In general, the results of the analysis indicate that it would not take much in the way of construction, parking, operational, retail, entertainment and commercial office impacts to make the stadium and ballpark village developments pay off for the State of Missouri. Our findings show an annual increase of roughly $120 million in gross state product at full operation and a net present value to the State of Missouri of $61.68 million in tax benefits over the 30-year investment. This indicates that between the start of construction and 2034 the state would be able to recoup its share of the financing and generate additional tax revenues. However, the degree of tax impacts in any given year fluctuates over the life of the financing, and would be negative in certain years.

To achieve this minimum level of success or beyond appears to hinge upon the completion of the ballpark village development. It is unlikely that just the construction and operation of the new stadium would generate significant increases in tax revenues for the state. Possible other benefits to the state not quantified here also seem to flow from the ballpark village development.

More immediately, the construction of the stadium slated to begin late this year would bring a quick boost to the St. Louis City and Missouri economies. Results of the study show a $72 million surge to the City's economy from construction in the next four years, and $140 million for the state. Afterwards, the analysis factors in $15 of additional visitor spending at the new stadium, accounting for new ticket prices and stadium sales. To the extent that spending is more by non-Missouri residents, then this would bring additional benefits to the state.

Much has been mentioned about Major League Baseball playing its All-Star Game in the new Cardinals stadium in 2006. The study did not assume the game would be played in St. Louis and did not factor in any additional visitor spending from holding this unique event in Missouri. If it does occur, then this would bring an additional benefit to the state.

Economic impacts and state revenues pick up as the ballpark village is phased into the site and made fully operational by 2014. Mixed-use developments, such as the one proposed, have become very popular as a strategy for urban economic renewal and development. Anchored by unique attractions, such as big league sports and world-class exhibits, these sites become much more attractive to businesses looking to relocate and to tourists and conventions looking for future destinations.

The study factors in about $15 of additional visitor spending being captured in the ballpark village with each trip there. To the extent that spending exceeds this level, or if more tourism and convention business follows, then this would bring additional benefits to the state. Commercial office space is assumed occupied by 50 percent new jobs to the state. To the extent it is more, or paying higher wages per job, then the better for the state.

The site would also have high-end residential units. The idea of adding permanent residents to the area gives the location some year-round vibrancy even when the Cardinals are not playing at home. The study does not attempt to quantify this benefit. Considering the enormous population exodus from the City in the last fifty years or so, bringing people back to live in downtown may be an important benefit of the project for some.

There is also the line of thought in economic development circles that an exciting downtown mixed-use development can leverage additional and complementary development in the area. The idea of "development synergy" is an intriguing concept, but again one that the study did not assume would occur. To the extent that it does, bringing new investment, jobs and spending to Missouri, then it would be beneficial.

It has been reported that the Cardinals may move from the City into other parts of the St. Louis metro, be it the Missouri or Illinois side. The analysis does not assume the Cardinals will move from downtown, in fact it assumes just the opposite: that they will stay in downtown St. Louis even if the stadium and ballpark village development are not built.

If the Cardinals were to move from downtown to St. Charles County, for instance, then it would shift economic benefits away from the traditional urban core. This does not necessarily lead to a loss of economic benefit for the state. The idea of the Cardinals moving may or may not concern some. Were the Cardinals to move to Illinois, then the state could stand to lose existing revenues generated by the team.

The study also shows that the economy of the St. Louis Metro Region is one of dichotomies. St. Louis County and St. Louis City are the slowest growing parts of not only the metro area, but in all Missouri. Meanwhile, the outlying metro counties of St. Charles, Jefferson, and Lincoln are among the leaders in overall economic influence in the state. Therefore to the extent that one is interested in targeting economic development incentives to distressed areas, then this information may be of value.

Lastly, there is the issue of psyche, of having major league sports franchises in your area. Obviously, this is difficult to put a price on and the analysis does not attempt to. The mobility afforded companies and workers in the New Economy does make amenities more influential in location decisions, so being a "Big League" City would appear to have marketing value.

In sum, the study raises many questions and provides some answers. An important one is that the state is not in much jeopardy of losing its investment in the project. It even stands to gain some additional economic benefit, and perhaps substantially so, if development synergies take hold.

Summary Presentation

To obtain the full report, please contact:
David J. Peters

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