State approves tax break for new Cardinals stadium

JEFFERSON CITY, Mo. -- In unusually quick fashion, a state board approved up to $29.5 million in tax credits Tuesday to help with the construction of a new Cardinals baseball stadium.

The tax credits are intended to offset infrastructure costs, such as the relocation of utilities and roads, at the new privately financed downtown stadium. Cardinals executives touted the state move as a necessity to begin soliciting contributions.

All told, the project is valued at $402 million, including $325 million for the ballpark itself.

The unanimous approval of the tax credits by the Missouri Development Finance Board came just six months after a plan for a publicly financed stadium failed in the state Legislature.

Afterward, the Cardinals began discussions with Illinois officials about relocating to the east side of the Mississippi River and St. Louis officials scrambled to pull together an alternative plan, which the Cardinals ultimately embraced.

The Cardinals and city had a baseball-team-sized delegation on hand for Tuesday's state board meeting, where they displayed color sketchings of the proposed stadium and touted its economic virtues.

Included in the entourage was Dean Wolfe, executive vice president for acquisitions and real estate at The May Department Stores Co. Wolfe suggested the St. Louis-based company would rethink its own downtown location if the Cardinals ballpark proposal fell through.

"The Cardinals development of a new ballpark is critical to the revitalization of the city," Wolfe told finance board members.

Board member Betsey Solberg of Kansas City expressed concern that the panel was hearing a presentation and voting in the same day -- trusting staff to draft a resolution complying with the vote.

Cardinals president Mark Lamping said even a month delay could have jeopardized the private fund-raising and, ultimately, the scheduled 2006 opening date for the stadium.

That satisfied Solberg, who said after the vote: "They convinced me that they need to go with it."

State officials, including Gov. Bob Holden and Lt. Gov. Joe Maxwell, praised the tax credits as an investment in a project that would provide a much bigger return in the form of tax revenues from a revitalized downtown.

Before approving the stadium tax breaks, the finance board also approved up to $14 million in tax credits for redevelopment of the Old Post Office area in downtown St. Louis.

The Cardinals expect to resell their tax credits at 85 percent of their face value and earn $25 million. If the Cardinals can get a higher resale value on the tax credits, the state could potentially issue less than $29.5 million in credits and the team could still make $25 million.

The tax credits would be issued in 2003 and redeemed over the next several years, meaning they potentially could reduce state revenues for the current budget year that runs through June 30.

At the end of the 29-year land lease to the stadium developers, the owners would have to repay the state with interest for the tax credits or give the state an ownership share in the stadium, said Jim Grebing, spokesman of the state Department of Economic Development.

"This is a sound financial investment at this time for the state," said Maxwell, a member of the finance board. "The taxpayers of Missouri ... will get their money back, and that's not a bad deal."

Critics of public stadium subsidies said they doubted the state would ever recoup the cost of the tax credits.

"This is $30 million the state will not have for legitimate public services -- in the face of a budget crunch that is causing millions in cuts," said Fred Lindecke, spokesman for the Coalition Against Public Funding for Stadiums.

Unlike the Cardinals' previous plan, the current proposal requires no action by the state Legislature.

Besides the tax credits, the Cardinals and the city also are seeking $12 million in state aid to replace an interstate entrance ramp that would be moved to make way for the stadium development. The Missouri Highways and Transportation Commission is scheduled to take up that request at a Dec. 6 meeting in Kansas City.