TAMPA BAY, Florida - The Braves want $20 million from the state of Florida for a new spring training home in North Port, on top of the subsidies they are already getting from the city, county, and land developer. And they're relying on an old study that's been wildly criticized to justify the spending.
In an application submitted to the state this week, the West Villages Improvement District claimed a new $75 million spring training park, primarily financed from city revenues and county bed tax dollars, would reap $1.7 billion in economic rewards for the county.
But according to the application, that figure was based on extrapolations from a 2009 statewide spring training economic report from Dr. Mark Bonn, a Florida State University professor who was recently spotlighted by 10Investigates. Bonn is not an economist, but has a rich history of selling reports to municipalities with robust economic impact claims they can use to justify large spending projects.
The $20 million grant money sought by the West Villages, Braves, Sarasota County, and City of North Port has already been allocated by the state for new spring training projects, so there may be little that critics of stadium subsidies in Tallahassee can do to stop it.
That's not new...but with Braves attendance at just 30,109 through SunTrust Park's first 21 games - by the way, below the team's avg. attendance in 2013, when the deal went down - let's take a fresh look at all the problems with Tampa Bay wanting to emulate what Cobb Co. did for the Braves:
FWIW, big portion of Hagan campaign $$ is from developers. It's also Hagan's family biz. Could they gain personally from new #Rays stadium? https://t.co/qkn98HgTS5
This blog has posted at-length about how pro teams seem to be making as much money outside the stadium (real estate & ancillary development) as they are inside the stadium these days, so Hagan's comments are kind of no-brainers. But the lack of transparency and willingness to lead the way on public subsidies are a bigger deal.
As I reported for WTSP this week, the Super Bowl's return to Tampa is not yet a done deal, as local organizers have a 90-day deadline to secure a slew of agreements from local businesses and taxpayer-funded agencies that spell out exactly what concessions will be made to the NFL for the "right" to host the 2021 game.
Among the requirements the NFL makes of host cities is to provide all police, fire, medical, and other governmental planning services free-of-charge during - and leading up to - the Super Bowl. Those expenses may run into the tens of millions. Tampa's City Council agreed to those terms last year.
We also know, from a leaked 2013 NFL document, the league typically expects a long list of hotel-, entertainment- and transportation-related concessions from host cities.
But the most jaw-dropping news this week may have been how the Super Bowl-to-Tampa news didn't prompt the typical claims of robust economic impact.
So yes, while Super Bowls are special, they are also expensive.
Last fall, Tampa's city council agreed to not only provide all police, fire, and medical services for Super Bowl week for free, but also any governmental planning, infrastructure, and security costs associated with Super Bowl events.
In addition to hosting football championships, the Tampa Bay Sports Commission has also enjoyed recent success luring less-complicated and less-expensive sporting events (along with their visitors) to town, from youth tournaments to the 2016 NCAA Frozen Four and 2019 women's Final Four.
This is that special week each year I sit down to eat cake (by myself) because Shadow of the Stadium has survived another 12 months!
The last year hasn't exactly brought forth the most consequential Stadium Saga news, as the Rays continue to bide their time, hoping for a change in both leverage and attitudes toward public financing. But Hillsborough has no money for a stadium and Pinellas faces doubt about throwing good money after bad.
So it's another opportunity to look back at some of the real interesting pivot points of the Stadium Saga turns nine (and this blog turns eight)....as well as an opportunity to remind you that the blog's goal (1,400 posts and counting) is to provide some big-picture perspective on where, when, how, and if a new Rays stadium should be built in Tampa Bay (along with other local sports business news):
In case you slept through the week of Tampa Bay sports business news, St. Pete voters gave the city overwhelming approval to work out a long-term deal with the Rowdies to renovate Al Lang stadium (supposedly with private funds, although many suspect annual public rent/maintenance subsidies).
Nothing is likely to happen without MLS awarding the city an expansion franchise...which is
unlikely to happen (IMHO) without the Rays deciding their future first. Neither the league nor the Rowdies like their prospects of drawing 20,000 fans to Downtown St. Pete if the Rays are still there, possibly in a new stadium.
Some tweeters suspect MLS loves the referendum news, solely because it ups the ante on other cities competing for expansion franchises:
Rough translation: "Listen, we'd love to let you and everyone else in, but bidding wars is bidding wars, jack." https://t.co/HyoePUF0oB
— Empty Seats Galore (@EmptySeatsPics) May 3, 2017
But, as always...time will tell. In other recent sports business news:
Detroit's stadium "renaissance" is apparently only a renaissance for sports teams owners, who appear to be cannibalizing economy from the rest of the city.
The state of Florida spends nearly as much money every year on professional sports stadiums as it does maintaining the Sunshine State’s top tourist attraction, its beaches. However, my latest WTSP investigation found the author of so many economic impact reports that support public sports subsidies may not be the expert economist state leaders believe he is.
The resume of Dr. Mark Bonn, a professor at Florida State University’s Dedman School of Hospitality, boasts of dozens of reports compiled for municipalities all across Florida, including some statewide organizations. Bonn’s side company, Bonn Marketing Inc., recently received $23,000 from just one study, commissioned by the Toronto Blue Jays and city of Dunedin to show the economic impact of spring training.
But emails uncovered by WTSP suggest Bonn encouraged the gaming of numbers to help justify a large public stadium renovation project. And several established economists call Bonn’s work deeply-flawed, resembling marketing propaganda more than an economic analysis; which may be appropriate, since Bonn’s background is in marketing, not economics.
Fuzzy Math
Bonn’s economic impact estimates have become the go-to statistic for politicians who either don’t know better or don’t care. But it doesn’t take an expert economist to recognize his reports often make unfair assumptions to get to a rosy conclusion about his clients’ projects.
For instance, Bonn’s recent report that claimed the Blue Jays created $70.6 million in economic impact for Pinellas County each year failed to take into account the fact that many out-of-town visitors who came for baseball attended multiple games; Bonn’s report considered every ticket-holder for every game a unique visitor to the county. He also seemed to forget in his initial draft to take into account that many spring training ticket-holders were Pinellas County residents.
Bonn’s Blue Jays report also failed to take into account some basic economic principles, such as substitution (where one business, such as baseball, cannibalizes economy from other local businesses, such as movie theaters or restaurants, rather than create new economy) as well as “leakage” (where money spent locally, such as at Dunedin’s stadium, doesn’t stay locally because out-of-state businesses get much of the revenue).
And a public records obtained by 10Investigates revealed Bonn was encouraging his clients to use inflated numbers to make their case for taxpayer subsidies stronger.
Emails sent by the Blue Jays revealed apparent frustrations at time with their consultant, including a suggestion on Dec. 17, 2016 that Bonn use more realistic numbers in one of his calculations.
Bonn responded, “This is your call, but as your consultant, I do not recommend going down this path, as it generates only a negative outcome and provides a good argument to defeat your proposal.”
Emails also indicate that Bonn was concerned with preserving robust estimates. And he suggested removing the methodology from his report to reduce the number of questions county leaders might ask.
The investigation also found:
Beaches are barely funded better than pro sports stadiums in Florida, despite a state survey that suggested 26% of out-of-state visitors came to Florida for beaches, versus just 6% for sports.
Many local counties allocate far more bed tax dollars to sports venues than beaches, including Pinellas.
Dr. Bonn teaches wine tasting and marketing at FSU, but not economics.
When asked why economists take such issue with his work, Bonn said, "well, I have economics classes...it’s basically a fine line."
When asked how he could suggest using bigger numbers to get to a desired result, Bonn said "it’s natural, I’m a consultant."
When asked if being a consultant is different than being an economist, Bonn responded, "no; I consider myself an economics background."
Last year, the Rays' estimated value, according to Forbes, "only" grew by $25 million. Well, what a difference a year can make.
According to the newest Forbes MLB valuations, the Rays' franchise is now worth $825 million, a 27% increase since last year and nearly a 400% increase since Stu Sternberg bought the team in 2005.
Of course, the Rays are still the league's least-valuable franchise (A's are next at $880 million), thanks to the fact that everyone is getting really really rich from TV and digital deals.
Forbes estimates the Rays pull in $205 million a year in overall revenues, with $32 million in operating income.
Basically, everyone's getting rich. Especially the highest-valued teams (Yankees - $3.7B; Dodgers $2.8B; Red Sox - $2.7B).
So as I say every year, this is just one more piece of evidence that any "problem" in Tampa Bay is not the fans' problem, but simply an issue of the league not sharing enough of its profits across its smaller-market teams.
The City of St. Petersburg and the St. Petersburg Area Chamber of Commerce will make its ‘Baseball Forever’ stadium campaign pitch today at 4 p.m. The 43-page plan will be presented at Tropicana Field - presumably behind closed doors for now - although the documents are public.
I'll post some more info later tonight, but check out @StadiumShadow on Twitter for the latest developments throughout the day.
BREAKING (1of3): #StPete will present its Baseball Forever stadium pitch to #Rays today at 4pm, followed by 530pm pep rally at Fergs...
Of course, the Rays don't play in Tampa. Tropicana Field is in St. Petersburg, which was not lost on fans. But Budweiser's response seems to indicate the slight was unintentional/ignorant:
Hey, at least Bud's sponsoring $5 Friday night stadium beers. The only catch: you have to drive to St. Pete to get them.
The City of Tampa may have a highlight reel to show off its successful 2017 College Football Playoff championship, but Hillsborough County doesn't seem to have the tax receipts to prove the event was an economic success for the region.
Initial data, just released from the Florida Department of Revenue, show no spike in taxes collected in Hillsborough County from sales in January 2017, when it hosted the national championship and a number of large events surrounding the game. The data will be reviewed and adjusted by the state next month.
While many factors play into a county's tax collections on any given month, Hillsborough saw just a 6% gain in tax receipts from the same month in 2016, on-par with the state's 6% growth from the same time period. Hillsborough's gain was also consistent with previous year's reports, where the county posted 4-6% gains most months compared to the same periods in 2015.
Pinellas and Pasco counties also posted similar tax numbers in January 2017 compared to their 2016 trends, each up 4% from 2016's reports. Polk County saw the bay area's best January 2017, reporting 12% better sales than from the previous January.
When Tampa landed playoff championship week more than three years ago, Hillsborough Commissioner Ken Hagan claimed the event would bring somewhere between 1,700 and 1,800 full-time jobs, as well as $250 million to $350 million in economic impact.
However, that kind of revenue would have generated an extra $17.5 million to $24.5 million in sales taxes, which there seems to be little evidence to support.
While it is difficult to determine all of the factors for taxable sales countywide, supporters of the national championship game point to large crowds gathering at Tampa-area hotels and establishments the week leading up to the game as proof the event is good for the economy. But economists are quick to point to tax data, which often refutes the robust claims of major events.
Rob Higgins, Executive Director of the Tampa Bay Sports Commission, told 10News the numbers from local hotels and Tampa International Airport were extraordinary. But overall, Hillsborough collected $127 million in taxes from January 2017 sales, compared to $120 million in January 2016.
FLORIDA'S BASEBALL FAILURES: Rays beatwriter Marc Topkin lands above-the-fold today with a look at why, entering their 20th season, the Rays have not been able to prove Tampa Bay is a viable baseball market...and why so many around MLB are disappointed in the Florida baseball experiment. (Yet Commissioner Rob Manfred still maintains he's "optimistic.")
PAYING FOR A PARK: Joe Henderson strikes the perfect pitch in a column about why the Rays are stuck between a rock and a hard place moving forward on the Stadium Saga. Hint: it's the same reason this blog has lamented about for years...neither MLB nor the Rays want to foot the bill.
UNCERTAINTY: Times columnist Dan Ruth muses about the lack of certainty in the Rays' future, especially when it comes to paying for a stadium.
MONTREAL: MLB has reportedly told Montreal it can play Rays-Jays home games at Olympic Stadium in 2018, but that would require either the City of St. Pete or the Toronto Blue Jays to give up three home games, which is unlikely. Meanwhile, Maury Brown reports Montreal isn't as close to landing a team as they'd like to think.
BASEBALL: And of course, there's all that on-field stuff too. The Times has a nice special section this morning worth picking up. Or, find the coverage online.
The Times' editorial board published its annual Opening Day editorial, complaining about the slow pace of the Stadium Saga for an eighth running.
The gist is pretty much the same every year, but the specific fears have evolved:
2014 - 2016: Please just hurry up and do something!
2010 - 2011: St. Pete losing leverage in negotiations
The opening graf lays out what is likely an overly-aggressive timeline for the Rays & local politicians...but give them credit for optimism!
The Tampa Bay Rays open their 20th season Sunday in sold-out Tropicana Field with new turf, new concessions (a $13 grilled cheese burger!?), new players — and a familiar discussion about prospects for a new stadium. By Opening Day in 2018, there should be a site selected for the next Rays ballpark and a general agreement on how to pay for it. The continuing uncertainty is unhealthy for the Rays and for a region that is enjoying a growth spurt but cannot afford to lose major-league baseball.
That's unlikely to change in the next 12 months. But at least the Times isn't contributing as much to MLB's fearmongering as it used to back earlier in the decade.
Although, it's good to see they're not afraid to recycle a lede:
The sellout crowd at the Tampa Bay Rays' 14th season opener tonight at Tropicana Field will find new food choices, a new playing surface and plenty of new players. What the franchise needs to ensure its long-term future in the region is a serious conversation about a new stadium.
That included Heat owner Mickey Arison, Jags owner Shahid Kahn, and some guy named Michael Jordan...but surprising to some, nobody from the Glazer family. And both Jeff Vinik and Stu Sternberg have a ways to go still.
My answer was that we'd likely see more Steve Ballmer's buying teams, but it doesn't mean they'll be willing to lose money on them.
A $5 million contract may be monopoly money to most of these billionaires, but realize that most of them got rich by being shrewd businessmen & businesswomen. And they don't like running businesses at a loss.
So while Tampa Bay is hoping someday for next Mark Cuban - a rich guy who doesn't seem to care as much about the bottom line as he does winning - the reality is, the best any city should hope for is more Jeff Viniks: owners who are shrewd enough to run their franchises as a loss leader, so they can advance their other business interests (real estate) while hopefully (most years) enjoying success on-the-field/ice/court as icing on the cake.
It's a well-covered issue on this blog, including a 2012 post that ironically came after a John Romano column proclaiming the Rays "are as good as gone." I asked, "how many more fans are needed to warrant the investment (in a new ballpark)":
Thirty-thousand? That would bump the Rays up to 15th out of 30 teams and would mean an extra 870,000 fans a year. But 30,000/game seems unsustainable given the fact that the Marlins only drew 27,400 in their first season and playoff teams like Cincinnati and Baltimore only drew 28,978 and 26,610, respectively, this year despite their modern stadiums.
Twenty-five thousand? That would bump the Rays up to 24th in the league in attendance and mean 465,000 more fans a year. But there's a big question if the Marlins could draw that many next year or if the Rays - by moving from a county with 900,000 residents to a county with 1.1 million residents could either.
Twenty-three thousand? Is it worth $500-600 million for 303,000 fans a year? If the ticket average is $25, that's $7.5 million a year for the Rays. Add parking and concessions and maybe it's $15 million a year for the Rays. Might just be cheaper for Pinellas and Hillsborough Counties to hand the team an annual tax credit.
Romano's 2017 take on the same issue questions how much revenue the team would need to make a real investment in a new ballpark:
For the Rays, this has always been a mathematics question. If they can boost their revenues $15 million a year in a downtown Tampa location, then they would invest a certain amount in construction. If a new stadium on the Trop site only boosts their revenues $5 million a year, then one might assume their investment would not be as high.
The difference at the Trop site is there is an abundance of property that does not have to be purchased, and the Rays currently hold the development rights through their stadium use agreement.
Those rights could go a long way toward deferring the team's costs, and they would allow the Rays to be partners in whatever development goes up around the stadium.
This doesn't mean a site in downtown Tampa won't suddenly become available at a better asking price, but the odds seem a lot less likely than a week ago.
What's now clear is that St. Pete is still a viable location, and that Hillsborough voices are less optimistic than in the past. All of which makes the Trop site seem a lot more attractive today.
Of course, readers of this blog knew Pinellas always had viable locations, since its got the most available tax money. And, if we are to learn anything from Atlanta, it's that MLB teams don't care quite as much about ballpark location if they can make a bundle of profit on real estate and ancillary development.
