Billion dollar idea: pay for it yourself

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In January 2015, I was sitting on my couch in disbelief as the news broke on NFL Network that the St. Louis Rams were moving back to Los Angeles where they had spent 48 years before moving to my hometown in the 1990s.

The team I had grown up with and loved despite constantly being in the NFL cellar was gone. Their way out was the stadium. The Edward Jones Dome was a dark stadium that was clearly a relic of the 90s and compared to the stadiums like NRG here in Houston, AT&T Stadium in Dallas and even the St. Louis Cardinals’ new stadium Busch Stadium, the dome wasn’t even close to them.

The city had tried to negotiate with new owner Stan Kroenke to build a new stadium in the greater St. Louis area but the writing was on the wall: he wanted to move to Los Angeles. It made sense for several reasons. More publicity, better financial opportunities, hang out with more celebrities. But the biggest reason was without a doubt the plan Kroenke had for the stadium to be built should the team move.

Kroenke battled fiercely to kill any other stadium proposal in the city in favor of his proposal in which he would own not only the stadium but the area surrounding it as well. This area will include an entertainment center that will have 8.5 million square feet for business parks, condos, hotels, a shopping center and movie theater, a lake with a waterfall fountain and the headquarters for the NFL media department. Basically, a mini city.

It’s obvious why he would want this to be the stadium the NFL decides to run with because he can make a lot of money off it despite the initial construction costs. Those costs made headlines last week when the NFL owners approved raising the debt limit needed for the stadium from $2.5 billion to $4.9 billion.

So when I was a college kid sitting on my couch watching my favorite sports team pack it up and haul out of town to get to their fancy new stadium, I swore I would never say anything positive about Kroenke. This is where I break that oath.

It’s natural to balk at a $4.9 billion project for just about anything let alone a sports stadium with amenities galore around it. With that said, there is something different from this one than the new stadiums that have recently been built in Atlanta, Miami and Minneapolis and future projects like the ones being built in Las Vegas and Arlington. All of those projects have hundreds of millions of dollars of public money being put into them but the Rams’ stadium is entirely privately funded.

This is not a piece to glorify Kroenke as charitable for paying for his own stadium, partially because he managed to fit in a tax reimbursement plan with the city that will effectively make the city pay for things like road and utility work and public parks. So while it’s still a cost, it will likely be much lower than anything previous teams have asked of their cities.

Take the stadium in Minneapolis that hosted the Super Bowl just a few months ago. The stadium was completed in the summer of 2016 and was named U.S. Bank Stadium in a $220 million deal with the Vikings. All that money went straight to the franchise. How much money did the city and state have to pay to build the stadium?

A combined $498 million.

In case you’re thinking the team shoulders most of the load through private funding, let me put your mind at ease. They only paid $3 million more to fund the stadium. So the city is paying for nearly half the cost to build it and yet they keep none of the revenue generated through sponsorship deals, concessions, ticket prices or anything else.

I’m not cherry picking either. The new Las Vegas stadium being built for when the Raiders move in 2020. After trying to get the city of Oakland to spend public funds to renovate an admittedly shoddy stadium and failing, the Raiders’ owner Mark Davis decided to move to Sin City. The stadium being built there is going to cost $1.8 billion for construction. Want to guess who’s carrying most of that load?

The price tag of $750 million is coming in public funding while the Raiders are spending $500 million out of their own pockets. The public is spending more money on a project they won’t see a return on. Owners say that new stadiums elevate the local economy by attracting visitors and tourists and get people in those areas to help local businesses but that’s not true.

An economics professor at Stanford found that “NFL stadiums do not generate significant local economic growth, and the incremental tax revenue is not sufficient to cover any significant financial contribution by the city.” Basically, stadiums are used so infrequently that they don’t have a long-term significant impact on the economy.

So what do the cities get in return for shouldering a significant or, in some cases, most of the financial burden? Just paying off debts for decades to come. One of the biggest slap in the face to the city of St. Louis was they still had to pay off debt for the Rams’ stadium even after they moved.

You may be wondering how city officials let this happen but sports flourishes on emotion. It’s part of the thing that makes it so great. Unfortunately, in this case, it’s what traps officials. They know it’s not financially smart to approve these plans but if the team moves to a city that is willing to do so, they will be seen as the city council or mayor who broke a million fans’ hearts.

So even if Kroenke is seeking tax breaks for his new knockoff Disneyland, it’s better than what everyone else is doing. St. Louis suffered from losing a team but Las Vegas, Atlanta, Minneapolis are all suffering financially because they have theirs.

Owners are billionaires and Kroenke is proving that you can build what amounts to a small town with their own money. They can no longer hide from the fact because of this. If he can privately fund his dream project, the rest should too. It’s time the billionaires pay for themselves.

Tad Desai covers sports and education for The Sealy News. He can be reached at 979-885-3562 or via email at sports@sealynews.com.

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