Developer Hines meets with Times ed board

Hines senior vice president Michael Harrison spent nearly an hour with members of the St. Petersburg Times editorial board Tuesday morning answering questions about his company's proposed redevelopment of Tropicana Field.

Among the highlights:

* Harrison said he would not, nor would any developer, guarantee to the city that Hines make its tax revenue projections for the project. Hines is estimating $858-million in new tax revenues over a 35-year period the development. Those projections are critical to the Rays' plan to finance a $450-million waterfront ballpark;

* Homes in the Hines project would start in the mid-200's, with condominiums going for up to $600,000 The company wants to build 1,173 homes;

* According to Harrison, the company already has spent "several hundred thousands of dollars" developing its plan;

* If chosen as the developer, Hines will campaign for its project ahead of a possible November referendum.

Harrison also criticized the bid of his competitor Archstone-Madison, calling their design "fractured."

BOTTOM LINE: It'll be interesting to see what the city asks for in the way of a guarantee and what Hines and Archstone-Madison are willing to offer. If developers won't come to the table, will the Rays have to? Or will the potential deal be too good for city leaders to pass up?

Comments

[get-smart]

First Question - How much is the Trop Clean-up? $130 million is my answer

[Dottie]

Harrison can't state with any authority what another developer will or will not guarantee.

If Hines plans to campaign for its plan it better be ready to explain how it was preaches by the Rays ahead of the official bidding process. How it had much more time to spend it "hundreds of thousands" on a bid package and why other developers should not be litigating because they did not receive due process.

[Don Mott]

Of course neither Hines nor any other developer can predict future tax revenue. What they can do is provide commitments from retailers and pre sold residences as a basis for their estimates. We've yet to see that though so the projections and estimates are moot at this point. Anyone can estimate anything but without guarantees and something in writing it is useless drivel. The question of bankruptcy and the developer taking a hike needs to be addressed as well. Of course this all assumes the Rays present an acceptable financial plan and the referendum is put on the ballot in Nov. Personally I think a lot of people are spinning their wheels and going nowhere. D.O.A.

[Chris Jenkins]

1,173 homes from 200-600,000? Excuse me? I suggest that Mr. Hines read about a little something happening around here called a "Housing Crisis". It's the combination of a bad market combined with a sub-prime mortgage crisis, and seasoned with heavy dashes of high property taxes and outrageous insurance bills.

How much of the 858 Mill is banking on someone occupying these properties? Is the developer going to be paying the property taxes, assessed the same way the owner would be, if no one buys?

[Jon McPhee]

I hope all this chatter is not just so much gum-pounding over what is already a done (dumb?) deal.

Someone relatively dispassionate needs to keep track of all the balls that are in the air and in play. One tiny question, and one I forget how to calculate: What is the present value of $858 million over 35 years, if you are willing to accept that number for "tax receipts" from Trop redevelopment and that those revenues won't be raided for other projects and purposes? Does the PV of that chimerical income stream come close to paying the cost of a well over half a billion buck stadium, especially if the interest on the money the City and County would be expected to borrow is added in? Is there a spreadsheet somewhere that tracks and is updated to show with any clarity a running total of what in the end will be the out-of-pocket costs for the average, tax-strangled citizen on the Pinellas Peninsula?

[Don Mott]

Spreadsheet? ah we don't need no stinkin spreadsheet it ain't our money. And it's in our best interests to keep the taxpayers in the dark. The less they know the less it hurts them.

[Jon McPhee]

So the Mayor wants a fanny-covering ok from the Council to go ahead and "negotiate" with 2 of the 3 RFP responders. What the heck are the parameters of any such negotiation? If every ball is in the air until the first pitch gets thrown out, how in our representative democracy does the yeoman citizen have even a tiny chance to figure out what's being done to him or her?

Dottie approaches an interesting point: likely litigation by disappointed suitors. That can happen several ways. One is when one or two non-selectees sue on the basis of some arguable preference or unfairness in the bidding process. That happens all the time in construction jobs and other government deals. The other is when the entity the City holds hands with gets a brushoff at one of the veto junctures in the long process, and then sues to recover money spent in detrimental reliance on the City's supposed lack of good faith, or a number of other equitable and legal theories. The settlements alone could be in the hundreds of millions. Think it doesn't happen? Look up the Florida Rock Supreme Court case, where a major fertilizer company bought a wetland knowing it could not be legally turned into a strip mine, then sued the govenment successfully in claiming that environmental regulations, of which it was well aware when it bought, constituted a constitutionally impermissible taking of the profit it WOULD have made by strip mining the area.

I've suggested before that the City and County will simply be out-lawyered in this whole mess, and that a bunch of (I'll say it again) carpetbagger slicks will eat our collective lunch, whatever happens to the overall Big Deal. People who walk around gawking up at other peoples' "visions" tend to fall into manholes and ditches.

Why is there even serious discussion about spending hundreds of millions to destroy/demolish a functional structure to allow "development" of still more high-end and maybe unsalable residential and untenatable retail property in its place? The building has a pretty long useful life and is a long way from being paid off, let alone amortized.

[Paul]

Just what St Pete needs, more homes starting in the mid 200's. We are in a recession, facing a rather ugly depression. Look at the economic data. No wonder the Rays are rushing to get the deal done, they know in another year, this deal won't even be close to getting off the ground. This is as ugly as politics get... and I'm sorry to say, I'm a St Pete resident who no longer likes our absent, silent, sit on the sidelines Mayor. Someone slap Baker and wake him up... get our Mayor doing Mayoral stuff. You know, assuring the public, giving an opinion on something... other than a few more parking spots. Our Council and Mayor are shamefully helping themselves to whatever spotlight they see in the future. Is there a Harvard lawyer in the house, besides Kalt, who can throw a wrench at our public officials and make them be our public officials? How is this government for the people? I'm baffled.

[get-smart]

To answer Dottie's question, the Rays paid for all the bids. It is just a show. Archstone-Madison will shoot themselves in the foot to get disqualified. The whole process is rigged. It's like the Mayor last week counting parking spaces. I did email him about the new proposed hotel downtown. He thanked me. He said those were the missing parking spaces that he need to make the numbers work. So its now OK to build the new stadium.

[get-smart]

Paul. The Rays are in a rush this year because this is a Presidential election year. There are more voters at the polls. They can campaign their side with better results. An off year election would bring out the Neighborhood "No" vote en mass.

[guy]

I say council should not even consider a vote by the people,
It is a stupid idea.

[guy]

Mayor Baker needs more athletic turds in his diet.

[Hammer]

The unanswered question still beckons…

Why hasn’t the County Commission authorized the County Attorney to seek an injunction against the City of St. Pete for issuing, and proceeding with negotiations, for the redevelopment of property owned by Pinellas County taxpayers?

Once this precedence is set… it’s bye-bye Ft. Desoto, hello condos.

[canweallgetalong?]

The beckoning question needs to be asked of the County Commission.

[Kathleen Chevy]

Get-smart - you're name is not representative of your posts. Are you freakin kidding me? This is one heck of an expensive ruse. The bids are real...wake up. Why will the Trop cost $130M to clean up? I'm sure you don't have any factual backup since you are just using scare tactics and lies like all these pathetic POWW wack jobs.

Guy - you are a moron. Very domocratic of you. Oh...that's right. You know this will pass in Nov because this city is bigger than Bayfront Tower. Get out of the way and stop impeding progress for our City!! You and Justin Elza get together and have an idiot party.

[Paul]

Ahhh Kathleen, do you have an opinion of your own or just like calling names at people? I for one do not want anything done on the waterfront other than what us citizens had already going and asked Council to do... make it a park. That is my opinion, kind of what you're encouraged to write here.

Aaron, your blog is a joke if you can't keep people from posting as others. Check 8:53.

[rayray]

It's going to get built folks, so get over it. St. Pete needs to move forward with progress like every other major leaque city. We would become a true alluring destination.

This proposal would be the best thing the city has seen ever and would last for decades/generations, well past a few naysayers time has come & gone under the dirt.

It's another great day in St. Petersburg!

[Sabine]

Mr. Harrison (and Mr. Kalt) keep using a tax revenue figure of $858,000,000 over 35 years. They fail to mention that the City's portion of that is only $406,000,000 ($11,600,000/year). This comes both from the Hines proposal (Page 34) and the City's summary of 3/18/2008. Will this be enough to pay off the debt needed to build the new stadium, given the interest rate the City is likely to get in the current market?

I don't know what the market interest rates are now, but I believe the rate the Rays used to turn a 35-year stream of rent payments ($10,000,000/year) into a rent prepayment of $150,000,000 is about 5.7%.

[Chris Jenkins]

200-600K.

1200 homes, downtown, from 200-600K.

Does anyone else not see the fatal flaw in this plan?

[Steve Lange]

Like I have been saying all along. This entire Ray's proposal is based on assumptions which are based upon other assumptions. No guarantees by the Rays, for anything, leaves the City holding the bag for all debt overruns, revenue shortfalls and other financial risks for things like Trop contamination, etc.

Just what can the City Council be thinking of?