currently Peter Kinder) is an ex-officio member of the board and the governor appoints the other members, that's probably a naive view of the body.

Kinder has been accommodating of St. Louis development, a fact that hasn't gone unnoticed by St. Louis Mayor Francis Slay or many downtown businessmen. And the Democrat running against Kinder, Rep. Sam Page, is from Creve Coeur and would probably be just as eager to score an assist in helping make the Village a reality.

City likely to go to bat for development

As far as the subsidies that the city of St. Louis will be asked to provide, this deal is very similar to what the Board of Aldermen approved the last time through. It'll be a tax incremental financing or TIF-like project. In TIF projects, a portion of future taxes generated is directed back to the project to pay for the initial costs.

One possibility would be to divide about half the tax revenue for the city coffers and half for the project. The TIF's life span is equally vague at this time with one insider guessing that it could be as long as 35 years. And according to reports, the city will not guarantee the TIF bonds so there would be no obligation on the city's general revenue.

This version of the project won't require an absolute number of housing units. That's largely a reflection of the woeful housing market, and it's a disappointment for the city, which has tried mightily to build its downtown population. But the change could actually make the project more politically acceptable. For example, with more commercial space, there woud be more jobs downtown, which in turn increases the city's earning tax revenue. That should make the numbers look better to Comptroller Darlene Green.

For now it's wait and see. Alderman Fred Wessels, chair of the Housing, Urban Development and Zoning Committee, has indicated that he wants an actual development agreement completed before he holds hearings.

That'll give opponents of public funds for the project some time to rally. But savvy City Hall observers expect the Board of Aldermen to look favorably on the deal for two reasons. First, the math they'll confront is simple: 50 percent of something beats 100 percent of nothing.

And second, with the mayoral and aldermanic elections coming in the spring, they'll all have good reason to want to see some signs of progress sprouting.

Dave Drebes runs Missouri Scout, a private news service covering state politics