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Missouri Governor-elect opposes public funding for St. Louis MLS stadium

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Every stadium proposal has its hurdles to overcome, but this isn’t one that SC STL wanted to face so early in the process.

Incoming Missouri governor-elect Eric Greitens expressed his opposition to any public funding for the proposed future home of an MLS team in St. Louis, calling the funding┬ánothing more than “welfare for millionaires”.

“I’m opposed to spending taxpayer money to build a soccer stadium in St. Louis,” Greitens stated. “This project is nothing more than welfare for millionaires. Right now, because of reckless spending by career politicians, we can’t even afford the core functions of government, let alone spend millions on soccer stadiums. This back-room wheeling and dealing is exactly what frustrates Missourians. This type of politics as usual is coming to an end.”

The statement comes at a crucial time for the stadium’s viability, as the Missouri Development Finance Board is set to vote on the approval of $40 million in state tax credits for the stadium, which would come in addition to the proposed $80 million in public funding to be voted on in April. This funding would leave the team with $80 million of their own to pay for the $200 million total stadium. The city of St. Louis would own the completed stadium and would lease it to the MLS team for 30 years.

The team would front any additional overrun costs and maintenance fees over the life of the lease, as well as the $150 million expansion fee into MLS. While the governor’s statement is far from fatal, it certainly throws a wrench into SC STL’s well-laid plans.

16 comments
  • Beto

    Yes! now if only more elected people would stand up to MLB and NFL.all stadiums – unless owned by the gov’t – should be privately funded.

    unfortunately this is coming from the state who just lost an nfl team because they opposed billionaire welfare for Stan Kronke. MLS wants the kind of handouts the other big league get; therefore mls will probably pass on St Louis.

    Like

    • Grunt

      Um…perhaps you missed it, but the article says the stadium be partially paid for by the team (about 1/3 plus any cost over-runs), but owned by the city.

      It is an economic/infrastructure investment that the mayor-elect would be well served to fully inform himself about before cutting off another piece of that city’s nose. On the other hand, there are lots of cities that would probably love that deal, so feel free.

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  • Tim

    Yeah, he’s not wrong. Whether that will end up being to the detriment of the city of St. Louis or not will be interesting to see.

    But taxpayer funded stadiums/arenas is the biggest racket in all of professional sports.

    Like

  • John Coctostan

    If you’re a mayor of a major city and an MLS owner came and offered you a brand new team and stadium free-of-charge. Would you take it? Of course, because that brings value to your city.

    What if instead of free, this MLS owner required $34 and a dozen eggs, would you take the deal as mayor? Of course.

    What if he required $10,000? Yes still a good deal.

    How about $150 million? Probably not.

    So somewhere between 10,000 and 150,000,000, it’s a good deal for the city. But it is not zero.

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    • wsmithers

      Thank you.

      While being opposed to ALL public funding for ANY stadium in ANY sport sounds good in theory, the reality is that a stadium brings value to a city/region. How much value? I don’t know, I’m not an economist. But I’m pretty confident that there are people who study this kind of thing, that the value is greater than $0, and that those who could give an educated answer will not be consulted by most politicians.

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      • Cravin' Frottage

        Indeed, there are many people who will give an educated answer to these questions. They are typically called “market consultants”, and the reports they produce are hundreds of pages long, involve months of analysis, and cost six-and even seven-figure sums to produce. Bidders on the World Cup and Olympics love these things, and some are even available online as public record if you are so inclined (the new DC United stadium is one example).

        Unfortunately, these reports have historically had a nasty habit of being wildly optimistic, often overstating the observed economic benefit by orders of magnitude when reviewed over the long-term.

        In truth, it’s really hard to blame anybody who doesn’t trust them as a basis for investing public resources. They don’t have a great track record for accuracy and can be easily manipulated by the (many) parties who participate in their creation.

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    • Anthony

      This issue has a lot of parameters, but what I will say is the monetary value created by a city paying for a stadium is usually overvalued and cities rarely recoup what they spend. I talked to a friend of mine who does sports law and worked on a stadium deal that did not come together. This conversation happened a while ago, but she said it all depends on the terms, most of the big 4 sports keep luxury boxes and vendor sales etc. What the city hopes is the sales and income from surrounding businesses offset the expenditure. The cost of the stadium, parking revenue share and level of tax abatement could offset this as well. According to her, cities rarely, if ever recoup the cost in this manner. It is more about goodwill about having a team in your city etc.

      With soccer, stadiums tend to be a cheaper $100/150 million vs $1 billion. Additionally, the impact on local businesses tends to be less than football/baseball/basketball/hockey.

      The most a city should do a lease buy-back, where a team commits to paying back the entire cost of development that a city chooses to pay up front.

      Like

  • TheFrenchOne

    Somewhat off-topic, but I’m currently reading the book “Charlie Mike” about veterans finding a new mission after returning from Iraq and Afghanistan. Eric Greitens is heavily featured in the book, but it was written before he won the election, so I didn’t realize he was about to take office.

    Like

  • Martha

    Too bad for St Louis would have made for a nice soccer town. Oh well there’s other suitors begging to join. I remember San Antonio had a similar situation and are now begging to get in

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  • two cents / lowercase letters guy

    I think the white elephant in the room is the 150M expansion fee to mls, which is almost as much as the stadium. what on earth does mls need this money for, I wonder?

    Like

    • Btcarl

      You two obviously know nothing about asset value. Should MLS just give prospective owners a product that can be sold for 150 million away for free because they like a city. The franchise fee is what a team is worth if it were to be sold to new owners.

      Like

  • ACS

    The other st. louis group looking to have a team, Foundry St. Louis, asked to be partial owners of any new club in st. louis so they would have to use public funding, SC Stl I guess didn’t like that option.

    Like

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