The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Hockey Public Funding

A fascinating fight is brewing in St Louis over public funding of the repairs to the Scottrade Center where the hockey Blues play. The Board of Aldermen passed an ordinance authorizing payment for the repairs in the form of 30 year bonds. A group led by Alderman Cara Spencer has filed suit and challenged the legality of the action because it violates terms of the Missouri Constitution. In addition to Ms. Spencer, another plaintiff is Jeanette Mott Oxford, former state representative, and Executive Director of Empower Missouri, a non profit advocacy agency for poor people. Ms. Oxford is a friend and colleague of mine and I can tell you she is very smart, determined, and fearless.

A major item of discussion concerns who owns the building. The popular perception is that the city owns it which is apparently not true. The city owns the land under it, and the Blues own the building.

Once again this is a matter of a cash starved city funding a sports venue for rich private parties. Furthermore most of the attendees at Blues game live outside the city. Ms. Spencer has recommended a regional sports authority that receives funding from the county as well as the city,

I love hockey and think Tom Stillman the owner of the Blues is a good guy. I also agree with Ms. Spencer and Oxford that public funds should not be used for this purpose. Written by Paul Dribin


Single Post Navigation

One thought on “Hockey Public Funding

  1. The Arrow on said:

    Ms. Oxford is mistaken in her interpretation of the Scottrade lease documents.

    Ownership: In order to issue bonds without a public vote the City (and lots of Cities) sell land to a development entity they control which then leases the land back to the City via a long-term lease. Technically the funding for this lease is subject to annual appropriations and not a commitment of the City’s credit (not triggering a vote requirement). Technically if the City doesnt make the lease payments credit rating agencies will rule that the City is insolvent and they will be downgraded to junk and not able to access the finanical markets (except at super high rates). If the Blues walk away tomarrow the City still has to pay the debt service so they effecitvely OWN the facility.

    Responsibility for Improvements: The Indenture clearly states that the Blues are responsible for maintianing any improvements and betterments they make to the facility. i.e. if they add signage or add fancy concession areas or VIP seating they are responsible for maintaining those improvements. The responsibility for new capital improvements is not outlined in the document. This is done purposely to provide flexibility and is in no way contreversal or unclear.

    Who Benefits: The Blues ownership has lost money 8 out of the last 10 seasons for a total loss of $25 million while generating hundreds of millions in direct revenue for the City along with parking revenue. Currently the blues need to make it atleast two rounds into the playoffs to breakeven which is not feasible long-term. This means they need to increase revenus (through upgrades to attract higher prices and other events) or through rellocation. Again, the Blues ownership has lost $25 million since taking over and is planning to invest more than half of the total cost of the upgrades. This unlike the Edward Jones Dome is a true partnership.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: