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- The Dude
Keeping The Rams In #STL - Part I
http://ramblingsofpaul.tumblr.com/post/75583201022/keeping-the-rams-in-stl-part-i
The silly season is about to start. Sure, I could blog about my mock draft, or my draft crush, but do any of you really care? At this time, those types of articles mean nothing. Thus, I decided to find something substantive. After Silent Stan bought 60 acres just outside of LA, I found my subject. How can a new stadium be built, when the primary requirement is public money? Forget the principle, morals, or political ideology. Silent Stan is a man who gets what he wants. He now wants public money. Trust me, he will get it or leave. There is no in between.
The only real issue for St. Louis (#STL) is whether we want to be a market that loses teams, Fortune 500 companies, and direct flights, or do we want to finally step up and show we are more than what we appear. We are on a bad streak of losing important characteristics of markets, and it needs to end. We simply can’t become a great baseball town that lost two NFL teams.
Some may say the Rams don’t bring in much money and actually hurt the public’s bottom line. Those people are idiots. They can only see the obvious. They need to look deeper. When a market has a bunch of Fortune 500 companies, the market gets much more than just tax revenue. The market gets prestige, a source for huge charitable donations, a source for large ticket items, and a source for political pull to get other items (ex. more direct flights at our airport).
The same is true for sports teams. A market gets much more than tax revenue from having a professional sports franchise. To say otherwise, shows an amazing lack of cognitive analytic ability.
If you agree with the above, the next question has to be: “Fine Paul, all the above is true, but where are you going to find the money to publicly finance the new stadium”. I can answer that question, but it will take several blogs. The first step to my plan is understanding how #STL financed the first stadium. To understand that, you must understand who the St. Louis Regional Convention and Sports Complex Authority is, how it was created and how it went from penniless to a net worth of $720,000,000 in less than a year.
Part II of this blog will be about the STL RCSCA.
---------------------
Keeping the Rams in #STL - Part II
If you need to catch up here is the link for Part I:
http://ramblingsofpaul.tumblr.com/post/75583201022/keeping-the-rams-in-stl-part-i
In 1988, Missouri passed legislation creating the St Louis Regional Convention and Sports Complex Authority. In legal terms, a new entity was created, a new person if that is easier to understand. The entity had a limited, but very interesting purpose. The entity could acquire land, it could accept responsibility for debt, and it could enter into some contracts. With these powers, the state of Missouri created a rich “person” who could construct and pay for a new dome.
You may say: “Wait, how did this brand new entity become rich?” To answer that question, we need to jump to 1991. Missouri issued and sold Class A Series Bond, St. Louis County sold Class B series Bonds and St. Louis City sold Class C series bonds. In total, $259,000,000 was raised. This was invested and it earned another $40,000,000 until it was all spent in 1995. The RCSCA, with its ability to enter contracts owned the land where the dome was going to be built, and got access to this bond money through a financing agreement with the State, the County, and the City.
By the end of 1991, the RCSCA had $259,000,000 invested and began plans to construct the dome. By the end of 1995, the dome was built, on time, for just under $300,000,000. Was all of the money gone? No! Another part of the 1991 legal maneuvering made the RCSCA responsible for paying down the bonds. It would be able to pay the bonds down because, it would receive annual payments from the State, County, and City, to the RCSCA. The state paid $12,000,000, the County paid $6,000,000 and the City paid $6,000,000 directly to the RCSCA each year beginning in 1991. Those payments will end in 2021, which also happens to be when the last payment on the bonds will be made.
If you are getting the picture, the brand new entity in 1988, the RCSCA, all of the sudden had hundreds of millions of dollars in cash in 1991 and had $720,000,000 guaranteed to be paid to it over the next 30 years. We did not find a rich St. Louis resident to pay for the dome, we created one.
This legal maneuvering is not new. The original convention center was built by a newly created entity and the new city jail was also built by a newly created entity. I could go on, but you should get the picture.
The cynics out there will notice, that I have not explained where the annual payment money came from? I will address that in Part III, but let me note that the City’s $6,000,000 payment to the RCSCA represents less than 1% of the City’s 2014 $985,000,000 budget. If you want to say the City can’t afford this, it is broke, you might want to look at pensions first. If you stopped this annual payment right now, the City would still be broke and it would still owe almost $100,000,000 to retired employees.
To be clear, I am not suggesting we take money from retired civil servants. I am simply noting that the do-gooders might want to look at this area first, if it truly wants to help the City’s finances. As a final note, and a foreshadow, only $20,000,000 of the $24,000,000 in annual payments to the RCSCA goes to pay off the bonds ….
http://ramblingsofpaul.tumblr.com/post/75583201022/keeping-the-rams-in-stl-part-i
The silly season is about to start. Sure, I could blog about my mock draft, or my draft crush, but do any of you really care? At this time, those types of articles mean nothing. Thus, I decided to find something substantive. After Silent Stan bought 60 acres just outside of LA, I found my subject. How can a new stadium be built, when the primary requirement is public money? Forget the principle, morals, or political ideology. Silent Stan is a man who gets what he wants. He now wants public money. Trust me, he will get it or leave. There is no in between.
The only real issue for St. Louis (#STL) is whether we want to be a market that loses teams, Fortune 500 companies, and direct flights, or do we want to finally step up and show we are more than what we appear. We are on a bad streak of losing important characteristics of markets, and it needs to end. We simply can’t become a great baseball town that lost two NFL teams.
Some may say the Rams don’t bring in much money and actually hurt the public’s bottom line. Those people are idiots. They can only see the obvious. They need to look deeper. When a market has a bunch of Fortune 500 companies, the market gets much more than just tax revenue. The market gets prestige, a source for huge charitable donations, a source for large ticket items, and a source for political pull to get other items (ex. more direct flights at our airport).
The same is true for sports teams. A market gets much more than tax revenue from having a professional sports franchise. To say otherwise, shows an amazing lack of cognitive analytic ability.
If you agree with the above, the next question has to be: “Fine Paul, all the above is true, but where are you going to find the money to publicly finance the new stadium”. I can answer that question, but it will take several blogs. The first step to my plan is understanding how #STL financed the first stadium. To understand that, you must understand who the St. Louis Regional Convention and Sports Complex Authority is, how it was created and how it went from penniless to a net worth of $720,000,000 in less than a year.
Part II of this blog will be about the STL RCSCA.
---------------------
Keeping the Rams in #STL - Part II
If you need to catch up here is the link for Part I:
http://ramblingsofpaul.tumblr.com/post/75583201022/keeping-the-rams-in-stl-part-i
In 1988, Missouri passed legislation creating the St Louis Regional Convention and Sports Complex Authority. In legal terms, a new entity was created, a new person if that is easier to understand. The entity had a limited, but very interesting purpose. The entity could acquire land, it could accept responsibility for debt, and it could enter into some contracts. With these powers, the state of Missouri created a rich “person” who could construct and pay for a new dome.
You may say: “Wait, how did this brand new entity become rich?” To answer that question, we need to jump to 1991. Missouri issued and sold Class A Series Bond, St. Louis County sold Class B series Bonds and St. Louis City sold Class C series bonds. In total, $259,000,000 was raised. This was invested and it earned another $40,000,000 until it was all spent in 1995. The RCSCA, with its ability to enter contracts owned the land where the dome was going to be built, and got access to this bond money through a financing agreement with the State, the County, and the City.
By the end of 1991, the RCSCA had $259,000,000 invested and began plans to construct the dome. By the end of 1995, the dome was built, on time, for just under $300,000,000. Was all of the money gone? No! Another part of the 1991 legal maneuvering made the RCSCA responsible for paying down the bonds. It would be able to pay the bonds down because, it would receive annual payments from the State, County, and City, to the RCSCA. The state paid $12,000,000, the County paid $6,000,000 and the City paid $6,000,000 directly to the RCSCA each year beginning in 1991. Those payments will end in 2021, which also happens to be when the last payment on the bonds will be made.
If you are getting the picture, the brand new entity in 1988, the RCSCA, all of the sudden had hundreds of millions of dollars in cash in 1991 and had $720,000,000 guaranteed to be paid to it over the next 30 years. We did not find a rich St. Louis resident to pay for the dome, we created one.
This legal maneuvering is not new. The original convention center was built by a newly created entity and the new city jail was also built by a newly created entity. I could go on, but you should get the picture.
The cynics out there will notice, that I have not explained where the annual payment money came from? I will address that in Part III, but let me note that the City’s $6,000,000 payment to the RCSCA represents less than 1% of the City’s 2014 $985,000,000 budget. If you want to say the City can’t afford this, it is broke, you might want to look at pensions first. If you stopped this annual payment right now, the City would still be broke and it would still owe almost $100,000,000 to retired employees.
To be clear, I am not suggesting we take money from retired civil servants. I am simply noting that the do-gooders might want to look at this area first, if it truly wants to help the City’s finances. As a final note, and a foreshadow, only $20,000,000 of the $24,000,000 in annual payments to the RCSCA goes to pay off the bonds ….
