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How will we know if the Rays’ $1.3B stadium deal is a good one?

League of Women Voters of the St. Petersburg Area

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Kansas City-based Populous will provided architectural and engineering services for a new Tampa Bay Rays ballpark, with a focus on community integration and accessibility. Rendering: Rays/Hines.

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On Oct. 2, 2025, St. Petersburg will make its last payment – $1.4 million – of what it still owes on the current existing Tropicana Field stadium, and then Tropicana Field the stadium will be debt-free. And, soon thereafter, demolished.

Last week, the City of St. Petersburg announced it had reached a deal with the Tampa Bay Rays, the baseball team that plays at the stadium, to collaborate on the construction of a $1.3 billion replacement stadium. It will be built on a City-owned 17-acre site, valued at $70 million. Pinellas County and the City will split the public’s cost to build the new $1.3 billion stadium. It is not clear how the City plans to pay for its share of the $600 million. Will it issue a sale of tax-exempt bonds, which act the same as a loan and will have to be repaid with interest? The County will reimburse the City each year for its share from a pledge of tourist development tax (bed tax) collected on hotels, rental properties, campgrounds, etc. The City could be obligated to pay about $24 million/year for 30 years. At the end of the 30 years, the City and County will have paid about $1.3 billion, with the City’s share alone totaling $650 million.

We at the League of Women Voters of the St. Petersburg Area want voters to understand the risks and benefits of this deal, so they can have an informed understanding of how their money is being spent by the City and County and how their land is developed.

A year ago, in reaction to the fact that the City had received admissions on its new request for proposals from developers interested in building a new stadium and developing the surrounding former Gas Plant neighborhood area, we decided to begin a study of publicly-funded stadiums. Why? Because of our mission to make sure citizens are educated as voters and about their communities. We held meetings with community leaders and members to discuss what they would like to see in the stadium and Gas Plant development.

We interviewed sports business experts and researched economics journals. We looked at other cities and counties and the deals they entered with sports teams. We have looked at mistakes made by them as well as contract terms favorable to cities that other teams have adopted, and the business risks St. Petersburg and Pinellas County may be taking on. We also found that often state governors provide the public funds for sports stadiums, as in Maryland, New York, and Nevada. Other governors, including Florida’s, will not contribute to the effort. So that leaves St. Petersburg and Pinellas County taxpayers on their own.

We were surprised to find one common conclusion by most of the economists published in economics journals; that cities should give less and take more when it comes to their interactions with stadium developers.

Economists Dennis Coates, Brad Humphreys and J.C. Bradbury recently conducted a comprehensive review of more than 130 studies of the economic impact of sports teams and stadiums. Their findings were published in Global Sport Matters in June 2022. One of their conclusions is “First, and perhaps most important, nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.” We decided to explore what economists meant.

Here are some questions worth considering to decide if this is a good or bad deal for the City, County and community. These are questions we need to have answered before the deal is approved by the City Council and County Commissioners.

1. Other teams pay rent to and share profits with their host cities. Will the Rays do either?

We taxpayers need to know what the business terms are in similar contracts and the allocation of risk for changes which are out of the public agencies’ control. For example, some contracts include a share of a team’s increase in value. When the first Rays game was played in 1998, the team was worth $200 million. Today, Forbes values the Rays at $1.2 billion. Under the current Rays contract, St. Petersburg gets none of the team’s profits. By contrast, in the contract for Marlins Park, the City of Miami was entitled to 5% of any profit the owner made in a sale of the team. When the team (purchased for $158 million in 2002), was sold for $1.2 billion in 2017, the City of Miami and Miami-Dade County received $5.5 million. While the City of Miami’s share was small, this demonstrates that teams recognize cities’ parts in increasing the value of the team. A good deal for St. Petersburg would include similar sharing.

In many cases, the sports team pays rent, a lease payment, or a payment in lieu of property tax. After all, St. Petersburg is giving the Rays the use of a $70 million property which it could otherwise rent to others. The Rays have not paid any of these in the past 25 years.  The City of Miami will receive at minimum $3.5M in annual lease payments from Miami Freedom Park Soccer (which includes an adjacent 58-acre development), which is being built with no public funding. Many public entities pay less than 50% of the cost of a stadium; Miami is paying $0 for the construction of the Freedom Park Soccer stadium. Again, by contrast, the Rays will pay the City of St. Petersburg $0 rent for the 17 acre stadium site and only $109 million the entire 60+ Gas Plant site. The City’s own appraisers have valued this land at $330 million.

Now let us look at revenue sources for sports teams, including ticket sales, naming rights, TV and streaming sales. Many teams share revenues with the local government partner. The City of St. Petersburg currently receives a small share of ticket revenues, about 50 cents per ticket. However, the Rays have one of the lowest attendance rates in the league, even in 2023. Knowledgeable sports professionals do not think attendance will increase substantially after the opening year of the new stadium.

So, what should the City do instead of relying on a small share of ticket revenues? Jay Cridlin, economic development reporter for the Tampa Bay Times, wrote in a piece published Sept. 25, 2023: “Even if they are not yet buying tickets, fans are showing greater interest in the team. Game viewership on Bally Sports Sun is up 26% year over year in the Tampa Bay market, according to Nielsen Media Research data provided by Bally. And streaming via the Bally Sports app is up 220% from 2022.”

Commissioner of the MLB, Rob Manfred, told Andrew Marchand and John Ourand of the New York Post (9/27/23), “If we get there to the betting off the screen, it’s going to be a separate, digital feed that the true gambler can opt into.” Will the City share in future revenues?

Andy Kostka and Pamela Wood writing in the Baltimore Banner (9/28/23) explain that in 2022 the Baltimore Orioles paid rent/revenue of $6 million; however the amount was as low as $414,500 in 2020. As recently as 2016, the franchise’s rent at Camden Yards reached a high of $11 million. The $300 million for improvements to the Orioles stadium will come from State of Maryland lottery funds, not the City of Baltimore.

If the City of St. Petersburg depends on rent and revenue from the Rays to repay their bond debt, then it must be prepared for cyclical economic fluctuations. Future revenue streams must be anticipated. The City’s general funds will make up the difference in bad years, taking away money from government services.

A good deal for the taxpayer would be sharing viewership and streaming revenue. Currently the City receives none of these revenues.

2. Who will pay for ongoing stadium and grounds maintenance?

The Rays claim that Pinellas County and St. Petersburg will benefit from non-baseball day events such as concerts, meetings, trade shows, etc. Who is responsible for marketing the stadium and for paying the cost to operate during those events? What will the City’s share of those revenues be? A good contract will enumerate who is responsible for marketing, operations and maintenance costs for non-baseball day events, and how revenues/costs will be shared.

An obvious bad deal is when the host city is responsible for ongoing maintenance, repair and upgrades. Typically, these contracts include a “change in law” provision making the city responsible for costs if, for example, safety standards require new equipment. The Milwaukee Brewers, for instance, demanded that Milwaukee pay $300 million for renovations after 22 years in their stadium.

One local government had to pay for a multi-million-dollar security fence well after their stadium was completed. Cobb County built a stadium for the Atlanta Braves. Local leaders pitched the ballpark as an economic “Home Run for Cobb,” but five years after its opening, the county ran a $15 million annual deficit to service stadium debt and cover operations. Nashville ran up a $32 million bill for maintenance on its stadium. The city got out from under that debt by issuing bonds for a new stadium for the Titans team. 

What would happen if the stadium was severely damaged during a hurricane? Certainly, there would be insurance. But it may not pay the full cost of repairs or rebuilding. Would the City and County be expected to pay in full or part to cover the difference?

The Rays need to stay for 30 years for the County and City to repay the debt on the stadium. A good contract will protect the County and City if the Rays leave St. Petersburg for any reason. Modernizing the stadium within the next 30 years should be at the Rays’ expense, not the County’s or City’s, unless the expenditure is clearly in the taxpayer’s best interest.

3. What if the economic outlook affects study for the stadium proves incorrect?

The County is basing its support for public financing on the study it commissioned from Victus Advisors, a “market, financial, and economic feasibility consulting firm that specializes in objective research and data-driven recommendations for public assembly venue development projects,” according to its website. The results are the same as many other Victus Advisors studies done around the country; it found that the promises of economic development were worth the significant investment the City and County will make.

But we had some questions about that study. First, the economic benefits are based on the “multiplier effect” model, which while popular with tourism professionals, is rejected by most published economists. Construction jobs will be created whether the city builds a stadium or office buildings, housing, museums or performance centers on the site. Yes, the new stadium will create jobs, but they are primarily part-time hospitality jobs, not the type of year-round, higher-paying jobs our city needs. The Victus Advisors’ study was also done before the business terms in the stadium deal were finalized, nor does it address business risk. For example, these studies do not consider the risks when the bed taxes the County will rely on to pay its share of the $600 million stadium cost fall short of the amount needed to make a payment on the bonds. Cobb County, Ga. (home to the Atlanta Braves) had to spend $2.7 million in taxpayer funds to cover inadequate bed tax revenues during two Covid years.

Economists suggest that sports teams who make promises and projections of benefits should agree to back up those claims by inserting a clawback provision in the contract. How does that work? If, say, the Rays fail to regularly fill the 30,000-seat stadium and thus the City’s revenues fall short of those promised, then the Rays would have to make up the difference between their claim and the actual revenues promised to the City. If the Rays do not agree to a clawback clause, then their claims should be deeply scrutinized. The Victus Advisors’ study suggests that the stadium will be used frequently for concerts. But who is providing proof of that claim? Will the County agree to make up revenues from the bed tax to make up the loss to the City if those revenues do not materialize?

4. What is the potential cost for baseball fans?

The average family of four spends $152/game. We know our community cannot afford to see that cost increase. But we also know that with new stadiums come new concessions, often with much higher price tags, and increased ticket prices. Rays’ fans deserve to know what it will cost to attend a game at the new stadium. This information must be prepared for prospective bond buyers, and it must be made available to St. Petersburg taxpayers as well.

Daniel Epstein, a baseball writer, raised the issue in a Sept. 20, 2023, piece on forbes.com: “By decreasing the number of seats in the stadium and keeping the park in the same general location, the Rays arent trying to sell more tickets than they currently do – so theyll make up the difference by increasing the price. Improving the fan experience in and around the ballpark sounds great -for those who can afford it – but if they are not interested in packing more fans into the park, they will surely pursue wealthier ones instead.”

5. When will residents get to see the actual written deal, and will we be able to testify before the City Council and County commissioners?

At this point, residents have not seen a term sheet or contract, so we do not feel there is enough transparency for taxpayers to be able to have an informed opinion. Voters have a right to review both the term sheet and the contract between the City and County governments and the Rays’ team, and to testify before these public bodies. We are concerned that several elected officials have expressed their support for this exceptionally large financial expenditure before seeing the final deal or hearing from their constituents.

St. Petersburg and Pinellas County could go a long way toward setting a new standard for fair and equitable sharing of risks and rewards in publicly financed stadium deals by sharing answers to the issues we have raised here.

Housing considerations

The Rays’ new plans for the Gas Plant site include building a convention center, convention center hotel, two boutique hotels, a performing arts center, a museum, office buildings and shops. Precious few housing units will be attainable for the 33% of our City’s families who work multiple jobs and have to spend 50% of their income on housing. There is no estimate of how many jobs will be created that will pay enough for people to be able to afford living in the city without spending half of their income on housing. Many of the new jobs will be part-time, low-paying hospitality jobs. 

The City is selling the $320 million site to the Rays for $109 million. Once it is sold, the City has no control over housing prices or rents. The consensus of the League’s community meetings was that most of the site should be leased, not sold so that the City and community retain control over affordable rents for an extended period. The census.gov data tells us that 33% of St. Petersburg households make less than $34,000/year; this includes 8,000 households which are paying more than 50% of their income for housing. Sadly, this need will not be met by the current housing strategy. In addition to housing, the development of the gas plant site is an opportunity to create living wages, full-time jobs so that our high school and college graduates can build a future here. Let us make sure it is not a lost opportunity.

How you can make a difference

Voters and residents have a responsibility to let their voices be heard. We encourage voters to call your County Commissioners (727-464-000) and/or City Councilmembers (727-893-7111) and express your thoughts on this $1 billion public commitment for a new stadium, the sale of the Gas Plant property and public investments in convention centers and hotels. 

The City’s website says that through this project, “the City has the opportunity to fulfill those unrealized promises and bring St. Petersburg new attainable housing, equitable business opportunities, office space, meeting space, open space, and overall equitable and impactful economic development that benefits all.” 

Let us all make sure that this time, the City lives up to its promises.  

The League of Women Voters, a nonpartisan political organization, encourages informed and active participation in government, works to increase understanding of major public policy issues, and influences public policy through education and advocacy.

6 Comments

6 Comments

  1. Avatar

    Alan DeLisle

    October 11, 2023at4:59 am

    Excellent article, starting to get to the many flaws in the deal. When you give up your leverage, this is what you get.

  2. Avatar

    S. Rose Smith-Hayes

    October 7, 2023at11:10 am

    Many of our questions are answered in this article. This deal will Not benefit the City of St. Petersburg, Fl. This deal will not appeal to surviving residents of the Gas Plant area. I do Not see how the City of St. Pete benefits from this deal. We begged them to Not sell the land. We begged the City to continue ownership of this property. How can City Council approve this deal ?????? “Regular” People will not be able to afford to live on this property. “Regular” were duped into abandoning the property.

  3. Avatar

    Polita Glynn

    October 3, 2023at6:44 pm

    Thanks to the League of Women voters for this thoughtful an comprehensive analysis of the deal.

  4. Avatar

    Ryan Todd

    October 3, 2023at5:44 pm

    Tell your City Council rep to vote No on this absurd corporate welfare for the Rays.

  5. Avatar

    Carol McNamee

    October 2, 2023at3:18 pm

    The LOWVSP has done a tremendous service to the community in writing this report. I appreciate the amount of time it took to do this level of deep research and then put the report together. I have been wondering about the answers to these same questions. The League did the work (VOLUNTEER TIME) that the elected officials and the bureaucrats have a responsibility to do before spending hundreds of millions of taxpayer dollars. These elected officials and public employees are paid with tax dollars to do that. So far, with some exceptions, I have not heard any of these points being made. I saw pictures in the news of a meeting of those who make these decisions, in this case it was the Tourist Development Board meeting to discuss the deal. I hoped they
    were talking about the kinds of issues raised by The League,
    and not just more bureaucratic group-think. There is still time for those with the decision-making power to stop this train before it leaves the station. Both The BCC and the City Council must answer these questions to the citizens BEFORE
    any contract is signed. They also need to hold public hearings in their chambers, not at some meeting hall.

  6. Avatar

    Bruce Nissen

    October 2, 2023at12:28 pm

    This article is right on target. There is no way to justify the massive subsidy being givn to the owners of the Rays with public money. Studies are almost UNANIMOUS that public subsidies (especially ones on this massive scale) do not pay off. The public land should not be sold off for a couple hundred million less than it is worth. As it now stands, this is a very bad deal.

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