Financing details for a proposed $1 billion downtown St. Louis football stadium were finally revealed on Friday, and it explains how the St. Louis portion of $150 million will be divided between bond proceeds and through money raised by the recently announced $158 million naming rights deal with National Car Rental.
You can read the bill here.
The hope is that the plan is sufficient enough to convince National Football League owners to reject St. Louis Rams owner Stan Kroenke’s bid to move the Rams to Los Angeles, where he is proposing a privately financed stadium in Inglewood.
But there are issues.
While the plan seemed to be well received in St. Louis – which still needs to approve it – it raises some immediate red flags with the National Football League.
Specifically, using the naming rights deal to finance $75 million of St. Louis’ $150 million contribution.
The NFL considers naming rights money property of the team, and while St. Louis plans to reimburse the Rams through unspecified game-day tax revenue, that might not fly.
According to a high-ranking NFL official, the idea itself is creative but the reason for it highlights the problem.
The city doesn’t want the risk so they take the guaranteed revenue stream in naming rights for itself, then uses part of it to fund construction costs.
The team gets a tax credit that should equal the naming rights stream. But it’s not guaranteed and dependent on future revenue.
The risk, obviously, is solely on the team. And that is a concern.
The financing bill is expected to be officially introduced to the St. Louis Board of Aldermen next week. The board is then expected to vote on it, although some board members have proposed introducing a bill that would require a public vote to decide whether the city can spend the $150 million.
If so, that bill would essentially overturn a ruling by Circuit Court Judge Thomas Frawley last August that nullified an existing city ordinance mandating a public vote for the expenditure.
And while St. Louis stadium task force head Dave Peacock said he welcomes a vote, the urgency is glaring. It seems unlikely a citywide vote can be done within the next month, and Peacock told the St. Louis Post-Dispatch failure to achieve city approval beyond November “puts this project and retaining our team at risk.”
Of course, the primary hurdle for St. Louis is that the Rams no longer want to be there and have set their sights on Los Angeles. So in many ways, St. Louis is pleading to a higher court – the NFL – to try to keep the Rams in Missouri.
But as they close in on approving a deal, it looks like they may have some issues convincing the NFL their plan is a good one for the Rams.
Approval relies on 24 or 32 yes votes.