The Edward Jones dome

Today will mark the start of negotiations between the St. Louis Rams and the Convention & Visitors Commission (CVC). The CVC will present the Rams with a plan that will include their vision on how to elevate the Edward Jones Dome to “top tier” NFL territory. According to the lease agreement, the dome has to offer a better experience than in 75% of the stadiums around the nation. It has to run with the top 8. It’s unclear what “top tier” exactly means, but if the Rams are unsatisfied with the CVC’s proposal they could end the lease and move after the 2014 season.

Nine new stadiums have been built since 2002. Gillette Park in Foxboro, Massachusetts, was built in 2002 at a cost of $325 Million. Metlife Stadium in New Jersey is the newest (2010), and most expensive stadium with a building cost topping out at $1.6 Billion.

Lucas Oil Stadium in Indianapolis

For comparison, let’s use Lucas Oil Stadium in Indianapolis as a benchmark. It was built in 2008 at a cost of 720 Million (2008) dollars, qualifies as “top tier” (it’s hosting Superbowl XLVI), and has a capacity of 63,000, which would be about the right size for our market. Thus, some $800 Million would be required to build a comparable stadium here in St. Louis.

The Edward Jones dome was built at a cost of $280 Million in 1995, mostly financed with bonds. The city, county and state are currently paying $24 Million per year (until 2025) to repay this debt.

The CVC has three options:

  1. Build a new stadium on a yet to be determined location;
  2. Renovate the existing dome;
  3. Let the Rams leave.

Let’s go over the first option. How likely is it that a new stadium will be built? Considering we’re still paying off the loans for the existing stadium, the exorbitantly high cost of building a new stadium, and St. Louis City’s,  St. Louis County’s and Missouri’s precarious financial situation, this option can be pretty much ruled out. Unless Mr. Kroenke draws his wallet to finance his own stadium here, a new stadium is very unlikely to happen.

The MX development on Washington Avenue

Downtown developer (MX/Laurel) and Principal of Brady Capital Amos Harris said this on KMOX:

“The best thing for the city would be if the Rams left, by far. It would be the best thing for my project, the best thing for the city.”

Harris says that while Rams’ games once a week don’t generate an economic blip, weekend-long regional events would be a major boom to downtown.

Harris says he doesn’t want the Rams to leave the region, but he believes that having them occupy the dome for half the year prevents the region from maximizing the dollars it’s put into the building. 

Now, Harris is right about the economic impact, or lack thereof, of the Rams being downtown. Just look at it: between August and January, six months out of the year, the Edward Jones Dome is dedicated to Rams home games. Unfortunately, there are only 10 of those, including pre-season games.  Revenue is only generated on 10 days out of a possible 180.

Most Rams fans drive downtown on game day in the morning, perhaps participate in a tailgating party, attend the game, and then it’s operation dust bowl: they leave en masse. Sales managers at downtown hotels – or restaurant owners – will tell you the same story. A Rams home game is not a big moneymaker. There is some economic impact, but it’s very limited.

Unfortunately, Harris’ position (since we’ve had to rule out the option of building a new stadium) would mean the end of the Rams era in St. Louis.

The second (and only) option to keep the Rams in St. Louis is to renovate the Edward Jones Dome, try to get it as close to being on par with newer stadiums, combined with the addition of revenue-earning opportunities.

Bryan Burwell, sports writer for the St. Louis Post-Dispatch, last week interviewed Patrick Rishe, a Webster University sports economist and Forbes magazine columnist. Some of Rishe’s comments in italics:

“And that’s why this can’t be one of those defiant negotiations where the commission walks into the room arrogantly pretending to hold all the trump cards because, plain and simple, the commission has little leverage. Kroenke is the one holding the easily breakable lease. He’s the one who has London in the East as a potential relocation option and Los Angeles in the West as another option.”

The CVC  is holding one trump card: time. Let’s not forget that regardless of the outcome of negotiations, the Rams will still have to play three seasons at the Edward Jones Dome. Kroenke has to respond to the CVC proposal by March 1st. If the Rams reject the offer, they have until May to counter. If they can’t  come to an agreement, arbitration will start on June 15 and will likely last until the end of the year. We should know by the end of the year if Rams will leave after the 2014 season.

“This is not a time or place for “Occupy Rams Park” manifestos, either.”

Maybe not, but what would happen if Rams fans decided to stop supporting the team if negotiations break down? That would be the time for Rams fans to stop buying tickets. The Rams would risk playing in an empty dome for the next three seasons.

The Rams cannot possibly be clear about their intentions (except if they committed to staying here) until late into the 2014 season. Would you support the team if you knew they don’t want to be here and are leaving in three years? That sounds like leverage for the CVC.

“Giving him land to build his own stadium or parking structure might do the trick. Giving him sizable amounts of cash might be just as nice in the interim. Thinking outside of the box is what it’s going to take to pull this off, and it would be great if a few outside forces created a little helping hand, too.”

Impression of renovated dome and attached convention hall + parking

The land to build a parking structure is available, right next door to the Edward Jones Dome. It’s called the Bottle District. The Rams could have their parking, and the city could add a cutting-edge exhibition hall to the Convention Center if $300 Million could be allocated.

This new center could be built attached to the dome, and would double as a portal/entrance to the dome on game days. This would increase revenue generating opportunities (restaurants/concessions/parking) for the Rams, and give the CVC a signature building to attract more and larger conventions to St. Louis. A building that would be available to them 365 days per year.

Mr. Kroenke is of course welcome to help finance the renovations to the Edward Jones Dome. (Sliding roof optional.)

Another revenue generating opportunity that will come up soon is the dome’s naming rights. Edward Jones is currently paying $2.65 Million a year on a contract that expires in 2014. Lucas Oil is paying $12 Million per year in Indianapolis, and Farmers Insurance is willing to pay the owners of, yes, a new NFL stadium in Los Angeles $700 Million over 30 years. The CVC should be able to collect at least $10 Million more per year.

A 2,000 car parking garage next to the dome

In a parallel development,  the CityArchRiver plans include removing the parking garage on the north side of the Arch grounds. MVVA, the architect of the Arch plans, stated in their latest update that further study is needed before removal can commence.  In plain English: Additional parking will be needed in the area.

A new state-of-the-art parking structure, under a new convention hall, just north of the Edward Jones Dome could function as a transportation hub for downtown St. Louis, Laclede’s Landing and the Arch Grounds, with shuttle service to each area. (Some of the) funding for this garage could come from the Arch grounds project.

This site, north of the dome, will become even more accessible after the New Mississippi Bridge opens in 2014. Many Rams fans and downtown visitors from Illinois will be entering downtown from the north, instead of using the Poplar Street Bridge to the south in the current situation.

Aerial view of renovated dome with attached convention center

Summarizing: St. Louis City, St. Louis County (but really the entire metropolitan region, including Illinois), the CVC, and Kroenke should work together to:

  • renovate the dome;
  • add a revenue generator for the Rams/CVC by attaching a parking garage/downtown transportation hub;
  • build a new signature exhibit hall for the convention center, which would be available 365 days per year;

Consequently:

  • the parking garage at the north end of the Arch grounds could be removed;
  • we prevent new parking structures from being built scattered all over downtown.

All of this could be accomplished at roughly half the cost of building a new stadium.

Let’s think outside of the box. By doing so, we might avoid having to look at the third option.

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ADDED UPDATE, WEDNESDAY, FEB 1, 3:30 PM: STATEMENT MAYOR SLAY

(Source: MayorSlay.com)

“As the CVC begins its negotiations with the St. Louis Rams today, there are a couple of things to remember.

First, the lease with the St. Louis Rams requires the CVC to bring the Edward Jones Dome up to top tier, as defined in the lease itself. The lease says nothing about building a new facility. It only talks about improvements to the existing facility. Not every sportswriter (or fan) yet understands the “top tier” requirement in the Rams lease – but you should. It is not about how the entire Edward Jones Dome compares to the many football stadiums constructed after the Dome. Rather, it is about how a dozen or so elements or features in the Dome as defined in the lease compare to those same features in the rest of the league.

Second, the proposal delivered to the Rams today is a good and credible one. It meets the terms of the lease both in deadline and in substance.

Third, had the CVC followed the advice of some sports reporters and surrendered to the notion that only a new stadium would suffice, the CVC would have been in default and the Rams would be able to leave the Dome . The CVC, happily, has assembled a very competent team that has actually read the lease.

So, what happens next? That’s spelled out in the lease. The Rams have 30 days to accept the proposal. If they don’t, they will have 90 days to submit one of their own. If the CVC does not accept that, the interpretation of the lease goes to arbitration. 

Today’s proposal begins negotiations that must, under the terms of the lease, take place out of the public eye. There will be financial and strategic documents whose general disclosure would harm the private party with whom the CVC is negotiating. There are legal, economic, and strategic documents that the CVC needs to keep confidential so that it can negotiate successfully. Missouri Sunshine Law clearly allows those exceptions. Everything else, including the CVC’s plans to satisfy the “top tier” requirements of the lease, should – and will be – matters of public and open record.

Finally, and I probably should have put this at the top of this update, I want to make my position on paying for enhancements to the Dome clear: new local public dollars spent to make the facility “top tier” will be subject to the prior vote of the people. If the CVC gets an agreement with the Rams, you will get the final say.”

 

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Related: A Bold Vision for The Bottle District