Trop tax analyses

As promised, here's the city's tax impact analysis on the two prospective Tropicana redevelopment proposals. There are three separate analyses.

Click here.

Comments

[Jon McPhee]

Is anybody on city staff or at the County going to try to analyze the "developer projections" to see if they are anything but POTA, as in Picked Out Of Air? Or are our leaders simply going to accept the "projections" as established fact? Due diligence, folks, costs a lot less than detaching oneself from a Tarbaby.

The Rays owners' claims that this project will "pay for itself" are all based on the supposed tax revenues that might be generated by demolishing Tropicana Field and building something else on the City's property there. And if the "projections" play out the way they have for every other recent large project, tell me again who pays?

And it appears the Rays owners are using a straw man to communicate the threat to move the team, that is always a gambit in any of the "negotiations" sports teams open to grab themselves a public subsidy. Posted elsewhere are the links that show that these threats have uniformly been hollow, and how team owners move even after they get their new venue.

Once again, this invitation to dance reminds me of how the cold-blooded deep-sea Megamouth fish feeds. It's got a little attractive-looking piece of flesh, shaped like a phosphorescent baitfish, dangling on a movable stalk from its forehead, which it jiggles tantalizingly. When an unwary fish goes for the bait, the Megamouth slurps it into a mouth full of back-slanted teeth so there's no way to escape.

I wonder -- do the Rays owners have marine biologists on their staff too, or do they just watch a lot of shows on the National Geographic channel?

[Rick K]

Folks,

Don't be fooled by Jon McPhee's attempts to blow smoke.

These figures aren't pulled from thin air.

As explained in the City documents, the Tax Estimates come from three sources (none of which are the Rays, but the Rays actually used professionals to devise their figures, which are unsurpisingly very close to the figures the City's independent research calculated).

First, the City's Director of Economic Development calculated probable taxes based on sample property values (in fixed 2007 dollars, to keep it simple).

This is the most common technique employed by professionals engaged in determing the financial feasibility of development projects.

Next, the City's Director of Economic Development adjusted those projections based upon hypothetical market factors, which he calls "the diversion effect."

Lastly, the City's Director of Economic Development analyzed the financial projections prepared by two exceptionally well qualified urban developers with successful track records of project completion.

NONE OF THESE NUMBERS were pulled from the air.

That Jon McPhee repeatedly wishes to distort is very revealing.

Jon, please get out of the way. You anti's claim to want more information. When the information is prepared and published (at considerable expense), you pretend that it is worthless, without actually having any professinal expertise upon which to base your claims.

STOP!

Let the facts speak for themselves.

There is no need to cheat, twist, lie, distort, or imply that the professionals involved in creating these numbers did anything other than an excellent job.

Instead of just implying these numbers are no good, do your own study and show us what you come up with!

[Jon McPhee]

Rick, I would like to be able to do a lot of things to double-check the math and reality-check the projections that float
a half-billion-dollar subsidy request, but I'm not a $ hundreds-of-millionaire, just a working stiff.

The folks who speak for the City and County are the ones with the resources to do the due diligence, and I hope they do a careful job since like the Trop debt and the other projects that have floated along, the taxpayers end up holding the short end of the stick.

There's a kind of script for stadium owners' approaches to taxing authorities when they want a subsidized new venue. That some say "that's the way it is" and "that's how these things are done," given the results for the community, is as you always say, revealing -- there is nothing that mandates this transaction if it does not add up. Part of the script includes today's indirectly communicated threat to "move the team" -- despite recent vows that the owners would honor their lease and stay even if the new stadium wasn't built.

The thing about blogs and the good old First Amendment and the free commerce in ideas is that it is free. I am not an "anti," except in the world the way you want others to see it. I am all for a healthy city that takes care of all its inhabitants, and doesn't mortgage the future in a big way without carefully examining the deal they might get into. I even like baseball, though I can't afford to go to games here. I really enjoyed Mariners baseball in Seattle's dome, where there was good fan support to the point that sports writers considered fan noise to be like a "10th man on the field."

As a famous baseball figure once observed, "It ain't over 'til it's over."

[Aaron Sharockman]

Hey guys,
Busy day on the blog, huh?

On the tax analyses, Table "C" is the city projecting tax revenues based on the assumptions made by Hines and Archstone Madison.

Tables "A" and "B" are city projections based on assumptions created by the city.

The difference between A and B and C is the taxable value per square foot calculations...And Table B attempts to account for any displacement that might occur by the creation of a new development.

Oh, and one more thing. The city's numbers are only for the first year of build out. They do not factor in any growth over time as taxable values increase or decreases or whathaveyou.

[Thomas]

Aaron,

May I clarify that statement.

The numbers in Tables A-B-C represent activity in just the first year of build out?

The sales tax estimates are based on only one year?!?

[Aaron Sharockman]

Thomas.
That is correct.

If I worked my calculator right, in Table A for Archstone Madison, we're talking about $281,500,000 a year in sales (to generate the corresponding sales tax income). The Hines proposal projects $197,500,000 a year in sales (again in table a).

[Thomas]

These numbers look really out of whack. I'm basing everything off the most conservative estimates - Hines from Table A.
(NOTE - I disregarded the typo in that table's "Other Agency Property Taxes" - but it is rather alarming that no one proofed these tables before they were published. I won't make any insinuations based on the lack of attention to detail.)

===================================

The estimate is $11,850,000 in Florida State Sales taxes, based on the 6% sales tax rate.

That means the redevelopment is going to do $197,500,000 in taxable sales in the first year -or- roughly $541,095 in sales each day.

The Table C estimate, as provided by Hines, is the laughable figure of $24,885,000 in sales tax revenues.
That equates a whopping $414,750,000 in sales.

So, during a recession, consumers are going to spend $1,136,301 each day in the Trop redevelopment zone alone.
Astounding!

===================================

The Property Tax estimates are even more alarming:

Same Table A - Hines column. The estimate is $10,546,666 a year in property taxes. The total millage rate is 21.1719.

(To calculate the property tax, multiply the assessed value of the property by the mill rate and then divide by 1,000)

So in order to get to the Hines estimate, the assessed property value will have to be... $498,144,521.

The parcel of land that commanded only $70M to purchase from the city is now estimated to be worth almost half a billion dollars. That's roughly a 700% increase in valuation.

===================================

Any comments or constructive criticism of this review would be welcome.

[Thomas]

How could anyone do anything but laugh at these estimates?

Seriously, I thought I had miscalculated something. I was literally a bit timid to even post for fear that I must have made a mistake. But Aaron corroborated my math.

I'll be very interested to see what the City Council has to say after their "workgroup" on these figures.

[Paul]

Ok, so is it me, or is Rick K the super blogger of the world? If I worked full time only for the Rays in promoting this stadium, I'm not sure I could keep up like Rick does. I am officially calling BS on Rick.

Rick, you are on here allllll day long posting these crazy made up FACTS as you call them, going for the kill shot on each and every post. No one person does that. There is no reason or motivation. I smell a paid for effort here. Kalt got his lunch handed to him, uhhh actually, sorry, let me rephrase: Kalt got his lunch STOLEN by the County Commissioners yesterday and this is a pure PR FUD (that would be Fear, Uncertainty and Doubt) campaign at this point. No problem Rick. Get it, been there, done that. Microsoft lost at it, Kalt and the Rays will too.

Its beyond obvious you are a paid for blogger... fine. You've made several mistakes in your posts that clearly shows you do not reside in St Pete and have no local knowledge of the City. You are an out of towner Rick, and you can't vote on this, so there ya go. You can not vote = your opinion doesn't count.

I have a gut feel on this.... i'm thinking you are a previous poster, who owns a marketing company, and was hired by the Ryays, who has recently disappeared from the blogs... and who lost alot of money on a fake chef. Am I close? Are the Rays your new client? If so, I'll leave it at that.

[Paul]

Thomas, I'm right there with you. These numbers are a sham.

I just hope our Council members see through this.

[Jon McPhee]

Who has the potential megabucks subsidy at play in this deal? Who has every incentive to “P” on the rest of us, as in PR, Projections, Propaganda and Politics? Is there any sense that the Rays’ owners are maybe pulling the old hidden-ball play? Is there any reason to be concerned that “boosterism” will propel us into the same territory that the Four Ps brought us with the Trop and other projects? Will Lucy really let Charlie Brown kick the football this year?

There’s this thing about “experts:” Anyone not know that expert opinions are for sale or rent? There are catalogs, in paper and online, of experts on every side of every topic anyone might want to argue. The hated trial lawyers, many of whom actually represent large corporate interests, refer to them every day, to find support for the image they want to persuade the jury to buy. The way the courts deal with experts is to let the parties cross-examine the basis of an opinion, and let the fact finder try to figure out who’s more dishonest. In federal court, there is even a doctrine, the “Daubert rule” (actually more of a guideline) that tries to keep junk opinions out of the fact finder’s deliberations.

So far, the Rays owners have made only the bare opinions of a few of their experts available. Someone referred to the stage we are in as “discovery,” as in the process in litigation where both sides are required to disclose all the information that is relevant, or likely to lead to relevant information, so the experts’ “opinions” can be tested and, if appropriate, impeached.

Agreed that, so far at least, this Big Deal is a very large business transaction, not litigation. But Big Deals are always subjected to the nearest equivalent to discovery, called “due diligence.” The public is being called on to pony up a very large subsidy for an ownership group that can easily afford to buy its own stadium, as has happened in other “major” cities. Look up what happened in San Francisco. That does not let the proposers of this subsidy off the hook for disclosing all the relevant information, not just PR PowerPoints and maybe private briefings to select members of the group of actual “deciders” – Mayor, Council and Commission.

Was it Chuck or Rick or, oh, Ray F, who said in another thread, the following: “An opinion can't be wrong. So I am not wrong. It is my opinion that we should build the park. It isn't wrong. Are we in 3rd grade? It would be like me telling you that you are wrong and that you don't really like to watch your favorite T.V. show.” Say what? How does anything ever get done in the world? Everything is everything, there are no categories, judgment goes by the board, eh?

And let’s hear it for all the folks that are of the “opinion” that St. Pete is nothing but dead old people and “Green Benches and Cottontops.”

On the scripting of owner assaults on the public piggy bank, here’s a link to a somewhat dated (1996) document put together by the Wisconsin Legislative Reference Bureau, which has the duty of providing accurate, complete and timely research pertaining to legislative proposals to the Wisconsin legislature, without advocacy. It seems to me at least to be a pretty short and reasonably unbiased look at all the considerations that a “decider” should have in mind and consider before jumping on a team owners’ bandwagon:

http://www.legis.state.wi.us/lrb/pubs/ib/96ib1.pdf

Thomas or Barbie has already put up links to sites that lay out the script for the psychodrama that team owners across the country want to play out as they try to persuade municipalities to buy them a stadium. There’s much of that same script laid out in the link here, including the anticipated latest clumsy “revelation,” through the Chamber of Commerce, that the Rays owners ‘are planning to take their team and leave if they don’t get their new stadium.’ It’s a little like invoking 9/11: Be afraid, be very afraid – you have so much to lose…

[A real city supporter]

Keep in mind that none of the monies being bandied about are dollars from the Ray's franchise.

They are all city, county and public dollars in the form of extended taxes, sales taxes, public land sales, collected rent, staff time, City costs for demolition, City costs for Tropicana Field contamination cleanup, etc. etc.

Every bit of this project is being paid for by you and me. The public.

Not the Rays.

[Rick K]

Paul, how about this.

I propose the following bet:

We agree upon an impartial arbiter.... We can maybe pick someone connected with the Times or Poytner, or a retired judge.

The proposition to be examined by that arbiter is the following:

Rick K is a professional blogger, or he is being somehow compensated, or he is in a position to somehow receive some future direct compensation if these proposals are approved.

I will provide, to the arbiter, proof to refute your claim. You may provide any evidence you wish (though your own irrational fantasies probably won't be enough). The arbiter may also employ any investigative techniques he/she wishes to employ to determine the validity of your proposition.

Prior to the inquiry, you and I shall wager the following:

A) $1000 US (or pick a different figure), to be contributed to the political committee or charitable cause that the winning side designates,
B) The loser shall be prohibited from further participation in the public debate (but allowed to vote in November, if it comes to that). No forum posts anywhere, no private lobbying, no participation in either "movement", no speaking at public events, etc.
C) The loser shall also pay the property taxes of the winner, for all real estate property owned in the City of St Petersburg, Florida, for a period not to exceed the period that the Rays play in St. Pete.

Of course, I know that you are a chicken and you know that I know.

My ineffectiveness and inadequacies in these postings should be sufficeint proof that I am no pro. I am just a guy who refuses to let the Anti's hijack the debate.

But what do you say, wanna bet?

[Let the voters decide]

Great argument guys. While I am supporting the new stadium I understand that this is a very delicate situation. In my opinion progressive cities move forward with calculated risks. The mere fact that such a large parcel of land is not being used to bringin tax revenue (Al Lang) in a growing metropolitan area (St. Petersburg) is a travesty that we have lived with for too long. Here are the choices.
1. Move the baseball stadium and re-develop the trop
2. Keep the trop, fix it up (Still probably using bed tax dollars or some form of public funds). But then WHAT DO YOU DO WITH AL LANG? let it languish?, how good does a decaying baseball field look on that million dollar gulf view from your downtown condo?
Do we re-develop Al Lang? to what? condos, again? Shopping? on the gulf? pretty expensive unique property for a Target isnt it?
Progress. Moving forward.
Find a way to increase tax revenue to the city and county while increasing the allure of our wonderful city on thh gulf.

[Rick K]

Agreed.

Let's let the voters decide.

A new ballpark, ampitheater and improved outdoor public spaces will be a great enhancement to our waterfront park system.