ST. LOUIS (KMOX) – The plan to spend millions of dollars in taxpayer money to fix up Scottrade Center is cited as an example of the city’s growing debt burden in a report released last week by a national credit rating agency.
The report from S&P Global mentions Scottrade Center in the context of the city’s “moderately high” debt obligations.
Without passing judgement on the Scottrade deal, the report says, “The city may issue $44 million of new appropriation debt in the near future for the Scottrade Center.”
The price tag now is actually $64 million.
That’s the size of the bond package that City Comptroller Darlene Green is refusing to sign off on, saying the total cost to taxpayers of $105 million over 30 years could hurt the city’s credit rating.
Green is being sued by the Blues ownership group, the Kiel Center Partners, which claims Green has no authority to “veto” a plan already approved by aldermen and signed into law by then-mayor Francis Slay.
The report from S&P on the city’s finances doesn’t say whether the Scottrade deal could harm the city’s credit rating. Overall, the city received a “stable” outlook with an A-plus rating for its general obligation bonds.
But the report also warns that the city’s “stable” outlook could either remain unchanged for two years –or be downgraded if the city’s budget conditions worsen.
“We may lower the rating should budgetary performance and flexibility worsen, which could result if expenditure growth isn’t offset by budget reductions,” the report said.
A separate credit agency report by Moody’s issued in March sounded similar concerns.
Moody’s downgraded the city’s credit to A-3, and issued a “negative” outlook.
The Moody’s report, cited by Comptroller Green when she announced her refusal to support the Scottrade deal, warned the city’s debt burden is “significantly high.”
“Given the city’s already leveraged debt position, which is primarily comprised of appropriation-backed debt, future borring and increases in the city’s debt profile, absent corresponding valuation increases, may have a negative impact on the city’s credit rating.”
Meanwhile, a separate lawsuit filed a by a St. Louis alderwoman to cut off public funding for the Scottrade Center was filed earlier this month.
Alderwoman Cara Spencer filed the suit, saying the city violated the Missouri Constitution when it agreed to use public money on a for-profit business.
“The state constitution is very clear,” Spencer said. “We cannot use taxpayer money to fund private investment, and that’s exactly what we’re doing here.”
Downtown Alderman Jack Coatar, who is not a party to the suit, is predicting it will be thrown out of court.
“This doesn’t violate the state constitution,” Coatar said. “The case law is clear on that, and this is the same group of folks who consistently sue the city and consistently lose their financing cases.”
In addition to Spencer, the plaintiffs in the suit include former state House Rep. Jeannette Oxford, and former city counselor James Wilson.