Sunday, October 29, 2017

Hahahahahahahahahahahahahaha. Transparency.

Ken Hagan, Hillsborough County's self-appointed stadium negotiator, has been working behind-the-scenes to get a deal done for the Rays. He even promised to brief everyone on his dealings 18 months ago:
But that didn't happen and his fellow commissioners tell me and other media outlets they're pissed.

Hagan helped create a private non-profit entity so he could negotiate a land deal without having to deal with public records.  He praised the secretly-negotiated, more-expensive-than-anticipated, possibly-illegal Braves deal. He never got buy-in from the City of Tampa.

Hell, Hagan didn't even tell Tampa's mayor or the Rays that he was announcing his deal last week.  And he went out of his way to withhold the news from media outlets that have previously challenged him on transparency issues and his lack of compliance on public record laws.

Now, Hagan wants you to know that he has the PERFECT location for the Rays!...but somehow has not yet discussed financing specifics yet with the team.

How's that for transparency?

Actually, it matches the Rays' record on the subject.

This blog has spent years calling for the Rays to be more transparent regarding its stadium "need," and what kind of tax money it is looking forThe Tampa Tribune once joined the chorus.  The Tampa Bay Times has also joined recently, writing "secrecy will erode public confidence, especially in this era of public skepticism of government."  It penned a similar editorial in 2016

But the same thing is happening in Tampa that happens in cities all over the country. Even though sunshine protects taxpayers, politicians go out of their way to keep their discussions private.

By foolishly thinking they can out-negotiate leagues that squeezes taxpayers for a living, many politicians only succeed in ensuring their legacy as pro sports' "sweethearts."

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Tuesday, October 24, 2017

Hillsborough Pitches Rays Stadium Proposal - Now What?

Hillsborough County's Ken Hagan surprised his fellow commissioners, county staffers, and probably even the Rays today, when he announced he had cobbled together 14 acres of land near Ybor City for a possible Rays stadium in Tampa.

It seemed most media outlets in town were called to his office, except mine, WTSP-TV. Shocker, really.

Maybe its because I've always said land isn't the biggest problem in the Stadium Saga; funding is.  And guess what?  It still is.

Here was other immediate reaction and perspective:

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Friday, October 20, 2017

Handy-Dandy Guide to How "Not Your Tax Dollars" are Really Your Tax Dollars (The Extreme Public Cost of a New Rays Stadium)

If the Rays are going to get a new stadium somewhere in Tampa Bay, it's clear from what local politicians and columnists are saying, it will cost taxpayers a pretty penny. But we've now seen several of them suggest local residents won't have to pay for the public subsidies. 


So here's a handy-dandy guide to how "not your tax dollars" really are your tax dollars, with some educated guesses as to how much each potential funding mechanism might contribute toward a new Rays stadium:
  1. Hotel/bed taxes - $60-75 million: Your first hint that these are taxes? The word "tax" in the title. Yes, tourists tend to pay more of these than locals.  And yes, state law restricts how you can use the dollars.  But...
    1. Despite what Hillsborough Co. leaders have tried to convince you, bed taxes CAN be used for more than just stadiums. They can be used for pretty much any event or capital expenditure that helps bring tourists to your county - often, more successfully than pro teams.
    2. Earlier this year, I found at least $550,000 a year in items earmarked in the county’s general revenue budget that could be covered by the bed tax, freeing up general revenue tax money for roads, law enforcement, etc.
    3. The money can also be used for marketing your county, which apparently, Tampa is in need of, since a dozen downtown/Ybor-area hotels just added a marketing fee on top of the bed tax to make up for the lack of marketing spending.
  2. Land - $15-30+ million: Any public giveaway of land for a stadium is a taxpayer subsidy. Consider the opportunity cost taxpayers could be missing out on through other uses of that land:
    1. If the city/county were to simply sell a developer 15-20 acres of prime real estate near Tampa's downtown, the project should conceivably net the county well north of $1M per acre.
    2. If the right development is chosen, as Commissioner Ken Hagan and so many others like to remind those around Tropicana Field, the land could net much more revenue and opportunity as something other than baseball.
    3. Of course, any fee the county pays to acquire land will cost taxpayers too.
    4. Then, there's the cost of relocating the facilities and/or residents that are currently there.  For instance, the Tampa Park Apartments would require relocating hundreds of families. Or Hagan's idea of relocating the sheriff's office would mean tens of millions more for a new HCSO facility.
  3. Future property tax growth/community redevelopment area (CRA) - $?? million: Also known as tax-increment financing (TIF), this method earmarks city and county general revenue property tax dollars within a defined district, to be used on special projects within that same area. The districts are specifically designed to cure blighted areas, and it is also somewhat limited in bonding capacity:
    1. The biggest variable would be how the CRA is drawn. Some of Tampa's existing CRA's produce zero revenue, while others produce more than a million per year.  This is why most CRA/TIF districts are pretty limited when it comes to future bonding capacities.
    2. The only CRA currently producing significant revenue is the Downtown district, but the city and county have already committed $100 million from that CRA to Vinikville "Water Street Tampa" and surrounding development near Amalie Arena. So don't count on a new ballpark complex leaning on Vinik's money.
    3. Again, these are REAL PROPERTY TAX DOLLARS that could go to pay for anything else the city or county needed: roads, cops, sewers, etc.  And when the TIF district fails to produce the revenue projected, as they sometimes do, general revenue tax dollars typically have to make up the difference.
    4. As Neil deMause recently wrote, incremental tax revenues "are generally pooh-poohed by economists as a subsidy by other means, since all evidence shows that entertainment spending in one part of a metropolitan area just ends up being cannibalized from somewhere else."
    5. Politically speaking, Hillsborough Co. commissioners recently fought over a CRA designed specifically for transportation improvement - they couldn't agree, and the county still desperately needs transportation money. Oh, and the House Speaker is also trying to end CRAs, which could limit how much the county is able to actually bond out. So its far from a guaranteed source of revenue.
  4. Entertainment district tax - $?? million: An additional sales tax could be added to bars, restaurants, and hotels within a special district, giving the Rays a way to capture revenue from private businesses adjacent to their park.  But the city and county don't need a new ballpark to institute a new tax if they want new revenue; those funds could pay for important infrastructure or existing commitments like Water Street Tampa.  Or any of the city's other pressing needs that require raising taxes. So directing new revenues toward construction bonds does, in fact, comes at the expense of other taxpayer needs.  Oh, and ask Cincinnati what happens when you bank on sales taxes funding your stadium and the economy slows down
  5. Infrastructure considerations - $20-80 million: Hillsborough County has a problem in that it cannot afford the roads and transit it desperately needs. But committing to fund new roads and infrastructure around a Downtown/Ybor stadium would most certainly take away from the infrastructure needs elsewhere in the county.
  6. Future development rights - $?? million: If Hillsborough County is to partner with the Rays, as St. Pete has proposed to do, any concession on future developments rights or revenues on public property is a taxpayer expense, even if it is deemed one with positive ROI.
  7. Naming rights - $40-50 million: Forget about any benefit from naming rights to that public stadium - the teams are quick to insist these are their revenues, contributing to their bottom line; not the public's portion of stadium bills.
  8. Rental car taxes - $?? million:  It's been a while since it was suggested rental car taxes could be raised in Tampa to help pay for a new stadium, and the Hillsborough Aviation Authority has since raised the rental taxes twice to pay for airport expansion.  So even if this is no longer a likely source of revenue, it's worth repeating that it could most definitely pay for other things around the community.
  9. Terms of a lease - $?? million: Will the Rays pay the county fair market rent, like most private businesses do that work out of a public space? Because anything short of market value  is a concession taxpayers are making at the expense of general revenue dollars.  Also worth keeping an eye out what kind of concessions taxpayers may have to make when it comes to stadium maintenance - a secret subsidy that adds up if public officials aren't careful  in negotiations.
  10. Property tax breaks or "Payments in Lieu of Taxes" (PILOTs) - $50+ million: Most businesses in Florida pay property taxes. When they don't, it comes at taxpayers' expense. And while there are various forms of the PILOT mechanism, they basically allow a team to skip out on paying property taxes, because of silly reasons like, "they're paying their construction bills instead" or "because they're good community stewards."  If only we were all that lucky!
  11. Sales tax concessions on construction - $20-30 million: When a developer constructs a building, he or she pays sale tax on the materials. But when pro teams build a stadium, they will often try to skirt paying those taxes by getting the municipality to purchase materials for them as a straw-buyer, tax-free. It's like a 16-year-old giving you money to buy him beer. It's just shouldn't be accepted.
  12. Tax-exempt bonds (federal) - $50-150 million: Just like giving private businesses a free pass on paying sales taxes, governments will often take out tax-free bonds on stadium construction so they can secured at lower rates than private businesses have access to. They're a better deal for pro teams because the taxpayers aren't getting their due revenues on the transaction.
  13. New Markets Tax Credits (federal) - $?? million: These federal subsidies, designed to incentivize private businesses to move to and invest in low-income "distressed" communities, can be tapped into in a creative way to benefit stadium development...without actually benefitting the communities the taxpayer is spending money to support. 
  14. Existing general tax revenues - $?? million: Do I even need to spell this one out? I shouldn't, but St. Pete has suggested spending several million dollars a year - on top of bed tax revenues and development rights - to keep the Rays in the 'Burg.  Obviously, this money could be spent on police, roads, or sewers.
You may also hear about foreign investment EB-5 funding as a possible mechanism on a new stadium, but the program's capacity is somewhat limited...and it is short-term bonding only, not the 30-year kind of bonding that the county would prefer for such a large project.

All-in-all, there's a good chance taxpayers would have to help pay for much of a new Rays stadium one way or another.  So don't believe elected leaders who promise there "won't be another sweetheart deal" like the Bucs got with Raymond James Stadium:
  If you know a politician who could use some education on these things, I'd recommend Judith Grant Long's Public-Private Partnerships for Major League Sports Facilities.

In the meantime, remember the important lesson Neil deMause has written about a million times: this conversation shouldn't be about “How can we get a new sports venue built?” - it should be about “What would make it worth our while to get a new sports venue built?”  

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Monday, October 16, 2017

Ken Hagan Does Not Like Tough Questions

Hillsborough Commissioner Ken Hagan is privately negotiating with the Tampa Bay Rays for a potential new stadium near Ybor City.  And even it seems the proposed stadium would include hundreds of millions of public tax dollars, Hagan has yet to reveal how many and how it would be funded.  He also is taking campaign contributions from one of the men reportedly involved in selling the county land.

He also refuses to talk about it:

For the full investigation and background, visit

RELATED: March 2017 - Ken Hagan Does Not Like This Blog

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Wednesday, October 11, 2017

Rays Stadium Saga: Cash for Kriseman, Latvala...But Not Tampa

Lots of interesting nuggets to share on the Rays' Stadium Saga...
  1. Batting leadoff: you saw me tweet about the latest donations to State Senator/gubernatorial hopeful Jack Latvala, including the Tampa Bay Rays & Miami Dolphins.
  2. Why do pro teams love Latvala?  In addition to his attempts to provide them stadium subsidies, he's also the biggest thing standing in the way of a House push to ban public land giveaways for new stadiums in Florida.  A bill attempting to ban the practice raced through the House committee stage already and will likely get approved by the chamber in January. But approval by the Senate or governor is much less likely.
  3. Meanwhile, locally, despite all the talk that St. Pete and Tampa are working together on things like landing Amazon's HQ2, they continue to play tug-of-war against each other on a new home for the Rays.
  4. In fact, here's another good article about how the two sides of the Bay are competing over another sports team. It's from 2010. And nothing's really changed since then.
  5. Remember, the more subsidy-friendly officials that compete over the Rays, the more the team stands to benefit from a tug-of-war.  Which may explain why Rick Kriseman's PAC just got another $50k from the Rays, bringing his 2017 campaign haul to over $80k.
  6. Speaking of mayors, the Tampa Bay Business Journal (subscription required) spoke to Tampa Mayor Bob Buckhorn about his Rays' stadium conversations, with the mayor seemingly distant from his once-aggressive push to bring the team downtownTBBJ reports six years into his term, the mayor still doesn't know how to pay for a new Rays stadium, other than possibly the county's CIT tax, which could be renewed (via referendum)...but the funds are spoken for through 2026, and an extension may also be needed for Bucs & Lightning stadiums by the time those leases expire in 2027.
  7. And finally, Forbes' Maury Brown reports TV ratings remain strong across MLB, including here in Tampa Bay, where the Rays remained the No. 1 cable program in the market, even though they slipped 5% from last year's viewership numbers.  They were only 18th in the league, by ratings points, but they averaged 52,000 viewers per night, according to Neilson.  There should still be good money in a new cable deal for the Rays, but it seems they chose to gamble with a short extension with Fox Sports several years ago.  If they missed the cable rights bubble, and get screwed because of their timing, it will be because of a failed business risk and not the failure of their fans to tune in.

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