Delayed bonds and deals around downtown St. Louis Dome and America Center complex
The hospitality industry employs roughly 90,000 people in the region and is a significant force in generating new revenue for St. Louis City and County and the surrounding areas. The convention center is a vital tool for economic development in St. Louis, supporting businesses and workers in the area’s hotels and restaurants, and employing union and nonunion labor for every large event held there. The building has been successful in being competitive with national convention selection and supports local businesses. However, the County Council delayed approval of bonds, which led to a delay in the project start and a rift within the Council. The City and County's Board of public Service was responsible for arranging contracts for project management and architectural services and construction out to bid, and overseeing all invoicing and payments, half of which would be sent to the county for reimbursement. The project was initially funded by half of the project, but a clause was inserted into the ordinance by the Council that required the County Executive to bring back the final bond documents for Council approval. The city delayed issuing bonds until October 2020, and the county delayed issuing them until July 2021.
Publié : il y a 11 mois par The St. Louis American dans Finance
The hospitality industry employs roughly 90,000 people in the region and is a significant force in generating new revenue for St. Louis City and County and the surrounding areas.
The convention center is a vital tool for economic development. While owned by the City and located downtown, it supports not only businesses and workers in the area’s hotels and restaurants but employs union and nonunion labor for every large event held there. Much of what is needed to service those events comes from local companies.
The building has been successful in being competitive for many years, with national convention selection. St. Louis, largely because of the team at Explore St. Louis under Kitty Ratcliffe’s savvy leadrship, has put together compelling bidsto win business, massaging hotel management to offers to attract deals, music and entertainment venues, and airlift opportunities.
It is important to note that her organization is a public agency that manages theconvention center as part of its responsibilities. However, they do not own it, nor is the convention center team managing the project; that is done, as with all city projects, by the city. As operators of the building, this team knows the building, how it works, and what the needs are. Significantly, they have commitments to existing customers whose events occur while construction is going on, a heavy task to manage.
The plan to keep the building competitive received support from three Mayors and two County Executives as well as the City’s Comptroller and members of the Board of Alderman, all of whom know the critically important role the building plays in the success of the hospitality industry that helps our entire region prosper.
So why has this subject become so controversial? Fractured St. Louis leadership. Let’s begin with the County Council’s delayed approval of bonds that, in turn, held up the project start. The County passed an ordinance in April 2019 that approved funding half the project. During the pre-COVID time, a reputable St. Louis construction firm estimated the costs to be $175 million, plus the cost of architectural design, project management and real estate acquisition, bringing in the total $210 million, 50% each from the City and County.
However, a clause was inserted into the ordinance by the Council that required the County Executive to bring back the final bond documents for Council approval. The fractured relationship between the Council and the County Executive would soon prove highly damaging to the project.
In March 2020, the Council finally passed an intergovernmental agreement between the city and county explaining how the multi-jurisdictional project wouldbe managed. It would be managed by the city’s Board of public Service, which would be responsible for arranging contracts for project management and architectural services and construction out to bid and would then oversee all invoicing and payments – half of which would be sent to the county for reimbursement. Because of the COVID pandemic, the city delayed issuing bonds until there was a more favorable market for them and did so with success in October 2020. The county chose to wait until the city awarded contracts and started making payments. Market conditions were even better when the County Executive sent the standard request to the council to approve the bond documents in early July 2021 so they could go to market.
From there the project went awry. Council Chair Rita Days announced that she was holding up the bond sale. Then it gets interesting. Clayco Chair Bob Clark gave the St. Louis Post-Dispatch an interview in which he offered an idea for a better plan and he provided a rendering showing the footprint of the Nashville Convention Center on top of the Dome at America’s Center, and also, interestingly, property that he owned with Larry Chapman and Paul McKee across the street commonly known as the Bottle District. That district was originally supposed to be leased to Northside Regeneration.
The “idea” was to tear down both the Dome and convention center and construct a new building in its place. A building that itself would have cost $1 billion, not to mention property demolition costs or the fact that, most importantly, St. Louis would be without a convention center for 4-to-5 years. How could that be good for our regional economy, especially when the Explore St. Louis team had already secured convention bookings as far out as 2030?
And in that same month, colleagues of Clark, including Larry Chapman and Jeff Rainford, made political campaign donations to Council Chair Days. She held the convention center bonds up in the Council until April 2022, only then permitting the County to begin to go to market on their bonds. By then, costs had skyrocketed.
Is there an effort to find a scapegoat for determinants in this mess way beyond her control.
And now do we see Bob Clark a major advocate for calling for Ratcliffe’s head?Why is Ratcliffe responsible for these setbacks? Ratcliffe has received many awards from her national peers in the hospitality industry. It takes seasoned leadership, industry knowledge and experience, perseverance, and fortitude. If she is a target, she shouldn’t be. It’s not her fault. The blame for the cost overruns and delays clearly lies elsewhere.
Delays in the city of over a year, and in the County of over four years, to issue bonds saw costs projected in 2018 to climb steeply.
We need to see more collaboration, not rancor, between the City and County to make certain our convention industry is more competitive.
Les sujets: Markets