NFL Merry-Go-Round: Relocation Roundelay

[IceCap]

A couple of other notes:

• Apparently Al Davis dismissed any notions that he'd be interested in moving to St. Louis. Called those reports false. I don't find that shocking at all. That always felt like a longshot in reality even though some of the logistics make sense.

So Mark is using a medium to communicate with Al while running the Raiders? That actually makes sense

Isn't the money they're spending for payments on the Dome earmarked for payments on the Dome?

This is my major objection to all of this. St. Louis is still paying off the EJD, and they want to spend $500 million on a stadium for a team that wants to leave town anyway? Even $150 million for a soccer specific stadium seems too high if they're still making payments on the Dome.

And if Goth is right about there being not enough money to pay for improvements to the city's infrastructure? It makes spending $150 million on a stadium unconscionable.

[Gothamite]

Just to be clear, it's not my assertion. What the hell do I know? I live in New York. I'm not on the ground in St. Louis.

That comes from the Post-Dispatch, which does know a lot about the situation, and which is on the ground.

(T)he city finds itself grappling with an aging infrastructure and little money for major repairs and new equipment.

Lewis Reed, the president of the Board of Aldermen, said resident input on the budget centered mainly on public safety concerns and more money for neighborhood development.

St. Louis ordinances require a balanced budget, meaning income must equal spending. That has left the city little money to tackle big problems such as major street improvements, technology upgrades and other capital projects.

Balanced budget requirements are bad laws. Intended to prevent irresponsible spending, they actually hamstring municipalities and encourage short-term thinking. The city of St. Louis has a limited amount of money they're legally allowed to spend. Do they spend it on un-sexy but important things like infrastructure? Not if there's something more photogenic they can spend it on. So they keep kicking these real obligations down the road for future leaders to worry about.

[STL FANATIC]

Isn't the money they're spending for payments on the Dome earmarked for payments on the Dome?

Being saddled with that balanced budget requirement means that any new spending has to be offset one-for-one with either increased revenues or reduced spending elsewhere. So regardless of whether there's a public vote, it's not as simple as saying the money is available. What taxes will be raised, or what programs cut, to pay for it?

The tax that pays off the Dome is a 3.5% hotels tax (which is on top of another hotels tax). It is commonly called the "Sports and Entertainment Tax," and exists "to provide funds for convention, tourism and sports facilities purposes and agencies." It is not, however, specifically tied to Dome payments. It was schemed up that way, but it's not formally marked that way.

The Board of Alderman are charged with allocating the money. And annually, they allocate a portion of it towards making their bond payments.

The tax has no sunset.

So again, the revenue stream that was created to fund the Dome will continue to generate that revenue. The question is whether we choose to spend it in this manner, and also how many other ways it's allowed to be spent given the quoted constraints above. (You could stretch to suggest that roads or police offers are a part of tourism or attracting conventions. But it would indeed be a stretch, and you might see that kind of spending of this money face opposition as well.)

And the article does say that while the financial situation has improved (whereas the state's has not), it specifically states that there still isn't enough money for ongoing infrastructure improvements and capital projects in the city.

Fair enough. This isn't exactly wrong. There is infrastructure that needs upgraded. But again, it's not necessarily as simple as saying you can apply the existing tax to that. There'd be a fight there depending on how they'd try to do it. (I don't think I would fight it, but there's a "letter of the law" case, I think.)

There is a need to raise some funding for other expenditures, though. But as that article notes, in all probability that will be done through a separate set of bonds, and a new tax of some kind to pay those off. The bond issue that article talks about was never brought to a vote by the citizens because the Board of Alderman couldn't agree on the specifics. But there is a new one in the works that appears to have the necessary momentum and will probably be passed in the coming months.

Sources:

St. Louis City Ordinance 62802 that established the 3.5% "Sports and Entertainment" hotel tax: http://www.slpl.lib.mo.us/cco/ords/data/ord2802.htm

St. Louis Regional Convention and Sports Complex Authority explanation of funding for America's Center (the Dome plus the convention center): http://www.stlrsa.org/americas-center-facilities-and-operations.html

[Gothamite]

Isn't the money they're spending for payments on the Dome earmarked for payments on the Dome?

Being saddled with that balanced budget requirement means that any new spending has to be offset one-for-one with either increased revenues or reduced spending elsewhere. So regardless of whether there's a public vote, it's not as simple as saying the money is available. What taxes will be raised, or what programs cut, to pay for it?

The tax that pays off the Dome is a 3.5% hotels tax (which is on top of another hotels tax). It is commonly called the "Sports and Entertainment Tax," and exists "to provide funds for convention, tourism and sports facilities purposes and agencies." It is not, however, specifically tied to Dome payments. It was schemed up that way, but it's not formally marked that way.

The Board of Alderman are charged with allocating the money. And annually, they allocate a portion of it towards making their bond payments.

The tax has no sunset.

So again, the revenue stream that was created to fund the Dome will continue to generate that revenue. The question is whether we choose to spend it in this manner, and also how many other ways it's allowed to be spent given the quoted constraints above.

Yes, but when is the Dome due to be paid off? I understand that it still has nearly a decade to go. And then after that, it'll need renovations to be converted into full-time convention or whatever.

So yes, they might choose to spend the specific tax money elsewhere. But that won't relieve them of their Dome payments, it'll just mean that those Dome payments will come out of some other area of the budget.

It's a zero-sum game, meaning that the Dome money will have no bearing on funding a new soccer stadium in St. Louis.

[STL FANATIC]

And this is really where we could use more clarity on the funding, which we of course don't have. We don't know if this is this an extension/refinancing of existing bonds, new bonds, or some combination.

It's fair to wonder if their will be an additional annual cost to the city would between the years of 2016 and 2021. The implication throughout has been that funding would be extended over more years and not increased annually, though. But until they tell us specifics, we can't really know.

(It appears that 2021 is when the current bonds will be paid off, however since the city, county, and state all issued different bonds, it's not a certainty that they all still lineup.)

It is also almost certainly true that the 3.5% hotel tax is generating significantly more money than the $6 million payment that's required annually. We don't know how much more, though, and it's certainly going towards something at this point, so I can't claim that money is necessarily there to be diverted to a larger payment. It may be, it just depends what it's presently budgeted for.

As far as renovating the Dome for conventions goes, that is where the County's role in the development now appears to stand. So that doesn't fall on the city. From the county perspective, that is unlikely to be an immediate need, so the county can begin making those payments after their Dome payments have finished.

This is unlikely to be as controversial or hard to come up with. They can come from the same funds from their 3.5% sales tax that were previously going to the Dome. (I neglected to mention before that the county passed a nearly identical tax as the city.) This wouldn't require a vote because it's not funding a sports facility but rather a convention facility.

So there are some valid curiousities about whether the city might have to find a few extra million between 2016-21. Even then, combing through the city budgets, I suspect that money exists. Currently some of the additional money generated from the 3.5% hotel tax seems to be going towards more general convention center improvements. There's likely the flexibility to budget some of that away from those and towards the new stadium if they so desired.

[STL FANATIC]

I just want to clarify that I'm not trying to say this is the right way for St. Louis to spend our money. Only that the funding mechanism for this from the city's perspective isn't particularly hard to identify and that the city isn't nor will it fall into disrepair if this is how we ultimately choose to spend these funds.

I'm with the many Alderman on this who are seeking to protect the right of the citizens to vote. I think we need to have a vote on this. I think the Stadium Task Force needs to clearly present what the funding plan is and make a real case for why this is a worthy investment. And I have no preconceived notions about how I'd vote or certainly about how the rest of the city would vote. I'm firmly on the fence at this point, and I can't get a read on the public at all. It's all over the place.

[Gothamite]

That's all fair enough. And since we still don't know how Peacock, Nixon and Co. intend to pay for the riverfront stadium, it's all academic.

[bosrs1]

A couple of other notes:

• Apparently Al Davis dismissed any notions that he'd be interested in moving to St. Louis. Called those reports false. I don't find that shocking at all. That always felt like a longshot in reality even though some of the logistics make sense.

• I'll do most of my discussing over in the NA Soccer thread, but MLS commissioner Don Garber was in St. Louis today. And while he cautioned against anyone getting ahead of themselves (noting expansion won't happen until sometime after 2020), he spoke very highly of St. Louis and seemed to suggest they're not opposed to playing in the NFL stadium. (Check that soccer thread for more soon.)

Did he do this several years ago or is he speaking from beyond the grave?

[Mac the Knife]

Isn't the money they're spending for payments on the Dome earmarked for payments on the Dome?

Being saddled with that balanced budget requirement means that any new spending has to be offset one-for-one with either increased revenues or reduced spending elsewhere. So regardless of whether there's a public vote, it's not as simple as saying the money is available. What taxes will be raised, or what programs cut, to pay for it?

The tax that pays off the Dome is a 3.5% hotels tax (which is on top of another hotels tax). It is commonly called the "Sports and Entertainment Tax," and exists "to provide funds for convention, tourism and sports facilities purposes and agencies." It is not, however, specifically tied to Dome payments. It was schemed up that way, but it's not formally marked that way.

The Board of Alderman are charged with allocating the money. And annually, they allocate a portion of it towards making their bond payments.

The tax has no sunset.

So again, the revenue stream that was created to fund the Dome will continue to generate that revenue. The question is whether we choose to spend it in this manner, and also how many other ways it's allowed to be spent given the quoted constraints above.

Yes, but when is the Dome due to be paid off? I understand that it still has nearly a decade to go. And then after that, it'll need renovations to be converted into full-time convention or whatever.

It'd be longer if the Rams left, as less tax revenue would be collected.

[STL FANATIC]

I'm not sure that's accurate DP. Not for the city's bonds anyways. It's unlikely the city sees a gain in tax dollars from the Rams. They could likely replace or exceed those dollars through increased tax dollars via added convention dates.

Now the state is another story. The Rams do likely bring in a bit more in tax dollars to the state than they make in bond payments. Not a ton, but a bit. And so for the state there would be a loss.

You're a smarter guy than I am, but that's how I understand the financial picture based on the information we've got currently.

[CubsFanBudMan]

Chargers-Raiders plan "the early favorite" of NFL owners, according to Jason La Canfora of CBS Sports:

http://mweb.cbssports.com/nfl/writer/jason-la-canfora/25191640/chargers-raiders-stadium-co-op-fast-tracks-nfls-la-return-but-rams-may-fight

...but there are concerns the Rams will "force their way out."

[Island_Style]

Of course the rams will. He has the money to do it.

[dfwabel]

Chargers-Raiders plan "the early favorite" of NFL owners, according to Jason La Canfora of CBS Sports:

http://mweb.cbssports.com/nfl/writer/jason-la-canfora/25191640/chargers-raiders-stadium-co-op-fast-tracks-nfls-la-return-but-rams-may-fight

...but there are concerns the Rams will "force their way out."

Yes since the Carson project involves Goldman Sachs and the NFL owners love to screw municipalities directly just a little bit more than they love "partnering" with Goldman Sachs to screw municipalities.

http://www.bloomberg.com/news/articles/2015-05-18/goldman-reaping-71-million-to-end-swap-on-colts-stadium-debt

[Gothamite]

That's a good point. All things being equal, the NFL would prefer a plan that continues their modus operandi of leeching off public funds, rather than a plan that upends it and shows that these gazillionaires can build their own damn buildings.

[colortv]

Colts owner Jim Irsay among those who believe an NFL team will be playing in Los Angeles soon.

At the conclusion of Wednesday's NFL annual owners' meetings in San Francisco, Irsaycharacterized the NFL's return to L.A. as inevitable.

“It’s not a matter of ‘if’ now, but ‘when,'" Irsay told the San Francisco Chronicle.

http://www.latimes.com/sports/sportsnow/la-sp-sn-colts-jim-irsay-los-angeles-nfl-20150521-story.html

[colortv]

Chargers-Raiders plan "the early favorite" of NFL owners, according to Jason La Canfora of CBS Sports:

http://mweb.cbssports.com/nfl/writer/jason-la-canfora/25191640/chargers-raiders-stadium-co-op-fast-tracks-nfls-la-return-but-rams-may-fight

...but there are concerns the Rams will "force their way out."

The San Diego plan would use close to $1 billion public money...I don't see anyway that is approved. Looks like the Rams have the best deal from a home market.

[dfwabel]

That's a good point. All things being equal, the NFL would prefer a plan that continues their modus operandi of leeching off public funds, rather than a plan that upends it and shows that these gazillionaires can build their own damn buildings.

It's not really owning the building which is their issue, it really is owning land.

Owning land makes it easier to be charged

PROPERTY TAX. Municipality owned properties, even used for commercial enddeavors, are generally tax-exempt.

[rams80]

Chargers-Raiders plan "the early favorite" of NFL owners, according to Jason La Canfora of CBS Sports:

http://mweb.cbssports.com/nfl/writer/jason-la-canfora/25191640/chargers-raiders-stadium-co-op-fast-tracks-nfls-la-return-but-rams-may-fight

...but there are concerns the Rams will "force their way out."

The San Diego plan would use close to $1 billion public money...I don't see anyway that is approved. Looks like the Rams have the best deal from a home market.

St. Louis Chargers?

[Rockstar Matt]

Chargers-Raiders plan "the early favorite" of NFL owners, according to Jason La Canfora of CBS Sports:

http://mweb.cbssports.com/nfl/writer/jason-la-canfora/25191640/chargers-raiders-stadium-co-op-fast-tracks-nfls-la-return-but-rams-may-fight

...but there are concerns the Rams will "force their way out."

The San Diego plan would use close to $1 billion public money...I don't see anyway that is approved. Looks like the Rams have the best deal from a home market.

That just isn't true. The most recent proposal calls for $242 million in public money. The whole stadium is estamated to cost $1.4 billion so...

The Chargers actually have the best deal from a home market. The key factor being the Chargers actually want to stay in San Diego whereas the Rams want to move to LA.

[CubsFanBudMan]

Spanos may want to stay, but in that article it says he's played his cards right for a move:

"Chargers owner Dean Spanos, among the league's more respected owners, has exhibited great patience in navigating his franchise through an uncertain stadium situation in San Diego and continued to earn kudos from other ownership groups at the meeting. ... There is a certain political element to this process, in securing necessary votes for franchise relocation -- in this case a dual relocation -- and Spanos has moved expertly, sources said."

And my favorite line...

"Some in the know have speculated the Chargers, in exchange for getting the keys to LA, end up moving to the NFC, with perhaps the Cardinals going to the AFC West, which would maintain the Raiders' rivalries with the Chiefs and Broncos, for as much as that is worth."