Bed tax primer

After six months of debate in St. Petersburg, the Tampa Bay Rays’ $450-million stadium proposal shifts to the desks of county government on Wednesday, as Rays’ officials make an introductory pitch for $100-million from the extension of a county tourism tax.

The Pinellas Tourist Development Council, meeting at 9 a.m., is expected to make a recommendation to the Pinellas County Commission next month. (You can watch the TDC meeting live on Bright House channel 618; Knology channel 18).

At issue is how a 1 percent tax on all hotel stays is spent.

Case for the Rays
The Rays are targeting 1 percent of Pinellas’ current five percent hotel tax, or the equivalent of $1 on a $100 hotel stay.

The tax largely is paid by non-county residents, according to tourism statistics, and how it can be spent is limited.

From April 2007 through March 2008, the five percent tax generated a total of $25.5-million for Pinellas County, according to the Pinellas Convention and Visitor’s Bureau. Of that:

• $15.3-million went to tourism marketing and operations;
• $5.36-million helped pay off debt at three sports facilities (Tropicana Field in St. Petersburg, Bright House Networks Field in Clearwater and Knology Park in Dunedin).
• $2.3-million was redirected to beach nourishment projects;
• And the remaining $2.5-million was either kept in reserve or awarded as cultural marking grants.

The Tropicana Field payments will expire in Sept. 2015.

The Rays want to extend the current distribution an additional 25-to-30 years to help pay for a new $450-million waterfront stadium.

“There’s a limit to what the Trop can do in terms of showing off the area,” said Rays senior vice president Michael Kalt.

Thirty-million people watch Rays home games each year from outside the Tampa Bay area, Kalt said. “What their vision is of St. Petersburg from baseball is a dome where we might as well be playing in Minnesota,” he said.

What makes the extension of the tax more compelling, the Rays say, is the unrestricted tax revenues that could come.

State statutes currently limit how the money now paying for Tropicana Field can be used. The money cannot be used to fund general county services.

But in return, the Rays say the county would receive some taxes generated by the redevelopment of Tropicana Field. That money, if the city agrees to remove the site from the a community redevelopment district, could be spent on everything from sheriff’s deputies, to parks and recreation, to even tourism marketing.

The Rays also say there will be a significant impact on the tourism economy itself. The team has been promised an All-Star Game in the new ballpark, which could have up to a $70-million impact, Rays officials say.

Case against the Rays
Opponents of the Rays’ plan for the bed tax envision a county that is unable to repair eroding beaches and compete in an ever-shifting global tourism market.

The county’s obligation to pay off debt at Tropicana Field expires in Sept. 2015.

But the tax does not. If it isn’t dedicated to help build a new waterfront ballpark, the tax could pay for plenty, some tourism officials say.

Take beach nourishment. Right now, half of one percent of the bed tax, or about $2.5-million a year, is used to maintain the white sand beaches that mean tourism gold to Pinellas.

Every dollar the county pays on the beaches, the state matches. And the federal government coughs up $3.50. Some county commissioners fear that the state and federal governments may not be so generous in coming years.

What’s certain is that beach nourishment dollars aren’t going as far as they once did due to fuel price hikes. Dredging the sand for these projects is very fuel intensive.

Nicole Elko, the county’s coastal coordinator, said that a beach nourishment project at Sand Key that cost $45-million in 2006 would likely cost twice that amount today.

“Without maintenance the beaches will erode and disappear,” Elko said. “The tourism economy would tank.”

That’s not all the money could be used for. It could support a new convention center, or a museum or zoo.

And it could be used, like much of the bed tax is today, to promote Pinellas as a tourism attraction nationally and internationally.

It’s all but impossible in 2008 to know which if any of those options could become a pressing need in 2015, when the obligation on the Trop expires, said Jody Armstrong, mayor of Redington Shores.

That’s why Armstong, who sits on the Tourist Development Council and will hear the Rays proposal today, worries it’s premature to commit the tax for a new ballpark.

“Come 2015, there might be an obviously better use for it,” she said. “It could be something brand new that we don’t even know about yet.”

-- Aaron Sharockman and Will Van Sant, Times Staff Writers

Comments

[Karl Nurse]

Aaron,

The charts given to the City Council last week showed the funds from the County bed tax to be $137 Million, not
the $100 Million that had be stated during the earlier meetings.

I do not have an explanation for the
change.

[Aaron Sharockman]

Karl, I can help you.

The city's chart factors in $37-million from the bed tax payments the county will be making from 2009-2015.

It also accounts for the higher city contribution in that same chart. I don't have it in front of me, but I'm guessing that number is around $33-million.... making the overall city committment look like its $107-million, not $75-million.

The difference is the city is counting those payments toward the new construction, while the Rays are counting those payments toward the old Tropicana Field debt and inserting the developer's payment to purchase Tropicana Field. The city's chart does not factor in that developer payment.

[John]

If the Rays would stop salivating over our waterfront and propose to turn the Trop into a retractable-roof ballpark with other uses off season like conventions, and add a convention style hotel to the property, they would probably get a MUCH warmer reception from the TDC. As it stands, they are not going to recommend this.

Looks like the BOCC is going to force the Rays to go back to the drawing board, where maybe they'll actually commit to this town by proposing such a complex on the property they already have.

There is no reason St. Pete can't compete with Tampa for conventions on the 284 days a year that the Trop is available when the Rays aren't home. Unlike the giant sailboat, which would sit empty for most anything except tractor pulls and rodeos.

As Polson said to Kalt & Silverman, "I'm suprised you've offered the public zero alternatives".

[Will Ferrell]

Mr. Nurse, please take a moment and consider what you would do to this community if the Rays left and our children were denied the chance to experience the Cowbell. The Cowbell is good, make sure that our children and our childrens children will experience the power of the Cowbell for years to come.

Vote yes for the Cowbell!!!

[Raymond The Rays Mascot]

Cry us river John. The benefits this county now receives besides the minimal Trop kick in compared to the overall take in, they would be embecile not to extend, when do they not .

Go Rays!

[Jon McPhee]

From the Mail Bag below:

"Chris asks, 'Just wondering... What will be the name of the new stadium? Will it still be called Tropicana Field or something new?'"

Questions framed like this must make the Ricks and Chucks and Garys very happy. Gone is the conditional-mood "would," in reference to "the new stadium," and in its place is the incontrovertibly indicative "will."

My guess, even given the Rays owners' arrogantly late start at influence-peddling, is that many among the county and city bosses have also migrated into the "will" camp. One might hope that they will at least make a show of making the carpetbaggers show their hands. One cardinal rule of negotiation is that you don't bid against yourself, but it's reasonable to believe that maybe most of the folks up on the dais are more interested in "how" than "whether."

Too bad there are no personal consequences for evil deeds and bad decisions any more. The CEO who bankrupts his company and shareholders, the investment banker that creates phony bundles of collapsible value, and the government official who puts personal connections, private advancement or lost-in-the-clouds "vision" ahead of the general welfare, usually just get to segue off into the blue.

That should give you subsidy supporters, who think it's just fine to make everybody pay for the benefit of a few, reason to go "BWAA-HAA-HAA-HA-HA" and make other gloat-and-chortle noises.

[atrulyconcernedcitizen]

REALITY CHECK...The Rays will pay at least 3 players TEN MILLION dollars EACH next year when Crawford's deal gets done. The city's taxpayers are already subsidizing MLB to the tune of 12 million a year. ABC/ESPN do an annual poll of US citizenry where they find that in a good year a percentage in the mid 40% range call themselves baseball fans. In a bad year..after a players strike..steroid scandal that number drops to mid 20% range. In other words less than half of our nation calls themselves baseball fans. Can somebody intelligent like Rick K please explore the fairness issue for me. Why does a business that can pay just THREE athletes 10 million a year possibly need a 12 million annual subsidy. Basically MLB owners, despite their advantage of monopoly, an anti-trust exemption from congress..screwed up their business so badly that they need the taxpayers to bail them out! Where is the fairness of asking half of our population to subsidize an activity enjoyed by the other half...ESPECIALLY when you consider that if Carlos Pena, Scott Kazmir and Carl Crawford could survive on just 5 million a year each..their would be money to pay for the stadium with cash left over. Where is the fairness in all of this obscene corporate welfare?

[Rick K]

Truly Concerned....

How many people like or patronize the Rays is not the issue. Because the Rays have far more visitors each year than any number of other publicly subsidized commercial and "not for profit" activities which receive City support.

At issue is not how many people like baseball, or how many people in St. Pete go to Rays games, it is how many dollars these two redevelopment proposals will bring to the local economy.

First, the $1.2 Billion in development expenditures. Second, the additional tax revenue, added tourism dollars, and other financial benefits.

The Florida Supreme Court addressed these questions when they were deciding the legality of the deal the Tampa Sports Authority gave the Buccaneers back in the 90's.

Of course the Rays will benefit from this deal. But that is not a reason to oppose it. Someone benefits from every expenditure of tax dollars. The trick is figuring out if there is enough indirect benefit that is spread widely enough to make the public investment worthwhile.

In this case, we are talking about a deal that is financed by a bed tax paid nearly 100% by tourists, an excise tax paid by a small portion of the population, and (pretty much) the rest of the money paid by the people who attend Rays games.

The average citizen in St. Pete who doesn't go to Rays games receives many of the benefits of these two redevelopment proposals, without bearing hardly ANY of the costs.

[Dave in St Pete]

It's on channel 622 not 618

[Ray F]

to truly concerned,

40% of 300,000,000 is 120,000,000.

That's a lot of freakin baseball fans.

6.8% of the population is under 6 years old so the percentage of MONEY SPENDING people that call themselves baseball fans goes up.

12.4% of the Population is over 65 years old so the percentage of money spending Fans goes up.

3% are mentally disabled

should I go on???

[John]

Ray F, which category do you fall under?

You're suggesting people over 65 don't go to baseball games? LMAO

You're suggesting parents don't take their kids to Rays games, spending money for them by proxy, buying their kids Rays gear, hot dogs, tickets, drinks, etc?

C'mon, man. Rick K is rubbing off on you.

[Rick K]

No John, Ray and I are not rubbin'.

(This isn't NASCAR)

What Ray is doing is pointing out that THIS arument (like most of the arguments spewed out by the ANTI's) is just silly. Concerned is admitting that there are more than 100,000,000 baseball fans (just in the USA) who represent the potential market for tourism appeals related to baseball in St. Pete.

That argument would tend to SUPPORT this pubic investment in a highly visible iconic image that instantly and indelibly links St. Pete with baseball.

[Ray F]

I'm saying the poll (which we know polls are flawed)- was probably conducted online and I have a very hard time believing a majority of persons under 6 would participate in the poll and a majority of the citizens over 65 would participate in it.

Would you not agree that internet usage is not very common to people in those categories???

[John]

Well you and Rick have made it clear polls are useless anyway, right?

Those 68% of 601 registered voters against this proposal, that's all nonsense. Even though the confidence rating with +/- 4 points is 95%.

Silly, silly polls.

[Ray F]

ohhhhhhh, so it's ok for you to use a poll to try and prove a point but when the same poll shows a contrary point- it's useless???

At least with the 601 people, we can all overwhelmingly agree that 601 people is NOT a majority of St Pete residents.

...and likewise, if the ABC poll was done with a couple thousand people it would be just as meaningless.

[Rick K]

Or, we could focus on the fact that the statistics cited by "A truly concerned" actually provide a strong argument IN SUPPORT of investing in baseball-themed amenities that are likely to open up a natural marketing avenue to those 100 - 150 million baseball fans scattered all across the fruite plain.

[John]

Or we could focus on the fact that if we have just one Category 1 hurricane hit in the vicinity of our area, it will wipe out years of beach renourishment projects, which is the REAL tourist driver in this community.

That would cost tens of millions to repair. Tens of millions that some of you think should instead be handed to the Rays to replace an 18 year old, perfectly functional stadium.

But hey, the TDC doesn't care about beaches, they want the Rays to be happy.

[Ray F]

John,

If a CAT1 hit tomorrow, what would you say? The 1% goes to the Rays till 2015.

Are you going to blame the Rays for the county not having money? The BOCC decided that the 1% was good for the county then being in the same hurricane suseptibility zone as we are now. Why should they not think the 1% wouldn't be good now, better yet 7 years from now?

What did they do with the 2.5 mill that was left over??? Probably saved it for a windy day.

[Thomas]

There's no reason to support this plan. The financial scheme is bad for the public.

- The city is not getting market value for the Trop land.
- The city is giving away the valuable land at Al Lang before opening it to competitive bidding.
- The developers tax revenue projects are inflated.
- 66% public funding for construction is too much.

Also, please note there is already a "baseball-themed amenity" called Tropicana Field. So we don't need to worry about creating one. It's already there.

That "themed amenity" has a lease that will not expire until 2027.

If the Rays can con enough people into supporting this awful plan - how far into their next lease will they make it before they need their "next" new stadium.

The only made it 10 years into their 30 year lease this time. Not a very good track record. And you don't need a poll to see that.

[TO the naysayer with bogus stats]

I don't know this "Thomas" bloke. But it's easy to see that his post is filled with lies.
-- Fair market value in Real Estate is the price a willing buyer will actually pay for land, period.
-- The city isn't being asked to give the Rays the land at Al Lang, the public will still own the real estate. There is a single proposal for that land in consideration, involving replacing the existing baseball stadium with a new baseball stadium.
-- The tax revenue projections from developers are, if anything, overly conservative. Take Intenational Mall, two hotels nearby, and the same number of residential units that exist nearby, and you'll see that they already generate sales in excess of those the developers are using. Call the Hillsborough County Tax Collector to check this out.
-- The deal the Rays have offered the City/County is more beneficial to the public than 99% of all such deals in existence in America. Raymond James Stadium, for example, was built with zero upfront contribution from the team, who pays less in ongoing rent and revenue-related payments to the landlord, while the Buccaneers derive more income and have more control from non-game events in the venue.

Thomas is lying.

[Thomas]

Rick K,

We all know it's you - so you can just put your name on your post and thus once again prove you're just a big fraud.

I thought you were "no longer going to respond to Thomas"

Anyway, my posts are well respected and you are just a joke.

To quote my buddy Brett Myers - "BOOM - Outta Here."

[Reader]

Thomas,

Who cares what Rick K's name really is?

Are you really going to evaluate the merits of the Rays' proposal based on whether Rick K is really named Rick K?

[Thomas]

Reader,

We've been over the "merits" of the proposal. There's a bullet point list right above that post.

Ironic that you call yourself "reader".

[Thomas knows of one tree]

THOMAS CLAIMS TO KNOW ABOUT ONE TREE, WHICH HE SAYS IS PROOF OF HIS CONCLUSIONS ABOUT THE FORREST.

SURE IT IS . . . . .

not!

[Jeff Gilbert]

How do we propose to determine the market value of the Tropicana Field site if we don't try to sell it? Do an appraisal? That would be funny. If someone buys this thing they are going to have to develop it, so only a developer interested in doing the project would be able to help establish the market for the site.
What are we really trying to say here? Isn't it true that any bid over the current debt on the site is really the threshold for a deal? In that case, the value is irrelavent no? What if the actual value of the site was in fact less than debt?
These comments are the height of inanity. We should be trying to figure out how to make something work, not whether we're for it or against it.

[Thomas]

The appraisal of the site was around $121M and it was called a developers dream:

http://www.sptimes.com/2007/11/14/Rays/Land_under_the_Trop_i.shtml
"According to the Pinellas County Property Appraiser's Office, the current market value is around $121-million... and the appraiser's estimates are typically low. Would a high asking price - say $200-million - scare off developers in the current climate? Several real estate experts think not. "Good sites are always in demand," said Alan Feldshue, a senior associate with the commercial real estate firm Colliers Arnold. "There would be funds out there to do the development."

But now the developers are only offering around $65M for the site, which is not even enough to retire the Trop debt.

That's a bad deal and "NO" is the correct answer to bad deals.

[Thomas is lying again]

There is no evidence to support the LIE by Thomas that the Property Appraiser's estimation of the value of this property (as it is currently improved) bears any relationship whatsoever to what a willing buyer is likely to pay for the property. The appraisal Thomas is referring to is based on the Trop site as currently improved. The County Appraiser has not performed or secured an appraisal of what the value of the property would be for the developer's intended use.

[Thomas]

Rick, bro, just use your name. It's okay that you could not live up to your pledge to not respond to me.

Interesting... I posted a link to a SPTimes article and Rick calls me a liar.

What a fraud.

[Ray F]

I have to agree. If anyone is going to try and be held reasonably credible for their responses, the least they could do is use their name.

...except Will Ferrell.

[Don Mott]

I told Rick to stay out of the medicine cabinet. Now all of his multiple personalities are coming out. Maybe I was wrong. Rick take your medicine.

[Paul]

I'm not thinking this extension of the bed tax for the Rays is a good thing. I doubt people from other countries want to see a ball game. I'm sure they are here for the beaches, museums (as they are more cultured than us yocal locals, on average) and well, our parks, like that big Ft. Desoto one.

I realize I am running the risk of being silly here and not spouting any 'facts' (making me baseless/pointless)... but heck, I'm feeling rather daring today, lol.

[Ray F]

Paul,

Do you think that the bed tax should be stopped after 2015 when the Trop debt is paid off?

or

Do you think the 1% that was going to the Trop should stop, but the rest of the Tax should continue?

If "B", than do we drop that extra that was going to the Trop and save the tourists 1% on their hotel or do we continue charging the extra 1% and divert it to something else? If so, What would you spend it on???

another museum? a zoo? a convention center?

[Thomas]

Just an opinion, but I think the Bed Tax that was dedicated to the Trop should be redirected to new International Tourism Campaigns.

With the decline of the American Dollar, more and more travelers are taking advantage of vacations in the US. Europeans are travelling to New York, Boston, San Francisco in greater numbers than ever before. I think St. Pete / Tampa Bay could be added to the list of top US destinations with a solid marketing program.

(Yes, I realize the economy may be vastly different when the Trop tax expires - however, exploring new markets is a much more sound use of the Bed Tax as opposed to just giving it to the Rays. MLB has plenty of revenue to use to build stadiums, they can fill in that funding.)