WASHINGTON - Stadiums are a lot like defeat: Once they're built, you have to live with them.
So why are they building a domed football stadium in St. Louis?
The question takes on increasing importance now that the National Football League has kicked off the 13-game 1993 season, and team owners get ready to huddle at the end of October to select two cities to host expansion franchises.
St. Louis is in the running for an expansion team, but so are Baltimore, Charlotte, N.C., Jacksonville, Fla., and Memphis. The two new teams will begin play in 1995. Of the five potential expansion cities, St. Louis and Baltimore already have demonstrated a taste for pigskin. Baltimore was once host to the Colts, who left for Indianapolis in 1984, while St. Louis was home to the football Cardinals until 1988, when the team moved to Phoenix. Now, as the NFL prepares to expand for the first time in 19 years, the two cities offer a study in contrasts in their preparations for the possibility of landing new teams.
These are neither the best nor the worst of times in this tale of two cities. Rather, it is a time of caution and innovation.
Baltimore, for example, is holding off building a stadium until city officials know whether they'll have a team, even though delay has meant the loss of a federal tax law transition rule that would have allowed the Maryland Stadium Authority to issue tax-exempt bonds. But authority officials say they have found a way to issue tax-exempt bonds anyway, should a team materialize.
In St. Louis, meantime, work already is underway on a 70,000-seat, domed stadium that officials there say will be financially viable even if the city does not get a team. As will be the case in Maryland should Baltimore strike pay dirt, tax-exempt bonds are making the structure possible.
In that respect, both Baltimore and St. Louis would fit right into the NFL, which currently has 28 teams. An informal survey conducted by The Bond Buyer revealed that of the 27 stadiums now used for NFL football - the Giants and jets share Giants Stadium - at least 21 were built or renovated with municipal bonds.
Another four stadiums were built with funds provided by the localities that host them, though officials in those jurisdictions were not able to say whether bond proceeds or appropriated tax dollars were used. Only two stadiums were privately financed. [More detailed information is contained in the accompanying chart.]
Somewhat surprisingly, it often is difficult to get detailed information on stadium finance. When finance officials in one city were contacted for information on a city-built stadium that opened in the 1970s, one said, "Gosh, I'm kind of new here, but I imagine that anyone who was here then has left." He referred a reporter to another official, who said, "My God, I was still in high school when that was being done." Another official likewise was perplexed, but was able to locate still another official who could provide a ballpark figure on stadium costs. In the future, municipal officials are likely to be more knowledgeable. Many existing stadiums were built at a time when money was not as tight as it is today, giving local officials more latitude to appease professional team owners with shiny new stadiums, tax abatements, and below-market leases. Now money constraints are forcing planners to take a closer look at sports facilities and how they should be financed,
As one indication of the changing attitudes toward stadiums and teams, Standard & Poor's Corp. in its July 26 edition of CreditWeek Municipal said flatly, "Civic pride and fan loyalty aside, some evidence suggests that the value of a professional sports franchise to a city is more myth than reality." The article examined a potential relocation by the New York Yankees to New Jersey, and concluded that the economic disruption to New York City of the move would be minimal.
Against that backdrop, some observers question the decision by officials in Missouri to build a stadium before getting a team. "They're a little ahead of us, aren't they?" said Bruce Hoffman, executive director of the Maryland Stadium Authority.
Hoffman said Maryland law forbids the authority from building a stadium unless it has a lease with a team. And, he said, common sense counsels as much.
"I think even if the law hadn't been there, we still wouldn't have done it," he said. "No one here would advocate building a stadium for a hypothetical team."
St. Louis is considered a virtual lock for one of the two teams - the group of investors seeking a team for the city includes James Busch Orthwein, a director of Anheuser-Busch Cos. and owner of the New England Patriots, and hall of famer Walter Payton, the former star running back for the Chicago Bears. But being a leading contender is not the same thing as actually having a team.
Just ask the folks in St. Petersburg, who were so eager to entice Major League Baseball to their community that they went to the effort and expense of building a state-of-the-art stadium.
Baseball has flirted with St. Pete, which has been on the verge of landing several ballclubs, but so far no team has accepted the keys to the pearly gates of the Florida Suncoast Dome.
With the St. Petersburg experience flashing an insistent yellow light of caution, the decision to build a football stadium before having a team may appear as stubborn as a Missouri mule.
But Lawrence E. Akley, executive director of the St. Louis Regional Convention and Sports Complex Authority, said it really does not matter whether his city gets a team, at least in terms of making the domed facility feasible.
"It's immaterial," Akley said. "Prior to doing this we looked at a number of things, and the first thing that did come up - and why we're quite different from St. Petersburg - is this was never sold or intended to be just for football.
"That's one of the things that it can accommodate, but the real use of it, 95% of the time, is going to be as an expansion of the existing Cervantes Convention Center," he said.
According to Akley, building a facility solely for football made little sense to planners.
"You couldn't do it," he said, noting that a pro football stadium can expect to host about 10 games a year - two preseason games and eight league games. That's hardly sufficient to pay for the cost of the investment in the project. I mean, 10 games a year won't do it."
The facility is costing $250 million, financed with tax-exempt, governmental-use bonds issued by the authority in three series. Missouri is picking up half the cost of the bonds, while St. Louis and St. Louis County are each picking up 25% of the cost.
Although the federal Tax Reform Act of 1986 eliminated the authority of municipal entities to issue tax-exempt, private-activity bonds, local governments can issue tax-exempt, governmental-use bonds for stadiums if certain conditions are met.
Under the tax reform law, tax-exempt bonds may be issued if the facility is not used principally by a private party or if less than 10% of the bonds are secured by a private party.
Akley said the bonds qualify under the 10% test for tax-exempt status.
According to Akley, the stadium project marks the first time the state, city, and county have teamed up to build, and pay for, a structure. Before agreeing to go in on the project together, all three levels of government had to be convinced of its economic viability.
What helped sell the project was the versatility afforded by attaching the stadium to the existing convention center.
"If you had, say, a Democratic or a national convention, or a large concert such as The Who or Rolling Stones or whatever, [this project] allows the convention center to have an additional 180,000 square feet of prime exhibit space," Akley said.
The extra space is on the same level as the existing convention halls, "which then allows St. Louis to have in one facility, under one roof, in a sense, because they're connected, about 540,000 square feet of prime exhibit space," he said.
Although the dome will soar to 200 feet, the facility will have a fight grid that can be lowered to the same level as the lighting in other exhibit halls so that the stadium can be used as an exhibit hall. The stadium also will have meeting rooms, expanded kitchen space, and banquet facilities.
At the same time, the structure will meet or exceed all the criteria established by the NFL to house a pro franchise, Akley said, plus upscale amenities such as 100 luxury boxes and club seating. And while designed with football sight lines in mind, the facility can be configured for basketball and tennis, too.
"It's a lot different from just a stadium," Akley said. In fact, it will not even look like a stadium from the outside, other than being massive, he said.
"It has a lot of brick and glass," he said. "It won't look like a concrete jungle the way a lot of stadiums do. It fits into the downtown atmosphere of the type of architectural design you'd be accustomed to seeing in downtown St. Louis." The facility is slated for completion by October 1995.
Akley stressed that although the project's success is not contingent upon getting a team, that does not mean he is indifferent to whether the city is awarded an expansion franchise.
"We were unfortunate enough to lose one team," he said. "And certainly, any city that doesn't have an NFL franchise would be interested in having one for what it brings to their community in terms of economics and status. But the real value of this [project] is completely independent of football."
It's a different ballgame in Baltimore, where a team is a must. Hoffman of the Maryland Stadium Authority said officials have done some planning, but more details remain.
For example, the stadium, if necessary, will be built adjacent to Oriole Park at Camden Yards, the critically acclaimed home of the Baltimore Orioles of baseball's American League, on land now used as surface parking. Construction will take about 33 months, meaning that the new field will not be ready until the 1996 season. But officials have not come to any conclusions about how the stadium should look.
"We're proud of what we did for baseball," Hoffman said of Oriole Park. "But copying may not be the way to go. My thinking is that the football stadium should be compatible [with Oriole Park], but not identical."
Oriole Park at Camden Yards launched a back-to-the-classics approach to ballpark construction, incorporating design elements found in some of the country's most revered baseball fields. If imitation is the sincerest form of flattery, Oriole Park is getting flattered in spades. New parks under construction in Cleveland, Denver, and Arlington, Tex., are following Baltimore's lead.
But the Maryland Stadium Authority may have trouble with an encore. "I don't know of any old stadium that is considered traditional or classic for football," Hoffman said. He said one of the first things authority officials plan to do if Baltimore is awarded a franchise is to visit several existing stadiums and "see what people like."
Likely stops include Joe Robbie Stadium in Miami, Giants Stadium in East Rutherford, N.J., Arrowhead Stadium in Kansas City, Mo., and Soldier Field in Chicago.
Although stadium design is in something of a limbo, financing is not. Hoffman said the authority will need to spend $150 million for construction, with about $90 million coming from two bond issues. One issue would be for $83 million; the second would be for $6 million to $7 million.
At first blush, it would appear that the football stadium bonds would have to be issued as taxable debt. Although the stadium authority received a transition rule to use tax-exempt bonds under the Tax Reform Act of 1986, a law that generally prohibited use of tax-exempt bonds for projects used primarily by private parties, the rule expired Jan. 1, 1991.
But with the law's 10% test in mind, authority officials have figured out a way to use tax-exempt, governmental-use bonds for a stadium.
The authority has crafted a lease for use of the stadium in which rent will be less than 10% of the debt service on the bonds. According to Hoffman, the authority has an opinion from bond counsel that such a structure will allow tax-exempt bonds to be used for the project.
Hoffman said the low rent charged will not make Maryland take a bath. He said the state will get some money back through an admissions tax charged on tickets. In addition, the proposed lease calls for the team to shoulder the expense of operating and maintaining the facility, something the authority ordinarily would do.
In addition, the use of tax-exempt bonds will save the authority an estimated $1.3 million a year in debt service costs for 30 years, Hoffman said. "All these things taken together more than offset the lower rent," he said.
Former Redskins coach George Allen once observed, "Every time you win, you're reborn; when you lose, you die a little." Fans in Baltimore and St. Louis died a little in the 1980s when they lost their pro football franchises.
Now, with the help of tax-exempt bonds, they're hoping to be reborn.
