[Hacksaw]

Football tax revenues don't cover existing debt on Dome, says city budget director

http://www.stltoday.com/news/local/...c ... d28e7.html


ST. LOUIS • A pillar of the financing package pushed by new stadium backers may not produce as much available revenue as they have represented in court.

For months, planners of the riverfront stadium have argued, as they arrange finances for a new arena, that city taxpayers will shoulder no new burden. The same taxes that are paying down debt on the Edward Jones Dome will fund the new stadium too, they say.

But according to records obtained by the Post-Dispatch, the $8.5 million raised yearly by the city’s hotel-motel tax is already spoken for. It’s pledged to the $17.7 million annual debt payments for the nearly 25-year-old south wing of the city’s convention center — not to the Dome.


Moreover, wrote Budget Director Paul Payne in one of multiple emails to key mayoral staffers, the St. Louis Rams aren’t producing enough tax money — from tickets sales, payroll, concessions, etc. — to directly cover the debts associated with construction of the Edward Jones Dome.

Collectively, the new information casts doubt on the premise that both sources of revenue could underwrite a future project — when in fact they do not support debts on projects already built.

“If we were starting from scratch, that plan would look great,” Payne said last week in an interview with the Post-Dispatch. “But we're not starting from scratch.”

A rosier picture was presented to Judge Thomas Frawley by attorneys pushing the new riverfront stadium. They argued repeatedly in court on Thursday that the hotel tax more than covers the city’s annual $6 million payments toward Dome debt and upkeep.

The attorneys were representing the public board that manages the Dome. The board is suing the city to block a citywide vote on the use of city tax dollars to help build the proposed $985 million stadium.

Frawley asked several questions about the funding source for the Dome debt. Attorneys for the Dome, including general counsel Bob Blitz, a member of Gov. Jay Nixon’s two-man stadium task force, answered consistently that the hotel tax covers the bill.

But, according to the documents, budget director Payne wrote to City Counselor Winston Calvert early on Friday seeking to clarify the record.

Payne had read news accounts of the hearing, including “arguments from opposing counsel … that the hotel tax approved by voters is the current source of funding for payments on the dome,” he wrote to Calvert.

“I have heard this contention before,” Payne’s email continued, “and it is certainly not the case.”

Hotel tax revenues are directed, by law, to first cover convention center debt, Payne said. Any leftover would go to pay the Dome debt, he continued. But there isn’t any.

Annual convention center and Dome debt payments together add up to about $23.5 million.

The two taxes dedicated to servicing that debt — the 3.5 percent hotel tax plus the city’s 1 percent restaurant tax — together produce less than $15 million, Payne said.

Blitz, contacted on Friday, said he wasn’t an expert on the issue, and passed questions to Thompson Coburn bond attorney Michael Lause. Lause, who argued on behalf of the Dome authority on Thursday, did not return a call seeking comment.

Calvert, the city attorney, said he heard the Dome attorneys in court, but decided not to jump into the fray. “I wasn't there to talk about the legal mechanics,” he said on Friday. “We've not been involved in what the financing plan would be.”

“A lot of legal issues will need to be worked out over time,” he said.

Mary Ellen Ponder, chief of staff to Mayor Francis Slay, said that the city still hasn’t received a formal financial proposal from Nixon’s task force. “How can I analyze a proposal I don't have?” she asked on Friday.

Still, she noted, it isn’t fair to gauge Dome revenues by Rams games alone; it creates some additional revenue through convention usage.

[Elvis]

Nice find, here's the St. Louis Biz Journal's take:

City’s math raises questions about stadium financing

Jun 29, 2015, 4:20pm CDT
Jacob Kirn
St. Louis Business Journal

The St. Louis Rams generate less yearly tax revenue in the city of St. Louis than what the municipality currently pays annually on bonds used to build the convention center, emails from the city’s budget director show.

A main argument of proponents of a new riverfront stadium has been that residents will incur no additional tax burden except on game-related activities.

As recently as February, city officials and stadium consultant Jeff Rainford appeared unsure of the Rams’ economic impact here, though the plan for a riverfront stadium was unveiled in January.

Former Anheuser-Busch CEO Dave Peacock, Downtown STL Inc. CEO Doug Woodruff and former Slay Chief of Staff Rainford have been planning it for more than a year, opting to “avoid Sunshine Laws until such a time that we’re far enough along to have a real idea to share publicly,” Peacock emails show.

On Feb. 1, St. Louis Mayor Francis Slay’s chief of staff, Mary Ellen Ponder, asked Budget Director Paul Payne how much city tax revenue is generated, directly or indirectly, by the Rams.

His response: more than $4.2 million, though Payne was “surprised” by how little the Rams generate in hotel taxes.

Rainford, now a consultant for Woodruff’s Downtown STL Inc., also expressed surprise.

“The state collects $10 million in income taxes from the players,” he wrote. “No way we only collect ($270,000).”

“Practice facility is in Maryland Heights,” Ponder responded. “We only get taxes from game days.” The emails were obtained by Saint Louis University law professor John Ammann through Missouri’s Sunshine Law and provided to the Business Journal.

Currently, the city’s annual payment for the Edward Jones Dome debt is about $5 million. The city still owes roughly $35 million on those bonds, which expire in fiscal 2022.

Slay’s spokeswoman, Maggie Crane, said that the dome was built for the Rams and conventions, and, similarly, a new stadium could be used for more than one purpose.

“If the Rams are in a new stadium, are they going to produce enough (tax revenue)?” Crane said. “It’s why we’re going after (Major League Soccer) and concerts.”

Further, a 3.5 percent hotel tax doesn’t cover current bond payments, according to an email from Payne, the budget director, to Ponder. The tax was passed in the 1990s by voters in the city and St. Louis County.

“Since the convention center debt service is over $17M per year, the hotel tax (and 1 percent restaurant tax) are always short of what’s needed for the convention center debt and so these revenues are insufficient to be applied to anything beyond their first purpose,” Payne wrote Ponder March 5.

Crane said multiple taxes, including the 1 percent restaurant tax, are used for the city’s convention center bond payments. The hotel tax and restaurant tax next year will generate $14 million total, including $8.5 million from the hotel tax, according to Crane.

[Hacksaw]

On Feb. 1, St. Louis Mayor Francis Slay’s chief of staff, Mary Ellen Ponder, asked Budget Director Paul Payne how much city tax revenue is generated, directly or indirectly, by the Rams.

His response: more than $4.2 million, though Payne was “surprised” by how little the Rams generate in hotel taxes.

Rainford, now a consultant for Woodruff’s Downtown STL Inc., also expressed surprise.

“The state collects $10 million in income taxes from the players,” he wrote. “No way we only collect ($270,000).”

I'm starting to wonder if anything these guys say is real anymore. If it walks like a duck....

[snackdaddy]

I have a feeling these guys are just planning to build it and worry about financing later. Once its built they gotta commit to it and they've done their job. As far as how to pay for it, they'll burn that bridge when they come to it. Sound like they haven't been totally honest with the financing plan.

[bubbaramfan]

Just read an article posted by rambill over at RRF ( the stadium thread page 58). According to the budget director, not only do they not have the money to pay for a new stadium, the taxes don't fully cover the ED Jones Dome monthly payment. More scrambling for Blitz and Peacock.

[Hacksaw]

viewtopic.php?f=3&t=179

[BuiltRamTough]

Wow. This could screw things up. You show this to the judge and he might ask for a public vote.

[BuiltRamTough]

I have a feeling these guys are just planning to build it and worry about financing later. Once its built they gotta commit to it and they've done their job. As far as how to pay for it, they'll burn that bridge when they come to it. Sound like they haven't been totally honest with the financing plan.

They're politicians, lying is what they do!

[bubbaramfan]

thanks for posting the link

[bubbaramfan]

My bad, didn't see this was already posted