The long-awaited report from the Greater Tampa and St. Petersburg-Area chambers indicated Hillsborough County may have more bonding capacity available for a stadium than previously believed. However, Pinellas County's revenue streams have fewer political strings attached.
The "Baseball Stadium Financing Caucus" focused only on stadium financing. It avoided talking about sticky issues like locations and the legal issues surrounding the team's current contract with St. Petersburg.
While the Tampa chamber is supporting the Rays' and Hillsborough County's push for a regional stadium conversation, the St. Pete chamber is supporting Mayor Bill Foster's effort to keep the Rays in Pinellas County.
If a new stadium were built in Tampa/Hillsborough County, the caucus concluded the best ways to reach the near-$400 million that may be needed would be mechanisms, including: (estimated 33-year impact in parenthesis)
- Using tax-increment financing (TIF) associated with Tampa's Downtown Community Redevelopment Area (CRA). Increased property tax collections downtown, which must be used for capital projects, would be directed to pay down stadium debt. ($105-$115 million)
- Re-direct a portion of the Community Investment Tax (CIT) from local road & infrastructure improvements to a new stadium. The local sales tax, of which a portion funds Raymond James Stadium, expires in 2026 and would have to be extended. ($70-$80 million)
- A new 5% surcharge on auto rentals, which would hit tourists more than local residents. ($140-$150 million)
- A new 6th-cent added to the tourist/bed tax. Hillsborough County isn't considered a "high-tourist" county, so state law prohibits it from charging tourists 6% tax on hotel stays. However, the chamber indicated legislators could be convinced to change the law. ($35-$45 million)
- Existing revenue streams already paying for Tropicana Field. Most Trop bonds will be paid off by 2015, so leaders can either stop collecting the taxes, re-direct the collections to other city & county needs, or re-direct them to a new stadium. ($115-$148 million)
- Re-direct a portion of the "Penny for Pinellas" local improvement tax to a new stadium. The tax sunsets after 2020, so its bonding capacity would be modest at best without another extension. ($35-$40 million)
- A new 6th-cent added to the tourist/bed tax. Pinellas County, like Hillsborough, isn't considered a "high-tourist" county, so lawmakers would have to change state statutes for Pinellas to increase the tax on hotel stays from 5% to 6%. ($50-$60 million)
- Re-directing a large portion of St. Petersburg's share of state sales tax toward a new stadium. The city currently receives $12.2 million/year from the state, and much of it could be leveraged into new stadium bonds. ($165-$175 million)
"We applaud the joint effort of the Tampa and St. Petersburg Chambers in identifying potential funding sources for our next ballpark," said Rays President Matthew Silverman in a statement released Monday afternoon. "Regional cooperation like this is sorely needed as we all move forward and work together to secure the future of Major League Baseball in Tampa Bay."
Tampa Mayor Bob Buckhorn called it a "great first step," and said he was happy the caucus didn't delve into the location debate.
The caucus also did not mention anything about creating a regional stadium authority with taxing power - a concept previously mentioned as one way to get multiple Tampa Bay counties to share in a stadium burden.
GRAY AREASThe Tampa chamber's Chuck Sykes, delivering the joint presentation, acknowledged ticket prices would likely jump at a new stadium, as would prices on stadium parking, concessions, and souvenirs to help pay the team's estimated $150 million contribution. There was no indication of whether a new ballpark would draw more fans than increased prices would keep away.
Sykes also stipulated, "you have to be a winning team" to get a big attendance bounce with a new stadium. The comment may have been referencing the Marlins, who drew just 27,400 fans per game this year, the lowest mark for a new ballpark in decades. While the Rays have posted five straight winning records, no on-field performance is guaranteed.
The presentation, which included no new sales taxes, was aimed at a "best-case scenario" in many instances. The caucus assumed a price tag of $500 million for the stadium, even though Sykes admitted it could cost a lot more: a parking garage could cost $150 million and some experts have estimated restitution to St. Petersburg for breaking the current contract could cost $100 milllion.
A number of the proposed funding mechanisms are also dependent on lawmakers re-writing state statutes - a scenario Buckhorn was skeptical about, given the conservative anti-tax feelings in Tallahassee.
"WE DON'T HAVE A LOT OF TIME"Sykes stressed the need for St. Petersburg and the Rays to advance the discussion soon since Tropicana Field bonds will be paid off in a few years and those revenue streams will be repurposed by the local municipalities.
"We don't have a lot of time," Sykes said. "Almost 60% of the (Tropicana Field) debt is going to be paid off by 2016. A number of the sources can be used for general funds...and in this environment, when the economy is tight (and) nobody wants to increase taxes, that's something to us that we need to move quickly. Because when that debt is paid off, it's not going to sit there. It's going to be claimed."
Sykes also said hearing rumors of contraction in MLB circles tells him Tampa Bay had better start acting on a new stadium.
"Please," he said, "don't look at that lease and think that you've got time, we really need to get going."
Buckhorn agreed, calling a stadium opportunity in Tampa one that could pay off exponentially for the city and county.
Following the presentation, I pointed out Forbes estimated the Rays were one of the most profitable teams in baseball and asked Sykes if he had seen any evidence the team was struggling financially.
"I saw financials that were leaked out to the public, and that was all I saw," Sykes said, referring to 2008 financial reports the Rays have never confirmed were accurate. "The key question, though," Sykes added, "was is those financials could support $150 million in debt."
Sykes, who had cooperation with the Rays for part of the report, called the financials "valid," but said the team never opened up its books to either chamber of commerce.
I also asked if the caucus took into account soaring television revenues Major League Baseball and it's teams are now receiving.
"It got us excited when we heard about the (billion-dollar) contract the Texas Rangers signed," Sykes said. "Every major-league team we came in contact with, though, said, 'don't make the mistake to think that that exists for a mid-market-level team.'"
However, Forbes recently reported the San Diego Padres quadrupled their annual television revenues from $12 million to $50 million. And the league recently doubled it's national television revenue to $1.5 billion - payments that are split evenly among the 30 teams, according to the Biz of Baseball.
"Compared to what we saw in 2008," Sykes said of local TV revenues, "I'm sure (the Rays have) opportunities to improve that, but I think what holds true is still that the 'main lever' that moves...is still ticket sales.
Sykes estimated ticket sales account for 35% of the Rays' revenue and the team "will get a new media contract with or without a stadium."