The longest con
Proposed Rams stadium won't help local economy, struggling neighborhood, WU faculty say
Sunita Parikh is a football junkie. Already a knowledgeable sports fan, she gained connections with the Rams through a friend and now speaks wistfully of the St. Louis team’s halcyon days of Kurt Warner and Mike Martz’s “Greatest Show on Turf.” Pinned to the bulletin board on her desk are her plane tickets to and from Atlanta for 2000 Super Bowl, where she cheered on the Rams’ thrilling victory.
But the Washington University associate professor of political science hasn’t always supported St. Louis. She grew up in the Bay area and was a Raiders fan—“Don’t print that; nobody will ever take my classes again,” she joked—when the team left Oakland for Los Angeles.
With rumors swirling about the Rams potentially departing for LA, Parikh knows firsthand the pain that St. Louis’ football fans might soon feel.
“When Oakland left and moved to Los Angeles, it was a real loss,” she said. “It’s part of a city’s identity, so when a team leaves, you lose that chunk of your identity. The Rams haven’t been here that long, but if you’re under 30 years old, they’ve been here as long as you can remember, so that’s not nothing.”
In a last-ditch effort to keep the Rams in St. Louis, city and state leaders have spent months planning a billion-dollar replacement for the Edward Jones Dome, which the team has called home since moving to the city in 1995.
Rams owner Stan Kroenke, worth $6.3 billion, is notoriously tight-lipped and hasn’t revealed whether a new stadium would be sufficient to keep the team or if he would still relocate to the West Coast. But that hasn’t kept Missouri Gov. Jay Nixon from moving forward with the construction effort, which calls for a nearly $400 million taxpayer commitment for an open-air stadium on the north riverfront.
Publicly funded stadiums are nothing new for professional sports teams, but of late, they have become more controversial as cash-strapped cities donate large sums of municipal bonds and tax incentives to increasingly wealthy owners.
And these agreements have taken hold across the country in cities the size of St. Louis. Earlier this summer, Wisconsin Gov. Scott Walker approved the use of $250 million in public financing for a new arena for the Milwaukee Bucks. Detroit’s leaders plan to contribute $285 million in taxpayer funds to build a new arena for the Red Wings. In May, Cobb County, Ga., agreed to give the Atlanta Braves nearly $400 million. The list goes on.
This extravagant devotion of public money for stadiums even reached HBO screens in July when John Oliver devoted 20 minutes of a “Last Week Tonight” episode to exploring the issue.
To gain both an academic and St. Louis-centric perspective on the Rams’ predicament, Student Life interviewed five Wash. U. faculty, each from a different discipline, who nearly unanimously spoke against the taxpayer-funded effort. They discussed at length, among other reasons, the plan’s flawed economic rationale, its misuse of public funds and space, and its sense of stagnation with regard to city planning.
The controversy extends beyond the bounds of the Edward Jones Dome and the blueprinted proposal on the riverfront; it fumbles about the city and, in the telling of more than one professor, embodies the state and local government’s mishandling of the region’s urban and economic development.
This debate matters for St. Louis at large, the professors argued.
“For St. Louis at this point, with all the things that we have that need attending to, it’s particularly painful for people to see how much energy can be marshaled for a football team,” Parikh offered. “And I love the football team.”
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The connections between the Rams, St. Louis and Los Angeles, and taxpayer-funded stadiums are a curious reflection of a similar situation in the mid-1990s, when the team’s then-owner, Georgia Frontiere, left LA for St. Louis in a power play aimed at increasing both the team’s fortunes on the field and her fortunes at the box office.
Despite serving as the Rams’ home for the previous half-century, LA lost its team because the city refused to use public funds to build a stadium exclusively for football. St. Louis, Frontiere’s home, was the beneficiary after the Missouri city itself had lost its longtime team, the football Cardinals, a decade earlier for not itself donating public funds for a new stadium.
And now, two decades, one Super Bowl title and an ownership change later, the Rams might be tracing their flight plans back to the West coast. Although Los Angeles remains a potential relocation destination for any of the Rams, San Diego Chargers and Oakland Raiders—all former LA residents—Kroenke’s plans for the Rams’ move are so far the most developed, comprising a $1.8 billion, 80,000-seat stadium in Inglewood, Calif., that NFL executives have described as “exciting” and “sexy.”
That’s a sharp contrast from the Rams’ current stadium, which sits squat, practical and most unsexy in downtown St. Louis. Since last November, however, state and city leaders have worked on a new stadium proposal, hoping that a sleek and modernized effort will convince Kroenke to keep his business here.
But Kroenke’s business should not be conflated with the government’s business, Glenn MacDonald, an economics professor in the Olin Business School, said in questioning why St. Louis leaders would support a publicly financed stadium.
Football teams “are regular commercial entities; they’re entertainment businesses, and we don’t think of those things as truly falling under legitimate government things to subsidize,” MacDonald said. In other words, a football stadium isn’t a road or a bridge or an initiative to curb pollution.
MacDonald is a Rams fan and has been even since before he came to St. Louis, so he would like the team to stay for personal reasons. But ask him his view as an economist, and the answer switches to a resounding no.
“It’s really hard to see this as overall a good idea. It’s going to be very expensive,” he said, without much concrete benefit for the city. “That’s not a very good way to spend government money.”
The expense for the new stadium, as currently detailed, totals $998 million to be split between the NFL, the fans and the taxpayers. The former would provide $450 million, likely comprising $250 million from Kroenke and $200 million from a special league fund, and an additional estimated $160 million would be raised from personal seat licenses, or deeds that entitle fans to buy season tickets.
From the taxpayers, the construction effort would take $135 million in bonds from the state, $66 million in bonds from the city and $187 million in tax credits and other incentives. All told, the taxpayer commitment would reach just short of $400 million. And that’s on top of the $12 million a year the state is still paying on debt and upkeep for the Edward Jones Dome, for which payments are expected to continue through 2022 due to the dome’s 30-year bond structure.
It’s a hefty investment, and even the rosiest views of its return paint a thorny picture.
“We’ve known since the mid-’70s that sports teams don’t bring fast economic benefits, certainly nothing that offsets the kinds of credits they’re getting,” Parikh said. “Ten times a year, 12 times a year, you get a huge influx of people in, [but] that’s it.”
Tax incentives can be important for building up communities or neighborhoods, she added, but that’s not the type of benefit a sports stadium confers upon its city.
A local sports team by itself doesn’t usually add much economic value to its city because it attracts funds that would otherwise go into different forms of entertainment locally, MacDonald said.
“People think of themselves as having an entertainment budget in a sense, and if they spend more of it on football, they spend less of it on other things,” he explained.
And even the more generous estimates place the impact of a Rams’ home game at no more than $5 million—making a full season of games a mere “rounding error in terms of economic activity,” MacDonald continued. “It would be one thing if you’re talking about revitalizing an entire city…but all you’re talking about is a small area.”
Rich Ryffel, a senior lecturer of finance in the business school, agrees. “It’s somewhat a zero-sum game with disposable income, so you build a stadium and people go to fewer movies or they spend more at the stadium for dinner and tailgating, and they spend less money out in suburban restaurants,” he said.
While in the industry before teaching, Ryffel worked on financing both the Edward Jones Dome and the new Busch Stadium through the use of municipal bonds, but he acknowledged that studies on the topic overwhelmingly conclude that a stadium is “not a good public investment. In other words, if the public puts in a dollar, they’re not going to get a dollar out of it.”
The unspoken conclusion to that analysis is that in the case of the proposed riverfront stadium, that’s $400 million the public won’t get back out of it.
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Throughout the project’s conception and presentation, organizers have said it is about more than a stadium—that it provides an opportunity to improve the downtrodden region. Earlier this month, Mayor Francis Slay told the St. Louis Post-Dispatch that he knows he can’t prove the stadium makes sense financially for the city, but it still represents a good investment because the north riverfront area isn’t going to develop organically.
With a similar mindset, the Missouri Development Finance Board approved $15 million in tax credits for the proposed stadium two weeks ago, marking the first step toward a total $50 million in credits from the agency over three years. In his recommendation to parcel out these credits, the finance board’s executive director called the relevant land “severely blighted” and wrote that a new stadium would help “transform the most visible downtown riverfront area and provide substantial economic benefit to the City and State.”
But that intuition is flawed and the proposal is rife with urban planning missteps, according to Michael Allen, a University College coordinator and American culture studies lecturer. A stadium will certainly transform the area’s blight, Allen agreed, but for a different—and darker—reason.
“What it does is it destroys the area so it vanquishes the blight that it identifies by just knocking everything down,” he said. The proposal just “decimates the existing urban character,” turning 90 acres of usable land into a “giant parking lot with a stadium in the middle.”
Allen studies architecture and planning in urban settings, and instead of an instance of a centerpiece stadium revitalizing a neighborhood, he sees the plan promoting a brand of “destination tourism” that offers little opportunity to generate local spending. Busch Stadium pushes fans into the network of downtown activities because they are forced to park away from the ballpark, Allen explained, but the riverfront proposal has a different design.
“That location makes little sense,” he said. “It’s cut off; it’s isolated; it’s not connected into a street system where traffic could dissipate…With the setup, the automobile-centric design, it’s not going to generate any activity downtown. Nobody would have any reason to walk to or from the stadium, so it’s not going to be producing any multiplier impacts that are going to be felt by downtown bars or restaurants.”
He wasn’t alone in that assessment. MacDonald, the economist, noted that the area’s bleak outlook doesn’t lend itself to easy solutions like hoping a stadium will catalyze economic activity.
“If you think you’ve got a problem in North St. Louis with poverty, well, don’t stick a Band-Aid on it. Try and figure out why people are poor and devote some resources to changing that. Throwing a stadium at it is just, watch us drop a bunch of money over there,” he said.
Job creation is another aspect of the proposal touted by its proponents: A stadium task force in April estimated that the project would create more than 5,000 jobs over a four-year period.
But multiple professors argued that number is a considerable exaggeration. Most of those jobs will be temporary for construction, Allen said, and both he and MacDonald pointed out that the work would largely go to union workers—meaning area residents won’t even receive the bulk of the benefit from those temporary jobs.
Allen thinks this issue comes from a lack of urban understanding on the part of the stadium’s advocates in government. “They don’t really care about building a neighborhood around downtown St. Louis,” he said. “They are continuing to follow a series of large-scale single-uses that are isolated from each other and don’t add up to a real coherent, rich downtown landscape.”
Allen mentioned a 180-acre project in the works from community organization Great Rivers Greenway, which seeks to transform the north riverfront by building public parks, recreation areas and residential opportunities, as an alternative plan that would do a better job revitalizing the neighborhood.
Great Rivers Greenway’s plans include blueprints both in collaboration with a potential stadium and for exclusive use of the land, but with the former option using half of the available space solely for the stadium. Representatives from the organization did not respond to requests for comment for this story.
Ultimately, Allen concluded, the stadium represents the “antithesis of urbanism. Urbanism is building up the center of the city. Urbanism is also, I think, about connections between buildings—you know, economic, social and architectural dialogues across streets and sidewalks, and that doesn’t happen here. This is a spaceship.”
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Both Missouri Gov. Jay Nixon and St. Louis Mayor Francis Slay don’t want to see the team leave, and it’s easy to discern the politicians’ angle: Nixon doesn’t want to be the governor who let the Rams go, and Slay similarly doesn’t want to be the mayor who lost the city’s only professional football team. (It gets worse than that. With both Saint Louis University and the city’s NCAA Division II schools lacking football programs, our own Washington University Bears would be the only post-high school football team left in the city.)
But these excuses aren’t reason enough to redirect such a sizable sum of taxpayer dollars, Parikh said.
“Are we spending $400 million because businesses want to say they are in a city with an NFL team and politicians don’t want to have this thrown up to them by a political competitor?” she asked.
The question of what businesses want is a tricky one, though, and it’s why Ryffel, who has experience working with businesses on the issue of stadium construction, supports a new stadium despite its economic questions.
“Being an NFL city puts you in a different category…when you think about first-tier cities versus second-tier cities,” Ryffel said. “Cities that have professional sports franchises are viewed as better places to work and live in a lot of people’s minds.”
But, Ryffel continued, that advantage comes only on the margin, and having an NFL team is less important for a city that revolves its athletic identity around the team that plays 81 games a year—plus playoffs, a taste the Rams haven’t savored in more than a decade—at Busch Stadium. Each professional team, he said, is “incrementally less impactful.”
Allen criticized the “first-tier” perspective through a historical lens, noting that the city didn’t fare any worse when it spent the decade between the football Cardinals and Rams without a gridiron team to call its own. And even with the Rams in town, MacDonald said, corporations still haven’t flocked to St. Louis.
“Let’s look at the list of large companies that have moved to St. Louis in the last 10 years. There’s nothing on it,” he said.
For Noah Cohan, a recent Ph.D. and adjunct instructor in English who studies the relation of sports fandom to identity and politics, the presence and popularity of the baseball Cardinals diminish the importance the Rams play in shaping the city’s character.
“I think it’s pretty clear to anyone that spends any time here…that this town’s civic sporting identity is Cardinals first, second, third, fourth, fifth, down through 10, then Blues probably and then Rams. So they’re already the low man on the totem pole,” he said.
Just like Parikh and her departed Raiders, Cohan has personal experience with a favorite team leaving: In 2008, he watched his hometown Seattle SuperSonics flee to Oklahoma City, moving one of basketball’s most exciting teams to a city that had never been a “Big 4” sports town.
Cohan is still bitter. He says he roots against “the team that I’ll just call the Zombie Sonics,” and his 6-month-old son sports a “Save Our Sonics” bib.
But with TV and Internet streaming advanced to the point that a St. Louis resident can watch any game from any U.S. media market, fans can stay in touch with distant teams. “You can be a huge NBA fan and live in St. Louis,” Cohan explained. “There’s no reason you need a St. Louis team.”
And with football’s fan experience in particular growing increasingly tilted in favor of watching from home, thanks to the advent of high-definition televisions and the RedZone Channel in contrast with increasing ticket prices, fans of the blue and gold may not lose much if the team leaves.
“Frankly, I think it’s much better on television,” MacDonald said, explaining that despite being a Rams fan, he only infrequently attends games. “So I actually don’t care where [the Rams] are very much.”
For that reason, Cohan doesn’t understand the impulse to ascribe a city’s health to its pro sports presence. “I think it’s kind of silly that some people in cities feel like they need to measure their city by how many teams from the Big 4 leagues they have,” he said, adding that the tangible impact of such a metric is difficult to quantify.
Mayor Slay, however, falls more in line with Ryffel’s line of thinking. He recently told the Post-Dispatch that a professional football team is “one of the things that make living in a big city fun” and that “it has a lot to do with big-city pride.”
But again, this argument sounded specious to Wash. U.’s professors.
“Sports teams are something that people like,” MacDonald said. “They want the Rams to stay here; they want to watch the Rams; they want to talk about the Rams on Monday at work. That doesn’t mean that the government should be providing the Rams to the City of St. Louis.”
And for Parikh, the government’s attitude in focusing on how a stadium can impart civic pride and “fun” is especially pernicious given the number of high-profile issues in the city that do more to strip away its dignity.
“We have so many other structural things that we say, ‘Well, it’s really hard and it’s really complicated.’ But gosh, Stan Kroenke needs us to build him a new stadium and we’re like, ‘Oh yeah, we think we can do that,’” she said.
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After months of deliberation, disagreements and the occasional lawsuit, the issue of the riverfront stadium is far from settled. Despite Nixon’s best efforts to push through a funding agreement, the plan is receiving staunch opposition from high-ranking members of the state legislature.
Most notably, the leaders of both the Missouri House and Senate budget committees have said they will block attempts to put money in the state budget for payments on a new stadium unless the legislature or voters approve it first.
The latter group, at least, won’t have a chance to voice either approval or dissent: A local judge struck a blow against public discussion at the beginning of August by ruling that voters don’t need to confirm taxpayer spending on a new stadium, striking down a city ordinance requiring such a vote for being “too vague to be enforced.”
That ordinance had come into effect via a 2002 referendum after the new Busch Stadium was announced, and it proved contentious both in court and amidst the professors interviewed for this story. The business school professors agreed with the judge’s decision, saying they trust politicians to wield their governmental power capably, lest they be voted out of office.
The non-Olin faculty, meanwhile, favored a public vote because of the amount of money involved. “That’s the only fair way to do it,” Cohan said. “If you’re going to give someone with as much money as Stan Kroenke public funds, the public should have a say in that.”
Even if the state legislature yields and grants Nixon the money to start construction, though, it’s still no guarantee that the $400 million carrot will be enough to sway Kroenke. The Rams’ owner has all the leverage, and Parikh doesn’t see a clean route toward ending this stadium spending spiral; if one city rejects a taxpayer-funded proposal, another city will outbid it and snatch up the wandering team.
Legislation restricting the use of municipal bonds for stadiums at the federal level would be needed, she said, because “it would take something where people couldn’t bid against each other, where everybody’s on a level playing field.”
Even Ryffel, the sole faculty member interviewed for this story who said he supports a riverfront stadium, said he wouldn’t object to tighter limits on using public money for corporate rather than governmental purposes.
In the case of these Rams and this riverfront proposal, though, any federal considerations are mere hypotheticals. As the debate continues both in Jefferson City and the media, the calculus simplifies to the cost of $400 million in taxpayer commitments versus the cultural and symbolic cost of losing a football team. (Admittedly, no math professor was consulted to see if that equation can be balanced.)
It’s a losing proposition that leaves Wash. U.’s professors lamenting the state of the city’s economic and urban strategy.
“Every year that goes by, we seem to be a year further out of date and out of step with business and society,” MacDonald said—although on this topic, at least, as the city follows Milwaukee and Detroit and Atlanta and scores of others that have agreed to finance large portions of stadium construction, St. Louis is right in line with the norm.
It’s up to the city’s leaders to recognize that following the norm isn’t the right course of action for a region absent the basis to sustain the multitudinous costs associated with construction, Allen summarized.
A football team is “one of those crown jewels” for a major city, he said, but “it’s a crown jewel on a crown we’re not really wearing anymore.”
Editor’s note: This article has been amended to reflect that although the Rams played in Los Angeles for half a century, the franchise did not start in LA. The team originated in Cleveland.
The photo credits have also been corrected. HOK is the name of the architectural firm designing the new stadium.