Financial mag talks about Rays stadium plan

Anyone read Total Securitization magazine? I didn't think so. Well, anyway, in its April 21 issue the authors have a short story on the Tampa Bay Rays' stadium proposal. Here's the article in its entirety:

• Major League Baseball's Tampa Bay Rays may securitize revenue streams as part of the financing for the team's new stadium in St. Petersburg, Fla. Michael Kalt, senior v.p. for development and business affairs, said the team is in the initial stages of structuring a financing package for the stadium and that lenders will likely push the team to securitize revenues.
  
  "We haven't gone far enough to determine what we will or will not be securitizing," said Kalt. He added that an outline of the financing package will hopefully be completed in the next four to six weeks. The total cost to build the stadium is $450 million.
  
  The new stadium, so-far unnamed, still needs to be approved by voters in St. Petersburg. The Rays currently play at Tropicana Field, a domed stadium with seating for 43,772 and about 8,000 parking spots.

So, my first question is, what does securitize mean? Investopedia says securitize is "the process of pooling a group of financial assets together to create a new security, which is then marketed and sold to investors. The value and cash flows of the new security is based off of the underlying value and cash flows of the assets used in the securitization process. Companies will securitize illiquid assets into liquid assets in order to increase their overall liquidity and generate immediate proceeds from their assets."

I'm still not sure what that means, but I'm guessing the Rays are thinking about taking out a big loan to pay for their $150-million share of the overall $450-million construction cost. Anyone get a different read on the article?

Comments

[get-smart]

Real Estate Weekly: This Week - Sunny St.Petersburg, FL
- Kate Dubosie -

December 1,2010 Edition
--------------------------------------------------
This month we visit Sunny St. Petersburg. Our Interview is with Real Estate Mogul and Guru, Mr. Johnnie Johns.

Kate: Good afternoon Mr. Johns. How is the Real Estate Market here in beautiful downtown St. Petersburg?

JJ: Good afternoon Kate. Just call me JJ.

Kate: O.K. JJ!

JJ: Well Kate, this market has seen its ups and downs...within the last few year we have experienced a number of condo fire sales. With the construction of the new Rays stadium in downtown, many residents are packing up and getting out. This puts pressure on the sellers as you know. The good news is you can buy a Penthouse Suite at a steal. Can I interest you in one, Kate? Haha

Kate: Really! How Big? How High? How Much? I Wanna KNOW!

JJ: It depends on where it is located on Beach Drive. On the south end next to the new stadium I have a brand new never lived in Penthouse. When it was built in '08 it had a price tag of $1.6M, now guess how much ... c'mon guess!

Kate: I want to say..er $1.2M!

JJ: Would you believe $750K!

Kate: That is a steal. I WANT IT, JJ!

JJ: Great! Sign right here, Kate! Ha Ha, All kidding aside,Kate, the prices are right. I have another one with a great view on the tenth floor for just $250K. It was $750K originally. Further north around the Vinoy, the condos lost only 25 to 30% of their former value because of the new stadium construction.

Kate: O.K. JJ, I gotta ask and I know my readers want to know: What's the skinny on St. Pete?

JJ: I've been in the real estate business for many years and I haven't quite seen anything like this. Many downtown residents want out before the stadium is completed. They know it will be the end of a quiet comfortable city. The noise and traffic is more than what these people moved to St. Pete for. With the condo and house prices falling due to the waterfront stadium, the city is losing millions in taxes. The redevelopment of the Trop is still four years away and that deal is souring. They are starting to talk about cost overruns on the new stadium and the city is considering increasing taxes to make up the short fall. So the political scene isn't pretty these days. But don't fret, Kate..I have condos, Condos and more CONDOS!, and they are all priced to sell!

- Continued on page 18:

[get-smart]

AAron- They are not going take out any loan. They are going to repackage the bad mortgage loans into a security. This is what Goldman Sachs and others have done to create the economy that we now live in. They supplied the money to China to export all our jobs. They sold mortgages to people who could not afford them. They repackaged these loans and sold them in the 401k market and banks. The state fund that many cities baled out of had them in it. THESE GUYS ARE CROOKS!!!

[Dale]

That was a pretty cute little story there, Get-Smart. Does the boss know how you spend your time?

As for the content....ever been to Wrigleyville? Yeah, people are just lining up to get out of there b/c of the stadium.

Or not. But definitely one of the two.

[Not-Very-Smart]

knock it off Dale ... allow me to try and rain on the parade

I don't like progress ... I don't really like people either, to be honest with you

[Jon McPhee]

Anyone know what the "illiquid assets" are? What, if anything, other than a very profitable franchise, do the Rays Boys own that's not readily converted to cash? Maybe they view the Trop and the land it's on, or even Al Lang, as an "illiquid asset," and can sell shares in that, even though it's actually owned by the public.

Afer our recent national collapse and bailout of "derivative investments" based on so astutely named "sub-prime loans," we should be a little shy about any "investment" we don't totally understand. The really big banks full of CPAs and MBAs, and a bunch of accounting firms and auditors, bought "progress" as a near-prelude to bankruptcy -- before the Ponzi swindle collapsed and us taxpayers bailed them out. Where is the City, as our proxy, going to find a "loan shark" who can swim with the cold, sharp-toothed fish the Rays are lining up?

Is all change "progress" and therefore good? Hey, too often, helpess doctors get to watch the "progress" of an aggressive metastatic cancer.

[TruthDetector]

I find Jon McPhees's rants to be little more than attempts to distract people.

OR, maybe he is still trying like heck to impress the "smart" girl who wouldn't go to the Homecoming Dance with him during his junior year.

HINT TO JON: You come across as a psuedo-intellectual, NOT a real thinker.