Day 4: The public share
The fourth in a five-day examination of the finances surrounding a new stadium, this section addresses the costs the Rays’ are asking government to bear. For previous coverage, see here.
Background: It appears that the Tampa Bay Rays will ask the city and county government for $300-million, on top of 12 acres of waterfront property, to construct a new ballpark?
Potential problem: Where is that money going to come from?
Analysis: This remains the biggest unknown of the $450-million stadium plan. City Council members have asked for details by May 16, while the Rays have publicly promised answers before June 5.
In the interim, all we can do is dissect the public statement so far made by the team.
In its documents, the Rays say that “No existing taxes will be diverted to fund the ballpark, and no new taxes will be imposed.”
Originally, most people assumed the Rays would seek the city and county property taxes generated by the Tropicana Field redevelopment. And that they may ask for some of the sales taxes generated by the Tropicana redevelopment.
But the Rays said last month that they would not seek property taxes for the stadium project, and that the team would ask the city and county to roughly split the public contribution.
So what’s left?
First, the county. Currently Pinellas County is contributing $5-million a year toward Tropicana Field construction debt from a 1 percent hotel bed tax. Extending the 1 percent bed tax appears to be the Rays’ most likely target, since the tax cannot be used to fund general county services.
Extending the tax would require the approval of the Pinellas County Commission. But it’s not that simple. The county cannot increase the hotel tax further, meaning that funds would not be available until 2016 if bed tax funds continue to pay off the Tropicana Field debt.
The Rays say their financing plan will address the remaining Tropicana Field debt.
The city meanwhile, is contributing a little more than $5-million toward Tropicana Field construction debt – mainly from the state sales tax revenues that are allocated to St. Petersburg. Again, extending those contributions to the new stadium could be a likely target.
But there could be other possibilities. A Rays’ preliminary financial analysis – which was shared with the city before stadium negotiations went public – said the team could tap several different sources: from potential parking revenues to federal tax credits to county and state transportation funding to city and county workforce housing incentives for the Tropicana redevelopment, to simply refinancing the existing Tropicana debt.
The city and the Rays broke off all financing discussions after the stadium project went public. And the document clearly is outdated. (In one place it says new state funding was “anticipated,” when the team now has abandoned that potential revenue stream. The document also includes money generated by a hotel that was originally contemplated for the southwest corner of the Al Lang site, but never became part of the project.) But the one-page analysis does provide some hint of what the Rays are thinking.
Read the document, along with the notes from a city official, here.
For discussion: If the bed tax is used, do you consider that a burden on local taxpayers?
Coming tomorrow: The finer points.