New: Latest on Kroenke, Rams and NFL in STL

[blue4]

Not true at all.

The only reason a lender acclerates ("demands") a loan is for default.

Yes, fraud is also a reason... but using proceeds from a loan to purchase another property is not fraud.
Remember, the equity portion of the equation is accounted for, as is the debt service

And this.

 

[blue4]

In defense - BC has mentioned this many times throughout this thread. The reasoning - and I can see it - is that Stan pretty much owns the venues his teams play in. It's his M.O. It may not have been discussed by anyone publically, but I wouldn't be surprised if this happens if LA falls through for Stan.


Certainly no words as SK hasn't really said diddly squat about either LA or STL. But based on nothing isn't entirely correct either. Stan has a history to go on. It's still obviously just grasping at straws for all of us though.


First off, the Chargers were here as a stopping point. I believe the idea was always to put them in SD. Either way, they were an AFL team - not an NFL team at the time and were in a temporary venue for one year. I think it's a little rich to consider them a team that LA lost.

Second, I don't see any of the larger markets offering a lease like what brought Georgia home to St Louis and I don't see St Louis doing it again for another team. With that being the case, does it make financial sense to put another team there? I don't know but I suspect it would put them behind some other similar sized markets.

My thought is that St Louis needs to hold onto the Rams or have something worked out before they leave town. Preferably, I am going to St Louis years down the road to watch the home town Rams play.


Will the money be right?

I think that may end up being a big part of the problem still to be resolved. Is Stan's $450 million investment going to pay off for him in a similar fashion to other markets? Would the Rams even be there if not for an absolutely ridiculous lease? Does the beer and hot dog tax eat (no pun intended) into Stan's profit margin on concessions by making people eat and drink before the game rather than during it? When someone is spending that kind of money on tickets, they are no doubt less likely to buy a hot dog or beer that costs $8. He won't receive any of the PSL money. Apparently parking goes to the city/state.

It's a fair question to ask. Will the money be right? Not by our standards but when comparing it to other NFL franchises. I don't know but I sure see potential problems there.


Couldn't agree more. I realize it looks like a lot of money that could have been spent elsewhere. But in reality, it is being paid for mostly through tourism. And the region's tourism trade is making a crap load more than the tax is costing them. Let the Rams leave. Then see how much that money was worth. I get what you mean by comical but it makes me angry and I don't even live there nor have a vested interest.

The other thing is that the cost of keeping the Rams is SO much less than trying to get another team to move there. I really wish the powers that be would have started demonstrating this to the public long ago. I'm sure the product on the field (not Stan's fault BTW) didn't help but they still could have been pushing this thing politically. I realize it sounds like hundreds of millions of tax dollars being spent on a billionaire's play toy but it is in reality a very good investment in drawing outside money that is spent and re-spent and taxed and re-taxed.

I'm just talking about future owners. The idea put forth was that losing the Rams would impact getting another team. I'm saying if another guy has the money and a good plan the NFL wouldn't care if we lost them, it'd be about the new situation. I used the previous teams in LA as an example of the NFL not caring if the deal is right.

 

[Stranger]

http://www.bizjournals.com/stlouis/news/2015/06/03/rams-contracts-hint-at-relocation.html
Rams’ contracts hint at relocation

 

[blue4]

I don't think you understand how mortgages work.

I own a house (house "A").
It's fair market value is $1,000,000
I have a $400,000 mortgage on it.
Assuming the lender's equity limit is 80% loan-to-value, they will lend me $400,000 ($1,000,000 X 80% - $400,000)
Assuming I qualify from a debt-to-income perspective and my credit qualifies, I get $400,000.
The lender really doesn't care what I do with that money.

I go out and purchase a rental property (house "B" - a 3 family income producing property) for $300,000 and use the proceeds of my home equity loan to buy it.

How is that "shady"?

If I default, the lender accelerates my the loan on my primary house (house "A") and they foreclose.

The rental (house "B") stays the same (no lien and income producing). In fact, if I defaulted on my primary house, maybe the rental income will help me make ends meet (assuming I defaulted due to some financial hardship).

Again, nothing shady about it... in fact, smart use of primary home's equity.

I keep wondering why it's assumed that the credit union loaned me more money than the house was worth. If I stopped paying on the old house, they'd simply sell the old house and have their money. I'm like you, I'm having trouble finding the shady part.

 

[The Ripper]

Its only shady if you don't hold up your end. And I did my homework before I did it. The idea that one would have escaped unscathed by not paying off the old loan is simply not true. The loans were also thru the same credit union. They knew what was happening. If that's shady, then what the average corporation does every day is pure evil.

The original bonds were issued for of the construction the Dome with the definition of "Facilities" means a convention and sports facility being constructed by the Authority generally east of and adjacent to the Cervantes Convention Center. " This is why it's in court not inaction from the legislature plus part of the suit involves the makeup of commissioners which was supposed to be split by party affiliation. It's just a mess not matter how you look at it.

Your situation is completely different and not a problem. This is more like refinancing a construction loan for address xyx and then building at address ABC. Most people would just get a new loan for ABC.

 

[MrMotes]

The original bonds were issued for of the construction the Dome with the definition of "Facilities" means a convention and sports facility being constructed by the Authority generally east of and adjacent to the Cervantes Convention Center. " This is why it's in court not inaction from the legislature plus part of the suit involves the makeup of commissioners which was supposed to be split by party affiliation. It's just a mess not matter how you look at it.

Your situation is completely different and not a problem. This is more like refinancing a construction loan for address xyx and then building at address ABC. Most people would just get a new loan for ABC.

Exactly. Nobody took out a loan on the dome to build another stadium. They're trying to re-purpose the loan for the dome to pay for something different. That's the shady part. But it's not really shady either. It's just what politicians do...

 

[dieterbrock]

If you qualify for a equity loan of $200K (qualifying, meaning you have the equity in the collateral and have proven you can handle the payment - debt ratio - associated with the $200K loan), then it doesn't matter about liability tied to the new house. You would have paid "cash" for it from the equity from your existing house.

But, let's say you only used some of the $200K on the second house. You'd have to go get another mortgage on that second house and that lender would make you go throught the same qualification process.

In both scenarios, the lender isn't going to hurt themselves and there's absolutely nothing "shady" about the transactions.

I've underwritten hundreds of home equity loans. If the borrower qualifies, the lender is not concerned about "intent". They've underwritten the loan (hopefully) to mitigate risk.

You are just not correct in what you are saying.

I'm totally correct in what I'm saying.
Not securing a mortgage instrument to the intended property is skirting rules for one intention or another.
Like you said, it makes the purchase of said home a cash buy or a free and clear property which on paper is true but in reality is not.

For one, the owner on the free and clear property doesnt require title or property insurance where if there was a mortage attached they would.
Also, if the purchased property was to be an investment property the owner would be screwed if they were carrying the debt on their primary, and the tennant (or multiple tennant) werent paying and they couldnt keep up on the bills. The owner wouldnt be afforded the opportunity to negotate with their lender on that property.

Again, its off the beaten path but in reality the reason for pulling from a primary in order to buy a 2nd is to skirt the system. Which is shady

As for the home equity piece, if somone applies and they allege their intent is to make sturctural improvements to the home, they likely will be turned down, so yes there are instances where intent is relevant.

 

[blue4]

The original bonds were issued for of the construction the Dome with the definition of "Facilities" means a convention and sports facility being constructed by the Authority generally east of and adjacent to the Cervantes Convention Center. " This is why it's in court not inaction from the legislature plus part of the suit involves the makeup of commissioners which was supposed to be split by party affiliation. It's just a mess not matter how you look at it.

Your situation is completely different and not a problem. This is more like refinancing a construction loan for address xyx and then building at address ABC. Most people would just get a new loan for ABC.

Well, I really was just defending myself from being called shady.

And I think this would all be great to talk about if speed wasn't such an issue. It's nice for these politicians to assign blame or talk about. But at the end of the day are we really going to be better off as a city if this goes thru? Are we going to walk around congratulating ourselves on winning the case if we lose all the revenue from the lost jobs and from the Rams themselves? There are still old timers around who debate whether the highway system was legal to build. No, I think this is in play solely for the benefit of the plaintiffs. The members in opposition to the governor get to derail a possible achievement and the members who filed from the same party get to tout the lawsuit when they go back to their increasingly republican leaning districts to help them survive. This is about reelection, not whether the city is served properly.

 

[dieterbrock]

Its only shady if you don't hold up your end. And I did my homework before I did it. The idea that one would have escaped unscathed by not paying off the old loan is simply not true. The loans were also thru the same credit union. They knew what was happening. If that's shady, then what the average corporation does every day is pure evil.

I'm not going to fall in to a trap here where you are twisting what Im saying in to some sort of judgement on your personal situation. I am not.

I find the way the bonds are going to be extended as shady and I made an example of the mortgage which I admitted was not exactly apples to apples

 

[blue4]

I'm totally correct in what I'm saying.
Not securing a mortgage instrument to the intended property is skirting rules for one intention or another.
Like you said, it makes the purchase of said home a cash buy or a free and clear property which on paper is true but in reality is not.

For one, the owner on the free and clear property doesnt require title or property insurance where if there was a mortage attached they would.
Also, if the purchased property was to be an investment property the owner would be screwed if they were carrying the debt on their primary, and the tennant (or multiple tennant) werent paying and they couldnt keep up on the bills. The owner wouldnt be afforded the opportunity to negotate with their lender on that property.

Again, its off the beaten path but in reality the reason for pulling from a primary in order to buy a 2nd is to skirt the system. Which is shady

As for the home equity piece, if somone applies and they allege their intent is to make sturctural improvements to the home, they likely will be turned down, so yes there are instances where intent is relevant.

But this is all factored into the risk assessment. The borrower wouldn't get a loan with no cash flow. You are assuming that the intent all along is to mislead. It isn't skirting the system, it's leveraging assets. This kind of thing has been happening since the bronze age.

 

[blue4]

I'm not going to fall in to a trap here where you are twisting what Im saying in to some sort of judgement on your personal situation. I am not.

I find the way the bonds are going to be extended as shady and I made an example of the mortgage which I admitted was not exactly apples to apples

Well, when you flat out said it was shady more than once, I don't think I was twisting your words. I don't think it's a stretch that I would assume it's a judgment. But if it's not, then no big deal.

 

[The Ripper]

Right now the RSA suit against the public vote is more interesting with the revolving door for judges. The new judge is a family court judge and up for re-election next year.

 

[D L]

Whatever happens, I'm sure St. Louis is going to get fucked in the ass.

 

[dieterbrock]

I don't think you understand how mortgages work.

I own a house (house "A").
It's fair market value is $1,000,000
I have a $400,000 mortgage on it.
Assuming the lender's equity limit is 80% loan-to-value, they will lend me $400,000 ($1,000,000 X 80% - $400,000)
Assuming I qualify from a debt-to-income perspective and my credit qualifies, I get $400,000.
The lender really doesn't care what I do with that money.

I go out and purchase a rental property (house "B" - a 3 family income producing property) for $300,000 and use the proceeds of my home equity loan to buy it.

How is that "shady"?

If I default, the lender accelerates my the loan on my primary house (house "A") and they foreclose.

The rental (house "B") stays the same (no lien and income producing). In fact, if I defaulted on my primary house, maybe the rental income will help me make ends meet (assuming I defaulted due to some financial hardship).

Again, nothing shady about it... in fact, smart use of primary home's equity.

You basically have answered your own question. If said person is so qualified, why not take out a loan to purchase the investment property?

 

[RamFan503]

I'm just talking about future owners. The idea put forth was that losing the Rams would impact getting another team. I'm saying if another guy has the money and a good plan the NFL wouldn't care if we lost them, it'd be about the new situation. I used the previous teams in LA as an example of the NFL not caring if the deal is right.

I get that. And it is actually what I'm referring to. I also think that by spending a bit more time on the funding issue, the city could get a bit more creative and actually sell the voters on more public funding. I think that is going to be necessary for any NFL owner unless they can show him a benefit over other cities in revenue streams. The last thing they are going to want to do is offer another ridiculous lease like they did the Rams. That lease was all in favor of the Rams and virtually guaranteed that any subsequent deal had to be a severe yanking back on the reins.

Bottom line is that I don't think that what they are offering Stan would lure any team to St Louis. The shiny new stadium is great and all - and I really like the plans. But they want $450 million from Stan AND they are going to use most of the other revenue streams that have typically gone to the owners IIRR. I want to see the great upside for an owner but I frankly can't.

 

[bluecoconuts]

Help Wanted: Judge, to hear stadium funding case

25 MINUTES AGO • BY DAVID HUNN

Updated at 3:58 p.m. with news on the removal of Judge Joan Moriarty and her replacement, Judge Thomas Frawley.

ST. LOUIS • The suit to sidestep a public vote on stadium funding now has its third judge in nearly as many days.

The first, David Dowd, removed himself. Around midday Wednesday, attorneys removed the second, Joan Moriarty.

By late afternoon, her replacement, family law Judge Thomas J. Frawley, had the job.

The public board that runs the Edward Jones Dome filed suit last month against the city of St. Louis. Its beef: A 2002 city ordinance that requires a public vote prior to the use of tax dollars on a new stadium. Dome authority attorneys argued in the suit that the city law is “overly broad, vague and ambiguous.”

On Friday, Dowd removed himself from the suit. He had cancelled the first hearing on the issue, scheduled for last week. One of his assistants said then that he was “under the weather.”

On Monday, the St. Louis Circuit Court’s presiding judge, Bryan Hettenbach, reassigned the case to Moriarty. Hettenbach said on Wednesday that Dowd is home under a doctor’s order, and will be for two weeks.

Dowd isn't trying to get out of hearing a contentious lawsuit, Hettenbach said; he is simply unable to handle the case in a timely way. “This is not something either party wants continued indefinitely,” Hettenbach said.

Moriarty was next in line to take the case, he continued. She and Dowd were both assigned to the “equity/pre-trial motions” docket at the start of this year.

Then, just after 11 a.m. Wednesday, the attorneys for the Edward Jones Dome authority requested that Hettenbach remove Moriarty, too.

Wednesday afternoon, Hettenbach reassigned the case again. He said he called the judges to see who was taking vacation and who had time to hear a case. He drew names from those who said they were available, and picked Frawley.

Bob Blitz, attorney for the Dome authority and a member of Gov. Jay Nixon’s new stadium task force, did not immediately return a call seeking comment.

His firm is asking the court to rule that the city law requiring a public vote on stadium tax funding doesn’t apply, conflicts with Missouri statutes or is unconstitutional.

City tax dollars are key to the $985 million stadium funding plan, and could help sway coming National Football League decisions. Nixon’s two-man task force is counting on at least $250 million from the state and city, not including extra taxes, tax incentives and seat license fees.

Mayor Francis Slay’s staff said in April that, despite the mayor’s support for the stadium, city attorneys would energetically defend the public-vote ordinance.

A few weeks later, St. Louis University law professor and legal clinic supervisor John Ammann filed on behalf of three city residents who sought to intervene. His filings say city ordinance requires a fiscal note, a public hearing and a public vote. He said the three residents fear the city will provide money for the stadium without fulfilling those.

Moriarty had ruled on contentious cases before. Last year, she prohibited Lyft ride-sharing cars from operating in the city before a hearing that summer.

Two years ago, she slapped the hands of city jail administrators after they errantly charged a man with 10 fingers instead of the correct suspect, who had only eight.

Why did they dismiss the one judge? I heard that they wanted to essentially stack the deck with a judge that would rule in their favor, but at this point if you're revolving judges, doesn't that look worse, after there's already murmurs of foul play? Pick a judge and keep them....

 

[RamFan503]

That's the shady part. But it's not really shady either. It's just what politicians do...

OK ... now you REALLY lost me.

 

[RamFan503]

I keep wondering why it's assumed that the credit union loaned me more money than the house was worth. If I stopped paying on the old house, they'd simply sell the old house and have their money. I'm like you, I'm having trouble finding the shady part.

The last thing a bank wants to do is foreclose on a property even if they are only loaning you 80%. By the time all is said and done, they generally lose quite a bit of money by taking back a property.

 

[RamFan503]

If you own another home, you'd deduct the taxes on schedule E, under expenses.

Are you referring to taxes or interest?

 

[blue4]

The last thing a bank wants to do is foreclose on a property even if they are only loaning you 80%. By the time all is said and done, they generally lose quite a bit of money by taking back a property.

Of course, but that's why they do the risk assessment. This is true of all credit, isn't it?