CHICAGO - The St. Louis County board rejected a call this week to put a measure on the April ballot to approve next year's debt service payments on the county's $45 million bond issue for the Cardinals ballpark. The request had come from the group behind a successful referendum campaign banning public subsidies for professional sports stadiums without a public vote.
"Since the coalition's entire premise has been to give St. Louis County residents the opportunity to vote, we respectfully request the County Council to put on the April 5 ballot the question of whether $2.7 million shall be approved to make the 2005 payment on the Cardinals ball park bond issue," Fred Lindecke, spokesman for the Coalition Against Public Funding, told board members in a statement.
County spokesman Mac Scott said the county stands behind its position that the charter amendment approved by voters at this month's election impacts subsidies for future stadiums and not the 2003 bond issue that helped finance a new stadium for Major League Baseball's St. Louis Cardinals.
"Our feelings haven't changed. We don't believe this applies to the Cardinals stadium. It's obviously headed for court," Scott said.
The bonds are secured only by an annual appropriation and the coalition believes that before the county can appropriate a debt service payment, it must receive voter approval. The next debt service payment is due May 1. The deadline for placing a question on the next ballot -- set for April 5 -- is Jan. 25.
The county's decision not to act on Lindecke's request means the coalition must make the next move. One of its members, Tom Sullivan, said it is seeking legal advice as to how best to proceed. While the county's legal advisers have said they don't believe the charter change can be applied to an outstanding issue, they acknowledged in bond documents at the time of the sale that the matter will likely have to be decided by the courts.
More than 70% of voters approved the amendment to the county's charter, which takes effect as soon as election officials certify the results. The coalition formed originally to oppose any subsidy for the Cardinals ballpark and warned as the bond issue was being approved that they planned to pursue such a charter change by referendum.
Moody's Investors Service warned prior to the November vote that the county's ability to repay the debt could be adversely affected. Moody's also affirmed its current Aa2 rating on the taxable issue that was sold through the Missouri Development Finance Board.
The bonds, part of a larger financing package that included state and city subsidies for the new $400 million stadium, are being repaid with a hotel and motel tax. "If the amendment is approved by voters and the expected court challenge upholds this interpretation, then the appropriation risk would be a function of voter sentiment, rather than council action," analysts wrote. Moody's rates the county Aaa.
A.G. Edwards & Sons Inc. served as underwriter and Thompson Coburn LLP was bond counsel. The bond trustee is UMB Bank NA. The new Busch Stadium, a 46,000-seat ballpark, is to open in April 2006. Fitch Ratings rates the bonds AA and Standard & Poor's rates them AA-plus.
