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City could gross $680 million on Gas Plant redevelopment

Mark Parker

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Despite the St. Petersburg City Council voting 5-3 Thursday to discuss a Tampa Bay Rays stadium straw poll, residents will not have a chance to take a nonbinding vote on the agreement. Screengrab from city documents.

The St. Petersburg City Council will soon discuss the minutiae of plans to redevelop Tropicana Field and 86 acres of prime downtown real estate for the first time.

Mayor Ken Welch will kick off a monumental Committee of the Whole meeting at 1:30 p.m. Thursday. City administrators have prepared a 108-page presentation that features previously unreleased details surrounding a new Tampa Bay Rays ballpark and the Historic Gas Plant District’s long-awaited redevelopment.

Among the highlights are return on investment estimates, comprehensive funding plans and that the team could annually wear “St. Petersburg Rays” uniforms. The opening slide states:

“We are developers, architects and planners. We are experts, analysts and environmentalists. We are parents, citizens and community members. This diverse group of organizations, individuals and perspectives have come together to do something that matters. We have come together around a baseball team and a historic plot of land to build something special, something meaningful, something lasting.”

A graphic highlighting the new ballpark’s functionality.

Economic impact

City officials expect to receive $680 million from a $417 million total investment paid through tax-exempt bonds. The money will fund city services, affordable housing projects and various programs.

Most of that return – $475 million – stems from gross property tax revenues over 30 years. Pinellas County government would receive $415 million, which will also go towards its general fund.

The Rays/Hines development team will invest $5.8 billion towards a new ballpark and a reimagined Gas Plant District. Local government agencies would receive $1.46 billion in total tax revenue over the 30-year agreement, with $200 million going to area schools.

The public-private partnership’s goal is for small, minority and women-owned businesses to complete 30% of construction work. The agreement’s 10% guaranteed minimum would provide $500 million in revenue.

The stadium

The design phase for a new ballpark and its infrastructure must begin next month to meet the Opening Day 2028 target date. City officials would have to approve final agreements in March to start construction in November 2024.

The Rays will contribute $700 million towards the new ballpark. Pinellas County tourism tax dollars will provide $312.5 million, and city officials committed $287.5 million.

The team will assume all operational responsibilities, including traffic management – a $400,000 annual cost – security and capital repairs and improvements. They will receive all revenue from the stadium, naming rights and sponsorships over a 30-year term.

An aerial map showing the redevelopment’s various aspects.

City officials can use the ballpark for events and will define the location and duration of St. Petersburg-branded signage. They will receive a suite, field tickets and parking passes.

While Major League Baseball must approve the initiative, the public-private partners plan to adopt an annual “St. Petersburg Rays” uniform day. The city can also use the stadium before, during and after local emergencies.

The team will provide at least 5,000 annual tickets to families earning less than 80% of the area median income (AMI). In addition, apprentices and workers considered “disadvantaged” must complete 15% of all construction hours.

The Historic Gas Plant’s redevelopment

City administrators listed separate plans for the land surrounding the ballpark according to “target” and “minimum” goals. The development team previously outlined the target development metrics.

The minimum development would still feature 600 onsite and 600 offsite affordable and workforce housing units. However, the number of market-rate residences would drop from 4,800 to 3,800, and the plan would eschew the highly touted 600 senior living apartments.

Hotel keys and commercial, office, retail, meeting and open space significantly decline under the minimum development. The Rays will provide $15 million to build affordable housing under either metric.

The deal stipulates that the Rays/Hines will construct the first 300 rent-restricted units. The city will dedicate 300 to those earning 60% or less of the AMI.

Another 300 are for those making 80% of the AMI, 100 are at 100%, and the remaining 500 are for those earning 120% of the AMI or less. The agreement includes a $25,000 per unit penalty for not constructing the rent-restricted units according to schedule.

A graphic showing “target” and “minimum” development plans.

The city will lease three stand-alone properties to the development team for 99 years. The Rays will pay $105.27 million on a parcel-by-parcel basis for 60.9 acres valued at $279.36 million.

However, administrators deducted $64.22 million for open space, $10.61 million for affordable housing property and $3.26 million for the Woodson African American Museum of Florida. They also credited the Rays $50 million for their “intentional equity” efforts and $53 million for infrastructure contributions – bringing the net land value down to $98.27 million.

The city will pay its $130 million infrastructure commitment over four phases. The Rays/Hines will pay an additional $50 to $70 million and any cost overruns.

 

 

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9 Comments

9 Comments

  1. Avatar

    Ryan Todd

    October 27, 2023at11:58 pm

    Pigs could fly if they had wings.
    Bad developments fail.

  2. Avatar

    HAL FREEDMAN

    October 27, 2023at5:03 pm

    There’s another elephant in the room. The Rays’ use agreement gives them a share of the development proceeds, if development begins prior to their agreement ending in 2027. Frankly, the Rays should not have been allowed to bid on a project where they get a share of the proceeds…a clear conflict of interest. What’s the hurry? Stop the process, wait until 2027 to re-bid the project. Then the City gets all of the proceeds. If the Rays are so in love with the Tampa Bay Area, they’ll stay. If they were in it solely for the money, they may leave.

  3. Avatar

    HAL FREEDMAN

    October 27, 2023at4:54 pm

    I’m confused. The City turned down the Moffitt project for 2 main reasons: 1) Moffitt wanted the land at a discount. This project comes with a much larger land discount for the Rays & Hines. 2) The Moffitt project did not have a high enough percentage of “affordable” housing included on the site. The % of affordable housing on site here is far smaller.

    The City/Mayor Welch gives lip service to these important outcomes (affordable housing and fair prices for City-owned land), but bottom line: keeping a baseball team is more important than keeping a promise to those displaced by the current Trop site.

  4. Avatar

    John Donovan

    October 27, 2023at8:23 am

    Repurpose city and county private suite in stadium to a common use benefit for citizens of St Petersburg. IOW – the money can be better spent elsewhere. Team already going to give away 5000 tickets annually. Go ahead council members and county commissioners and explain why you need free tickets to baseball games to do your job. I’d love to hear that explanation.

  5. Avatar

    Chris L.

    October 27, 2023at1:52 am

    This article is a summary of the Ray’s sales brochure. Where is critical analysis and opposing points of view? Where are interviews with expert economists, 85% of whom oppose public financing of stadiums. Where are the financial projections of how much money the Rays’ owners will make from this deal? Other cities receive significant share of revenues, our City will receive none. Without revenue sharing this is not a business deal, it’s corporate welfare.

  6. Avatar

    Thomas G Clark

    October 26, 2023at6:42 pm

    Get off my lawn!
    Buy my house!

  7. Avatar

    Velva Lee Heraty

    October 26, 2023at4:41 pm

    Carl and Mark both make valid points. I remember both the PR around the new Pier and the football field size art work on Spa Beach. Both were riddled with deception. The Pier was 90 million over budget. The art work size, stanchions, and origin was grossly minimized. It was, in many opinions, outright thievery and trust for that city administration was never regained. My devil’s advocate asks, what’s to prevent that from happening again? Is there going to be an ethical oversight committee divorced from the many profiteers? If not, why not? I remember sitting in city council meetings many a day watching a parade of money requests some with no purpose (“50 million, just in case we need it”) Not one request was refused. That’s where the 90 million overrun for the new pier came from. Please Mr. Mayor, get that ethics, compliance committee together now.

  8. Avatar

    Mike C

    October 26, 2023at3:45 pm

    This plan is aspirational and riddled with unbound assumptions and risk. Does the city have actual business people working the plan? Respectfully, what will the unemployment be at completion? the area is currently around 3% with help wanted signs everywhere. What metrics are we using to measure a “stronger middle class”? An influx of tech businesses would help for sure, but were not attracting tech. Philanthropic giving needs to come from the private sector and individuals? How will this generate revenue and what is the projection upon completion? I want to push the I believe button but this plan seems, misdirected, aspirational and unbounded.

  9. Avatar

    Carl

    October 26, 2023at8:02 am

    The economy of St Petersburg will certainly change as a result. Look for a much stronger middle class, significantly lower unemployment and hard to employ percentage, a cultural and social shift forward and of course a far more progressive philanthropy. A model for the nation.

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