Cards’ Collapsed Deal Bodes Ill for Owners

You can’t blame local owners if they did a double take when they learned that the ownership of the St. Louis Cardinals took a huge hit last week when the Centene Corporation refused a deal to become the corporate anchor of the Cardinals’ planned ballpark and village project. St. Louis’s new ballpark, which opened last April, was built with private funding and was supposed to be part of an urban development project led by the Cardinals’ ownership group and its Baltimore development partner, the Cordish Company. The development would have included space for the Cardinals’ corporate headquarters, a mall, a Cardinals Hall of Fame, and residential properties that would be built on the site of the old ballpark and the six-block area north of the new ballpark.Centene, a health care enterprise that provides programs and related services to individuals receiving benefits under Medicaid, was planning to move 1,200 employees to the downtown St. Louis ballpark village from its suburban Clayton, Mo., facility.“Since our announcement in September 2007, we have been working closely with representatives of Ballpark Village to finalize details for this project. Despite the best efforts of everyone involved, we could not bring our plans to fruition,” according to a statement released by Centene. The Cardinals’ and Cordish’s comment was through a news release and was brief.“Ultimately, the complexities of Centene’s proposed project in Ballpark Village proved insurmountable,” the news release said.St. Louis now has a hole in its skyline not far from the Gateway Arch, with no real prospects to fill it in the very near future.The owners of the Cardinals first proposed the ballpark village concept in 2001. Elected officials in Missouri gave the Cardinals’ ownership more than $100 million in tax subsidies from St. Louis and Missouri lawmakers to help get the ballpark village built. Once the ballpark opened in 2007, a goal was established to have some development done at the old park site by the 2009 Major League Baseball All-Star Game, which will be played in St. Louis.The Cardinals and Cordish plan to go back to city and state officials and come up with a new proposal for development. The team desperately needed Centene and other companies to commit to the planned village to help pay down the debt on the new ballpark.The ballpark village project isn’t on the ropes, but the Cardinals’ ownership has an agreement with St. Louis to get 60% of the project built by 2011 — or they must pay an annual $3 million penalty for not hitting that mark. With Centene gone and the housing market softening, the Cardinals’ ownership has some problems.Oakland A’s owner Lewis Wolff has to be one of the owners most interested in the Cardinals’ sudden problem. Wolff wants to be build a ballpark village to house his team down Interstate 880 in Fremont, Calif., not too far from San Jose. Wolff and Fremont have not gotten all of the necessary approvals from Fremont and Alameda County officials to start building the stadium. On November 14, 2006, Wolff announced he had reached an agreement to purchase a 143-acre parcel from Cisco Systems with the intent of constructing a baseball park in Fremont. The A’s released a statement at that time that “the anticipated funding for the ballpark will be a combination of private equity and the application of the value of land that will use entitlements that will be generated by the activities of the ballpark and the adjacent ballpark village developments.”Wolff needs companies to join Cisco in his efforts to get the ballpark village built once he gets green-lighted by Fremont and Alameda County officials. The Centene decision cannot bode well for Wolff.Nor should Centene’s dropping out of the St. Louis ballpark development plans be any comfort to Chester, Pa., officials, who recently approved the construction of an MLS stadium and development plan on the Delaware River waterfront; to the Giants’ and Jets’ plans in East Rutherford, N.J.; to Nets owner Bruce Ratner’s hopes in Brooklyn, or to Islanders owner Charles Wang’s desires in Uniondale, N.Y.Urban planners have been debating for decades what real benefits a ballpark or an indoor arena have for a community. The 1986 Tax Reform Act changed the way municipalities paid for publicly funded stadiums and put a limit on the amount of taxable revenue generated in a stadium— which allowed owners to get a large percentage of dollars produced by a stadium. At that time, there was a major push to build or renovate stadiums and arenas in major league (and major league wannabe) cities across America. Proponents claimed that stadiums and arenas were economic engines, would produce new jobs, and, in most cases, would be paid for by out-of-towners through hotel, car rental, and restaurant taxes, or with so-called “sin taxes,” with levies placed on alcohol and cigarettes.Stadium proponents pointed to Baltimore as a major example of how stadiums can revitalize a rundown area. But Oriole Park at Camden Yards in the Inner Harbor area was built nearly a decade after the Harborplace and National Aquarium opened.The stadiums and arenas did not produce the revenues or jobs that stadium proponents had suggested — openings in Cleveland, Houston, Seattle, and Phoenix have not been economic engines. The public began saying no to stadiums and arenas in referendums in the late 1990s. At the same time, though, the paradigm began to change with San Diego’s approval of a stadium village concept for a new baseball park for Padres owner John Moores. He got a publicly financed stadium in exchange for helping to develop a run-down area of the city.Chester, Pa., is hoping that it can reverse years of declining population by building a soccer stadium for an MLS expansion team, which will begin play in 2010, as the anchor for economic development. The multimillion-dollar project seems to be very similar to the one the Cardinals and Cordish proposed, except that Pennsylvania taxpayers are on the hook for the costs of the stadium. The city is hoping to attract businesses to help rebuild the Delaware River waterfront.The Giants-Jets project, the Ratner Brooklyn project, and Wang’s Lighthouse Project all depend on more than just a stadium. The planned stadium or arena-villages need more than just 20 home football games a year, and more than 41 NBA or NHL games. The projects need major commitments from companies who are ready to become partners with the teams’ owners. But in these tough economic times, it is a risky business — as the Cardinals found out.The St. Louis Cardinals baseball team has lost its biggest game of the year and it may take years for the team to recover economically.evanjweiner@yahoo.com

Cards’ Collapsed Deal Bodes Ill for Owners

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