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County hotel tax windfall is key in ballpark talks
By Eric
Stern of the Post-Dispatch Sitting on a relatively untouched pile of money for tourism projects, St. Louis County always has been considered a team player in talks about a new ballpark for the Cardinals. Paying $2 million or $3 million a year to help subsidize a downtown ballpark, and keep the Cardinals in St. Louis, had enough "intangible benefits" to sway most county officials early on. But under a plan offered Tuesday, the county would lend the entire $45 million upfront and, after 29 years, get paid the loan amount plus compounded interest or get an ownership share in the stadium - or a combination of both. "This is just kind of a bonus," said Jim Baker, director of administration for the county government. The county also would share profits with the city if the team were sold. Mayor Francis Slay sent a letter to the County Council on Tuesday asking for a $45 million loan, which would be made to the city's Land Clearance and Reclamation Authority, the owner of the future stadium site. Private investors are expected to build and own the ballpark. They would lease the site from the city, but the investors could defer those lease payments up to 29 years for federal tax reasons. The Cardinals simply would rent the ballpark from the investors, paying about $14 million a year for the first 29 years. After 29 years, the investors would have to make all of their back lease payments, plus compounded interest. That amount is estimated to be about $400 million. From that money, the city would be responsible for repaying the county its $45 million loan, plus interest. The county would be due $200 million to $250 million, which could be repaid in the form of cash or partial ownership of the stadium, or both. The county could become a part-owner because the private investors would have the option of paying the city its $400 million in cash, ballpark ownership, or both. Ideally, the Cardinals would want to continue playing at the then-29-year-old ballpark and the city, county and maybe the state would be paid rent. "St. Louis County will get back substantially more than its original investment," Slay wrote in a letter to Council Chairman Greg Quinn, R-Ballwin. Details of the loan have not been worked out, but it appears to enjoy near unanimous support on the seven-member council. It is also the last critical piece of the public-financing puzzle for the $402 million plan. The city and state already have approved tax credits and tax breaks to the Cardinals, who are expected to put up $50 million and land. Private investors are being asked to provide $275 million. The council is not expected to take any action on the ballpark plan until next month. Quinn said the council would hold a public hearing before it votes. "It's 180 degrees different than what was requested before," said Councilman Kurt Odenwald, R-Shrewsbury. The Cardinals had wanted the county to make annual payments on the ballpark project from a growing surplus of county hotel taxes. County voters approved a hotel tax increase in 1990 to help build the Edward Jones Dome. But the hotel tax generates millions more than is needed to pay the county's $6 million annual bill on the Dome. The extra money generally has been sitting in a bank account, earning more than $500,000 a year in interest. State law prohibits the county from spending it on anything but tourism and recreation projects. The county likely would sell bonds to raise
the $45 million for the ballpark and pay back investors with money from the
hotel tax fund. |
