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Thursday, September 28, 2017

Redo Proposed for Scottrade Center Plan Would Use Facilities Fee, Not General Fund

Posted By on Thu, Sep 28, 2017 at 6:48 AM

click to enlarge With Board Bill 130, Cara Spencer hopes to repeal a previous plan to spend $105 million in general funds on Scottrade Center. - PHOTO BY QUINN WILSON
  • With Board Bill 130, Cara Spencer hopes to repeal a previous plan to spend $105 million in general funds on Scottrade Center.

In February, the city's Board of Aldermen narrowly approved a plan to commit as much as $105 million in general fund revenue to upgrade Scottrade Center, the home of the St. Louis Blues.

But now, some city officials are calling for a redo on the deal, saying that a copy of the lease — which was not provided to them at the time of the vote — makes it clear that the Blues' owners are responsible for upgrades.

The arena is city-owned, but the Blues pay no rent and no property tax.

Board Bill 130, proposed yesterday by Alderwoman Cara Spencer, would have the city repeal its previous bond authorization — and suggests that the $3.50 "facility fee" that the Blues impose on every ticket should instead be put toward the facility.

That money, along with the proceeds of a special taxing district created for the Blues' benefit last year, would be enough to cover the cost of the improvements on Scottrade Center, Spencer says — and even leave roughly $1.2 million a year to start a "seed fund" for future projects, including perhaps a MLS stadium for professional soccer.

Among Spencer's co-sponsors? Aldermen Shane Cohn, Dan Guenther and Scott Ogilvie, who was the swing vote supporting the deal in February.

The original vote was hasty (the board passed it as an emergency at the very end of its session) and messy (Board President Lewis Reed, who did more than anyone else to fast-track the deal, flipped at the very end to vote no, claiming the bill was simply moving too fast).

Since then, Comptroller Darlene Green has refused to authorize the bonds that would allow the Blues to access the funding, saying that doing so would have too great an impact on the city's general fund revenue — and triggering a lawsuit from the team to release the funds.

Meanwhile, Alderwoman Spencer has herself filed a lawsuit against the deal, saying it's an illegal gift under the state constitution. The suit, too, relies on the revelation that the Blues are responsible for maintenance under their 1992 lease with the city.

click to enlarge An excerpt from the Blues' lease with the city.
  • An excerpt from the Blues' lease with the city.

Using the facility fee and the special taxing district to fund the repairs is the only way to get a true "regional" plan through to pay for the repairs, Spencer says. Data shows that St. Louis County residents use the facility more frequently than city ones — and that even Illinois residents outnumber city ones. But creation of a bi-state district would require an act of Congress.

So why not use the facility fee the Blues are already charging for the facility? "Where is that money going?" Spencer asks. "They don't own it, they don't pay rent, they don't pay property tax, and they've testified that they've literally done next to nothing as far as upgrades on that building. What are they using it for?"

In addition to new revelations about the lease, the city's financial position is ever more precarious, with massive amounts of police overtime in recent weeks as protests have rocked the city — not to mention a series of lawsuits from people claiming wrongful arrest and police misconduct.

Video of Ways & Means committee hearings where the Blues plan was discussed in January show that then-Alderman Antonio French asked for a copy of the current lease. Instead of getting it, he was assured by David Richardson, the attorney at Husch Blackwell advocating for the project that the lease "is pretty much silent on major capital improvements such as this."

(See 1:53 for the key quote.)

Comptroller Darlene Green yesterday issued a statement praising Spencer's plan.

"This is the right approach for Scottrade Center and the City of St. Louis. By levying a small fee on ticket sales that are then set aside in a fund for facility construction and improvements, the plan does not draw upon the city’s general fund or risk harming the city’s credit," she said. "I am confident this bill can serve as a model for future sports and entertainment development projects in St. Louis."

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