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 Taxpayers will now shoulder the remaining payments for the Edward
Jones Dome with only the help of revenue from tractor pulls,
volleyball tournaments, concerts and the like.
St. Louis Board of Aldermen President Lewis Reed has asked the NFL
to help pay off the stadium, but so far has gotten no response.
“The fans are being left holding the bag,” Reed said. “I think they
should factor that into the total cost of the move."
The leftover debt and maintenance costs are another example of the
NFL's negotiating prowess with many cities, sports economists said,
and also reflects larger problems with the deal St. Louis struck
with the Rams.
Even before the team decided to leave, the city's stadium revenues
didn't cover its payments, leaving the city with annual shortfalls.
The league and the Rams did not respond to requests to comment.
Across the country, cities have gotten stuck with substantial costs
after sports teams leave or even move across town. Often, local
governments must pay bonds, maintenance costs, or demolition fees
after a team is gone.
Houston’s iconic Astrodome, once dubbed the Eighth Wonder of the
World, sits empty a decade after the facility housed 25,000 evacuees
of Hurricane Katrina and nearly 20 years after the Oilers left. The
Detroit Lions’ former Silverdome in Pontiac, Michigan, was used
sporadically after the team moved downtown in 2002, but shuttered
for good when the inflatable roof was deflated.
Today, after years of exposure to the elements, the Silverdome is
slated for demolition. Robert F. Kennedy Memorial Stadium, the
Washington Redskins' former home, may meet the same fate, said Greg
O’Dell, president and CEO of Events DC, the convention and sports
authority that owns the stadium.
NFL stadiums are primarily designed for one thing - eight home games
a year - and don't necessarily adapt well to alternate uses. Cities
also have little chance of attracting a new professional team to an
old stadium; building a glitzy new one is often what it takes to win
league approval.
“These things become economically obsolete before they become
physically obsolete,” said Victor Matheson, College of the Holy
Cross economics professor.
It’s not uncommon for local governments to pay debts and maintenance
on abandoned stadiums for years - even after it is demolished.
Seattle’s Kingdome bonds were retired only last year, 15 years after
the facility was imploded in 2000. Philadelphia has $160,000 left to
pay on Veterans Stadium, more than a decade after the facility was
torn down. Debt from Indianapolis’ Hoosier Dome - demolished in 2008
- still hadn't been paid off in 2013, according to state filings.
In St. Louis, the $280 million agreement to build the Edward Jones
Dome for the Rams raised eyebrows since its opening in 1995. Unlike
other stadium deals, the St. Louis contract included a clause
requiring the 67,000-seat dome be maintained to a first-tier
standard, meaning the facility must be considered among the top
quarter of all NFL football facilities.
As the stadium aged - and new, state-of-the-art NFL stadiums were
erected in New Jersey, Texas, and California – the bar became more
onerous.
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“This was a contract designed to be broken” by the team, said
Matheson, who studies stadium finances. “They had a terrible,
terrible contract with the Rams."
A few years ago, to maintain the stadium’s top-tier status, the Rams
sought an estimated $700 million of improvements. St. Louis balked,
and the Rams started looking elsewhere.
To cover costs, the city paid about $6 million for annual debt
service and maintenance for the stadium but collected only about
$4.2 million in direct revenues from Rams games, according to the
Mayor's office. The state, which paid $12 million annually, made
$12.4 million in revenues from NFL activities, Missouri Department
of Economic Development estimated. The county paid $6 million
annually; it's unclear how much of that was offset by Rams-related
revenues.
All three entities will continue paying their share until the debt
is paid off in 2021.
Without the Rams’ revenues, St. Louis is looking at an even deeper
financial hole. And it’s coming at a time when the city is facing a
spiking murder rate, high poverty and high debt. Last August,
Moody’s Investors Service downgraded the city’s credit rating to Aa1
from Aa3, which could lead to increased borrowing costs.
“We’re going to have to tighten the belt in a few places,” said
Reed, the alderman.
In 2002, St. Louis city voters displayed their frustration with
public stadium financing by passing a ballot measure that required a
public vote to approve any future sports subsidies.
But last summer, a judge invalidated the law as too vague. The next
day, voters rejected a $180 million proposal to purchase more fire
trucks and improve police equipment.
The juxtaposition of residents voting on such basic needs while
being denied a say on stadium subsidies did not sit well with
Jeanette Mott Oxford, executive director of Empower Missouri, a
social justice organization, and co-founder of the Coalition Against
Public Funding for Stadiums that campaigned for the ordinance.
“When you live in an urban area, there is money needed for public
safety, public health, even just repairing potholes,” Oxford said.
“I just became so cynical."
(Reporting by Robin Respaut)
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