Thrive
City to borrow $85 million for Trop repairs, debris removal
The City of St. Petersburg will secure an $85 million line of credit from Bank of America to pay for ongoing storm recovery costs.
Administrators believe borrowing the money is prudent given federal uncertainties and outstanding costs related to debris removal and Tropicana Field repairs. City council members discussed the unique measure and fiscal policy amendments at an April 10 committee meeting.
The Budget, Finance and Taxation Committee unanimously approved allowing tax-exempt debt to include a credit line, increasing allowable variable rate debt from 5% to 10% of the city’s total and excluding the $85 million from previously established borrowing limits. Officials can make principal prepayments with insurance or Federal Emergency Management Agency (FEMA) proceeds and reduce interest costs.
“If emergencies happen, this is what the city is going to have to do,” said Councilmember Lisset Hanewicz. “And, a lot of times, it’s because it makes financial sense because it’s cheaper to borrow the money.
“You don’t have the $100 million sitting there to take care of this – because you have to use your money in more effective ways.”
The meeting came a week after the council approved spending $22.5 million to replace the Trop’s storm-damaged roof and meet obligations under a use agreement with the Tampa Bay Rays. Officials believe total repairs remain in the $56 million range established in November 2024.
St. Petersburg has already spent about $10 million on planning and mitigation efforts at the Trop. After paying a $22.5 million deductible, the most the city could receive from stadium insurance is $22 million.
The cost for storm debris removal was $125.8 million. FEMA provided a $37 million advance, and administrators expect to receive another $88 million in reimbursements from the organization.
In January, Erika Langhans, director of budget and management, said St. Petersburg would ultimately only pay $14 million of its $274 million in storm costs. However, the presidential administration has since discussed abolishing or restructuring FEMA.
In addition, uncertainty surrounding tariffs and interest rates has exacerbated the problem. Jay Glover, managing director of PFM Financial Advisors, said Thursday that the “very conservative” city has never considered “anything other than traditional fixed-rate debt for financing options.”
“This is a unique circumstance whereby we think this line of credit is the best tool for the city to use,” Glover said. “It really hasn’t happened before because we haven’t been faced with this situation …”
He explained that the city previously took advantage of historically low interest rates between 2% and 3%. Glover said his firm and officials “locked in some tremendously attractive long-term fixed interest rates.”
Borrowing costs have increased over the past two years. PFM estimated that the city would pay about 4.5%, or $4.7 million in interest, on a fixed-rate loan.
The firm believes officials will save about $1.5 million by utilizing a 3.94% variable rate credit line. “If variable rates do dramatically increase, obviously, that’s an issue,” Glover said.
“I don’t really see many circumstances where the Federal Reserve is going to be increasing that rate anytime soon,” he added. “It’s either going to remain the same or probably come down, actually … given all the turmoil we’re facing right now.”
St. Petersburg spent about $126 million on storm debris removal. Photo: Peter Wahlberg.
Councilmember Richie Floyd noted those were speculative assumptions and that variable rates could increase. Glover said the city could take out a fixed-rate loan to pay off the credit line’s balance if it is no longer fiscally advantageous.
Hanewicz asked how the council should direct its fiscal focus with “everything that’s going on in the world.” Glover said maintaining a healthy fund balance – which the city has – that provides flexibility to address unforeseen circumstances should be a priority for any local government.
He said PFM was “very comfortable” with the city issuing $300 million in tax-exempt bonds to subsidize a new Rays stadium and the Historic Gas Plant District’s redevelopment. Glover believes St. Petersburg now has “substantial capacity to add additional debt.”
“You have flexibility now, again,” he continued. “So, we’re very comfortable with where the city’s at.”
Glover called the previous debt policies overly restrictive. Councilmember Brandi Gabbard agreed and believes the changes reflect lessons learned during an unprecedented hurricane season.
However, she and her colleagues expressed concern over switching from a biannual to an annual rate analysis. Glover pledged to monitor the situation daily and provide the committee with quarterly reports.
Hanewicz noted the city has already borrowed $50 million to cover storm costs, and the 2025 hurricane season begins in less than two months. “You’re going to see improvements made and changes in policy across our organization,” said Assistant City Administrator Tom Greene.
“It’s important to learn from your experiences that you haven’t had before. So, I think it’s the right time to be taking a look at this.”
bradley cochran
April 15, 2025at5:46 pm
So the city cut insurance on the Trop right before hurricane season… and now they’re borrowing $85M to clean up the damage? That’s just poor planning.
JAMES GILLESPIE
April 15, 2025at4:45 pm
THIS IS FLAT OUT DESAPPOINTING NEWS THOUGH SOME OF THE COST WAS BEYONG CITY CONTROL. CITY BORROWING MEANS IT HAS LIMIT DOING OTHER THINGS WHCICH NEED TO BE DONE AND PAID FOR.
Bradley
April 15, 2025at12:10 pm
So the city cut insurance on the Trop right before hurricane season… and now they’re borrowing $85M to clean up the damage? That’s just poor planning.
Lucas stone
April 15, 2025at11:06 am
It’s tough to watch people still struggling post-storm while the city lines up millions for stadium repairs. There’s a time and place for that, but right now the priority should be getting families the help they need. Public money should start with public needs.
Julia Burke
April 15, 2025at10:47 am
I do not pretend to fathom all the fiscal and budgetary complexities of running a city…BUT…there seem to be so many unknowns and assumptions around the stadium’s future. The City is playing craps with our safety, stability and resilience. There is SO MUCH that needs attention in the infrastructure, repairs, etc., and more storms are coming. I hope the City does not lose sight of this, with all their puffed-up, high-rolling negotiations…
S. Rose Smith-Hayes
April 15, 2025at10:08 am
The City cut the policy provision in half to save funds on the premium. This is a losing proposition. The Rays offered to fund the renewal of the current stadium and to stay and play here for a while after the original deal was scrapped. Now they borrow $85 million and do Not ask us Taxpayers anything. This too shall fail big time.
Joseph Boone
April 15, 2025at9:54 am
This is the real cost of major hurricanes… cities having to take out credit lines just to handle repairs and debris. And with hurricane season starting again soon, hope they’re making everything stronger, not just replacing what was there
Alan DeLisle
April 15, 2025at5:33 am
Demand a plan for the redevelopment of the Trop before this goes any farther. If the city spends all this money on the Trop and allows itself to get tied up with the Rays again to control the sites’ destiny, then there isn’t much hope for the city. The only reason to fix the Trop is to give the city back control of the site. Taxpayers should know what the plan is now.
Hal Freedman
April 15, 2025at12:06 am
Jeff: Our City risk department, in its inimitable wisdom, reduced it ti $25M last March to save $275,000 in premiums.
Ryan Todd
April 14, 2025at6:53 pm
Stop the madness. The Rays will never play in the Trop again. Let’s negotiate a settlement and start tearing the Trop down. Is anyone confident that the repairs can be complete before the next hurricane makes landfall? Will a repaired roof be able to withstand another storm? We shouldn’t gamble with any more public funding.
Settle and move on.
Jeff Harr
April 14, 2025at3:45 pm
I thought the city had. $100 million insurance policy on the Trop. What happened to that?