St. Louis Rams' Lease Negotiations: Guide to the Continuing Process

Justin Gibson@JustinNColumbiaCorrespondent IIIMay 10, 2012

Fox2Now St. Louis reported yesterday that part of the Rams' demands to the St. Louis Convention and Visitors Commission (CVC) includes putting in a retractable roof on the Edward Jones Dome. Los Angeles residents wanting the Rams to come back to their city believed this news proved their wishful thinking was becoming one step closer to reality. St. Louis Rams' fans had a mixed reaction.

Nonetheless, there are many factors to be aware of as the lease negotiations continue.

The Edward Jones Dome, which opened in 1995, was financed primarily with $256 million in revenue bonds, which is still being paid off with $24 million annually in tax money. The state of Missouri is responsible for $12 million of that, while St. Louis city and county each pay $6 million. According to the St. Louis Post-Dispatch, the Rams pay $500,000 each year to lease the Dome ($250,000 in rent and $250,000 in reimbursement for game-day costs). The team profits from advertising, concessions and box office revenue.

St. Louis Mayor Francis Slay has said paying for enhancements to the Edward Jones Dome that require public funding will be subject to prior vote by local residents. The mayor has also said he believed the CVC's initial proposal was a solid proposal that gets the negotiations moving.

According to a report from Yahoo! Sports, the downtown Los Angeles stadium proposal is in trouble because of the developer's reluctance to alter terms of the deal that would be offered to any NFL team interested in coming to L.A.

The issue arises over Anschutz Entertainment Group (AEG), which would build and manage the downtown L.A. stadium, wanting to buy a minority stake in the team at a discounted rate. AEG reportedly wants anywhere from 30-50 percent of any team in its stadium.

Yahoo! Sports reports that three months ago, AEG's Phil Anschutz met with NFL commissioner Roger Goodell, Los Angeles Mayor Antonio Villaraigosa and New England Patriots owner Robert Kraft. At the meeting, Goodell told Anschutz that his demands were unacceptable to the NFL and teams who could potentially move to L.A. However, Anschutz still refuses to change the terms of the deal that Goodell and the NFL oppose.

AEG has still pushed forward with a nearly $30 million environmental impact report.

The 10,000-page report was delivered to the city of LA after 18 months of work.

The LA City Council unanimously approved the overall framework for financing the stadium project last year. The deal approved demolition and relocation of a section of the LA Convention Center.

Farmers Field, the AEG-developed plan to bring NFL back to LA, plans to open in 2016. It seats 68,000, expandable to 78,000 for special events like the Super Bowl or NCAA Final Four.

The Rams rejected the initial proposal to upgrade the Edward Jones Dome submitted by the CVC in March. The plan outlined $124 million in stadium improvements, with more than 50 percent being funded by the Rams. Included in the proposal from the CVC was constructing a 96-foot-wide by 26-foot-high scoreboard, building a new three-story structure on Baer Plaza connecting to the Dome with a bridge over Broadway Street, installing window panels to allow more natural light inside the Dome and more.

It was no surprise the Rams rejected the initial proposal. The CVC even expected the Rams to reject it. However, the Rams were "pleasantly surprised" with the CVC's proposal.

The Rams submitted their counter-proposal to upgrade the Edward Jones Dome to the CVC on May 1. However, it was not released to the public, as both sides cited a confidentiality agreement for the negotiations. The CVC then asked a judge the following day to decide whether it was obligated to release the plan to taxpayers. Missouri Attorney General Chris Koster stepped in earlier this week, saying he would comply with a Sunshine Law request that would make the Rams' counteroffer open to the public.

EARTH CITY, MO - JANUARY 17: St. Louis Rams owner Stan Kroenke addresses the media during a press conference at the Russell Training Center on January 17, 2012 in Earth City, Missouri.  (Photo by Dilip Vishwanat/Getty Images)
Dilip Vishwanat/Getty Images

No cost estimates or price tag was included in the Rams' proposal to the CVC. Therefore it is unknown what amount, if any, owner Stan Kroenke is willing to kick in if the CVC were to accept his offer.

The CVC has until June to to either accept or reject the Rams' proposal. The matter will go to arbitration if the matter is not resolved by June 15.

Arbitration for the lease negotiations are a non-binding process. This means the arbitrator will make a ruling between the disputing parties, but it is not enforceable. 

If the CVC and Rams cannot find a resolution on how to make the Edward Jones Dome a "first-tier" stadium, then the team could terminate their lease and move out of St. Louis in 2015. However, the CVC does not have to make every aspect of the stadium first-tier.

In negotiations with the CVC, the Rams have never brought up the option of moving out of St. Louis. The notion of the possibility, at this point in time, is nothing more than propaganda.

Rams' Chief Operating Officer Kevin Demoff has said on interviews on 101ESPN and KFNS that the team is committed to building a long-term winner in the city of St. Louis. He pointed to the team's overwhelming amount of civic and philanthropic work in the region as building a local relationship.

The Rams are considered to have one of the top leases in the NFL, as an owner told St. Louis Post-Dispatch columnist Bernie Miklasz.

NFL Commissioner Roger Goodell wants the Rams to stay in St. Louis. Goodell recommended St. Louis when ultimately two expansion teams were given to Carolina and Jacksonville. The NFL commissioner will not hurt Kroenke's leverage in talks but will assist with keeping the Rams in St. Louis if the opportunity arises.

Kroenke was the lead investor in 1993 to bring the St. Louis Stallions to Missouri, which would have brought the NFL back to his home state. Additionally, the Rams owner bought his initial 30-percent stake in the team in 1994 on the predetermined condition that the Rams would move to St. Louis. On top of that, in just the few years since Kroenke has taken over the Rams, the team has vastly expanded their preseason network coverage. The Rams also won the 2010 St. Louis Philanthropic Award for their expanding community service work.

Kroenke is working diligently with the chairman of the CVC and lead negotiator for the CVC in the Edward Jones Dome lease negotiations for the Rams to redevelop Union Station in St. Louis. Also, Kroenke's main job is with his realty development company, THF Realty, which is headquartered in St. Louis.

Denver billionaire Philip Anschutz, who is the developer for the LA stadium, is a personal friend and business partner of Kroenke's. The two businessman joined together in Colorado to run the 6,000-seat Broomfield Event Center (now the first Bank Center) and have several other business ventures.

Kroenke has remained quiet publicly on the negotiations. He has not made any public statements and has been dismissive of any questions concerning the negotiations in interviews.

St. Louis' top-connected media member Bernie Miklasz stated on his radio show on 101ESPN earlier this year that his sources embedded in the negotiations have told him they believe Kronke is not going to move the Rams out of St. Louis. He believes that the two sides are closer than most would expect.

When Jeff Fisher was hired as head coach of the Rams this year, he said in an interview with Miklasz on 101ESPN that he believed Kroenke would keep the team in St. Louis. Fisher is from California, however.


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