Major League Soccer is looking at St. Louis as a possible expansion city, but before MLS has even awarded the city with a franchise, the possible owners of said MLS team have applied for a massive tax credit for the stadium.
An application was recently sent in by the possible ownership group asking for $40 million in state tax credits to build a new MLS stadium downtown. The St. Louis Post-Dispatch detailed that big ask and more.
In April, city voters will have to vote on whether an additional $80 million will be allotted to stadium construction. Because, you know, citizens should always pay millions for stadiums they will get much less profit from compared to the owners.
The massive tax credit issue was presented to the state Development Finance Board at a special meeting in Jefferson City on Thursday. The board is expected to vote on the $40 million tax credit by December 20th.
“We remain committed to working with (team ownership group) SC STL to develop a sound financial proposal to put before the voters,” Mayor Francis Slay’s Chief of Staff Mary Ellen Ponder said in an emailed statement to the STL Post Dispatch. “This is a piece of that proposal.”
The estimated cost of the stadium and acquiring the expansion team would be around $405 million. The potential ownership group is led by former Bain Capital exec Paul Edgerley, St. Louis FC founder Jim Kavanaugh, and former Anheuser-Busch President Dave Peacock. That group would provide around $280 million for the project and the $200 million expansion fee. The current reported tax figures contribute about $120 million towards that project.
Meanwhile, an additional $9 million would be spent by the Missouri Department of Transportation to get the land ready for development before its sold to the city, who would buy it for $15 million. Those dollar figures, of course, are likely paid for by taxes on Missouri citizens. That $24 million total would be part of the $80 million in tax credits voters will decide on.
The stadium for the team that doesn’t exist yet would reportedly have a capacity of 22,000 that could be expanded later toe 28,000. Edgerley added that for this entire project to be a good investment on the ownenship’s part, it needs public investment as well.
“We believe economically the city will do much better than break even from the economic development that’s created,” said Edgerley, who is also a minority investor in the Boston Celtics and AS Roma Italian soccer team. “I don’t think other people are going to come up with $400 million of private money and believe that’s a reasonable investment.”
“I think soccer will be the second- or third-most popular sport in the United States in 20 years,” he said.
While tax-paying citizens won’t see a major benefit from the stadium that compares anywhere near to the benefit the ownership group will have, there are some reasons to consider the project.
For one, the stadium and team will bring more jobs to the area.The job numbers could sit at around 538 permanent jobs and 1,345 temporary jobs during the stadium’s construction. Additionally, the ownership group estimates after the first decade, the city and state could generate around $40 million in tax revenue.
While the idea of an ownership group asking for taxpayer money for a stadium isn’t always viewed wisely, this stadium project isn’t as costly as others. Once again, the stadium is estimated to cost around $200 million, which is much cheaper than the Texas Rangers’ new proposed stadium.
“We don’t want to build something half-way and not have the fan experience be right and have to redo it at twice the price later,” Edgerley said.
But remember, the team doesn’t even exist yet so this all could be for naught if the MLS decides against expanding to St. Louis.