The strategy for a new baseball stadium includes enlisting the involvement of key downtown developers while limiting public say over subsidies

Jan 12, 2000 at 4:00 am
Dreaming is free. Stadiums cost money. So it is that plans for a new ballpark for the St. Louis Cardinals remain murky more than a year after the team decreed that Busch Stadium belongs on the scrap heap.

Somewhere in team headquarters are preliminary drawings of a new stadium, but the Cardinals won't unveil them. Team president Mark Lamping says the team has spent nearly $500,000 on stadium plans during the past year but that everything is under wraps because no one has yet figured out who will pay or how. "It would be easy for us to float all types of exciting renderings of a new stadium, but we just don't think it's appropriate to do that unless we have a way to pay for it," he says.

The team, which two years ago successfully fought a proposed state law that would have required a public vote before any public money could be used for a new stadium, is downplaying any possibility of a tax increase. As in most other cities with new or under-construction stadiums, the building would probably be publicly owned and built with a combination of public and private money. In exchange for public subsidies, the team would sign a long-term lease. In a meeting late last month with area legislators, the Cardinals told state lawmakers that the team doesn't have a funding package yet but may have a proposal together before the end of the legislative session. "We just wanted to let them know that if things really come together quick ... maybe we might see you in Jeff City this year," Lamping says. Any proposal will likely contain much more than plans for a ballpark.

The team faces an uphill battle in several respects. First is Busch Stadium itself. The team is having a tough time convincing politicians and the public that there's anything wrong with the 33-year-old building. The Cardinals, who own Busch, are also in the last wave of teams to pitch stadium proposals. One-third of the 30 major-league teams got new ballparks in the 1990s. Another seven have broken ground. Of the remaining 13 teams, only the Chicago Cubs and Kansas City Royals are not seeking new ballparks. Public patience has worn thin with budget-busting palaces like the Trans World Dome, built in 1995, or, more recently, Safeco Field in Seattle, which, at $517 million (including $100 million in cost overruns), is the most expensive stadium in North America. The Minnesota Twins haven't been able to sell a tax increase to pay for a new stadium, even after threatening to move the team to North Carolina. In San Francisco, the Giants gave up on the electorate and are now building a new stadium entirely with private money.

So what do you do when you have a perfectly serviceable ballpark in a city inclined to look at the Trans World Dome and vow, "Never again"? You dream really big. Instead of pitching a new stadium, the Cardinals are talking a new downtown. A $300 million stadium on land already owned by the team just south of Busch would be the anchor for a district that would include new apartments, restaurants, shops and offices. That sort of thing tends to deflect attention from the fact that public monies would be going to line the pockets of team owners -- Bill DeWitt Jr., Drew Baur and Fred Hanser -- who are already millionaires several times over. Just listen to Lamping: "We think it's critical that a new ballpark for the Cardinals be much more than just a new place for the team to play," he says. "We have a high level of confidence that a ballpark development could help bring to the south end of downtown things that are so sorely lacking today such as entertainment options, as well as potential residential options for people that want to live downtown. Anything we can do that helps our fans enjoy the baseball experience more and at the same time help revitalize downtown St. Louis, we're all for."

Team owners have already recouped a substantial portion of the $150 million they paid for the Cardinals. The deal included the team, the stadium, four parking garages, the land beneath two downtown hotels and the parking lot directly south of Busch where a new stadium may be built. The team has sold the parking garages for $91 million and the hotel property for $9.7 million. Nonetheless, the Cardinals are still worth more than what the owners paid four years ago -- Forbes magazine in 1998 set the team's value at $174 million.

Owing to political realities, there are a few ground rules for a stadium deal, prime among them no new or increased taxes. "All of our preliminary studies indicate that it might be possible to finance a new stadium with not only not increasing taxes, but perhaps using only those tax dollars which Cardinal fans generate through the purchase of Cardinal tickets, food and beverages and other purchases at the stadium," Lamping says. In particular, the Cardinals have been complaining about taxes on tickets, especially the city's 5 percent amusement tax. "Unfortunately, Cardinal fans today are burdened with the highest tax rates of any baseball fan in this country," Lamping laments. Whether this is true should be borne out in the coming year, when the Greater St. Louis Sports Authority, formed in 1997 by the state Legislature, plans to review taxes on baseball in other cities to determine how the Cardinals' tax burden compares to that of teams in other markets. The team figures baseball at Busch pumps about $14.5 million into government coffers, a figure that includes property, sales, admission and earnings taxes. Add some or all of that to a hefty contribution from the team and you've got enough to pay the mortgage on a new building, or so the team hopes. Beyond saying the team is prepared to contribute "tens upon tens of millions of dollars," Lamping won't say how much the Cardinals would pay for a new home.

Such a scheme would leave a $14.5 million hole in state and local government budgets. That's not much of a bargain for the public, unless you can come up with a way to replace those tax dollars, which explains why Denver and Baltimore keep coming up in conversations about a new stadium. Both cities saw their downtowns revitalized when new ballparks were built. There's no reason the same thing couldn't happen in St. Louis, say stadium supporters.

Richard Baron, whose company McCormack Baron & Associates is redeveloping the Cupples Station district adjacent to Busch, says he's had general discussions with the team about a new stadium but nothing close to a deal tying a new stadium to redevelopment projects that could help convince state and city officials to pay for a new ballpark. Baron has already broken ground for a hotel and has firm plans for retail and office development that together will take up seven of 10 historic warehouses near Busch. It's rumored that Baron plans a 50-story residential tower that would overlook a new stadium, though he says discussions of anything that big are premature and speculative. "We have always indicated that residential, as part of the Cupples Station redevelopment, is a very real possibility, and certainly we've studied it and are continuing to," he says.

Baron says a new stadium would lure development, particularly residential, downtown. "I don't think there's any question about it," he says. "Certainly we're excited about it and welcome it. It's not necessarily anything that will cause us to do more than we are already planning to do, but I do think that it will open up some other opportunities for development in and around the ballpark that I think would add greatly to downtown, and my hope would be that it would generate even more residential opportunities, which is what we really need in downtown."

Could redevelopment around a new stadium bring in enough tax revenue to offset public investment in a ballpark? "It certainly could be part of it," Baron says.

Lamping points to Denver and Coors Field as an example of what could happen in downtown St. Louis. "You would hope that any type of plan would leave the city of St. Louis in a stronger position than where they are right now," he says.

So far, the team hasn't been able to make it all pencil out. "We don't have a plan yet," Lamping says. "We've talked in generalities in terms of what our vision for a new ballpark would be. Until such time that we have developed a way to pay for it, we don't think it makes a lot of sense to be talking in detail because new plans without ways to pay for them are simply dreams."

Among other roadblocks, the team must figure a way around federal tax law that prohibits government from using stadium revenue to back tax-exempt construction bonds. Without tax-exempt bonds, government must offer higher interest rates to lure bond buyers, which would add millions to construction bills. The federal law, passed in 1986, was designed to end subsidies to professional sports teams, but it didn't stop the stampede for new ballparks that began 10 years ago. Instead of paying for stadiums with stadium revenue, governments backed tax-exempt bonds with money from increases in sales, entertainment and other general taxes. Lamping can't say just how the Cardinals would be able to propose a ballpark that would pay for itself with stadium revenue and still be eligible for tax-exempt bonds. "That is a very complex question," he says. "We are still early in this process. Although we are further along than we anticipated we would be, we still have a long way to go before we would be prepared to present something to our fans and legislators and, most importantly, the city of St. Louis to consider."

A new stadium isn't a hot topic at City Hall. Mayor Clarence Harmon didn't return phone calls on the subject. Aldermanic President Francis Slay, who has announced he will run for mayor next year, says no one from the team has talked to him but that he's willing to listen. "I'd like to listen to what the proposal is directly, and nobody from the Cardinals organization has ever mentioned anything to me about this at all," Slay says. "I don't want to rule anything out at this time. We'd be foolish not to listen to what their proposal is."

Ald. Alfred Wessels Jr. (D-13th) says he'll be a hard sell. Just one constituent has told him the team needs a new home, he says. Far more have said "no way." "The best response I heard was from an 81-year-old volunteer at the office where I work," he says. "She said the Cardinals need more pitching, not a new stadium. I thought she was right on target." If the Cardinals weren't selling out games and Busch was in poor condition, that would be one thing, Wessels says. But with the team drawing 3 million fans a year, Wessels says he can't understand how a new stadium would bring more people downtown than are already drawn by Busch.

The city amusement tax on tickets generates about $5.5 million a year between the Cardinals and the Blues, who have also been complaining about their tax burden. "If that money is lost, it has to be made up in some other fashion," Wessels says. "Everybody wants tax relief -- I'd like some, too. It's kind of hard for me to ask my constituents to give a tax break to wealthy team owners so they can pay wealthy players more money."