Category: St. Louis Blues

St. Louis mayor says Blues arena needs $70m to keep wrestling finals, but what does math say?

access_time personNeil deMause

I spend a fair amount of time here ragging on media outlets that go out of their way to parrot the arguments made by sports team owners and their political allies on behalf of stadium and arena subsidies. But it’s also instructive to stop and take a look at a more routine kind of media bias: the kind where journalists do their basic job of reporting the facts, but stop short of the most important step, actually explaining to readers what those facts mean.

For today’s punching bag, I present reporter Austin Huguelet of the St. Louis Post-Dispatch, whose entirely competent article on St. Louis Mayor Francis Slay asking the state of Missouri for subsidies to his city’s hockey arena (or the Blues‘ hockey arena that is on the city’s books, if you prefer) included the following:

A proposal from Sen. Dave Schatz, R-Sullivan, would allow the state to contribute up to $6 million per year to upgrading the St. Louis Blues’ 23-year-old home ice, which officials say needs urgent fixes if it is to continue attracting top-flight sporting events and concerts…

Without the money, Jack Stapleton of St. Louis Sports Commission said Scottrade could lose out on events like the wrestling championships to better equipped facilities with better public support.

“The competition is stiff,” he said. “We are going to up against a lot of cities with newer buildings with public funding.”

He listed Louisville, Chicago and Oklahoma City as examples.

Proponents also offered an array of statistics to support the bid. A report prepared by Johnson Consulting and given to legislators said Scottrade has generated nearly $170 million per year in spending from visitors and an average of about $11 million in annual tax revenue for the state.

So far, so good, though it’d be nice to explain who Johnson Consulting is or what their track record is for economic projections for their other consulting projects. (One example from this site’s archives: Johnson’s prediction of hotel stays due to Austin’s new convention center ended up being overly optimistic by more than 25%.) But more to the point, let’s connect the dots between the first and last figures in that story: The state is being asked for $6 million a year in subsidies in order to avoid hurting an arena that produces $11 million a year in state tax revenues. Unless the wrestling championships are a huge chunk of the arena’s business, that seems like a pretty terrible return on Missouri’s investment — taxpayers would be far better off letting Louisville have the damn wrestling and keeping their $6 million a year for other, more economically productive uses.

Sure, there are other benefits to having the shiniest arena on the block. (Though there are also other downsides that aren’t reported here, like the roughly equal amount of money that the city of St. Louis would be putting up under the Blues owners’ proposal.) But still, this is one of the huge drawbacks of a media industry that sees its job merely as accurately reporting what elected officials and business leaders say, not exploring whether it makes any damn sense. Doing basic math isn’t bias, and neither is investigating the bona fides of the institutions you’re reporting on — though both take time, something that’s increasingly in short supply at newsrooms stripped to the bone in response to declining revenues (and demand for higher profits). So my sincere sympathies to Huguelet and his ilk, but if you have a moment to spare, please try to up your game some next time, okay? Little things like an informed public and the fate of democracy depend on it.

 

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St. Louis council approves $127m for Blues, MLS venues, voters can still block the latter

access_time personNeil deMause

St. Louis lawmakers took major steps last week toward throwing $127 million at upgrades for the Blues‘ hockey arena and construction of an MLS soccer stadium, though the latter will depend on the results of an April voter referendum:

  • The board of aldermen voted on Friday to approve $67 million in subsidies for Blues arena renovations. (It will add up to $105 million over time, but it’s worth $67 million in present value. And while it would mix sales taxes, ticket taxes, and other revenues, all those are all diversion of existing taxes, not new ones the team owners are agreeing to pay, so as discussed earlier, it’s all money that the city would otherwise be able to spend on other things if not being siphoned off for the Blues owners.) Alderman Steve Conway defended the subsidy as necessary to keep drawing NCAA events (“If we don’t make improvements, what comes into general revenue diminishes over time”), though he didn’t appear to provide numbers showing that any added revenue is worth the expense; Alderman Antonio French retorted, “We do not have $105 million to give to anybody. And we’re about to give money to some of the richest people in town because they want a new scoreboard.”
  • Circuit court judge Michael Mullen approved putting $60 million in funding for a new MLS stadium on the April ballot, despite the board of aldermen having approved it too late for the deadline after the initial bill was withdrawn and revised. There will actually be two votes: one to raise sales taxes by 0.5% to expand St. Louis’s light rail system, which would automatically cause use taxes on out-of-state purchases to rise by the same amount; the other would approve taking those use taxes and pouring them into paying off $60 million worth of stadium costs. If either fails to get a majority, the stadium subsidy wouldn’t happen.

The soccer stadium vote will be, unless I’m mistaken, the first time that St. Louis voters will actually be going to the polls under the law approved by a 2002 referendum requiring a public vote on any sports subsidies. (The Cardinals stadium had already been approved then, and the Rams stadium never happened.) The only poll on the subject that I can find is just of Democratic primary voters (though St. Louis is pretty overwhelmingly Democratic); it found respondents opposed to soccer subsidies by a 61-22 margin, so I think it’s fair to say the proposal faces an uphill battle. There’s still two months of campaign spending left, though, so open up those Jamba Juice (and Bain Capital) coffers, Paul Edgerley!

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St. Louis committee approves more than $100m in subsidies for Blues, MLS, but who’s counting?

access_time personNeil deMause

The St. Louis Board of Aldermen’s Ways and Means Committee approved bills this week to funnel public money into both renovations of the St. Louis Blues arena and a new MLS stadium. How much money? As is so often the case, that’s a complicated question:

  • In the Blues’ case, the original plan was to demand $67.5 million from the city, mostly in the form of kicked-back sales taxes. (It would add up to $112 million over time, but the present value would only be $67.5 million.) The committee amended the bill to include $55 million in ticket tax revenue — in place of some of the sales tax money, I think, maybe? — but that cash flow wouldn’t start arriving until 2034 since it’s currently being spent elsewhere. And since it’s not a new tax surcharge but just money that otherwise the city could start collecting for other uses in 2034, I’m not going to go through the trouble of firing up Excel to figure out the present value of that, because it’s a subsidy either way. (The Blues owners are still also demanding an additional $70.5 million from the state of Missouri, though given the new governor’s feelings about such things, that may not go so well.)
  • For the proposed St. Louis MLS team, the original plan was for the city to provide $80 million from mumble-mumble-hey-look-over-there, but that bill was withdrawn by its sponsor last month. In its place now is legislation to provide $60 million in city money, mostly from redirected property taxes, but also including a ticket tax surcharge (really payments in lieu of a ticket tax, for reasons not worth going into here) that would provide $7.5 million to $12 million over the next 30 years, and … okay, now I will fire up Excel, and that’s worth: somewhere between $4 million and $7 million now, so not really a big concession on a $60 million get.

The MLS stadium plan, if approved, would go before city voters in an April referendum. The hockey deal for some reason everyone thinks doesn’t require a public vote, though that’s not what the law passed in 2002 says. Hey, Jeanette Mott Oxford, if you’re reading this, any plans to file suit to intervene in this one?

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Blues owner demands $138m for arena one day after governor declares end to sports subsidies

access_time personNeil deMause

As if to prove that when one governmental subsidy door closes, a governmental subsidy window opens, the St. Louis city council followed up new Missouri Gov. Eric Greitens’ declaration that he won’t approve any state sports subsidies by announcing it would vote on spending $67.5 million in city tax money on upgrades to the Blues‘ arena. A funding bill, which would involve $4 million a year in kicked-back arena sales taxes and a new 1% arena sales tax surcharge over 28 years (yes, that’s $112 million total, but since much of it would be collected far in the future it’s only worth $67.5 million in present value), could be introduced as soon as this week in the city council, and council president Lewis Reed has said it won’t require a public vote, notwithstanding that disputed St. Louis law saying that all sports spending requires a voter referendum.

And why, exactly, does Blues owner Tom Stillman think the city should pay to upgrade his team’s 23-year-old arena with such items as new seating, a new scoreboard, sound and lighting upgrades, and renovated locker rooms and concessions stands? Glad you asked!

“The Scottrade Center is no longer competitive,” said Blues Chairman Tom Stillman, adding that NCAA and concert promoters have warned that they will stop coming to St. Louis without upgrades to compete with facilities in Indianapolis, Kansas City, Nashville, Tenn., and elsewhere.

Yeah, that is a concern — to whoever is in the business of operating the Scottrade Center, which would be Stillman. The only potential cost to the city would be the loss of some sales tax revenues if the NCAA or concert promoters actually cut back on events, and since even according to Stillman the city only earns $6 million a year in sales taxes from the arena currently, it’s pretty inconceivable that any loss would be worth $4 million a year, since the Blues would still be playing there 41 nights a year. But as we’ve seen before, the first refuge of a stadium-subsidy grubber is to declare the old place obsolete, so it’s not surprising to see Stillman making that claim, even if the numbers don’t quite add up.

And speaking of numbers, Stillman’s total subsidy demand could more than double, as he’s preparing to ask for a second round of money from the state, Greitens’ Monday announcement be damned:

City and Blues officials also are planning to ask state legislators for $70.5 million for further renovations in a second phase, the timeline for which is still being finalized.

That would come to $138 million in public money for upgrades to a 23-year-old arena, with the only public benefit in return being “maybe we’ll get more concerts and NCAA tournament games this way.” A sane city negotiator would say, “Okay, great, how about you give us a cut of the actual revenues from those events to help pay off the public’s costs, like you’ll be using them to pay off your own share of the renovation?” Instead, we get this:

Reed stressed that the facility has already paid for police officers and transportation needs but hasn’t had a major upgrade since it was opened. “We must stay competitive,” he said.

Greitens hasn’t publicly commented on the Blues subsidy proposal yet, but one newspaper columnist has already decried local officials’ “disunity” on sports funding as the reason why St. Louis is having trouble keeping up with the likes of Louisville. Yes, he said Louisville. Apparently they don’t teach irony in journalism school.

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With Rams gone, Blues owner wants St. Louis to throw money at him instead

access_time personNeil deMause

Okay, who didn’t see this coming?

The St. Louis Blues want local governments to renovate their city-owned downtown arena as part of a project that will also upgrade the city’s convention center and former home of its recently departed NFL team.

The Blues ownership’s renovation request is expected to cost more than $100 million (the entire franchise sold for just $120 million in 2012), while adding upgrades to the convention center and the Edward Jones Dome — which won’t be home of the Rams anymore, but is still used by conventions every once in a while — could run into the “hundreds of millions,” says the St. Louis Post Dispatch. Blues owner Tom Stillman first asked for arena upgrades last October; convention center president Kitty Ratcliffe says “it would not have been the right time” to ask for this money before, what with Missouri being in the middle of debating shoveling money at the Rams and all, but now it’s a different story.

And why exactly would St. Louis want to spend hundreds of millions of dollars to upgrade its convention center and its NHL team’s arena, entirely at public expense?

“We’re looking at this as a boost for the region’s tourism industry,” said Mary Ellen Ponder, St. Louis Mayor Francis Slay’s chief of staff. “But right now it’s basically us listening to their needs.”

Translation: The Blues owners said they need it, so we’re going to try to give it to them. Excuse me now while I go write a letter to Mayor Slay explaining why I need a pony.

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Blues owner says 21-year-old arena needs “major renovation,” may seek city subsidies

access_time personNeil deMause

There needs to be a name for the phenomenon when one team owner in a city demands stadium upgrades, and then another owner in the same city chimes in that he wants them as well. (The “Me-Too Effect”?) Anyway, the St. Louis Blues‘ Scottrade Center was built in 1994, just one year before the Rams‘ Edward Jones Dome opened, so naturally the Blues’ owner says it needs improvements, and is looking for them to be on somebody else’s dime:

St. Louis Blues owner Tom Stillman says the Scottrade Center is in desperate need of an upgrade, and has met with city of St. Louis officials on what a renovation could include and how it can be financed.

“All around the league, particularly in the NBA and NHL, arenas around the 20-year mark tend to go through a major renovation and that is going to be necessary at the Scottrade Center — probably even more so (in St. Louis) than in other markets,” he said while speaking on a panel at a Washington University business of sports seminar. “We are in the early stages of planning a renovation… Obviously part of the aim is to be the best possible home for the NHL and the St. Louis Blues, but Scottrade plays a key role in bringing other big events to St. Louis, like major concerts and other sporting events like NCAA March Madness. We’re not going to continue to draw those events unless we upgrade the arena significantly.”

The obsolescence claim, the threat of lost economic activity if the arena isn’t upgraded — yup, that’s two of the main gambits from the standard playbook. No threat to move to Las Vegas yet, but there’s plenty of time for that.

As for how extensive these renovations would be or how they’d be paid for, nobody is talking. The Blues are losing money according to Forbes, which is how Stillman’s ownership group was able to pick them up for a bargain price of $120 million in 2012. It’ll be fun to see if the renovation demands end up being more than the entire franchise is worth — given construction prices these days, it won’t be hard.

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