Missouri will allow professional sports teams to use state-backed bonds to develop stadiums, now that Gov. Mike Kehoe has signed authorizing legislation.
The move comes as
"We have consistently said that we're exploring all options and will share a plan when it's ready to be shared," said Sam Mellinger, vice president of communications for the Royals.
The team said in a statement after the legislation passed: "As we said from the beginning of the legislature's deliberations, their work is a very important piece of our decision-making process. Now that both houses have voted and the bill is headed to the governor's desk, we look forward to evaluating the plan in full detail."
A spokesman for the Chiefs did not respond to requests for comment.
"The Director [of Economic Development] and the Commissioner [of Administration] must be satisfied that there is sufficient public investment made by units of local government to support infrastructure or other needs generated by the project," the law states.
The law also requires that teams benefitting from state funding stay in Missouri for the term of the agreement, not to exceed 30 years. If they don't, they are considered in default and required to repay the funds expended by the state.
SB 3's passage follows a defeat at the ballot box last year for the Royals. Voters in Missouri's Jackson County overwhelmingly rejected
"Pro teams typically do not want a public vote, because they often fail," said Robert Baumann, economics and accounting professor at College of the Holy Cross. "It is far easier to motivate a small number of city, county or state officials than the voting public. After all, these are subsidies to extremely wealthy people that generate negative economic returns. All of the details are easily revealed over the process of an election runup. Individual public officials have proven to be far easier to convince."
There is no scenario under which economists have found stadiums to be efficient uses of government spending, said Baumann, who has
Prior to the Jackson County vote, County Executive Frank White, Jr., had pushed for a deal that would have made more demands on the Royals in exchange for public funding for a stadium. Baumann said public officials should expect more reciprocity of businesses "receiving a handout."
He added, "I recommend public officials take a stronger bargaining position. In many deals, teams get the money with no strings attached and that has become a status quo. But the reality is that municipalities have far more bargaining power than they exert."
The teams may have more leverage over Missouri in this case because they wouldn't need to make major changes to their identities to cross state lines, Baumann said. Still, he added, "It's getting to the point where teams don't even need a credible location to (threaten to) relocate."
SB 3 passed by
The law's sponsor, Sen. Kurtis Gregory, R-Marshall, did not respond to emails or phone calls, and his voicemail box was full.
Majority caucus whip Sen. Jill Carter, R-Granby, who voted no on the legislation, did not respond to requests for comment. Sen. Patty Lewis, D-Kansas City, who also voted no, did not respond to requests for comment.
Fitch Ratings, Moody's Ratings and S&P Global Ratings all assign Missouri a triple-A rating.
