Gov. Jay Nixon’s Stadium Misdirection Play
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Gov. Jay Nixon’s Stadium Misdirection Play
Effort to get public funding is all about deceit in St. Louis
By Ray Hartmann June 15, 2015 6:47 AM
A proposed $1 billion NFL stadium in downtown St. Louis is an improbable dream, owing to the troublesome detail that its backers do not—and, in all likelihood, will not—have an NFL team to play in it.
But it's still engrossing to watch this particular cut of political sausage being made by Missouri Gov. Jay Nixon. And on Friday, it got a little more gross.
That’s when the administration of Mayor Francis Slay—an ardent stadium backer—pretended to launch a broadside legal attack at the Regional Convention and Sports Complex Authority (RCSCA)—an ardent stadium backer—over its right to make the whole thing happen. It was staged in the form of a counterclaim to RCSCA’s lawsuit challenging a city ordinance that requires a public vote before public funds can be committed for a stadium.
The St. Louis Post-Dispatch dutifully played along: “City fires back at Dome authority, says can't build new stadium.”
Wow. What gives here? Why did Slay change his mind? Why would his city counselor go for the jugular to derail a stadium project that the mayor considers a top priority for the city?
The short answer: None of that is happening here. The entire lawsuit is as staged as pro wrestling. It’s stadium backer versus stadium backer, all designed to produce one outcome: to achieve a verdict in local circuit court that would remove any impediment to Nixon almost singlehandedly delivering $400 million in public funds to NFL owners as an incentive to keep St. Louis in its fold.
Without doubt, it’s Slay’s firm intention for the city to lose the case it’s feigning to defend. That’s not even debatable. But what’s extraordinary about the counterclaim is that it would appear that the city is surreptitiously trying to help the RCSCA clear its biggest hurdle—the fact that it's limited to fund facilities “adjacent to a convention center”—by intentionally losing the “argument” about what adjacent means.
The definition of adjacency is a matter of considerable case law, and how it’s determined depends upon which precedent a judge chooses to follow. In one case, “adjacent” might mean attached. In another, it might mean across a road or across a river or in the adjoining county. Most significantly, some case law states that a judge should consider the context of what lawmakers meant when limiting an authority such as RCSCA with the term “adjacent.”
Now, were it to come down to common sense and not legalism, the stadium backers would lose on the question of context. There is absolutely no question that the RCSCA was established in 1989 by Gov. John Ashcroft and the legislature for one purpose, and one purpose alone: To facilitate and fund the expansion of St. Louis’ convention center with a domed stadium that would serve the multiple purposes of expanding exhibit hall space, attracting new major sporting events and serving the needs of a potential NFL team.
I’m sure of this, because as publisher of The Riverfront Times, I was one of the people who the stadium backers of that era sold on the project. I supported it, much to the dismay of most fellow liberals (including much of the RFT editorial staff) because of the convention-center angle (not knowing that it would be dark for convention purposes half of the year).
It’s perfectly logical that the RCSCA’s scope was limited to a project “adjacent” to a convention center because the central sales pitch was that St. Louis needed to do this even if it didn’t get an NFL team. That’s how we became the only city to build an NFL stadium on the come.
Nixon and his so-called, two-man “task force”—businessman Dave Peacock and attorney Bob Blitz—are attempting to use the RCSCA as a permanent stadium-financing mechanism. Their strategy: to use its authority to issue bonds for the first stadium to finance a second one. That’s why they chose the north Riverfront site on the theory that it’s close enough to the convention center to be adjudicated as “adjacent.”
My legal sources tell me that the city is likely to cite cases that don’t invoke the context requirement in the hope that Judge Thomas J. Frawley will rule that the proposed new stadium meets the adjacency definition that governs the RCSCA. Then, the RCSCA would be free to extend existing bonds, raising $250 million in state revenue bonds without any action or approval from the legislature.
The same legal sources suggest that the RCSCA is optimistic about prevailing on the question of whether it can avert a city vote on funding the debt service for the extended bonds. If it’s established that the RCSCA can issue the debt, the messy details of funding the debt service can be simply kicked down the road to future city governments, as at the state level, because no immediate funding would be needed from city voters. And the RCSCA’s high-powered counsel would probably pick apart the city’s stadium-vote ordinance in any case, especially with no serious opposition from the defendant.
In sports parlance, the city would appear to be “throwing the game” with regard to the court case. The Slay administration appears intent not only on losing, but losing on key arguments that would weaken its other key legal challenge, a lawsuit filed in Jefferson City by six legislators against the RCSCA that attacks its authority to extend existing bonds on the adjacency issue, among other points. Rep. Jay Barnes (R–Jefferson City) is the lead plaintiff.
A Cole County circuit judge would not be bound by the decision of a St. Louis circuit judge, but he or she might be influenced by it. Plus, the RCSCA could argue in Jefferson City that a St. Louis judge has already considered what adjacency means in the “context” of St. Louis geography, thus removing the need for a judge in Jefferson City to rule to the contrary.
If this sounds like conspiracy theory to you, answer this: Why else would the city of St. Louis go out of its way to attack the RCSCA’s fundamental right to finance a stadium project that Slay considers his top priority? Speaking in code, City Counselor Winston Calvert told the Post-Dispatch that the counterclaim “is a reflection of the fact that everybody is ready to get these issues resolved and move on.”
By “resolved,” he means “resolved” in favor of Slay and other stadium backers, not on behalf of the city as a defendant. And by “move on,” he means to avoid any other hurdles, such as the pending case in Cole County, which would delay the stadium backers. The NFL’s insistence that funding issues be resolved almost immediately (perhaps as early as a special meeting of team owners in August) gives them precious little time and almost no margin for error.
Consider it the understatement of the century that the city isn’t likely to appeal to a higher court should it “lose” its case “against” the RCSCA. And with the city playing to lose, there’s a decent chance that the RCSCA may prevail in court.
Whatever happens, we have the answer to the stadium issue’s original mystery: How was Nixon going to wrest hundreds of millions of public dollars out of a state legislature that is certainly hostile to him, to stadium corporate welfare and to St. Louis? Why, he happened upon a legal technicality: The “authority” of the RCSCA to borrow $250 million in state funds by simply extending the existing ones. Add to that $150 million in tax credits that Nixon apparently can manufacture through existing administrative authority—opportunity cost to other projects be damned—and voila, St. Louis has “decided” to offer $400 million to the NFL.
Unbelievable. It’s a legalistic cousin to the “boat in the moat” concept through which casinos were essentially able to use oversized bathtubs to meet a (stupid) state requirement that they be situated as riverboats. For NFL fans, think “tuck rule.”
The bottom line is this: If Nixon succeeds, he will have effectively committed future generations of Missouri taxpayers to finance a new NFL stadium in St. Louis without so much as a committee hearing on the subject. And if $150 million in potential non-football projects go unfunded in St. Louis, so be it. The end justifies the means.
I’m not in the custom of siding with Missouri Republican legislators, but you cannot blame them for finding this outrageous. This truly is an abuse of executive power, arguably even an unprecedented one.
To the extent that NFL officials having been praising “the stadium progress in St. Louis,” it’s probably out of astonished gratitude that a governor has concocted a way to send $400 million their way without any public process at all. With apologies to the sportswriters who hang on every encouraging word that comes from the office of NFL Commissioner Roger Goodell, what do you think they’re going to say in response to such a spectacle? Of course, the NFL likes the idea of a governor pulling something like this off. What a nice precedent for them.
Unfortunately for stadium backers, that doesn’t translate into “thanks, you’ve got your team.” The St. Louis franchise of the NFL is ranked 32nd among 32 teams in value in the respected Forbes rankings, and the area is stagnant in growth and wounded in reputation. The NFL cannot possibly give it a high priority.
Worse, there’s two possibilities, neither of them good for St. Louis stadium backers: One is that Rams owner Stan Kroenke achieves his long-standing dream of moving the team to Los Angeles, leaving St. Louis in the tenuous position of trying to steal still another team from another city. Or, two, is that Kroenke is thwarted, forcing him to remain, at least for the moment, as the not- so-proud owner of the St. Louis Rams.
In the former case, it’s not clear where the team would come from, because the San Diego Chargers would almost certainly stay in San Diego or reluctantly join Kroenke as his tenant in Inglewood, and Raiders owner Mark Davis has been emphatic (almost cruelly) about his unwillingness to consider a move to St. Louis. Plus, any relocation would take time—likely years. It’s entirely possible that if the Republican legislators lose in court, they’ll make it a top priority in next year’s legislative session (or a subsequent one) to prohibit the RCSCA from extending existing bonds for a new stadium.
And if St. Louis succeeded in thwarting Kroenke from moving the Rams, his next move would almost certainly be to do nothing, holding his cards in his hand, Kroenke style. You see, as reported here (almost exclusively, for some reason), Kroenke owns nine one-year options to play, one year at a time, at the perfectly functional Edward Jones Dome on the sweetest lease in the league, wherein he receives uncommon millions in naming-rights fees and other advertising revenues, and pays less rent ($25,000 per game) than it costs to operate the building.
I’m not sure why, but there’s an assumption in the media that if forced to stay in St. Louis, Kroenke would somehow be persuaded to invest $250 million into a stadium that he doesn’t own, in a bottom-ranked city that he just tried to leave (and one that blew up his dream, no less), replacing his sweetheart deal with a market-rate one (the only way it could begin to work), giving up all those millions and, more importantly, the free agency to pick up and leave St. Louis if and when any better deal came along in, say, San Diego or San Antonio or London or Mexico City or Portland or...well, you get the point.
The best response you get privately when challenging stadium backers on this is that they’ll figure out a way to persuade Kroenke to sell the team or to swap franchises with another owner. But who’s going to pay his price (which hardly would come at a friends-and-family discount in this event) and throw in $250 million for a new stadium in the bottom-ranked NFL market?
So this whole saga isn’t likely to end well for stadium backers. But if I’m wrong about every word of this—if somehow, you and I are going to enjoy NFL football years from now in a state-of-the-art, new NFL stadium on the north riverfront, then let’s do our best to forget that it was all made possible by an unprecedented use of smoke and mirrors. And deceit. I’ve even got a name for our team, resurrecting one that, until recently, served local amateur hockey well.
Go, St. Louis Bandits!
SLM co-owner Ray Hartmann is a panelist on KETC Channel 9’s Donnybrook, which airs Thursdays at 7 p.m.
Gov. Jay Nixon’s Stadium Misdirection Play
Effort to get public funding is all about deceit in St. Louis
By Ray Hartmann June 15, 2015 6:47 AM
A proposed $1 billion NFL stadium in downtown St. Louis is an improbable dream, owing to the troublesome detail that its backers do not—and, in all likelihood, will not—have an NFL team to play in it.
But it's still engrossing to watch this particular cut of political sausage being made by Missouri Gov. Jay Nixon. And on Friday, it got a little more gross.
That’s when the administration of Mayor Francis Slay—an ardent stadium backer—pretended to launch a broadside legal attack at the Regional Convention and Sports Complex Authority (RCSCA)—an ardent stadium backer—over its right to make the whole thing happen. It was staged in the form of a counterclaim to RCSCA’s lawsuit challenging a city ordinance that requires a public vote before public funds can be committed for a stadium.
The St. Louis Post-Dispatch dutifully played along: “City fires back at Dome authority, says can't build new stadium.”
Wow. What gives here? Why did Slay change his mind? Why would his city counselor go for the jugular to derail a stadium project that the mayor considers a top priority for the city?
The short answer: None of that is happening here. The entire lawsuit is as staged as pro wrestling. It’s stadium backer versus stadium backer, all designed to produce one outcome: to achieve a verdict in local circuit court that would remove any impediment to Nixon almost singlehandedly delivering $400 million in public funds to NFL owners as an incentive to keep St. Louis in its fold.
Without doubt, it’s Slay’s firm intention for the city to lose the case it’s feigning to defend. That’s not even debatable. But what’s extraordinary about the counterclaim is that it would appear that the city is surreptitiously trying to help the RCSCA clear its biggest hurdle—the fact that it's limited to fund facilities “adjacent to a convention center”—by intentionally losing the “argument” about what adjacent means.
The definition of adjacency is a matter of considerable case law, and how it’s determined depends upon which precedent a judge chooses to follow. In one case, “adjacent” might mean attached. In another, it might mean across a road or across a river or in the adjoining county. Most significantly, some case law states that a judge should consider the context of what lawmakers meant when limiting an authority such as RCSCA with the term “adjacent.”
Now, were it to come down to common sense and not legalism, the stadium backers would lose on the question of context. There is absolutely no question that the RCSCA was established in 1989 by Gov. John Ashcroft and the legislature for one purpose, and one purpose alone: To facilitate and fund the expansion of St. Louis’ convention center with a domed stadium that would serve the multiple purposes of expanding exhibit hall space, attracting new major sporting events and serving the needs of a potential NFL team.
I’m sure of this, because as publisher of The Riverfront Times, I was one of the people who the stadium backers of that era sold on the project. I supported it, much to the dismay of most fellow liberals (including much of the RFT editorial staff) because of the convention-center angle (not knowing that it would be dark for convention purposes half of the year).
It’s perfectly logical that the RCSCA’s scope was limited to a project “adjacent” to a convention center because the central sales pitch was that St. Louis needed to do this even if it didn’t get an NFL team. That’s how we became the only city to build an NFL stadium on the come.
Nixon and his so-called, two-man “task force”—businessman Dave Peacock and attorney Bob Blitz—are attempting to use the RCSCA as a permanent stadium-financing mechanism. Their strategy: to use its authority to issue bonds for the first stadium to finance a second one. That’s why they chose the north Riverfront site on the theory that it’s close enough to the convention center to be adjudicated as “adjacent.”
My legal sources tell me that the city is likely to cite cases that don’t invoke the context requirement in the hope that Judge Thomas J. Frawley will rule that the proposed new stadium meets the adjacency definition that governs the RCSCA. Then, the RCSCA would be free to extend existing bonds, raising $250 million in state revenue bonds without any action or approval from the legislature.
The same legal sources suggest that the RCSCA is optimistic about prevailing on the question of whether it can avert a city vote on funding the debt service for the extended bonds. If it’s established that the RCSCA can issue the debt, the messy details of funding the debt service can be simply kicked down the road to future city governments, as at the state level, because no immediate funding would be needed from city voters. And the RCSCA’s high-powered counsel would probably pick apart the city’s stadium-vote ordinance in any case, especially with no serious opposition from the defendant.
In sports parlance, the city would appear to be “throwing the game” with regard to the court case. The Slay administration appears intent not only on losing, but losing on key arguments that would weaken its other key legal challenge, a lawsuit filed in Jefferson City by six legislators against the RCSCA that attacks its authority to extend existing bonds on the adjacency issue, among other points. Rep. Jay Barnes (R–Jefferson City) is the lead plaintiff.
A Cole County circuit judge would not be bound by the decision of a St. Louis circuit judge, but he or she might be influenced by it. Plus, the RCSCA could argue in Jefferson City that a St. Louis judge has already considered what adjacency means in the “context” of St. Louis geography, thus removing the need for a judge in Jefferson City to rule to the contrary.
If this sounds like conspiracy theory to you, answer this: Why else would the city of St. Louis go out of its way to attack the RCSCA’s fundamental right to finance a stadium project that Slay considers his top priority? Speaking in code, City Counselor Winston Calvert told the Post-Dispatch that the counterclaim “is a reflection of the fact that everybody is ready to get these issues resolved and move on.”
By “resolved,” he means “resolved” in favor of Slay and other stadium backers, not on behalf of the city as a defendant. And by “move on,” he means to avoid any other hurdles, such as the pending case in Cole County, which would delay the stadium backers. The NFL’s insistence that funding issues be resolved almost immediately (perhaps as early as a special meeting of team owners in August) gives them precious little time and almost no margin for error.
Consider it the understatement of the century that the city isn’t likely to appeal to a higher court should it “lose” its case “against” the RCSCA. And with the city playing to lose, there’s a decent chance that the RCSCA may prevail in court.
Whatever happens, we have the answer to the stadium issue’s original mystery: How was Nixon going to wrest hundreds of millions of public dollars out of a state legislature that is certainly hostile to him, to stadium corporate welfare and to St. Louis? Why, he happened upon a legal technicality: The “authority” of the RCSCA to borrow $250 million in state funds by simply extending the existing ones. Add to that $150 million in tax credits that Nixon apparently can manufacture through existing administrative authority—opportunity cost to other projects be damned—and voila, St. Louis has “decided” to offer $400 million to the NFL.
Unbelievable. It’s a legalistic cousin to the “boat in the moat” concept through which casinos were essentially able to use oversized bathtubs to meet a (stupid) state requirement that they be situated as riverboats. For NFL fans, think “tuck rule.”
The bottom line is this: If Nixon succeeds, he will have effectively committed future generations of Missouri taxpayers to finance a new NFL stadium in St. Louis without so much as a committee hearing on the subject. And if $150 million in potential non-football projects go unfunded in St. Louis, so be it. The end justifies the means.
I’m not in the custom of siding with Missouri Republican legislators, but you cannot blame them for finding this outrageous. This truly is an abuse of executive power, arguably even an unprecedented one.
To the extent that NFL officials having been praising “the stadium progress in St. Louis,” it’s probably out of astonished gratitude that a governor has concocted a way to send $400 million their way without any public process at all. With apologies to the sportswriters who hang on every encouraging word that comes from the office of NFL Commissioner Roger Goodell, what do you think they’re going to say in response to such a spectacle? Of course, the NFL likes the idea of a governor pulling something like this off. What a nice precedent for them.
Unfortunately for stadium backers, that doesn’t translate into “thanks, you’ve got your team.” The St. Louis franchise of the NFL is ranked 32nd among 32 teams in value in the respected Forbes rankings, and the area is stagnant in growth and wounded in reputation. The NFL cannot possibly give it a high priority.
Worse, there’s two possibilities, neither of them good for St. Louis stadium backers: One is that Rams owner Stan Kroenke achieves his long-standing dream of moving the team to Los Angeles, leaving St. Louis in the tenuous position of trying to steal still another team from another city. Or, two, is that Kroenke is thwarted, forcing him to remain, at least for the moment, as the not- so-proud owner of the St. Louis Rams.
In the former case, it’s not clear where the team would come from, because the San Diego Chargers would almost certainly stay in San Diego or reluctantly join Kroenke as his tenant in Inglewood, and Raiders owner Mark Davis has been emphatic (almost cruelly) about his unwillingness to consider a move to St. Louis. Plus, any relocation would take time—likely years. It’s entirely possible that if the Republican legislators lose in court, they’ll make it a top priority in next year’s legislative session (or a subsequent one) to prohibit the RCSCA from extending existing bonds for a new stadium.
And if St. Louis succeeded in thwarting Kroenke from moving the Rams, his next move would almost certainly be to do nothing, holding his cards in his hand, Kroenke style. You see, as reported here (almost exclusively, for some reason), Kroenke owns nine one-year options to play, one year at a time, at the perfectly functional Edward Jones Dome on the sweetest lease in the league, wherein he receives uncommon millions in naming-rights fees and other advertising revenues, and pays less rent ($25,000 per game) than it costs to operate the building.
I’m not sure why, but there’s an assumption in the media that if forced to stay in St. Louis, Kroenke would somehow be persuaded to invest $250 million into a stadium that he doesn’t own, in a bottom-ranked city that he just tried to leave (and one that blew up his dream, no less), replacing his sweetheart deal with a market-rate one (the only way it could begin to work), giving up all those millions and, more importantly, the free agency to pick up and leave St. Louis if and when any better deal came along in, say, San Diego or San Antonio or London or Mexico City or Portland or...well, you get the point.
The best response you get privately when challenging stadium backers on this is that they’ll figure out a way to persuade Kroenke to sell the team or to swap franchises with another owner. But who’s going to pay his price (which hardly would come at a friends-and-family discount in this event) and throw in $250 million for a new stadium in the bottom-ranked NFL market?
So this whole saga isn’t likely to end well for stadium backers. But if I’m wrong about every word of this—if somehow, you and I are going to enjoy NFL football years from now in a state-of-the-art, new NFL stadium on the north riverfront, then let’s do our best to forget that it was all made possible by an unprecedented use of smoke and mirrors. And deceit. I’ve even got a name for our team, resurrecting one that, until recently, served local amateur hockey well.
Go, St. Louis Bandits!
SLM co-owner Ray Hartmann is a panelist on KETC Channel 9’s Donnybrook, which airs Thursdays at 7 p.m.