Arbitration Panel Rules in Favor of Ram’s $700M Stadium Proposal, Retractable Roof and More

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According to sources, the arbitration panel tasked with plotting a future path to a "Top-Tier" stadium for the St. Louis Rams has ruled in favor of the team's ~$700M stadium proposal. The panel could have ruled for the CVC's $120M proposal, or crafted a compromise. The St. Louis CVC has 30 days to decide whether to accept the arbitration panel's decision and seek a funding source for upgrades, or to reject the decision. If rejected, the Rams could break their lease as early as spring 2015. If the panel had ruled in favor of the CVC, the Rams lease would have remained in effect until 2025.

While the ruling will lead many to begin counting the Rams' remaining days in St. Louis, look for all parties to get to work in an attempt to indentify funding sources. Recent stadium renovations and new construction in the NFL have been aided by substantial funds from owners as well as the NFL and its new "G4" loan pool. An outline to reach something close to $700M could include $150-$250M in state and local funding with the remaining amount coming from owner Stan Kroenke and the NFL.

{the CVC's vision for natural light was a far cry from that of the Rams, and the arbitration panel}

In effect, the CVC had argued that an array of changes, from updated luxury suites to a little natural light introduced to the dome would satisfy the "Top-Tier" language in the Rams' lease. The Rams argued that "Top-Tier" in today's NFL means significantly more space for seating, concessions, luxury suites, a retractable roof, and much more. This is the argument the Rams won. The "Top-Tier" status requires that the dome be in the top 25 percent of NFL stadiums based on 15 measures. The decision cited the stadium's small footprint as one factor keeping the facility from "Top-Tier" status. The Rams proposal suggests closing a portion of North Broadway and expanding the stadium to the east.

Ultimately, one of two things will happen: the Rams stay or the Rams go. If they go, and the likely destination would be Los Angeles, though San Antonio and a couple others cities are possibilities, there's not much to talk about. The dome would be used for conventions, as it is sometimes now, outside the NFL season. The City of St. Louis and St. Louis County would continue to pay $6M each year on dome debt and the state would continue its $12M per year payment. The total pay off, ending in 2025 would be $720M.

The other scenario is that the Rams stay. What's clear from today's arbitration ruling is that the team will not be playing in the existing dome, not even with a couple hundred million dollars of renovation. A reconstructed dome, similar to the Rams' $700M proposal would work, the Rams could play at Faurot Field in Columbia, as the Bears played in Champaign during the reconstruction of Soldier Field. Lastly, a new stadium could be built.

Camp Kroenke
{Patriot Place superimposed on the former Chrysler plant in suburban Fenton, MO – one of several possible locations around St. Louis where a new stadium could be constructed}

The CVC is expected to reject the arbitration result. What happens next is more negotiation. The Rams must give one year notice of intent to end the lease (as early as Spring 2015). However, even if Kroenke were motivated to move the team, no city would be ready with a new stadium by that time. Maybe the Rams could play in the Alamodome, but it's older than their current home.

After seven seasons with an NFL team, the Rams moved to St. Louis in 1995. Then-mayor Freeman Bosley, Sr. has explained the not-so-favorable lease terms agreed to by the city by simply stating, "We weren't negotiating from a position of strength." St. Louis badly wanted a team. Since the league left Los Angeles, no city has been negotiating from a position of strength. The threat has always existed that a team could pack up and move to the nation's second-largest television market if they didn't receive the stadium they wanted. Today, one only need to look at the Dodgers $8B, 25-year television deal with Time Warner to understand the allure of the City of Angels.

Nearly every NFL team has leveraged the league's absence in Los Angeles into greater tax payer subsidy for new or renovated stadiums. Over those 17 years, 28 of 32 franchises have built new stadiums or made significant renovations to their existing home. With deals in place for both Minnesota and San Francisco, it's 30 of 32. Leaving Los Angeles without a team has been the best business decision the league has ever made, at great cost to cities and taxpayers. Communities have rallied time and again to find $200M, $400M and more to keep their franchises.

NFL stadium funding

In "the worst stadium financing deal ever", Hamilton County, OH (equivalent to St. Louis City and County combined) fully financed the Bengals Paul Brown Stadium. Today, stadium debt costs consume 16.4% of the county budget, $36.4M in 2010. St. Louis city and county pay a relatively smaller $12M each year. By how much, and by what means, might the region be willing to up the ante?

Indianapolis provides one encompassing example. The team put up $100M for the $720M stadium, while the remaining $620M (86%) is being funded by taxpayers. Marion County (synonymous with Indianapolis) raised taxes on food and beverages, rental cars, hotels and ticket sales. Seven of the eight surrounding counties in the metro area added a 1% food and beverage tax. In Minnesota, the state legislature approved $348M to support a new Vikings stadium.

But St. Louis is not speaking with one voice and Missouri is not likely to be as generous. The CVC's public position is that they are dedicated to having the Rams stay in a renovated Edward Jones Dome "with improvements to the facility that make sense to the Rams ownership and our community." Jeff Rainford, Chief of Staff to St. Louis Mayor Francis Slay, has publicly and vocally stated that the NFL doesn't belong downtown. "Hopefully this moves us to where the Rams can play somewhere else in St. Louis." The main objection: The blackout imposed by the NFL season on use of the dome for conventions costs the city convention business. Other cities understand this too. While the Colts' Lucas Oil Stadium remained downtown, it was separated from a then expanded convention center.

CVC final proposal to St. Louis Rams - August 2012
{the Rams didn't believe modest changes to the facade (from CVC proposal) were adequate}

To use a round number, let's assume a new stadium would cost $1B. Could the state and region double its current commitment from $24M each year to $48M? That could get the project off to a good start. Add 50% of the cost from the Rams and an NFL G4 loan, some other job creation incentives, tax abatements (say, on 295 acres in Fenton), the whole shebang, and you're close.

The region's political and civic leaders clearly believe there's taxpayer money waiting to be tapped. This spring, voters in the city and county will vote on a 3/16% sales tax increase to fund the Arch grounds and local parks. That revenue would amount to an estimated $6.2M per year in the city and $24.9M per year in the county. This would be very close to funding the public side of a 50/50 $1B stadium deal. And that's without any state money. Both Rainford, and St. Louis County Executive Charlie Dooley have stated that any new taxes would need approval from voters. Will local leaders fight for a stadium deal? Have they decided that parks are a better investment, a higher priority? If put to the voters at the same time, which would win? After all, the Rams may move, the Arch isn't going anywhere. Voters may not get that option, but the stadium issue will likely be on their minds when considering the Arch/parks tax.

That's the numbers game, but there's more to it than that. A profile of Ram's owner Stan Kroenke on makes for very convincing reading. Stan's a Missouri guy, born and bred. He was the lead investor in a failed attempt to land an NFL expansion team in St. Louis after the Cardinals left. He bought a minority interest in the Los Angeles Rams on the condition that they move to St. Louis. Ownership groups in Los Angeles want to own a team. Kroenke has never sold any portion of his NBA, MLS or NHL franchises. It's estimated that Kroenke's wealth grew from $6.1B in 2010 to $8.5B in 2012. All of this points to the Rams staying. But Stan is a business man, people shout, and unfortunately for Kroenke, St. Louis and Missouri appear unlikely to show him the money.

St. Louis Rams – St. Louis Convention and Visitor's Commission full Arbitration Report

The arbitration panel ruled in favor of this proposal from the Rams:

St. Louis Rams response to CVC

Full coverage of the CVC and Rams proposals on nextSTL:

In Reply, Rams Tell CVC Retractable Roof and Much More Needed for "Top-Tier" Status

In Effort to Keep Rams, St. Louis CVC Offers $60M, Asks Team for $64M to Push Dome to "Top-Tier"

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  • raygsanders01

    How stupid are we? We build multimillion dollar and close to a billion dollar baseball and football stadiums, while our infrastructure falls apart. That is comparable to a person with very little money and living in a house that is falling down around them, and that person goes out and purchases a $10,000 stereo system. Dumb.

  • raygsanders01

    It is absolutely ridiculous for working and middle class people to purchase a playground for multimillionaire players and multibillionaire owners. This is socialism for the rich and should have never been allowed to happen in the first place. I don’t care if the egotistical owners want to pay a player a billion dollars a year to have a winning team. Just don’t ask me to subsidize his egomania. If Stan wants a new or improved stadium, then let him pay for it. He married into the Walmart fortune and can afford it. Anheuser Busch didn’t ask taxpayers to build him a stadium and neither should Stan Kroenke. Stop the madness.

  • Gary Kreie

    After reading the entire ruling, I find it increasingly bizarre. Besides seeing a roof (and I assume fan comfort) as huge drawback compared to open air stadia, the arbitrators keyed on the fact that people in luxury sky boxes would not be able to easily view the new hanging giant video screens proposed by the CVC, and would have to settle for individual large video screens in each of their individual suites.

    Also, they completely dismissed the CVC argument that the Rams proposal would push fans further from the field vs. the CVC proposal average distance of 623 feet. The arbitrators argued that many newer stadia exceeded the average of 623 feet, therefore pushing fans away from the field is a characteristic of Tier 1 stadia, not a drawback.

    Then they declared that the CVC must pay the Rams legal fees for their trouble. Who are these guys?

  • Gary Kreie

    The arbitrators said “In order to be first tier, the Dome must be open”. This seems very odd to me. It sounds like they are setting up the rationale for moving to LA. Both stadia proposed there are open, hence first tier.

  • Noel

    I think the stadium should stay downtown because its just not Missouri fans attend these games. And I think it would be extremely silly to move to L.A.! They already have everything it just wouldn’t be fair.

    • jhoff1257

      They don’t have an NFL team…

  • Gary Kreie

    The Post Dispatch quoted the arbitrators as saying,

    “During the twenty years since the Dome was opened in 1995, 17 of the 22 domes built have been open-air stadiums,” the arbitrators wrote. “In order to be first tier, the Dome must be open or, if closed, must have an operable roof and abundant natural light inside.”

    The first sentence is false, unless they are including baseball stadiums in their evaluation. I wonder who fed them this and other false information. The only NFL dome stadiums built since 1995 are in: Houston, Dallas, Phoenix, Indianapolis, and Detroit. Four of the five have roofs that open. Detroit is a closed dome. By their criteria, the EJD is the 6th newest dome — out of 31 nfl stadiums — upper 20%.

    If they are saying newer open air stadiums are better than domes, as a charter PSL holder, I take issue with their assessment. No team that once had a dome has gone back to a non-dome except Seattle, where the weather is temperate. Dallas, Detroit, Houston, and Indianapolis all went from dome to dome.

    I am disappointed that these lazy arbitrators didn’t bother to get their facts straight, but I am more disappointed that they didn’t even bother to attempt the option of coming up with a compromise configuration. I guess they had a plane to catch. Or maybe they were meeting in an open air conference room.

  • Aaron

    London Calling?

  • I really hate the ida of building a football stadium out in Fenton. I think the sports teams should play downtown. The only plus I could see about putting them out in Fenton is that it’d give us a good excuse to bring MetroLink down 44. I was looking at Google Maps and though, “If we’re going to build a new stadium, why not on the Illinois side?” There seems to be a lot of land along what will become I-70.

    • Charlie

      The problem there is tax revenue and economic activity. The Rams in Illinois would add nothing to our economy on this side of the river.

      • If it is close enough to the river, people could just cross the bridge to visit the bars and restraunts in downtown St. Louis. The county is horrible because public transit (trains) aren’t there and it isn’t close to downtown.

        • I think you’re giving football fans and their game day dollars too much credit.

          The whole reason for moving to a large, vacant parcel is to increase franchise-controlled parking on which attendees can do their tailgating (read: not spending money in nearby businesses).

          Unless St. Louis could work out a sweetheart deal with St. Clair County and the Rams about revenue sharing, fat chance Missouri would opt to provide tax incentives and/or tax increases for an Eastside stadium.

          If St. Louis were able to somehow ANNEX East St. Louis, however, THEN we’re talking. Go wild — new stadium, water taxis, the whole she-bang. Worth it to have a controlling stake in both sides of the Mississippi.

          Given my d’ruthers then, I’d slot it right north of the Martin Luther King Bridge — equi-distant to two casinos two: a mere shuttle ride across the river to Lumiere and a short walk to the Casino Queen (which would ALSO move into the City’s new footprint with annexation…)

          A fella can dream…

    • ChadyzGroove

      I think the best solution is a stadium on the Illinois side as well. It is more likely that the Metrolink extends up towards SIUE than continuing on down 44. Building the Stadium around the 55-70/255 interchange in Collinsville would likely be the best place. Hopefully this new stadium would be made to play soccer as well like the new one in Seattle. Plenty of space for parking which means plenty of space for tailgating which is huge in football.

      • I don’t know why we’d continue to build so far out in to Illinois. That is not where the population of St. Louis is and it just doesn’t seem smart to go to far from the river.

  • Lou

    Get rid of the Rams!

  • T-Leb

    I don’t see how this can work if the Convention Center is closed for any prolong period of time. I’d be happy to see Stan fork over a lion’s share of cash if they stay. I have my doubts that football as we know it will even be around much longer with all that is coming out about head injuries and performance enhancing drugs… seems like one can’t be a football player without getting to know both well.

    • jhoff1257

      I agree about the drugs and the injuries. However, Football makes money, and money is king. I think Football will be around for a long time.

      • Eric

        Boxing used to make lots of money too. Now it is marginal, in part because of distaste for head injuries.