by Doug Moore
Post-Dispatch
09/16/2003
online source: http://www.stltoday.com/stltoday/news/s ... enDocument
The Cardinals plan to break ground on a new stadium as soon as Oct. 15 as team owners continue to put the finishing touches on private financing that is to serve as the largest part of funding for the more than $400 million project.
"We expect to close on the financing perhaps as early as next month," Cardinals President Mark Lamping said this week. Construction could begin anywhere from immediately after the ceremonial groundbreaking through the end of October. Once the private financing is secured, actual construction will begin to keep the project on schedule, team owners said.
Financing for the project previously had stalled as:
The first company hired to raise money was fired.
The portion of the money to come from St. Louis County has not yet been requested.
Because of that, the removal of a highway entrance ramp that sits in the path of where the stadium is to be built has been delayed.
While the Cardinals remain adamant that they can get the new ballpark open by April 2006, the owners concede that the later the money comes together, the more expensive the project could get as contractors move to an aggressive construction schedule that has crews at the site around the clock.
"The way we view this is, until we move off opening day of 2006, we don't think the exact date of closing on the financing is all that important," Lamping said. "We're well within where we need to be to be open in 2006 and expect to stay to that schedule."
Dean Bonham, who runs a sports marketing and consulting company in Denver calls the Cardinals' construction schedule "very aggressive, but realistic."
Team officials want to have the money in the bank before announcing which investors are financing the project, Lamping said.
Banc of America Securities is responsible for finding about $75 million in equity investors for the project.
An additional $150 million would be borrowed by the company that commits to build and own the stadium. The investors would lease the stadium to the Cardinals. The team is pitching in $50 million.
St. Louis County has agreed to kick in $45 million, but the County Council has taken no formal vote on how the money will be paid.
The balance of the money will come from the city eliminating a ticket tax and from state tax credits.
Until financing is secured, the deal is too risky for the St. Louis County to put up money, county leaders have said.
"We've heard informally through the grapevine that they are very close and that we will hear from them in a matter of days," said Jim Baker, director of administration for St. Louis County. "Everything we've heard is that we'll hear a lot more shortly."
Once a formal request is made, it would take a minimum of three weeks to get final approval from the County Council, said Baker. It will take another five weeks before the county could get the bonds sold. Under that time frame, the money might not be in the hands of the Cardinals until the end of the year.
As long as the council has agreed to provide the money, the Cardinals would proceed with construction plans, team owners have said. The Cardinals are also holding off on announcing an exact date until the baseball season ends.
He added that the team has met three essential elements to securing private financing by:
Negotiating a long-term cable agreement to broadcast more Cardinals games. The number of games per year on cable jumps to 110 from 89.
Securing 10-year commitments from companies to purchase 30 of the 63 suites planned for the ballpark. The team has presold 52 suites.
Arranging for a long-term agreement with a concessionaire to handle food and beverage sales.
"Essentially, it's a done deal," Lamping said. "What we needed to show evidence of was our ability to increase our revenue to support the annual ($14 million) payment," that the Cardinals will make to the ballpark owner, he said.
Naming rights for the stadium have been set aside to focus on "agreements critical to financing," Lamping said.
Because financing was not in place by Sept. 1, the Missouri Highways and Transportation Commission canceled a $273,000 contract to tear down the Eighth Street entrance ramp to U.S. Highway 40 (Interstate 64) to clear the path for the new stadium. A Missouri Department of Transportation spokesman said that a new contract would be awarded in December. Lamping said a delay in bringing down the ramp would not affect the team's construction schedule.
"There have been no new developments over the last six or seven months that changed that at all," Lamping said. In April, the Cardinals fired the company it had hired to help secure private financing. Team owners were concerned about being linked to Property Funding Group after one of the managers of the Washington firm was named a federal terrorism investigation.
In July, the Cardinals announced that they had revised the design of the stadium so construction would be less disruptive during the 2005 season and save the team money by keeping Busch Stadium fully intact during that year of play.
The total ballpark price of just more than $400 million includes the highway ramp replacement, utility relocation and other infrastructure improvements.
Pulitzer Inc., which owns the Post-Dispatch, and Pulitzer's chairman, Michael E. Pulitzer, are part-owners of the Cardinals. Their combined stake is slightly less than 4 percent.
Next steps
Cardinals must secure $75 million more in equity investors.
Investors borrow $150 million more.
Once that private financing is in place, the St. Louis County Council is to sell $45 million in bonds
