Monday, January 26, 2015

Florida's "New" Stadium Process is Same Process with Just More Tax Dollars

A new law, designed to improve Floridians' return-on-investment when it comes to subsidizing pro sports facilities with tax dollars, may actually help funnel more state money to teams, many of which don't seem to need them.

When State Sen. Jack Latvala, R-Clearwater, was fighting for SB 1216 last year, he said his goal was to create a competitive process that would force pro teams to prove job creation and positive economic impact before they got state tax dollars for facility construction.

But all the process has shown so far is that the pro teams and leagues that call Florida home are very good at filling out paperwork, and the governor's Department of Economic Opportunity (DEO) is not very good at settling debates.

The Jacksonville Jaguars, Miami Dolphins, Daytona International Speedway, and Orlando City Soccer club are all seeking tens of millions of dollars in state tax dollars for stadium renovation/construction projects.

And even though the projects are already funded and underway – and the suggested benefits to Floridians are expected to be delivered – all four applicants claimed getting reimbursed with state tax dollars would help them create jobs and spur economic growth that wouldn't take place otherwise.

ALSO SEE: Teams renovate stadiums anyway, even when they don't get state tax dollars

Despite the dubious claims, the DEO "approved" all four projects as "eligible" for state funding. The agency did not rank the projects, leaving the job to the Legislature. In a lengthy memo, the DEO indicated it wasn't responsible for ranking applicants until next year's pool.

"It would have been nice to have more guidance from the DEO," said Sen. Bill Galvano, R-Bradenton, who sits on the Joint Legislative Budget Commission (LBC), which will now decide the applicants' fate.

Galvano added that he expected the four applicants to resume heavy lobbying ahead of the 2015 session. SB 1216 was supposed to take the lobbying out of the process and award state incentives only to the projects with the greatest return-on-investment.

Calls to other local LBC members not returned Monday.

But it appears the incentive process is not much different than it has been in previous years, where eight teams now claim $2 million each in annual stipends from the state. The only difference now is that last year's SB 1216 significantly increased the available pot of money for pro teams by $7 million this year and $13 million every year afterward.

"There are no new jobs; it's smoke and mirrors," said former state Sen. Mike Bennett, R-Bradenton, who is now Manatee County's supervisor of elections. "How can we possibly tax the working people of the State of Florida to support … a sports franchise that pays its players $8, $10, $12 million a year?"

It is believed the majority of pro sports franchises in Florida are owned by billionaire owners, yet the state has contributed $300 million since 1994 to eight pro stadiums. Those dollars are in addition to the billions in local subsidies Florida taxpayers have helped contribute to pro sports stadiums in recent decades.

VIDEO: Gov. Scott dodges questions on stadium subsidies

The Jaguars and Dolphins are seeking new state subsidies this year, even though their facilities - EverBank Field and Sun Life Stadium, respectively – both already receive the $2 million annual stipend from the state. Both teams claimed renovations would help draw out-of-state visitors.

"Disney certainly creates a lot more revenue than a baseball game," Bennett added. "People do travel all across the country to go to Disney, but I don't think we need to give them a handout either."

State economists tend to agree with Bennett. In a recent report, they indicated Florida's current pro stadium subsidies have returned just 30 cents on every dollar invested, largely due to the fact that most fans of the four major sports come from in-state.

But the subsidies will only grow, as SB 1216 opens up tens of millions of dollars in new incentives over the next few years. It also expanded the teams and leagues eligible for state money to include motorsports, Major League Soccer, and the North American Soccer League, in which the Tampa Bay Rowdies play.

"I stand by the need to spend dollars," Latvala said of stadium projects. "It's no different than spending money on libraries or performing arts centers or parks … These are amenities for the people who live in our state."

Latvala and Galvano both said the City of Orlando and Orlando City Soccer, specifically, would not have moved forward with stadium construction had the prospect of state subsidies not been in place. Latvala also pointed to convincing support from both legislative chambers for the final version of his bill.

Watchdog group Florida TaxWatch gave its hesitant approval to the bill as well, opining, "If the state is going to subsidize stadiums, Florida TaxWatch commends the Legislature for creating a competitive evaluation process to do so."

It's yet to be seen if the evaluation process will be competitive, since the DEO approved all four applications and gave no indication they'd challenge any claim made within.

"The only money they can get back is the incremental increase in sales tax generated by the new projects," Latvala said, referencing a safeguard in the law that requires recipients of the incentives to show new economic activity to receive their money. Payments are in the form of sales tax rebates.

But 10 Investigates combed through the thousands of pages of applications and found much of the estimated increases in tax receipts were from higher ticket prices and inflation, not an influx of out-of-state visitors.

The Miami Dolphins' renovations actually involve removing 10,000 seats.

But because lawmakers also carved exemptions for any "first-time applicant whose project exceeds $300 million and commenced on the facility's existing site before January 1, 2014," neither the Dolphins nor Daytona are subject to the incremental/baseline tax rule, per FSS 288.11625(4)(h).

When I asked Gov. Rick Scott about the stadium spending this month, he provided little insight as to the benefit to taxpayers:

"It's a new process," Scott said. "The DEO is reviewing it; they'll be making their report to the Legislature on the completeness of those programs."

Sports teams and leagues have been among the state's most-active political donors and lobbying interests in recent years.

As 10 Investigates reported in October, the Dolphins, Jaguars, and Daytona-affiliated donors have spent hundreds of thousands of dollars on political contributions and Tallahassee lobbyists to try and sway lawmakers.

In 2014, Latvala's political action committee, the Florida Leadership Committee, reported a $20,000 contribution from the Dolphins, a $5,000 contribution from the Jaguars, and a $5,000 contribution from International Speedway Corp.  He also received $100,000 from Bill Edwards, owner of the Tampa Bay Rowdies, which were also included in SB 1216 as eligible for state stadium subsidies for the first time.  He defended the contributions to WTSP in May.

Jaguars owner Shahid Kahn gave $250,000 to Rick Scott's "Let's Get to Work" political committee in 2014.

LOOKUP: Political contributions from Florida athletes, teams

10 Investigates asked the four teams and leagues applying for funds "what happens to the construction if the team loses its bid for this year's money?"

Leonardo Santiago, vice president of communications for Orlando City Soccer, responded the team was working with the DEO on its application and, "We look forward to working through the process to a positive outcome for our club, our fans and the community, which stands to benefit greatly from an economic standpoint."

International Speedway's manager for corporate communications, Gentry Baumline-Robinson, wrote, "ISC's significant investment of $400 million for a complete transformation of the 'World Center of Racing' is on target to open just one year from now as the nation's first true motorsports stadium."

Neither the Jaguars nor Dolphins provided a response for this story.

READ: Daytona's application
READ: City of Orlando/MLS application
READ: City of Jacksonville/Jaguars' application
READ: Dolphins' application

2 comments:

  1. Really good stuff here. Thank you for doing this. Florida is so so corrupt. Divided governments are messy, but unified governments are so dirty that, like all things related to Jack Latvala, they make you want to take a shower. Libraries (not for profit). Performing Arts (not for profit). Parks (not for profit). Sports franchises (for profit plus handouts). Jack, one of these things is not like the other: fork, knife, spoon, kickback.

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    1. Thanks for the comment, and thanks for reading!

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