On Wednesday, Hillsborough County Administrator Mike Merrill finally provided insight on how to pay for a new Tampa Bay Rays stadium. In a memo released prior to Wednesday’s Hillsborough County Commission meeting, Merrill laid out the following:
- The Rays would bear 50% of the cost for the acquisition of land and construction of a stadium.
- The remaining 50% funding would come from some, or all, of the following sources: private investment via an Opportunity Zone Fund; private investment by Ybor landowners via a Community Development District(s), authorized by the City of Tampa; and Community Redevelopment Agency (CRA) property tax revenues.
- Construction cost overruns would be borne by the Rays.
- Depending on results of future negotiations with private investors, a future guarantee provided jointly by the Rays, City of Tampa and County (estimated to be less than $50 million in total) may be necessary. Such a guarantee, if called upon, would be reimbursable to the Rays, City and County.
- The Rays would be required to make annual rent payments.
- The Rays would be required to fully fund and maintain reserves for stadium repairs and maintenance, as well as for future capital improvements to the Stadium.
- The Rays stadium would be immune from property taxes, as is the case with Raymond James Stadium, Amalie Arena, and Steinbrenner Field (except for the private portions of the Stadium controlled by the Rays).
Since the three public funding sources are very different in where the money would come from, that doesn’t tell us a whole lot. However, Neil deMause (Field of Schemes) separated the signal from the noise and explained things in a way that I better understand it.
The Opportunity Zones are a Trump creation that allows land development to be used as a tax shelter on capital gains taxes; it’s not entirely clear how the county would monetize this, though it’s certainly possible. CRAs are effectively tax increment financing, where any rise in tax receipts in an arena gets kicked back to pay off a project’s construction bonds. CDDs are similar but are a tax surcharge, not cannibalization of existing taxes, so are somewhat easier on the current public purse.
Clearly those are all different kinds of subsidies with different pros and cons — the CRAs are the most straight-up of a cash grant, while with CDDs and OZs the concern would be more if the county would have to promise to backstop any shortfalls if the new revenues didn’t turn up, which is a thing that happens.
There are other options as well, including a 1% hotel tax increase that the county could put in place, which as Pransky notes would raise less than $100 million, but every drop counts.
The concern here is that Tampa is going to get caught focusing on “How can we find enough money to make this happen?” instead of “How much is it worth to taxpayers to make this happen?”, which as any experienced eBay bidder knows is a great recipe for paying more than you wanted to. There are some potentially not-terrible funding ideas here, but none of them are likely to get anywhere close to the kind of public money Sternberg is looking for — which raises the question, if Sternberg doesn’t think it’s a good investment to put more than a couple hundred million into a new $900 million stadium, are we sure that building one is a good idea in the first place?
And the likelihood of this all coming together to pay for the almost $900-million stadium?
Both pies in sky.
— Noah Pransky (@noahpransky) December 5, 2018
Meanwhile, Merrill also set a do-or-die deadline for the proposed stadium deal, and if the Rays don’t agree to the county’s terms within the next three months, then there will be no ballpark in Ybor City. Yet a decision needs to be made in the short-term, with just 26 days left to commit.
As it stands, the Rays now have three choices:
- Ask St. Petersburg city officials for an extension (the team hasn’t approached the city yet). Such an extension could cost the team millions of dollars and delay the construction of a new stadium.
- Give formal notice they will move to Tampa without a finance package in place (According to Pransky, the Rays can give St. Pete notice they intend to leave on December 31, and nothing really changes. St Pete will still be held hostage by the inability to finalize a deal in Tampa. The team can give notice they are moving across the bay, without specifying a timeframe.)
- Give formal notice they will stay in St. Petersburg through 2027.
For his part, St. Petersburg Mayor Rick Kriseman said he hasn’t talked to the Rays about extending their agreement with the city. Kriseman did not show his cards in a statement after Thursday’s news broke.
There are some issues that need to be resolved if that were to occur, as my city needs some certainty regarding this matter. We tried to accomplish that by giving the team three years to look around.
Both Hillsborough County and Tampa have had many more years to prepare for this, so it’s unfortunate to see so much ninth-inning scrambling.
To put it another way:
That being said, Hillsborough and the #Rays have had two years and 11 months to patch together a deal…not to mention all the secretive decisions made by Hagan before the 2016 MOU. Cobble something now, not March, or let the team work on a deal in St. Pete.
— X-Rays Spex (@XRaysSpex) December 6, 2018
Winter Meetings
Marc Topkin (Tampa Bay Times) wrote on Wednesday that the Rays are looking to add players to the roster, although it is uncertain what moves need to be made since “the versatility and flexibility of their youthful roster leave them somewhat position agnostic on whether that hitter plays the infield, outfield or DH.”
Topkin added that they could add to the pitching staff — be that a legit starter, or an additional arm in the ‘pen — or an impact position player. Either way, an incumbent player stands to lose playing time, which Senior VP of Baseball Operations Chaim Bloom spoke about.
This is less about trying to plug specific holes than it is about saying, okay, we have this group now that did what they did last year, that we feel strongly about their futures, how can we help support that group to put them in the best position to do what we didn’t do this past year, which is pop champagne and get to the postseason?
The Rays have reportedly kicked around countless ideas, including the acquisitions of players like Noah Syndergaard and Paul Goldschmidt, neither of whom are available on the market any longer. Other right-handed hitters who could be of some level of interest to the Rays include Nick Castellanos, Evan Gattis, Carlos Santana (switch hitter), Andrew McCutchen and Adam Jones, among others.
The Rays have plenty of financial flexibility with only about $32-million in payroll committed to the current squad. Expect something to come as early as this weekend.
This is a time to look at a wide array of possibilities, Bloom said. The important thing for us is to make sure we balance our opinion that we have a group that is capable right now of competing for the postseason with knowing this is something we want to do not just once, but we want to do year in and year out and have a consistently and sustainably competitive club.