The city of St. Louis chose Pinnacle Entertainment to build a casino (Lumière Place) after extracting promises that the developer would pour an additional $50 million dollars in urban Renaissance development in the city.
Well, it got a profitable casino. But Pinnacle has not delivered on the promised Renaissance development:
In 2004, Pinnacle Entertainment made a deal with the city to invest $50 million in revitalizing the riverfront area within five years of opening its $507 million Lumière Place casino.
A year later, Pinnacle promised a $25 million condo tower on Laclede’s Landing. In 2006, the company announced plans to build stores and additional condos as part of a second phase of Lumière Place, which opened in December 2007.
But the recession hit — and the projects were canceled.
Pinnacle now faces a December deadline. Its only investment outside of its casino complex: the $9.8 million Stamping Lofts project. And even though it is getting full credit for the project, its financial investment was just $2 million.
To recap how these gilded deals play out:
- Pinnacle promises urban Renaissance development if it gets to build a casino first. Pinnacle builds the casino, then does not meet its other promises.
- The St. Louis Cardinals promise a $550 million dollar urban Renaissance development if they can build a new tax-subsidized stadium first. The new ballpark opened in 2006. Six years later, the promised mixed use development is coming soon. After additional tax subsidies, please.
- A series of developers promise to urban Renaissant (we might as well coin a verb for it) with a series of tax credits, incentives, loans, and the city of Springfield’s construction of parking garages. (The saga unfolds here.) Decades after the first attempts at public/private glory, the building remains boarded up at city expense, but the parking garages and their debt and annual maintenance costs are there.
What happens over and over: The private developer gets what it wants and breaks its promises. The iron-clad contracts to which the city thinks it has bound the developer are renegotiated when the developer is going to not meet them to save face for the city, or the developer walks away from the contracts entirely.
Sadly, the lesson tomorrow’s leaders won’t learn a lesson that these sorts of agreements benefit the private at the expense of the public. The lesson they will learn is to make their iron-clad contracts iron-cladder as they continue the same pattern.