Thrive
Will St. Pete help fund the Rays’ share of infrastructure costs?
St. Petersburg administrators are considering implementing a “springing special assessment” to fund the Tampa Bay Rays and Hines’ share of the Historic Gas Plant District redevelopment’s infrastructure costs.
According to documents obtained by the Catalyst, Councilmember Lisset Hanewicz requested a discussion with city and project attorneys regarding the new financing mechanism in a Feb. 12 email. That followed a Jan. 14 email from Chris Roe, an attorney with Bryant Miller Olive, to city administrators.
Roe wrote that a city assessment against the “subject property” could potentially fund the Rays/Hines’ $54 million contribution to infrastructure upgrades. “That’s one thing that’s came out about the deal after the term sheet,” said Hanewicz, who awaits the discussion.
“I don’t know the details. I still don’t understand the whole thing.”
The city will pay for its project contribution, capped at $287.5 million, through tax-exempt bonds and tax increment financing (TIF). That includes $130 million of $180 million in estimated infrastructure upgrades.
“Why are we taking out municipal bonds for their portion … to save them what – financing costs?” Hanewicz asked rhetorically. “That’s not something that’s normally done. I think these are details that the public needs to understand.”
In addition, Hanewicz said administrators recently asked their county counterparts to amend the Intown Community Redevelopment Area (CRA) initiative that encompasses Tropicana Field. The two governments contribute to the CRA’s TIF fund, which finances redevelopment projects within its boundaries.
The CRA agreement ends in 2032, and Hanewicz said administrators asked for a 10-year extension to accommodate the $6.5 billion Gas Plant redevelopment and a new ballpark. They also hope to increase their funding contribution from 50% to 60%.
“They’re asking for more flexibility to make sure they can keep more money in there to pay the bonds,” Hanewicz explained. “They’re telling me that it’s an insurance policy. The issue is you’re taking money that will go into the general fund back, that pays for other things, to pay back bonds for the stadium.
“I’m still trying to get a full grasp of how it affects the city in total.”
U.S. Rep. Kathy Castor (right) and St. Petersburg City Councilmembers Lisset Hanewicz (center) and Ed Montanari talk at ThriveDTSP. Photo by Mark Parker.
Hanewicz said she has several project concerns but is not necessarily for or against the deal. However, she stressed the importance of discerning the details.
Government officials must perform due diligence on behalf of constituents, she said, which takes time. She also noted that St. Petersburg’s deal will receive national scrutiny.
While the team’s lease at Tropicana Field ends in 2027, Hanewicz said the Rays could file a one-year extension. She said there is no official requirement to vote on approximately 13 legally binding contracts by May – or even October.
“This is the largest deal in the city’s history,” Hanewicz added. “It’s the largest amount of debt that the city has ever taken. Yes, there can be lots of benefits. At the same time, you’re looking at the largest public subsidy …”
When will local leaders vote on a stadium deal?
City documents obtained through a public records request note that administrators once planned to conclude development and funding agreement negotiations Thursday. The draft timeline, dated Dec. 14, states that the city council would approve those contracts and an interlocal agreement with the Pinellas County Commission at a March 21 meeting.
However, Hanewicz called the ever-changing schedule and deadlines “arbitrary.” She said the timeline is a “moving target at this point,” and “if I don’t have enough time to review stuff, people are going to hear about it.”
Initially, the plan was to vote on a $1.3 billion ballpark in “early 2024.” In February, city officials pushed the date to May at the earliest.
A site plan of the $6.5 billion redevelopment project. Photo of provided rendering by Mark Parker.
At a March 5 commission meeting, County Administrator Barry Burton said attorneys are still reviewing agreements. He also noted that City Administrator Rob Gerdes set a three-week deadline to finalize documents.
“The devil is in the detail,” Burton said. “And we’re in the heart of the detail right now.”
After the meeting, Commissioner Charlie Justice told the Catalyst that the commission would not rush the process. “I know the team is trying to make a timeline for construction,” he added.
“But it’s better to get it done right than to get it done fast.”
The council last discussed the momentous plans together in October 2023. At the time, Rays president Brian Auld stressed the importance of approving final agreements in March to start construction in November. He said diverging from the timeline could jeopardize the project.
Auld recently said the Rays/Hines development team is “working diligently with the city and county to responsibly move forward as quickly as possible for final approval this spring,” in a prepared statement. “Our deadline remains the same – to be ready for first pitch on Opening Day 2028.”
HAL FREEDMAN
March 9, 2024at3:41 pm
Besides the financial idiocy of this deal, here are some additional thoughts:
1) A deal to build a Moffitt Cancer & Research facility in St. Petersburg was foolishly rejected by our Mayor. Why? His reasons were: the land was being purchased for too big a discount. And, there was not enough affordable housing on site (17% of the total dwelling units). The Gas Plant deal is worse in both cases. 22 acres GIVEN AWAY and the rest sold for a small fraction of its value. And only 10% affordable units on site….and maybe not for 25 years.
2) The Community Benefits Advisory Council was told to review only the 60, non-stadium acres. Why? The entire 86 acres is owned by the city and should provide benefit to the city.
3) Why the rush? If the Rays really want to stay, they can play at the Trop for an extra year or 2. If their real goal is just to take their share of the development proceeds, increase the team’s value with a new stadium (built with TAXPAYER money), and sell the team, they want to pressure us into a contract. Frankly, if we wait it out until 2027, the Rays would no longer share in the development proceeds at all.
Velva Lee Heraty
March 9, 2024at11:31 am
Thank you all who have posted with such detail. I and many others are totally against a new stadium so support all of the above. It needs to go elsewhere. The land belongs to the people who live here and call St. Pete home. The proposal reads like greedy marauders have come to plunder with total disregard for the residents who ultimately will bear the financial burden AND loss of community. WE DON’T NEED THEM NOR A NEW STADIUM FOR THE SELECT FEW SEASON TICKET HOLDERS.
John Underhill
March 9, 2024at10:51 am
Good bye the new Nashville Rays
Karyn Mueller
March 9, 2024at9:02 am
While serving as a volunteer member of the Community Benefits Advisory Council, I had the opportunity to review the draft development terms in detail. This led to my strong NO vote, that the Community Benefits are not nearly adequate compared to the massive transfer of public assets in the form of 80 acres of extremely valuable land in addition to $130 million in city funded infrastructure. (This doesn’t include the $600 million the Rays are seeking for the stadium).
Remember that the City “adjusted the value” of the 60 acres of land by subtracting both the $50 million in Community Benefits AND $53 million for developer contributions to infrastructure to arrive at a “value” of $97 million, justifying the Rays/Hines purchase price of $105 million. (See 10/26/23 Committee of the Whole meeting abe agenda on City website).
As it stands, the developer is asking for the following:
1-buying the 60 acres of land for $25 million
2-receiving $130 million in city funded infrastructure
3-not paying more than $4.4/million a year for the land (and only a total of $50 million in first 12 years)
4-ability to sell parcels after not even having paid for them (“right to assign” in draft terms)
5-deferred payment of property taxes
The developer is not contributing the $50 million in Community Benefits, they paying for the land with it and then outlining the ways they will allocate the money
The developer only has to pay $25,000/unit to opt out of building the affordable housing. Why would they build it at all if it costs 80% less to just pay the penalty??
The Community Benefits Advisory Group recommended increasing the affordable housing penalty to $150,000/unit. However, Rays/Hines indicated during the CBAC meetings they would not make any changes.
There will be office buildings built in the development which is a benefit to the City of Saint Petersburg but the value has not been disclosed.
Now the developer is asking for even more, they are asking the City to give them the remaining $53 million in infrastructure up front and for the residents to hold the note.
This is a nightmare development scenario and the public needs to stand up to prevent City Council from allowing it to proceed.
The development will stop if one more council member in addition to Floyd, Hanewicz and Muhammad vote no. Please contact Council members Gerdes, Gabbard, Figgs-Sanders, Driscoll and Montanari today!
The earliest the vote may occur is currently May, 2024.
This is not a done deal, the public needs to get involved in a substantial way to prevent this debacle.
The MLB wants to expand and add two teams. The MLB calls the shots, not Stu Sternberg. MLB wants the Rays to get this deal done. The City holds the assets and hence the leverage, not the other way around.
City Council, tell the Rays to come back with a reasonable proposal and say NO to this outrageous and embarrassing rip off.
Robin Davidov
March 9, 2024at7:56 am
Agreed. Most pro sports stadiums are built with Stste money (Buffalo, Baltimore, Las Vegas) or by large Cities. Asking a small City to pay $1.2 billion and forgo rent and property taxes is inadvisable and irresponsible. The Rays need to share revenue and pay taxes like other pro sports teams.
Alan DeLisle
March 9, 2024at7:46 am
It gets worse everyday. I told you Rays/Hines would never pay $54 million for infrastructure. Remember the so-called Term Sheet with this expense allocated to the Ray/Hines. NOT SO. Just another hit to “affordability” for whoever lives there. Do you really think it makes sense that St Pete taxpayers pay $130 million for infrastructure and Rays/Hines pay nothing? Taxpayers should pay $0 for infrastructure and get full value for the land associated with development, like the Atlanta Braves deal. Don’t tinker on the edges like the Community Benefits Committee did that was lead by a Councilmember who had already folded and doesn’t have a clue. Thank God one Councilmember is doing her job and digging deep. It will get worse I promise you. Oh, and the national stories about how St Pete got taken by Wall Street are already being written. Welch gave away the store and the mall. Keep digging St Pete. You deserve so much more!!
Richard Philip Blommaert
March 8, 2024at6:12 pm
If the Rays want a new stadium, which is demographically in the wrong place, they should bear the entire cost. Some economic benefit studies question wether it makes economic sense to incur massive debt to benefit a group of wealthy individuals when we have other, greater, concerns.