Petersburg— Mayor Ken Welch chose the Tampa Bay Rays’ proposal with Hines to renovate Tropicana Field and its 86 acres on Monday.
It’s now difficult. St. Petersburg, Pinellas County, and the Rays will discuss how a $1 billion, 30,000-seat, open-yet-covered ballpark fits into the reconstruction and who will pay for it.
If the Rays sign a 30-year lease, the team, county, and city would share the cost of building a new ballpark, including construction overruns, according to a December draft term sheet. How will that look?
“Until we had the mayor’s announcement, we really couldn’t move that forward,” Barry Burton, the commissioner for Pinellas County, who has been in charge of talks with the Rays, stated. “Now’s the time where we start to do the heavy lifting.”
The team was ready to contribute its fair share, according to a statement from Rays president Brian Auld.
“We know that we are going to have to contribute more to the ballpark than we once thought because that is what it is going to take to remain in Tampa Bay,” he said. “That has been the goal from Day 1.”
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Bonds, bed taxes, and beyond
The Texas Rangers’ Globe Life Field, which opens in 2020 for $1.2 billion, is similar in price to a new Rays stadium’s estimated $1 billion.
The Rays may finance half of a new stadium. The Rays proposed a $700 million split between Tampa and Montreal in 2021, with the franchise paying half.
The city requested proposals to spend “a minimum of” $75 million in downtown property tax income on infrastructure, including stadium enhancements. The team requests $150 million in public infrastructure assistance. “That’s not something we’re discussing,” Burton said of any property tax income exceeding $75 million.
Tropicana Field is in the Intown Community Redevelopment Area, a special tax zone to improve redevelopment projects. This tax district funded the new St. Pete Pier, Mahaffey Theater renovations, and Trop construction and upgrades.
Hines/Rays proposed a new tax district for funding. That would require moving the Gas Plant District from Intown to the new special tax district. County commissioners must approve the move. A city-commissioned third-party research concluded the consequences of such a shift would be uncertain, although the city would carry some financial burden, as in the current special district.
The Rays will seek county funds from a 6% bed tax on hotel stays and short-term rentals, which earned $94.7 million last year. By law, 60% of bed tax income must fund Visit St. Pete-Clearwater and other marketing operations, while 40% must pay for beach nourishment and tourism capital projects.
Burton said the Rays had proposed “all kinds of sums” for a bed tax. However, other ventures will compete. As the project has grown, the Dalí Museum has requested $15 million from the county. Meanwhile, Clearwater Mayor Frank Hibbard is considering bed tax funds for $300 million spring training complex upgrades for the Philadelphia Phillies.
Hibbard, a Tourism Development Council member who advises county commissioners on bed tax expenditures, said the Phillies’ proposal should come by spring. He believes Clearwater hotels’ bed tax revenues will fund the team.
“North county deserves some of that money,” Hibbard added.
Bed tax revenue can also be used to repay city bonds for pro sports stadium construction or repair. 1996. Pinellas hiked the bed tax by 1% to pay off St. Petersburg bonds to prepare the Trop for MLB at the Devil Rays’ request.
Burton said the panel has only considered the bed tax as a county funding source.
“I would venture to say that commissioners would be in unison that that would be the only source of funds,” he said.
Welch said St. Petersburg would not request too much bed tax.
“We want to make a request that is reasonable,” On Jan. 30, Welch announced a developer. “And right now the focus is for the stadium, not any other uses of the bed tax on the site.”
The county could pay differently. St. Petersburg and the Rays might request 1% sales tax funding from Penny for Pinellas, which funds countywide projects.
Hibbard predicted county bed tax-backed city bonds. If that happens, the interest could increase the three sides’ agreement.
“You’re going to be putting more in because you’ve got debt service,” Hibbard said. “Let’s say it’s $500 (million) total. That’s more like $800 million when all the interest is added in. Especially with interest rates being where they are right now.”
A ‘strong financial package’
The Rays predicted $4 billion in development expenditures, excluding the ballpark. They’ll finance $1.8 billion.
After building the residential, commercial, and senior living properties, Hines and the Rays would buy each parcel from the city at an agreed-upon sum.
Pinellas County would lease the ballpark’s land for 30 years. The ballpark would be public when not in use for baseball. The city and county might hold a limited number of community events at the park. Another stadium finance option.
A New York investment firm engaged by the city and county to broker a stadium agreement estimated that local governments might earn $9.4 million annually from sponsorships, leases, events, parking and ticket fees, and sales tax on concessions. That’s $129 million today.
Welch, a 20-year county commissioner, said he chose the Rays and Hines plan in part because of the team’s solid financial package and his experience working with Ray’s management.
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“They have once not been honest and forthcoming in my work with them as a county commissioner on any issue,” he said Monday. “I expect that to continue.”
Ed Montanari of the St. Petersburg City Council stated the council has not been updated. As a fiscal conservative, he wants the Rays in St. Petersburg, but not at any expense.
“They have to pay their fair share,” he said.
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