Five-day financing crash course. Day 5: The fine print

Day 5: The fine print.
The final installment in a five-day examination of the finances surrounding a new stadium, this section addresses the finer financial points related to the Rays stadium proposal. For previous coverage, see here.

Background: The Tampa Bay Rays have an ironclad lease to play at Tropicana Field until 2027. The team has said it is not demanding a new stadium, but that it cannot be successful longterm in the dome.

Potential problem: Could the Rays break the lease if voters, or the city, rejects their proposal for a new ballpark?

Analysis: The short answer is yes, but not without cost. The Rays' lease with the city includes a provision for breaking the lease. In order to break the lease, the Rays would first be required to pay any remaining debt on Tropicana Field.

In 2009, that would require a $69-million pay out. By 2012, the outstanding debt would have dropped to less than $40-million. In either case, it's a lot of money, but certainly less than the $150-million the Rays are prepared to put into a new stadium.

The expense may be more palatable if another city was willing to pay for more of the costs to build a new stadium.

But that's not the only cost the Rays may face.

According to the lease, payment of outstanding debt is only one element of the damages the city should receive. In fact, the lease says that neither the city, nor the Rays "has an adequate remedy at law for breach of this agreement."

Though the lease protects the city in some respects, it doesn't in others.

The city has lost $26.7-million operating Tropicana Field 1990. The losses likely will continue as long as the Rays keep playing in the dome. More than 95 percent of the city's operating costs at Tropicana Field are contained to two items: traffic management outside the stadium and property insurance for the dome.

Each year, the city spends about $400,000 managing traffic outside the dome. The city agrees to pay for those costs as part of the lease. The city also has been paying nearly $2-million a year to insure Tropicana Field.

Those costs are not offset by the revenues the city receives from the dome.

For discussion: What should be more important for the city and county: capping potential liability or maximizing the greatest potential return?

Comments

[John]

"What should be more important for the city and county: capping potential liability or maximizing the greatest potential return?"

Are you crazy?

ZERO potential liability because any liability is on the taxpayers backs.

"Greatest POTENTIAL return." You mean like that huge projected return when they built the dome? Potential is potentially a very dangerous word that can get us into a potential bankruptcy.

Anyone reading about the economy these days? This is a giant sub-prime mess being shoved down our throats by Mayor Baker and his sidekick, Rick Mussett. Yes, Mussett is the same guy who brought us the dome fiasco, Bay Plaza, Pier Park 1, Pier Park 2 and the almost destruction of Albert Whitted field.

He needs to wake up and listen to City Council. Leslie Curran keeps asking him why we don't develop around the dome. He keeps cutting her off.

The city can develop about 60 acres at the Trop and ALL the taxes generated will go to the city for whatever we need. We do NOT need to pay for a new stadium with our tax money! The Rays say "no new taxes."

What they do not say is that ALL of the city's portion of the NEW taxes on the redevelopment will go towards paying for a new stadium, not for city servises like police and fire and code enforcement.

What they do not say is that there are no tax revenues from the redevelopment for at least three years while the new stadium would be under construction.

What they do not say is that their $150 Million "contribution" is OUR money - it is 30 years rent paid up front so they live rent free for 30 years.

What they do not say is that the land they want to take over is OUR land (Al Lang field) and on OUR waterfront and if we are so anxious to maximize "greatest potential return" then we should sell it for $50 - $100 Million to a developer who can put about 1,000 condos (with parking) on the site and the city will get huge tax revenues every year!

What the Rays do not tell you is that they do not pay property tax on the new stadium. Imagine that - a $450 Million structure on a $100 Million lot and NO property tax. Wish I could get that deal on my little house. And the city pays for the insurance!

All this malarkey about progress and how neat it will be and how good it will be for St. Pete is just that, malarkey. Let's keep St. Pete sane and happy - it's a nice place to live and we don't want to risk losing what we have!

Once the Trop is paid off, the situation gets a lot better and the subsidies decrease significantly.

Does anyone think we should trade a $26 million subsidy for a $450 million subsidy - we'll still be stuck payiong (more) insurance and (more) traffic control costs.

I don't know why the Times keeps spinning this thing as good for us. No hard facts yet on why it will be good for us, just pie in the sky projections.

Let's go see the Rays play in the A/C!

[JudyToo]

LISTEN TO YOUR MAYOR:

Rays play in a great ballpark; what they need is our support
By RICK BAKER
Published March 19, 2005
St. Petersburg Times

The Times' recent series, What Went Wrong? 10 Years of Devil Rays Baseball, discussed the 10 years of experience since the awarding of a Major League Baseball team to St. Petersburg.

Tropicana Field provides a great home for Major League Baseball, today and into the future. It possesses functionality, comfort and good sight lines. Comments that Tropicana Field was already an old facility when the Devil Rays took to the field in 1998 are very misleading. Over 85-million new dollars were spent renovating the Trop just before the Rays' opening season, adding renovations identified by the team and Major League Baseball. To assert that it was a "10-year-old stadium" is comparable to saying that the Renaissance Vinoy Resort, which underwent a $93-million renovation in the early 1990s, was a 75-year-old, out-of-date hotel when it reopened. Just as the owners of the Vinoy Resort opened a newly restored modern hotel in 1992, the city of St. Petersburg delivered a great ballpark on opening day in 1998.

One of Tropicana Field's best selling points is its location in downtown St. Petersburg. It is surrounded on three sides by uncongested interstate highways and it has 7,000 on-site parking spaces and 25,000 parking spaces within a mile. In fact, in a Tampa Tribune editorial following the first week of the Rays' regular season in 1998, the newspaper concluded that the city can handle traffic. Cars moved swiftly along St. Petersburg's streets going to and coming home from the game. And there was plenty of parking.

As a testament to its accessibility and popularity with fans, Tropicana Field holds nine of the all-time top 10 NHL attendance records, the all-time Arena Football attendance record, the U.S. attendance record for Davis Cup tennis, and attendance records in Florida for the NBA and NCAA men's college basketball. Cirque du Soleil selected Tropicana Field as the location for its last two very successful touring shows to the region, and will return later this year. In 2000, Sports Travel, Inc., a sports marketing company, ranked Tropicana Field as the second most fan-friendly park in the major leagues in its 30 Ballpark Millennium Tour.

Similarly, downtown St. Petersburg may be the strongest destination on Florida's west coast, where 1.5-million people visit the Pier and 3-million people visit BayWalk each year. It is home to an internationally televised Grand Prix, art festivals, concerts in the park and museum exhibitions like the current "Monet's London" exhibition, "Diana: a Celebration," last year's Chihuly exhibition, or the blockbusters "Treasures of the Czars" and "Titanic." Indeed, in recent years, downtown St. Petersburg has emerged as one of Florida's most active entertainment destinations with more than 1,000 special events and attractions that draw nearly 10-million people annually.

The reality is that we have a great ballpark in a great location that is at the heart of the biggest and richest media market south of Atlanta. As we have seen with the Bucs and the Lightning, a winning team can generate excitement, attendance and revenue for a sports franchise in this region. We experienced a sample of the excitement Major League Baseball can bring to our community last year when the Rays had a 12-game winning streak, and drew nearly 70,000 fans for two weekday games with the New York Yankees in July.

I am confident that the Rays management and ownership intend to build a franchise that will succeed on the field. They are investing in their organization and are producing great young talent. I have heard manager Lou Piniella say on many occasions that a winning team will bring in the fans, just as it did for the Bucs and the Lightning. We all can help make this vision a reality by attending games and supporting the Rays as our home team. When we host our first playoff game, Tropicana Field will be sold out and the crowd noise from the fans cheering on the home team will provide a distinctive home-field advantage for the Rays.

Rick Baker is the mayor of St. Petersburg.

[Don Mott]

Once again you are spot on John! Pie in the sky predictions about how good this will be don't mention the millions it will cost us. There should be zero liability and the return should be on the positive side of the balance sheet not the negative.

[Chuck]

Can someone answer this - what's the big deal with Albert Whitted Airport?

I don't get it. Why do people care that it exists?

[H.L.Menchen]

Chuck, Albert Whitted airport is a boy's club allowing approximately 100 pilots free rein on one of the most valuable pieces of waterfront in the nation. The Citizens for a New Waterfront Park attempted to change this by making it a public park, but were framed as condo develpers by a huge cash influx by the Aircraft Owners and Pilots Association in the latter part of the campaign, thus distorting the media as to the true motive of the group which was to open up the public land to the public as a park. The voters bit and the proposal was overwhelmingly defeated via misinformation. Most of the population still believe development was the motive and that is why this myth still prevails when in actuality, Albert Whitted is a dinosaur and a drain on the city. The misinformation spead by special interests is once again being diseminated by new stadium advocates that dodge the truism that we, the people will be paying for this monstrosity if it prevails.

[Jon McPhee]

Attaboy, Chuck, if you can't dazzle 'em with brilliance or baffle 'em with bullpuckey, see if you can change the subject.

I go with John on this, of course -- he draws the true picture of this crapola deal in basic black and white.

AT&T Stadium, opened in 2000 in "corn-dog" San Francisco in a rather rough "working waterfront" area, was built almost entirely by funds from SF business, except for BART and bus line stations so those Left Coasters who found wisdom in public transportation could get to games without parking. If the deal is so great and the value of the team is so high, where's the contribution from all the businesses that will benefit from the mythical flood of new money? Let them plunk it down, they should be able to "securitize" those future income streams the way the Bucks apparently want to do with the money us taxpayers and bond obligors would have to pony up. This "deal" is nothing more than what we see all through the nation these days -- public money used to create a "welfare state for capitalism."

[question]

why would they have to break the lease? they could just go somewhere else and continue making lease payments on the trop. that would be a heck of a lot cheaper for them.

[get-smart]

H.L.Menchen with all due respect, if there is no airport there would be skyscraper condos along Beach Dr. and the USF campus would have a skyline profile. There is a condo developer component that may have been hidden in the park proposal. Al Lang needs to be a park. We need to leave something open and available to future generations.

[Jay]

Mr Menchen, speaking of misinformation, you stated that Albert Whitted airport is a drain on the city, when actually it's self supporting, (much like the municipal golf courses off of 62nd ave N). Not to mention it's two runways help house the Honda Grand Prix that we had just a few months ago.

http://en.wikipedia.org/wiki/Albert_Whitted_Airport

Nice try though.

[Michael]

It is amazing how this "city" cannot get out of its own way. Eventually, it will be developed and the skyline will change. I agree that the costs of this should not fall directly on the shoulders of local residents, but the entire process is a negotiation. Maybe the eventual propopsal will not make sense, but an open minded approach would not be amiss. Using the airport as some sort of justification for barring future development is ludicrous. It PREVENTS all ordinary citizens from enjoying the waterfront. It is a playground for a wealthier local clientelle. If it had been developed, our residents would probably have enjoyed a mixed use area with parks, shopping, and yes- residential development. Upon the recommended criteria being met, a waterfront stadium would be a jewel for this community. Misinformed personal agendas are not the solution to this problem. Remember, residents begged for a professional baseball team and got one. But, they do not attend games. Either let the team go or find a viable solution...

[William L. Shirer]

H.L.(love the handle, except I think it's spelled Mencken), with the exception of your last paragraph, I agree with much of your assessment of the '03 Airport vs. Park referendums. If anything, the campaign tactics of stadium opponents are more directly comparable to those you decry from that time.

[get-smart]

Michael
The downtown is developed. We need to leave something open for future generations. The airport would take no more than a week to roll up. If the residents of 2050 plan on getting rid of the airport and build a stadium there, that is their business.

Your plea is not unheard though.

If you care about St. Pete, please find a way to redevelop the Trop site with a New Stadium and New Conference Center. How about a HiTech Industrial Center to attract real jobs, not just car parkers and popcorn vendors. Please sharpen your crayons and show us pretty pictures of a fully redeveloped Trop site,including Central Ave and 1st Ave.N., and a New Stadium.

Michael, building a new stadium downtown is easy. Creating a "New Central St. Petersburg Renaissance City" with a New Stadium as its Jewel is hard.

Your half measure of building a stadium downtown with a impossible promise of a redeveloped Trop site that would bring
prosperity some time in the future, rings very hollow to me and many residents. In fact, that was the past promise. If it is a good idea, there will be no problem in finding investors to fund the project. In my opinion, I find it unconscionable for communities to take money out of the pockets of its poorest residents and give it to millionaires.

When you did your research on stadiums, you should have realized that the new stadiums went in areas of the city that were depressed. You also should have discovered that the cities wind up financing hundreds of millions of dollars in infrastructure and cost overruns to the detriment of the city. I'm sorry I can't be your cheerleader but I live here.

[Chuck]

Wait...

Why don't we want condos on the Albert Whitted site again? Better yet, can we rip the airport down and build the stadium there?

I suggest barefoot jogging at Crescent Lake Park if you're not happy with one of the HUNDREDS of parks in this city.

[Brad]

“No existing taxes will be diverted to fund the ballpark, and no new taxes will be imposed.”

Enough said. Bring on the new waterfront stadium!

[Mel]

God! I hope people are reading this and not some of those other horrible blog comments on the Times sites regarding this new stadium! These are the only factual comments I've read so far.

WE, are the people of St. Petersburg and WE DO NOT want this new stadium here and for all the reasons listed above.

There is already talk that if they build this new stadium residents will place thier homes up for sale for fear of having these costs passed on to them for years to come! No one wants to pay for this stadium.

I agree 100% with what "Get Smart" says, "I find it unconscionable for communities to take money out of the pockets of its poorest residents and give it to millionaires." Mine and many, many other residents of this city's sentiments exactly! We will get absolutely nothing out of this deal. What we will get is another liability and that is not what the people of this city want or better, it is not what the people of this city DESERVE!

One commenter on another stadium site wrote something along the lines of: Hey, on the nights of baseball games maybe we can get the residents of St. Pete to stay home so that there'll be enough parking for the patrons of the games. It will also alleviate the traffic issues if they all stay at home during a home game! Now, I'm not sure if this person was serious but if so, that one sentiment alone should be enough to send residents of St. Petersburg into a scramble for the nearest polling place.

Jon McPhee, Get Smart, Don, Judy and all who write so well and get their point across so well - Please keep plugging for the people of St. Pete. Keep this city the way it is now. There's nothing wrong with it the way it is. Businesses are thriving here. This city is growing the way that it should be. Maybe not fast enough for the money grubbing, fat wallets but fast enough for the citizens of this city!

Redeveloping the Trop site is a good viable idea, but my question keeps getting ignored - why is redeveloping the Trop site not being seriously considered?

[Mel the Censoring Facist]

Das is right
Because I agree mit Jon McPhee, Get Smart, Don, Judy we need to stomp out any and all dissenting opinion because we know what is besser for them.
Sie wissen nicht!

Eine Stimmeneine Lehre!!!
Sieg Hitler

Mel
hitler1@aol.com

[Don Mott]

"Redeveloping the Trop site is a good viable idea, but my question keeps getting ignored - why is redeveloping the Trop site not being seriously considered?"
Mel, if I may offer my opinion, and it is just that, if the Rays redevelop the Dome property they have less or no tax revenue to use in their endeavor to build a new stadium. I'm sure the idea of a waterfront stadium is enticing but in my mind it's more about financing. Just my opinion.