Ballpark Village Deal Reached in St. Louis

[mjohnson71]

Sounds like a financing deal has been reached.

 

http://www.stltoday.com/stltoday/news/stories.nsf/stlouiscitycounty/story/62BEFFF84431611986257214001427D1?OpenDocument

 

A deal on Ballpark Village

By Jake Wagman

©2006, ST. LOUIS POST-DISPATCH

Friday, Oct. 27 2006

 

The mayor and a developer working with the Cardinals have reached an agreement

for financing Ballpark Village, ending months of negotiations on a downtown

project that could rival the new stadium in size and scope.

 

The complex deal would provide more than $100 million in public funds to help

build a $387 million development. The proposal must be approved by other city

and state officials.

 

Riding the momentum of the Cardinals' improbable championship run,

representatives of Mayor Francis Slay this week reached the agreement with

executives from the Cordish Co., a Baltimore firm that has built urban shopping

and entertainment districts around the country.

 

Here, the firm is making a pitch to change the downtown landscape: six blocks

of stores, condos and restaurants next to the new ballpark. Highlights include

a grocery store, a pair of "celebrity chef" restaurants, a Cardinals museum,

boutique shops and a bowling alley.

 

The village site — the spot where the old Busch Stadium once stood — has sat

empty for more than 10 months as Cordish and the mayor's office negotiated

several issues, including the number of residential units, the amount of

parking spaces, and the size of the public subsidy.

 

Those issues have been resolved in an agreement that covers phase one of

Ballpark Village — roughly two-thirds of the total cost of the $650 million

proposal.

 

The first phase will include all of the ground-level retail and entertainment

venues, plus 250 condos and 100,000 square feet of office space. The next two

phases would add a pair of office and residential towers atop first-phase

buildings. When those are built will depend on demand in the market.

 

"We've worked very hard on both sides to the point where we could make this

important milestone," said Blake Cordish, vice president of the company founded

by his great-grandfather.

 

The package still must pass several rounds of state and local approval before

the deal is final. In the months ahead, city aldermen and others will be asked

to support the incentive package.

 

Funding for the $387 million phase one will come mostly from Cordish, with tax

dollars created by the development footing the rest. Details include:

 

— $271.2 million in private funds from Cordish.

 

— $56 million in tax-increment financing from the city.

 

— $29 million in state money authorized by the Missouri Downtown Economic

Stimulus Act.

 

— $26 million from a special tax district created for the development. It would

create an additional 1 percent sales tax in the district and a $1 ticket tax

for the development's attractions, such as the Cardinals museum.

 

— $5 million in public bonds to be bought by the Cardinals and Cordish.

 

The $116 million public portion of the funding would be raised upfront by

issuing government bonds. Those bonds would be paid back with taxes generated

by the project.

 

Bill DeWitt III, the Cardinals' senior vice president for business development,

noted that Cordish has received larger public subsidies in projects elsewhere.

 

In a similar downtown development under construction across the state, the firm

was awarded nearly $300 million in tax incentives for the Kansas City Power and

Light District.

 

The city "drove a hard bargain," DeWitt said. "I think the Cordish guys, just

from my perspective, felt it was a stretch. At the end of the day, they kind of

feel so excited by the site, and our partnership, and everything else, they are

ready to go."

 

The agreement is a coup for Mayor Slay, who has made bringing more people and

businesses downtown a focus of his 5 1/2 years in office. But the mayor also

has expressed concern about public reaction to tax breaks for

 

Ballpark Village.

 

The Cardinals' commitment to build Ballpark Village was a key reason the city

supported tax incentives for the new $365 million ballpark. The city waived a 5

percent ticket tax, which has saved the team about $3 million a year.

 

Slay is quick to point out that city funds are not being used for Ballpark

Village.

 

"Everything for the project will come from the project," Slay said in a

statement. "Not one dime of anyone's tax dollars will be used to build phase

one of Ballpark Village unless they are a user or consumer of the shops,

restaurants, retail stores, office space, or the condo tower."

 

That also means public agencies such as the St. Louis Public Schools won't

receive the full tax benefits of the development for more than 20 years.

 

Officials estimate that over a 40-year period, the project will bring in $142

million in new taxes to the school district and $291 million to the city.

 

In the tax-increment financing arrangement, a portion of the taxes generated by

the development would be used to pay back bonds issued for construction. Much

of the money will be used for building streets and other infrastructure.

 

Cordish is hoping for a similar arrangement with the state. Under a Missouri

law passed in 2003, part of state taxes generated by Ballpark Village could

also be used to help pay back the bonds.

 

An additional funding source would come from making

 

Ballpark Village a special taxing district, allowing for the creation of a 1

percent sales tax on goods purchased in the district. Tickets to attractions in

the district would also carry a $1 surcharge.

 

Cordish and the Cardinals also have promised to buy $5 million in city-issued

bonds that would be paid back with future taxes generated by Ballpark Village,

but only after all other bondholders are paid first.

 

Blake Cordish said his firm has had detailed discussions with stores and

restaurants that could anchor Ballpark Village, though he declined to identify

them.

 

Many of the company's other projects in places such as Baltimore and Louisville

include themed restaurants, like Hard Rock Café or ESPN Zone. Cordish said that

Ballpark Village would have one-of-a-kind entertainment venues and restaurants.

 

"I can say with absolute confidence that the tenant mix will be extraordinary,"

Cordish said.

 

Under the agreement between the developer and the Cardinals, the team has

approval over every aspect of the village, including tenants.

 

The foundation of the partnership between Cordish and the team is the land

underneath

 

Ballpark Village, which is owned by the Cardinals. The team gave the

development company rights to the land in exchange for a percentage of the

profits.

 

The team had initially committed to spending a minimum of $60 million to

develop at least two blocks of Ballpark Village.

 

Now that the project has grown exponentially, DeWitt says the $60 million

figure was "a placeholder."

 

The city is hoping Ballpark Village will bring more residents and businesses to

the city's center, even in the off-season.

 

The approval process for the state and city funds could last through the

winter, putting a potential groundbreaking at spring or early summer. That

would allow the village to open in spring of 2009 — the same year that Major

League Commissioner Bud Selig has strongly suggested the new stadium could host

its first All-Star Game.