The Friday stadium discussion
The discussion to Thursday's post on the Tampa Bay Rays' stadium-financing proposal has been vigorous and lengthy and I thought I would pick it up in a new post today. Naturally, this will be the subject of my Sunday print column as well.
In my own mind, I divide the debate into two categories: Stadium Finance and Everything Else. Even this might be objectionable to folks either for and against the stadium who care most about a particular topic. I am certainly leaving out some arguments (feel free to add!) but for a quick summary of the "Everything Else" debate:
FOR THE STADIUM: Economic impact of construction and permanent jobs. Positive effect of pedestrian traffic downtown. Renewal and redevelopment (to whatever extent) of a new "west downtown" on the Tropicana Field site, with new property tax generation that will not only help pay for the new stadium, but create new revenues for schools and other services. Exciting new use for a site (AL Lang) that now only gets 15-20 uses a year. Creating a first-rate "signature'' on the waterfront, with the likely prospect of hosting an All-Star Game every bit as good or better for St. Pete than the Grand Prix. The argument that small-minded "green-benchers" are risking a unique opportunity that, once lost, may drive away the team eventually and doom the city to mediocrity.
AGAINST THE STADIUM: Misuse of the city's precious and irreplaceable waterfront that should be preserved for open greenspace or passive public use. Infeasibility of parking, ruinous traffic, heat & weather, degrading of downtown quality of life. Environmental impact of dredging and construction. "Hidden" future costs to taxpayers for law enforcement, public services, infrastructure, etc. The general argument that public support of sports facilities is unwise when we're cutting Medicaid, education and other services. The fact that there is still "shelf life" for Tropicana Field, which is not even paid off yet.
Okay, those are what I can think of in the "Everything Else" category. Now, as to the financing itself...
(1) The Rays say they will put up $150-million, a third of the cost, and guarantee any cost overruns. I do not think this is coming out of their pockets -- one earlier scenario was they would artificially inflate their rent payments to the city, and use that "revenue stream" to borrow the money. One way or the other I figure they will borrow it -- maybe against improved concession deals at the new park -- but I am not sure I care, as long as the public is not at risk. In engineering or software terms, their contribution is a "black box" -- i don't care about what's inside it, as long as it spits out $150-million and there is no public risk or detriment.
(2) Without question in my mind, the extension of the county and city payments represent "new" tax dollars -- otherwise the existing debt would be paid off by 2017. The question is whether the whole shebang "pays for itself" through all the new taxes we are supposed to collect on the new development at the Trop site. To me this is the critical question. Rays finance guru Michael Kalt says there is no question we will get that money -- which makes me ask, in that case, why isn't there some way to guarantee it, either in the contract with the developers, or the Rays? If it is such a slam-dunk, and Hines is such a world-class outfit, then I am just a little bib-overall-wearing, small-town rube, but I still think the deal should guarantee St. Petersburg that the revenues will be there, or else we shouldn't take the deal.
By the way, the math is tricky and can be worked in any way you want, rhetorically. The $100-million (county) and $75-million (city) contribution as estimated by the Rays simply represents the tax payments AFTER the existing debt period on the Trop runs out. In reality, we are talking about selling off one public asset (the Trop), leasing away another (Al Lang), dedicating the proceeds of the Trop sale to the new stadium, AND continuing to make the existing payments through 2017 even after we retire the existing debt. This is how I get to the calculation of $150m owners, $245m taxpayers, $55m parking and other deals, which is not quite the way the Rays frame it.
(3) Having said that, I can see the argument that this is a good deal anyway. The county and city taxpayers keep making their same "car payment" that they're making now, and they get a new "car". Plus they get whatever benefit arises from the Tropicana site redevelopment, and all the corollary benefits of new business downtown, job creation, economic impact, etc.
The devil is in the details. The city has to negotiate a Development Agreement for the Tropicana site, and a stadium lease and construction agreement with the Rays. In both these deals I want every possible protection for the taxpayers, and I do not know that I have 100% confidence in the city's ability to negotiate it. Just for starters, the city has to be protected from any environmental clean-up liability at the Trop site. There's the question of who pays for the Tropicana demolition. We need to be able to hold the developer's feet to the fire with a construction schedule, penalties and guarantees, and I don't mean just the ultimate "nuclear weapon" of reversion to city ownership, since that doesn't solve the basic problem of paying for the stadium. Then there's a whole separate body of issues concerning the new stadium. As one commenter noted wisely, what's a "cost overrun" and what's a "change order" that the taxpayers WOULD have to pay for? How do we deal with unforeseen costs and expenses? What happens if the thing is half-built and somebody files Chapter 11?
So my own thinking has not really changed much since the beginning. I am the guy sitting in the car dealer's office, being offered a deal that "pays for itself," and all I am saying is: If it pays for itself, then why won't you put that in the contract?














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