DRAFT St. Louis Riverfront Stadium Project Financing, Construction and Lease Agreement

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NFL stadium proposal - St. Louis, MO 09/01/2015

The full draft St. Louis riverfront stadium project is below. It runs 58 pages of definitions, clauses, and financial details. Much was already known: an NFL owner is expected to put $250M into the stadium, the NFL’s loan program another $200M. The plan anticipates at least $160M in personal seat licenses (PSLs).

The total cost to the City of St. Louis would be $207.5M. While the “City Financing Amount” remains at near today’s annual commitment, payments are scheduled to extend for 35 years, to 2051. Payments of $5M for eight years, $5.5M in 2024, and $6M annually thereafter represent cumulative funding of $207.5M. Other funding includes state payments of $10M per year rising to $12M to 2051, a total of $415M. A bond issue would convert the $158M naming rights agreement recently made to cash for stadium construction. State brownfield and MDFB tax credits would comprise the final funding component.

The math can be viewed more than one way. According to the draft proposal, the city’s contribution to the $1B project would be $145M, or just at the 15% contribution for which some supporters had been aiming. The cost to the city of paying off bonds to cover that $145M appears to be the aforementioned $207.5M. There are basically finance charges. The same as the $280M Edward Jones Dome is being paid for by the city, St. Louis County and the State of Missouri with $24M annual payments for 35 years, or $840M. The total city commitment to pay off bonds to build the Edward Jones Dome is $210M ($6M x 35yrs).

Perhaps the most interesting, though unsurprising news was relayed by David Hunn at the St. Louis Post Dispatch. Hunn writes that NFL Vice President Eric Grubman told him the NFL “considers naming rights and even game-day taxes — on tickets, hotdogs, parking and beer, for instance — revenues that belong to team owners, not to the public.” This means, in the NFL’s view, that such revenue should be credited as a team contribution to the project, and not public money. In effect, this equates to tax increment financing (TIF) for all NFL activity, because as Grubman states, “Whether on tickets or parking, that tax wouldn’t exist but for the activities of the team.”

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DRAFT St. Louis Riverfront Stadium Project Financing, Construction and Lease Agreement

What does “Event Day Tax Revenues” mean:

“Event Day Tax Revenues” means all tax revenues from the following taxes generated at
the Stadium and adjacent parking owned by the Authority and actually collected by the City for
any Event: (a) parking garage gross receipts license tax levied and collected by the City pursuant
to Chapter 8.76 of the Revised Code of the City; (b) the following sales taxes levied and
collected by the City: (i) the general municipal sales tax levied pursuant to Ordinance No. 62884
or any successor thereto, (ii) the general municipal sales tax levied pursuant to Ordinance No.
55497, as amended by Ordinance Nos. 57179 and 57979, or any successor thereto, (iii) the
transportation sales tax levied pursuant to Ordinance No. 56554, or any successor thereto, (iv)
the capital improvements sales tax levied pursuant to Ordinance No. 62885, or any successor
thereto, and (v) public safety sales tax levied pursuant to Ordinance No. 67774, or any successor
thereto; (c) entertainment license tax levied and collected by the City pursuant to Chapter 8.08 of
the City Code; and (d) restaurant gross receipts tax levied and collected by the City pursuant to
Chapter 11.42 of the Revised Code of the City.

ARTICLE III
PRIVATE FUNDING CONTINGENCY; AGREEMENT TO ISSUE PROJECT BONDS;
USE OF PROCEEDS

Section 3.1. Private Funding Contingency. The Authority currently estimates that the total Project Costs will be approximately $998,000,000, as more particularly shown on the Proposed Project Sources and Uses attached hereto as Exhibit D and incorporated herein by reference. It is the express intent of the Authority, the State and the City that their public funding pursuant to this Agreement, including pursuant to Article IV hereof, be committed to the Project only upon the binding commitment of the NFL and the NFL Team to also fund not less than $450,000,000 of the Project (representing not less than $250,000,000 from the NFL Team and not less than $200,000,000 from the G4 program administered by the NFL or other sources) as shown on Exhibit D. Notwithstanding anything to the contrary, the issuance of the Project Bonds and the performance of the State and the City under this Agreement shall be expressly contingent upon the receipt of evidence of the satisfaction of all of the following conditions (the “Private Funding Contingency”) by , 2017 to the reasonable satisfaction of the parties hereto:

(a) The NFL irrevocably commits to a contribution from the NFL G4 program (or from other funds) for the Project of not less than $200,000,000;

(b) The NFL Team signs a lease, Sublease or other binding commitment (the “NFL Team Lease”) to play NFL football games in the sports facility constructed as part of the Project for a term of not less than 30 years or the term of the Project Bonds, whichever is longer;

(c) The NFL Team signs a binding and enforceable non-relocation agreement with the Authority that includes specific performance and injunctive relief provisions, pursuant to which (A) the NFL Team will irrevocably and unconditionally commit and guarantee to play all its home pre-season, regular season, and post—season games at the Project for a term of not less than 30 years (subject to a limited number of NFL-approved neutral site games and other customary exceptions), and G3) the NFL Team will be required to maintain its membership in the NFL during such term and will be prohibited from (1) relocating from the City, (2) applying to the NFL to transfer to another location outside of the City, (3) entering into or participating in any negotiations or discussions with, or applying for, or seeking approval from, third parties with respect to any agreement, legislation, or financing that contemplates or would be reasonably likely to result in, any breach of the non-relocation agreement, and (4) terminating the non- relocation agreement during the term of the NFL Team Lease;

(d) The NFL Team irrevocably commits to a contribution of not less than $250,000,000 for the Project;

(e) The Authority receives proceeds from the sale of seat licenses or from other funds for the Project in an amount of not less than $160,000,000;

(f) The final closing of any financing transactions necessary to effectuate (a)-(e) above; and

(g) The delivery of certifications from the Authority and the Sponsors (or their authorized representatives) acknowledging the satisfaction of the Private Funding Contingency in all respects.

DRAFT Board Bill: St. Louis Riverfront Stadium Project Financing, Construction and Lease Agreement by nextSTL.com

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  • Matt B.
  • John R

    I assume that the “base rental payments” the City would be required to pay for years 2016-2021 for the new stadium would not be on top of the payments we were scheduled to make on the Dome.

    I guess the question is whether the bond issuance would bring in not just $70 million for the new stadium construction to the table but also fulfill the remaining obligation on the bonds for the construction of the Dome. Has that been verified?

  • Brian

    “The NFL Team signs a binding and enforceable non-relocation agreement
    with the Authority that includes specific performance and injunctive
    relief provisions…” As I read this, the lease can be revoked if the stadium or government does not satisfy some terms of the lease. The devil is indeed in the details, and given the secrecy surrounding the process thus far, we can safely assume that the BOA will not be involved in the lease negotiations; rather, they will be given a take-it-or-leave-it vote with a tight time line. Even in the unlikely event that the Rams or some other team ends up playing here, I expect that the billionaires will be back at us in 2035, putting a gun to our heads and demanding that we refill the trough with a billion or so in public money so they can once again gorge themselves on our obtuseness.

  • Jeff Kramer

    I think that it would be a better idea to get a commitment from the MLS and have the MLS owner pay 76 million. I don’t get the point of giving up all of the game day revenues. Why spend 76 million and get nothing from it but “the intangible benefit of having an NFL team” whatever that means. Especially when it’s entertainment money which won’t be lost.

    • I agree the MLS being a part of this would be a big help, but I think they realize there’s not near the amount of money in the MLS as there is in the NFL… so it may not be worth their time. That being said – I, as a huge soccer fan, would love to hear more MLS talk co-mingled among the NFL speak.

  • T-Leb

    Does the NFL think it is a church?

    • Benjamin Aronov

      Wondering what this line refers to?

      ” If you don’t think the NFL can go broke remember they started one season without a main sponsor within the last 10 years.”

      • T-Leb

        Remember when PGA started loosing sponsors b/c most of them were investment banks? Didn’t look good for a while.
        NFL had same issue, started one season a few years back without official main sponsor. I couldn’t find article, it was a few years back. FIFA is finding out that sponsors have some ethics too, calling for changes in who runs the org.

        • Benjamin Aronov

          I’d be very interested to see this article. Don’t recall the issue/wasn’t aware at the time.

  • SnakePlissken

    The Authority

  • JacksonD

    Get Rrrrrrr done!

    • jhoff1257

      After a public vote!

      • Bruce Bruce

        For the 100th time. We are where we are. A public vote means that the Rams go bye bye. It’s nice to stand for something on the principle of it, but you have to realize it’s not realistic

        • rgbose

          Is the hope that with a stadium plan nailed down the NFL will force the Rams to stay?

          • Mark

            nfl won’t force the rams to stay. NFL can’t do that. NFL can endorse the raiders and chargers to move to LA therefor pushing the Rams to the table here. The Rams have never said they want to leave. I believe tbeir hand was forced to explore La and keep going down that path because they believed that there way no chance in hell of getting a deal here. Than peacock came in and here we are