ST. LOUIS — Leaders of Ƶ and Ƶ County have signed off on a plan to transfer over $500 million from the settlement with the NFL and Rams football team to investments with a higher return, a move the third party in the settlement, the owner of The Dome at America’s Center, has advocated since June.
Ƶ Mayor Tishaura O. Jones and Ƶ County Executive Sam Page finalized the transfer with the Dome’s owner, the Regional Convention and Sports Complex Authority (RSA), on Friday. It followed a formal request Wednesday from the RSA board urging the city and county leaders to agree to move the money to higher-yielding accounts while negotiations over how to split the settlement three ways play out.
RSA board members in June unanimously passed a motion urging the city and county to work with the entity to find a higher-yielding investment for the money during negotiations, arguing it could easily be earning more interest amid ongoing Federal Reserve rate hikes. Last month, they again urged the city and county to move the $515 million in NFL Rams settlement money — the amount left over from the $790 million settlement after attorney fees to law firms Blitz, Bardgett & Deutsch and Dowd Bennett.
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Currently, it’s earning 1.89% interest in Dowd Bennett’s trust account with Commerce Bank. Even there, it earned some $800,000 in just a month.
The RSA presented a more concrete option for the money Wednesday from Commerce Bank to invest the money in three-month U.S. Treasury bills that could earn 3.25%. The board voted unanimously to move the money there.
In a joint statement from Jones and Page on Friday, the two leaders said they had “reached an agreement to invest Rams settlement funds into a flexible, low-risk account at Commerce Bank, in line with other City of Ƶ funds.” They cited RSA’s vote Wednesday as an “official action” that allowed the transfer.
“Once the RSA took official action to allow us to do so, we signed off on the movement of these funds,” the joint statement from Page and Jones said. “Meanwhile, negotiations continue towards an agreement on how to best divide these funds for the long-term benefit of our region.”
The settlement money could be moved to the treasury bills, federal government debt viewed as a virtually risk-free investment, as soon as Monday. Every day matters with a pot of cash this big: RSA members have said the region was missing out on as much as $28,000 a day by keeping the money in the low-yield trust account.
The three parties have been negotiating since November over how to divvy up the money. Ƶ , arguing it was most damaged by the loss of game-day revenue downtown. Ƶ County, on the other hand, declined to join the ill-fated 2015 effort to finance a new riverfront stadium to keep the Rams here.
The RSA, for its part, exists almost exclusively to own and maintain the Dome built for the Rams. The city, county and the state fund it, but that arrangement expires in 2024, so it needs funds to pay for the venue’s long-term maintenance. It’s also burning through operating cash, which the RSA’s director said could run out as soon as March.
The RSA’s moves to urge city and county leaders to help it find investment options during negotiations came even from Page and Jones appointees to its board. Both leaders, as well as Missouri Gov. Mike Parson, moved to put their stamp on the board with new appointees after the Rams settlement put the usually low-profile board in the spotlight.
Going forward, the RSA is looking for safe investment options for the money that could yield even more than U.S. Treasuries. In September, it voted to have its staff issue a request for proposals along with the city and county for investment options. But on Wednesday, it voted to move ahead on its own and have its staff issue an RFP for investment services for the settlement money. Depending on what responses come back, there could be additional investment options after the treasuries mature in three months.
Updated at 5 p.m.