The two-person group advising Gov. Jay Nixon on a stadium plan for St. Louis is set to deliver its recommendations Friday, less than a week after Rams’ owner Stan Kroenke unveiled plans to help build a new stadium in Los Angeles.
The conventional wisdom says financing a new stadium in St. Louis would be complicated and difficult. Actually, the pure numbers are not only easy to grasp but probably achievable, at least from the public side of the ledger.
Let’s say a new football stadium in St. Louis would cost $1 billion — that’s roughly the price for new stadiums in Atlanta and Minneapolis.
The state of Missouri and the St. Louis city and county could borrow about $400 million for their shares of the project. Debt service on $400 million over 30 years comes to about $23 million a year, at 4 percent interest.
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But Missouri and the St. Louis region already spend $18 million annually on the existing stadium. Assuming those funds continue — more on that below — the public would have to come up with another $5 million a year to fund its piece of the project.
Raising another $5 million a year in St. Louis would be relatively easy. You could create a community improvement district around the stadium, capturing increased sales taxes, perhaps even earnings taxes. Rental car taxes might be available. A hotel tax. A restaurant tax.
Naming rights could bring in $2 million or more a year. A ticket tax on other events at the facility would provide cash. You could use tax increment financing for part of the cost. The state could kick in one-time tax credits, further reducing the annual debt service for a $400 million building fund.
Financing the public side of the stadium in this manner would meet Nixon’s professed goal of not raising taxes statewide to pay for the stadium. It would mean extending the state’s commitment — but not increasing it. The city and country would have to extend their spending, too.
The other increases could be sold as user fees.
Of course, $400 million in public financing only gets you part of the way there. You need another $600 million to pay for a new stadium.
The NFL will lend a team $200 million for a new stadium, but only if the team owner kicks in at least that much. That leaves a $400 million gap.
Enter Stan Kroenke, or any other potential franchise owner.
Under any plausible stadium scenario, the team’s owner would have to make a significant contribution to the project. If Kroenke or another owner put up $400 million to match the public’s $400 million, and the NFL provided $200 million, the stadium could be built.
Kroenke proved this week he has that kind of cash — and isn’t opposed to using it for football stadium construction. But by all accounts he’s completely uninterested in spending it in St. Louis.
Without Kroenke’s $400 million, the NFL’s $200 million is unavailable. And there’s no way the public sector alone could financially or politically provide full funding for a $1 billion football stadium in St. Louis.
The scenario above is necessarily simplified. It leaves out funding for repairs and upkeep at the current stadium, for example. And lawmakers would have to extend their state commitment at a time when the budget remains squeezed.
But financing a $1 billion stadium is possible. Just not very likely, unless the team’s owner has a major change of heart.