Tuesday, May 22, 2012

Bernie Miklasz on the Rams and the Dome

Bernie Miklasz of the Post-Dispatch wrote a column on Sunday advising that "Cool Heads Are Needed in Dome Discussion."  He's absolutely right, of course, which is why we need to take a careful look at the costs and benefits of any possible public financing of the Edward Jones Dome.  As I posted earlier, David Nicklaus described the economics of the situation.  Now, Micklasz lays out what he thinks are the issues and facts at hand.  He's largely right, but let me point out some problems with what he says.

1. "The Rams have all of the leverage. Unless the Edward Jones Dome is dramatically reinvented to qualify for elite status (top 25 percent) among NFL stadiums, the Rams will be free to leave after the 2014 season. Don't blame Rams owner Stan Kroenke. He didn't write the lease that offered an incomprehensibly stupid escape clause in 1995."
The Rams do have all the leverage because of the incomprehensibly stupid escape clause, but Kroenke can still be blamed for exercising it. The clause is binding on the CVC, not on Kroenke and the Rams.

2. "This is an election year, and politicians will run away from this. Do you think that any incumbent wants to come out in favor of doling out public money for the benefit of a multi-billionaire NFL owner? It isn't quite that simple, of course. But any politician perceived as taking a pro-Rams, pro-Kroenke position would be an easy target for ridicule and devastating campaign ads"
I think that's called democracy. Is it better to make these decisions without caring about the voting public?

3. "This isn't just about football, either. When the city, St. Louis county and state cooperated to fund the original stadium deal, it was part of a wider project — the expansion of the downtown convention center to improve the slumping convention and trade-show business.
"The basic principle is still in place. If public money is used to renovate the Dome, it would be a dual-purpose investment. The dollars would secure the Rams for St. Louis for the next 30 years or longer. The money would also upgrade the city's convention facilities and keep St. Louis modern and attractive in the highly competitive hospitality market."
The CVC has already made it clear what it thinks is the appropriate amount of investment for their purposes, and it's less than one-tenth the cost of the Rams' proposal.

4. "Obviously, if Kroenke agrees to contribute significant funds to the project, and the NFL floats the Rams a loan to cover another big piece of the cost, the city-county-state obligation is reduced." 
I'm not optimistic about the prospects of Kroenke ponying up what it would take to make this a good deal for St. Louis. The original CVC proposal suggested splitting the costs 50-50 with the Rams. The Rams' proposal was silent on how to split the costs. Given that the Rams hold all of the cards (see item number 1), it doesn't make any sense for them to budge from that. Kroenke has made his fortune in commercial real estate development, where the strong-arming of local governments is just good business. Should anyone expect him to change his business model now?