I must concede, with the tiny writing staff that does everything on a voluntary basis for X-Rays Spex, paired with the hectic and stressful end of the school year — due in large part to standardized testing season — I haven’t been able to focus much of my time or energy toward anything, much less the blog. That will change for the better in 11 school days, although that’s neither here or now. In any case, there either has or hasn’t been much progress in the stadium saga depending on your point of view. Personally, I tend to view things through pessimistic lenses, although I prefer to call it being realistic.
With just nine months left to figure out a funding apparatus for a Rays stadium, county administrator Mike Merrill acknowledged that Hillsborough County still has an extremely long way to go late in April.
The Times reported on April 20th that Hillsborough County planned to make developers shoulder the lion’s of stadium construction costs, although negotiations with developers are not yet underway. As Noah Pransky (WTSP Action News) writes, that leaves countless unanswered questions about how the cash-strapped county will pay for a new $800 million stadium in Ybor City that the Rays have, so far, only offered to contribute $150 million toward. In other words, Hillsborough County is looking for private developers to generously assume risk that no one really seems willing to assume.
Another Times writer, Richard Danielson, later proposed a list of ways that Rays owner Stu Sternberg could pay for the estimated $800-million facility without contributing much from his own pocket, or dumping all the costs on taxpayers.
Danielson’s list includes making the stadium a showcase for local food, using the training facilities as a community wellness center, letting a culinary school use the ballpark’s kitchens, or building a community water slide.
Neil deMause (Field of Schemes) did what I meant to had time not been a concern: offer a critical counter argument.
How about a water slide! The article doesn’t actually explain how a water slide would help pay for anything, but moving on:
“You want those who use it and go there to help pay for it,” said Hillsborough County Administrator Mike Merrill, who is at the center of the Tampa-Hillsborough effort to study stadium financing options.
Getting warmer, but how exactly is “make users pay” going to work? After all, that principle has been used for everything from ticket surcharges (which mostly come out of team owners’ pockets, and so are a pretty good deal for the public) to kickbacks of taxes in a “stadium district” (which don’t and are not).
“We’re aggressively looking for private capital, private developers, to build a stadium,” [Hillsborough County Administrator Mike Merrill] said.
We’ve heard this before, too, but a private developer is only going to invest in somebody else’s stadium if they can get a cut of the stadium revenue, right? At which point Sternberg may as well just put up the money himself and repay himself with those revenue streams.
At SunTrust Park, which opened last year, the Atlanta Braves spent $400 million developing The Battery Atlanta, a multi-use destination next to the stadium with a hotel, two office buildings, 550 apartments, a theater and about 20 restaurants. Still, the public contributed $400 million toward a ballpark that cost $622 million.
Ayup. And closing libraries to help pay for it.
Tampa Mayor Bob Buckhorn recently outlined one possible scenario. The city could create what’s been loosely described as an entertainment district around the stadium. Inside the district, a surcharge on sales of food, drinks and merchandise could generate revenue that would be used to help pay off stadium construction bonds.
“Because a stadium is there,” Buckhorn said, “restaurants are going to do better, alcohol sales are going to be higher, T-shirt sales, whatever it may be. The hope is that monies generated by construction of the stadium — be it commercial, residential or retail — be used to pay some of the debt service on the stadium, so you shift the burden from the taxpayers to either tourists or to folks who are benefitting from the construction of the stadium.”
Okay, so there’s an actual idea! Not a great idea, mind you — local restaurants aren’t going to do that much better as a result of having a stadium open 81 days a year nearby, so you’re quickly going to run into problems of whether to raise the tax surcharge to pay off more of the stadium or keep it low enough so people will actually want to open more businesses nearby — but it’s something.
Variations include creating a community development district (there are lot of CDDs for suburban Hillsborough neighborhoods already) or a special district similar to what the Legislature approved this spring for the $3 billion Jeff Vinik-Cascade Investment project known as Water Street Tampa.
Those are very different models, so different that “variations” isn’t really an accurate term. CDDs are basically TIFs: Public improvements are repaid by the projected future rise in regular property tax payments, a plan that can fail in two ways — either if property values don’t actually rise that much, or if they just cannibalize development you would have gotten anyway, either on that site or elsewhere in your city. The Vinik-Cascade project is a special tax surcharge on property owners, which at least doesn’t dip into money the public would be collecting anyway, but which also presupposes a lot of property value increase just from a stadium being built nearby, which doesn’t have a great history of coming true.
“A stadium is a magnet for, arguably, development that might not otherwise occur,” Merrill said. “What you’re trying to do is assess growth, new development, within a district that benefits from a stadium.”
That’s one heck of an “arguably” there.
The problem, ultimately, is that Sternberg is trying to find ways to equitably slice up a giant piece of nothing cake: There are only two ways to pay off a stadium, and one is through the increased revenues that come in from one — which isn’t likely to pay off anything close to the full construction cost, because new stadiums are usually not good financial deals , and if it were Sternberg could finance it with something called a “bank loan” — while the other is with public subsidies. “Let’s charge all the business and property owners who’ll be riding for free on our stadium” isn’t a terrible idea — New York state is considering using it to build more subways — but given past Florida experience with baseball-related development, you might maybe want to temper your expectations a bit.
Knowing that the business community likely wouldn’t pay for a stadium, last week Tampa Mayor Bob Buckhorn went on hunt for tax breaks to incentivize development in low-income and blighted areas. Buckhorn petitioned Governor Rick Scott in the hope that he would reconsider a decision on “economic opportunity zones,” so that tax breaks could be used to lure developers to the tract of land in Ybor City where the stadium has been proposed.
Buckhorn’s letter called the Ybor site “a vibrant commercial, residential and industrial neighborhood that includes Ybor City, the historic heart of Tampa,” which also “includes pockets of blight and shuttered industrial buildings that could be home to hundreds of new jobs.”
Ambitious as it may sound, the mayor wants the governor to substitute the Ybor neighborhood for another one of the city’s recommended tracts in the Oak Grove neighborhood.
Buckhorn’s letter, however, did not mention anything about a stadium, although the goal for that tract of land is no secret.
His attempt is a jump-the-shark moment … a Hail Mary in a sense. It feels, logically, like a move that would be made when all other means have been exhausted. If that’s so, the private funding aspect has all but flat-lined.
According to Pransky, a DEO spokesperson said, “Hillsborough County did not prioritize opportunity zone census tracts upon submitting them to the state for review and recommendation. We will forward this request to the US Treasury Department which is currently reviewing input from the states.”