Trop's price likely top issue in talks with developers

ST. PETERSBURG — Now that the city has picked a potential developer for Tropicana Field, negotiations will quickly turn to a key provision in the deal.

What is the Trop site worth?

The current offer of developers Archstone and Madison Marquette is $65-million. But that's $2-million to $3-million short of what the city wants in what would be St. Petersburg's biggest land deal ever.

The purchase price likely will be Topic A on Monday when the city and Archstone-Madison begin six weeks of talks on remaking the 86-acre site.

Failure to reach an agreement before August would doom the $1.65-billion downtown redevelopment, including the Tampa Bay Rays' plan for a $450-million waterfront ballpark.

"There's a gap we need to cover," city economic development director Dave Goodwin admits. "More money needs to be paid for the land. Or more money needs to be paid for the land sooner."

Archstone-Madison's current offer would be paid out in three phases over seven years.

According to the developers' timetable, Archstone-Madison would pay $15-million in 2010, $40-million in 2013 and the remaining $10-million in 2016. The payments are tied to each phase of construction.

But they do not keep pace with the debt payments outstanding at Tropicana Field, which is how the city wants to use the money from the sale.

The city and county are paying about $11-million a year to pay off bonds for the construction of Tropicana Field. Those bonds, which cannot be prepaid as part of an agreement with bondholders, are set to expire in 2016.

The city estimates it would need the developers to pay nearly $4-million toward the bonds in 2009, and about $11-million a year thereafter until 2016.

How that could happen is subject to negotiations, city and Archstone-Madison officials say. But both sides at least offered reasons to hope an agreement can be reached.

Archstone-Madison officials said their purchase price and payment schedule was based on a development pattern, not the need to pay off outstanding debt.

The schedule might be adjusted to accommodate the city's financial positioning, they said. That could mean moving their payments up a year or more, or including more money in a first payment, and less in later installments.

Moreover, the city owns a block just east of Tropicana Field, between Second Avenue S and Third Avenue S that Archstone-Madison might be able to purchase. The additional land sale may help close the difference.

Paying off the Tropicana debt would enable the city and county to shift resources to fund a $450-million waterfront ballpark for the Tampa Bay Rays.

"We're close enough that I think we can come up with a way to bridge the gap," said Ken Miller, a senior vice president with Archstone. "We want to be able to help the city make the Rays' stadium happen. Obviously, it's in our interest because we want to develop the Tropicana site."

City officials say they hope to have informal agreements with Archstone-Madison on the purchase price, along with a number of other details, by Aug. 1.

Also on the table will be the potential environmental liability at the Tropicana site, what financial and development guarantees Archstone-Madison may be willing to offer, and how much money the developers will be willing to contribute to demolish the dome.

The discussions, however, will be nonbinding. City officials even laid out a scenario in which formal development contracts would not be signed until 2009, after a potential referendum on the waterfront stadium proposal.

City attorney John Wolfe said, however, that if the terms of the preliminary agreements are not in the final contract, the city likely will walk away from the deal.

"I don't think the project will go forward" in that scenario, Wolfe said.

What else will be on the negotiating table

Environmental liability: The city says the known environmental problems at Tropicana Field are minor and can be solved with less then $100,000. But the city and Archstone-Madison also must account for any unforeseen environmental problems at the 86-acre site. How will the city and developers split the testing costs, if testing is required? Who will pay for the work, or how will the costs be shared, if environmental cleanup is ultimately required? Archstone officials called the potential environment cleanup a huge issue. But they say it's no worse than at any other prospective development.

Financial Guarantees: The city will shoot for the moon, while the developer will want no guarantees. The most likely outcome is somewhere in the middle. The city will likely not be able to get guarantees on tax revenue projection, but Archstone-Madison has seemed willing to guarantee the construction of up to 1-million square feet of retail space, which in turn will create some tax revenue. The developers also must be willing to guarantee a time line for any development and an agreement for the purchase of the 86-acre site that coincides with the plan to finance a waterfront ballpark.

Comments

[atrulyconcernedcitizen]

Why should Archstone Madison guarantee the tax revenues..no developer should be required to do that. However since these are "paired proposals" and the Rays are the ones getting the first chunk of the proposed tax, and the stadium is based on that tax, and they are SOOO CONFIDENT of those taxes, indeed there will be sooo much that there will be plenty left over for schools etc...shouldn't the Rays be willing to guarantee that revenue stream.
After all if you or I went to the bank and financed our home they would want us to sign on the note and also place a lien on the property to protect them against potential loss. Since we would be banking the Rays new home and they are soooo sure of this proposal why shouldn't they be willing to put a lien on the franchise. Why should the taxpayers be the ones to not only pay but also assume ALL of the risk? Do the Rays not believe in this deal?

[Demetrios]

Atruely..

The rays are not getting the first chunk of the proposed tax. The Rays are not paying off the debt, the city and county are. They have not exposed themselves to the risk. The city and county are at risk. With risk comes potential benefit. If the Rays do as you say and assume the risk, they will want a portion of the benefits (taxes), on top of getting their stadium, if the development is successful. Do you think anyone would go for that? Not saying it's right but that's what would happen.

[John]

What disturbs me about this story is the fact they're negotiating something that has ZERO chance of passing the referendum.

If Al Lang is off-limits, what are they negotiating for?

Can we find a bigger waste of our city staffer's time and tax money?

Why wasn't any negotiations with a developer delayed until the TDC and BOCC have their say and after the referendum to see if negotiations would be necassary in the first place!!

Thanks Silverman and Kalt, for wasting our time and taxpayer money. Oh and for wasting Archstone and Hines money chasing ghosts.

[Rays Mike]

I've been asking Aaron repeatedly when the next St. Pete Times poll is going to come out, so we can get a CURRENT gauge of public perception..

[Thomas]

Hey Demetrios,

Just curious on your opinion on this:

So since the city/county are at risk, and the Rays are not, would you still support this proposal if the Rays present lease terms that include:

- No Annual Rent (all rent paid up front as original "contribution")
- Rays keep all naming rights
- Rays keep all advertising revenues
- Rays keep all suite/luxury seating revenues

Or would you argue that the city/county should get the bulk of those revenues since the city/county is paying the bulk of the cost and assuming all the risk?

[Rick K]

Why do solidly commited "no" voters suffer from the delusion that the rest of us would consider letting them frame the remaining important questions, which they are going to oppose anyway?

The hysterical ignorance of the ANTI's is no more apparent than in these threads where they tell us all sorts of horrible things that might happen, mixed with their indignant certainty that there is no way the voters will approve a ballot question about the Trop.

I visited a friend who lives near NE High School this morning. On the way to and from his home, I counted red and blue signs. Along my route, red signs in front of about every 50th house, and blue signs actually slightly outnumbered the red, on the streets I drove.

[Thomas]

Well Rick, if you say so, it must be true.

We all know you to be a very sane and credible person.

Boom- Outta Here.

[John]

Rick K

You're the new ANTI

ANTI ANYTHING except what Rick K wants.

Still counting signs, I see. Good work.

Take a drive down 83rd ave just east of 4th st.

Every single house on both sides of the street has at least one red sign.

How's that help your count?

[since1962]

The sales negotiations are MOOT when the chair of the BOCC Bob Stewart,St Pete councilman Polson,
(to name JUST two)

AND 68% of voters
(to "name" many)

REJECT THE PROPOSAL AS UNWORKABLE.

Watch the Bay New 9 POLITICAL CONNECTIONS INTERVIEW.

Too much staff time and taxpayer money is STILL being spent on THIS when MULTIPLE, REASONABLE ALTERNATIVES HAVE BEEN OFFERED TO THE RAYS.

[Demetrios]

Thomas

Like I said, I didn't say it was right, it's what I believe would happen with that hypothetical situation. Obviously there is a negotiation process that STILL needs to be completed before ANY of us "experts" (me included) can argue one way or another. If the lease is bad, if the developer doesn't step up their guarantees, I'm not for it and doubt the city will go for it. I don't anticipate that the Rays are going to ask for more than any other franchise out there considering what they are getting in a new stadium. Again, it's just an opinion.

[Thomas]

That's cool - I can def respect that.

Just was curious if you were one of those "Stadium at ANY cost" folks.

There are fringe people that are going to support or oppose no matter what happens in negotiations.

[Dave in St Pete]

I call BS on the blue out numbering red around NE. I live here and drive these streets all the time. Red out numbers blue in the 10 to 1 area.

I live 1 mile from the Middle shcool (south of it) and between my house and NEMiiddle there are 9 red signs and a big goose egg for blue.

[Thomas]

Dave,

Don't sweat it bud. Rick is not known to be accurate.

But anyway, sign counting is pretty subjective. It's alright.

It's very clear that there are far more opposed than for this plan.

[Rick K,]

Rick K,

why are you so steadfastly pro stadium since we do not ahve all of the information regarding the financing, No agreeemnt has yet been reached with Archstone-Madison, You have not seen the terms of the Ray's lease agreement etc, etc, etc.?

I am opposed to the proposal due to the waterfront loacation and the public financing aspects.

But I don't understand how a rational person could be so rabidly pro staduim with out knowing any of the salient facts of the deal.

Enlighten me!

[atrulyconcernedcitizen]

Demetrios,Rays Mike, Ray F and others who are attempting to debate with fact instead of statements like those from Rick K who has been reduced to a blathering idiot.."hysterical ignorance of the ANTI's" how many ad hominem attacks can Rick K create...even he must be running low on pejorative words.
Demetrios you are correct that the risk associated with paying off the remainder of the Trop debt does not belong to the Rays. That risk falls on the city and the developer. Since Rick K loves historical precendence..we have some in this city..it is called Bay Plaza the last redevelopment project of this size which turned out to be a 40 million fiasco for the city and never got beyond the beautiful drawings..well actually it was worse..the city actually used eminent domain to destroy property..some of it historical..which is one reason some folks dislike Mr. Mussett. That is the risk associated with the fact that if AM doesn't complete enough of their project...perhaps financial difficulties associated with the 8 billion in red ink bleeding from their parent corp...or whatever. That risk means we might not even get enough payment from the site to repay our EXISTING DEBT.
The risk I was referring to was the revenue stream that will supposedly come from the "projected" tax revenue to repay the 300 million in bonds we'd have to put out to pay for the stadium.
There is also some local historical precedence for that..it's called Centro Ybor...a project that actually got out of the ground in Tampa but fell in value from 47 million to under 20 million even though it was a beautiful project and really looked good on those artists renderings. Tampa taxpayers are still stuck with $750,000 annual interest payments and the need to pay off a 9 million dollar Federal loan.
Of course given the fact that Kalt's baby the new Yankee stadium has required an additional 107 million in infrastructure costs as well as having the Yankees request an additional 350 million in tax exempt municipal bonds could also be classified as a risk with historical precedent. The Rays promise to cover cost overruns but when this stadium balloons to way over 450 million as it certainly will...what would we say if they came back with their hands out for a loan to complete the project. If we had a half built stadium that needed completion who would have the leverage? Rick K will call that hysteria...but again I refer you to historical precedent...I challenge Rick K or anybody else to give me a hyperlink to a stadium that came in on budget. I'll give 3 for every one you provide that came in way over budget..beginning with Kalt's babies..Yankee stadium and the new Met's stadium...oh and let's toss in the idiot of all time..Bud Seligs stadium in Milwaukee..250 projected..over 425 actual.

[Clear Direction]

The post at 1:18PM is mine.

Not sure why it showed up as Rick K.

[Rick K replying to Clear Direction]

Clear Direction:

Thank you for your direct invitation for me to help you understand where I am coming from. First, I would not characterize myself as being steadfastly pro stadium

First and foremost, I am steadfastly for honest and open debate. I find the majority of POWW's claims on it's website, and the overwhelming majority of posts by ANTI's in this Blog to be little more than attempts to distract, distort, delay and deceive.

(For those of you still struggling with the meaning of ad hominem attacks, what I just offered is not an ad hominem attack, it is a my summative judgement about the bulk of information I have read. I can either back that up with examples and other reasons I came to that judgement, or not, but my failure to support my summative judgement does not make my judgement an ad hominem attack. Latin class is dismissed).

It is also important to understand what draws me to these paired redevelopment proposals, Clear Direction.

Even before the Trop was built, I hated the approach to the project. I hated the idea of anhillating a large swath of downtown, displacing residents, and tearing down significant properties in order to construct an ill-advised, improperly designed ball park for a team the City hadn't even landed yet.

There were hopes of a team. There were dreams of urban renewal. There were fantasies that the Suncoast Dome would be a cutting edge addition to the ranks of those stadiums that are, by themselves, tourist destinations.

While St. Pete did eventually get a MLB team, it took them 10 years to become what the optimists envisioned. A recongizable source of community pride, a national promoter of the region, and humming economic engine.

The other parts of the dream never materialized, and will never materialize, because we built the wrong stadium in the wrong place.

It kills me when I go to the Trop and see the acres and acres and acres of surface parking lots which once contained HOMES for citizens. It kills me.

It kills me when I see this giant air conditioned warehouse that was obsolete by MLB standards the day the first MLB game was played there. It kills me to think how much the stadium has cost the people of St Pete/Pinellas County, and all we have to show for it is an obsolete stadium which is also an envrionmental embarassment.

So.... the chance to TEAR down the Trop and turn those 86 acres into a vibrant interconnected neighborood of residences, businesses, offices, entertainment destinations and public open spaces is one of the most exciting opportunities I have ever encountered in more than two decades of passionate devotion to urban development.

The Rays want a new stadium. There are hundreds of different possibilities in this regard. They could relocate and build a stadium just about anywhere. They could build a stadium in any number of places in the Bay Area outside of downtown. They could even build a new stadium on the site of the existing stadium.

But NONE of those ideas will allow us to get rid of the bad decision that was the 86 acre Trop site and replace it with uses that are better for the City of St. Pete.

That brings us to the waterfront. I think it is practically criminal that our City's greatest asset is so woefully underutilized.

I think these paired redevelopment proposals give us a chance to do what no region gets to do in the modern era. We can actively participate in significantly transforming our downtown core into a vibrant urban center which not only makes the city more livable and inviting, but also drives economic growth and increases the downtown's impact on attracting tourists.

Those are all the reasons I like these proposals, before I look at the specific financing terms and other details. When I take the time to look at the details, I am even MORE convinced that these proposals are a gift. We have a once-in-a-millenium opportunity to do something grand that will pay off HUGE dividends, with little risk.

The proposed outline of financing sources presented by the Rays is fairly realistic. Based upon my study of stadium development deals all over the globe, this one is in the very small class of publicly subsidized stadiums which require very little support from general taxes levied upon the people who live in the City.

My professional expertise informs me that the outlined financing sources are fairly realistic. I understand that people who have no professional expertise in this area would look at the numbers and think they are merely pie in the sky projections. But anyone who makes that uninformed assumption is making a mistake.

Here we have a stadium which will be funded by the Rays organization (from monies they plan to recoup from Rays game attendees), from people who park downtown to attend Rays games, from tourists, and from part of the City's share of County sales taxes, which tax pool will increase significantly because of these two redevelopment projects.

We all know that if the City and the Rays spend $450,000,000 over three years building a new stadium, a portion of that money will go right into this community. As an economist, I also know that the local portion of this money will be spent more than once.

I understand that an agreement has not yet been reached with Archstone-Madison, but my professional experience and confidence in the developers and city staff convinces me that such an agreement is extremely likely.

I have not yet seen the terms of a new lease agreement with the Rays. But I have seen the terms of the existing lease agreement, and I am familiar with these agreements. I know what the City and the Rays have said so far about what they both expect an agreement to look like. All of this, combined with my professional and life experience, convinces me that it is highly likely we will end up with a lease agreement that does not differ that much from the lease we have now.

I understand you are opposed due to a waterfront location. I happen to think the waterfront is the best possible place to put the stadium. Many people like me actually thought that back when the dome was being built. I think it was true then, and I think it is MORE true today.

As for the public finacing aspects of the proposal, again, I can only guess that what separates me and you is my specific knowledge of this subject. What I know about stadium deals convinces me that this one is pretty close as good as we could possibly get. While it is obviously possible to build a stadium somewhere else with no public financing component, I don't think that would give us the many considerable benefits we'll get from a downtown waterfront stadium.

When I add up the reasonable projections of costs and new income to the City and County from a waterfront stadium, my calculations lead me to the inescapable conclusion that these proposals won't cost the citizens of Pinellas and St. Pete. They will actually make us richer!

I guess the primary difference in your and my view of these deals is: Where you see uncertainty about details, I am able to make reasonable informed judgements about likely outcomes.

My knowledge informs me these proposals are an outstanding deal for the people of St. Pete.

[Xenu]

Xenu thinks its Tuesday now.

[Thomas]

My new $5 bill says "In Rick We Trust" on it!

[Xenu]

Xenu thinks it will take over 90 million of the new $5 bills to build new sailboat. Xenu thinks that is alot of "trust" to be given.

[John]

My new $5.00 bill says "Good for one gallon of gas" on it.

Oh and Rick, you're an idiot. That's my ad hominem attack for the day.

[Chris Jenkins]

"Thank you for your direct invitation for me to help you understand where I am coming from. First, I would not characterize myself as being steadfastly pro stadium"

Lie.

[Rick K to whoever is impersonating Chris]

Whoever made the 8:04 pm post....

You obviously don't know what a LIE is. For some clues, look at the POWW website or examine the ridiculous claim by the Move the Dome clowns that they can have the dome moved for $40 in AAA membership fees.

My goal in these forums, first, is to counter those devoted ANTI's who willingly distract, distort, delay and deceive. That many who post here are so blindly devoted to their ANTI-stadium agenda does tend to make many of my counter-spin posts look like pro-stadium posts.

My reasons for liking these paired redevelopment proposals are because I love the proposal to redevelop the Trop Site.

Everything else comes after that.

[Rays Mike]

That is the best you guys can do? "Liar" and "You are an idiot?" Rick K had one of the most thoughtful postings on here (right up there with others recently by TruelyConcerned and John, to be fair) explaining WHY he thinks this is a good IDEA, not the final agreements or contracts that will be what we will vote on in November. And most importantly, why he can make "reasonable informed judgements about likely outcomes," and yet that is what this blog has been reduced to. I'm tired of the same 5 people on here going nowhere each day. Good luck to everybody on this blog. I'm done.

[Clear Direction]

Ricky K,

Thanks for the clarification on your position.

So you really are for the opportunity to redevelop the Trop site into something that will make sense of the sacrifice of the redidents of the former Gas Plant neighborhood.

That is certainly commendable. I also think that the Idea to redevelop the trop site makes much better use of that site. Residential is always the highest and best use for any property.

Where we disagree then is what you characterize as the "woefully under utilized waterfront".

I submit that the fact that the waterfront is not developed and therefore "Under utilized" is exactly why our waterfront is as you concede "our most valuable asset".

If the waterfront continues to be developed or sold off then that valuable asset which other cities (like Tampa) are trying to emulate, ceases to exist.

Virtually all of the organic development which has occured in St. Petersburg over the last 20 years has happened because of and around our open and accessable waterfront.

So let's redevelop the Trop and find an appropiate location for a new stadium at a time that is closer to the 2027 lease term when the Trop is nearly paid off.