Card Sharks

The St. Louis Cardinals want your money for their $370 million ballpark. But before the game begins, somebody needs to reshuffle the deck.

Not everyone feels the same way. St. Louis Mayor Clarence Harmon, who has said the team must open its books before he'll support public financing, wants to put any funding proposal on the ballot.

Gene Scott, presiding commissioner of Franklin County, says the Cardinals haven't come by with a tin cup yet, but he already knows what he'll say: "I don't think it's unsafe in me stating in any way, as the executive officer of the county, that if revenue were asked to be contributed by the citizens of Franklin County, a ballot issue would probably be necessary."

It's the same message in Jefferson County, where Samuel Rauls, presiding county commissioner, says there isn't any extra money sitting around in the county budget to help pay for a ballpark. "So I see the only way of generating any money out of Jefferson County would be some kind of tax issue, and the only way I would even think about something like that is to put it before a vote of the people," Rauls says. "I think that's the only fair thing to do."

Cardinals president Mark Lamping: "I guess if every time there's going to be public dollars involved in any project that we're going to put it forth for the people to vote on it, then why do we need legislators?"
Jennifer Silverberg
Cardinals president Mark Lamping: "I guess if every time there's going to be public dollars involved in any project that we're going to put it forth for the people to vote on it, then why do we need legislators?"

Rauls can't understand how the team's proposal would work. "I'm interested in how you generate $250 million without raising taxes," he says. "And I'm more than happy to sit down and listen to the Cardinal organization on that issue."

The idea that a stadium can pay for itself through increased tax revenue but no new taxes is dubious at best, according to economists and other academic experts who analyze the business of sports. There's only so much money available for discretionary spending in any community, so more tax revenue from a ballpark would mean less tax revenue from other places. "I would be very reluctant to suggest to taxpayers that they will ever get a positive return or payback on the diverted (tax) funds," says Mark Rosentraub, an Indiana University professor who analyzes the economic impact of sports on urban areas. "Since people spend money elsewhere if they don't go to the game, those transactions would be taxed, and that money would go to the governments involved. The taxes received in the future are not gains or profits, since they simply return to the public sector what it is that they have been receiving." Rosentraub isn't the only one who doesn't think a ballpark could pay for itself. "Maybe they can try and sell a bridge in Brooklyn, too," says Mark Kamlet, dean of the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University, which helped study the economics of a new stadium for the Pittsburgh Pirates. "My first impression is one of deep skepticism. If that's going to generate so much additional revenue that it can self-finance the stadium, why don't they just do it themselves?"

The Cardinals seem to be in an excellent position to pay for a new stadium: They have virtually no debt, according to Forbes. They sold a record number of season tickets before opening day, prompting predictions that they'll set an all-time attendance record with 3.3 million fans coming through Busch gates this year. More than 22,000 season tickets were sold before the season's first pitch, even though the team finished 21 games out of first place last year, when more than 3.2 million fans went to the ballpark.

The Cardinals' biggest expense is the team payroll, which at $61.5 million ranks 11th in the 30-team league this year. The Minnesota Twins, last in the league, have a $16.5 million payroll. That's a difference of $45 million. If the Cardinals are serious about their fans' paying the full cost of a new stadium and they truly don't have the resources right now, wouldn't it be possible for the team to slash payroll for a few years, weather some losing seasons and use the savings to pay for a new ballpark that would, in the team's own words, ensure a competitive franchise for the next 100 years? After all, DeWitt says he's in it for the long haul -- he claims he wants to own the Cardinals until the day he dies. "We're in it because we love baseball and we want to own it forever," says DeWitt, who once was partners with George W. Bush in the Texas Rangers and has owned interests in the Baltimore Orioles and Cincinnati Reds.

Start talking financial details with the Cardinals, and the team grows as silent as Busch in December. Beyond saying what they'll contribute and what the project will cost, team officials haven't said much. If the team's tax-revenue projections prove overly optimistic and the stadium doesn't generate enough tax revenue to cover the debt, is the team willing to guarantee it would cover any shortfall? That's an idea an elected official would have to suggest. "I would like to respond to those types of proposals as opposed to guessing what our response would be," Lamping says. "We'll see."

And so it goes. How did the team determine that tax revenue from a new stadium will rise steadily through the years, starting with $1 million jumps each year for the first dozen years of the project and eventually mushrooming to $75 million a year in 2034? Lamping explains that the 30-year projections were drawn from the last five years at Busch, where revenue has gone from $6.1 million in 1995 to a projected $15.3 million this year -- it was a simple matter of extrapolating the curve. Wouldn't tax revenues ever stabilize at the new stadium? "Those are questions that the city of St. Louis and the state of Missouri need to ask as they evaluate this project," Lamping says. "If I could predict the future, I wouldn't be here working for the Cardinals. Based on what we know right now, is that the best projection we can give you? Yeah."

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