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It's time for an update. Let's catch up.

*The Rays announced their 'Here to Stay' campaign in October 2023, and we think now is good time to reflect, take a look back and bring everyone current where things stand today.


Mayor Welch and the City of St. Petersburg have been negotiating a deal with the Tampa Bay Rays baseball team and Hines, a real estate development company, regarding the 86-acre Gas Plant site, where the Rays currently play. The proposed deal includes building a new baseball stadium on about 22 acres and developing the balance of the 86 acres with offices, residential areas and other uses.


The Rays Hines deal is a proposal - it is not a done deal. We don't think it is a fair and needs to be renegotiated.

The proposal calls for both St. Petersburg and Pinellas County to pay for a significant part of the costs of the development, and it also calls for St. Petersburg to sell Rays/Hines the balance of the land for development. The proposal requires a vote to proceed by both the St. Petersburg City Council Members, and the Pinellas County Board of Commissioners. Currently, that vote is not expected until at least late May.


 

Who am I and why am I involved?


I am a local resident with a professional background in finance and putting deals together, which gives me unique insight into the mechanics of the Rays Hines proposal. More importantly, I have children and grandchildren in the community, and this decision will impact St. Petersburg for years to come. I like baseball well enough, but not at any financial cost to the community. Moreover, I'm finding that the deal facts are just not that well known by the public, and instead various myths have prevailed.


I founded and ran Raymond James Affordable Housing for over 30 years. I have a great deal of experience evaluating multi-million deals, acting as a fiduciary for billions of dollars of other peoples’ money. The St. Petersburg City Council Members and the Pinellas County Commissioners find themselves in the same position - having to evaluate the Rays/Hines proposal and make a decision as to whether to invest billions of dollars of St. Petersburg and Pinellas County residents' resources.


Working with Pinellas County Schools I founded Lunch Pals – the lunch time mentoring program that focuses on helping the kids who need us most – kids who come from challenging backgrounds. I have been mentoring for 8 years and currently mentor a fourth-grade student at Lakewood Elementary School.  It has given me a perspective on the great needs in our community.   I care about the city and about its future for my children and grandchildren, and for everyone's children and grandchildren. Again, similar to what the St. Petersburg City Councils Members and the Pinellas County Commissioners have to consider - what matters most to our community and where should we spend our resources.


 

Where are we today with the Rays/Hines proposed deal?

 

The Rays currently play at Tropicana Field with a lease through the end of the 2027 MLB Season. The owners want a new stadium. St. Pete has negotiated a deal with the Rays and Hines – a major private developer from Texas – to build a new stadium at the same location with the city and county agreeing to pay for half the cost. In addition, the deal provides that the city sells about 64 acres (the parking lots for the current stadium) to Rays/Hines to develop as mixed use with apartments, offices, shops, etc.  


The city and county representatives now have the fiscal and fiduciary responsibility to review the deal and then vote. They are the checks and balances. See St. Pete City Council: Slow Down for more on this important review period.


Gas Plant Land: The stadium was built in 1990 with the hopes to attract a baseball team. At the time, the area around the stadium was not highly developed. Baseball started there in 1998 and its arrival did not serve as an economic catalyst.

 

It wasn’t until about 10 years ago that the city started its new trajectory to bring it to where it is today. Why? It began slowly and grew over time... with initiatives like The Dali, a new pier, all of the condos on Beach, then all the restaurants on Central, and then all the apartments. It was also the rising business stars of companies like Tech Data, Publix, Raymond James, Jabil, Outback and many others. Covid even had a big impact by bringing new permanent residents migrating from other states, dramatically pushing up property values. And these new folks came for all of the same reasons... in addition to our lack of state income tax, and of course our beaches. Clearly, our growth downtown was not attributable to the Rays.


Where are we now? With the surrounding areas of Grand Central, Edge, Innovation and Arts Districts...the Gas Plant site, previously classified as industrial zoning with limited uses, has now become extremely valuable 'urban core' land – and probably the largest, most desirable developable property on the East Coast.

What this means – while we like baseball and want it to stay in the Tampa Bay area, this site is ready for development with or without the Rays. 


 

The Cost to the City and County


City of St. Petersburg = $1.6 Billion Total Cost to the City

  • $700 million: the money with interest the city would have to borrow to pay its share of the stadium costs. The Rays do not share any revenue to reimburse the city.

  • $400 million: lost real estate taxes. The team also pays no rent to offset the lost real estate taxes.  

  • $500 million: Rays/Hines get a virtual option for 30 years to buy the 64 acres $105 million – the land is now worth $600 million. 


Pinellas County = $800 Million in Total Cost to the County

  • $600 million: the money with interest the county is paying toward the stadium. 

  • $200 million: lost real estate taxes.  

 

What would be fair: 


  1. Profit Share: Since city and county pay ½ the cost, they get half the team profits and share is profits if the team is sold.

  2. Rent: The team pays rent equal to the lost real estate taxes.

  3. Fair Land Value: Rays/Hines pay fair value for the rest of the land.  

 

Myths about the Deal


Myth #1: The promise of1200 Affordable Housing Units to be built as part of Rays Hines development at the Historic Gas Plant District.

Reality: There is no guarantee of any affordable housing. The developer can pay a mere $25,000/unit to get out of building the promised affordable housing units.

Myth #2: Baseball has and will continue to drive economic growth and jobs.


Reality: For the first 20 years of the Rays at the same location, there was no attributable economic growth to baseball; with the exception of the primary benefactor being Ferg's Bar. Since then, the area around the historic gas plant land has grown organically and seen a recent surge due to migration patterns and relocations spurred after Covid. What has drawn so many to choose St. Pete? Answer.... it's the beaches, the cultural attractions, the vibrant downtown - all driving economic activity into our hospitality and the retail sectors. Also, the resulting real estate development that has contributed to job creation. And the growth of major area businesses and relocations here. According to the St. Petersburg Area Economic Development Corporation, Coworking Cafe recently ranked St. Petersburg #1 in Florida for work-life balance, an important factor in the city's growth.

**Economic Impact Studies: More than 130 stadium studies have shown that stadiums and their ancillary developments have limited economic impact for the communities where they are based. There are decades and decades of experience with stadiums across the country that show the minimum impact of stadiums. Think about if you were going to re-locate your company to an area, would baseball or any professional sports team be the reason? *Reference: See our compilation of U.S. Stadium Deal research.

Myth #3: A stadium will be an 'anchor' tenant; spurring surrounding development.

Reality: St. Petersburg has proven to be the anchor, not the Rays. St. Pete has grown and boomed in recent years, and not because of the Rays. And we will continue to grow, with or without baseball, as long as we manage and maintain the fiscal health of the community. We are continually ranked high by both citizens and business. Thinking about the Rays and the stadium as an anchor is simply outdated thinking.


Retail malls need anchor tenants like Macy's or Saks to draw in people to shop, and other stores want to be near them. This is not this situation with a stadium. The Gas Plant site seeks to attract office building and apartment building developers and tenants. Do you think people who work in an office building want to be next to a stadium? When they are trying to drive out, the people coming to a game will be driving in - creating congestion. Do you think people want to live next to a stadium? Imagine wanting to take your dog for a walk when a baseball game is ending?

Myth #4: The stadium will be used and 'activated' 300+ days a year.

Reality: The Rays have played in Tropicana Field since 1998. As best I know it, besides a few high schools graduations, the stadium is never used except for baseball. The Rays keep most if not all of the revenue from other events. If they could not generate other uses for the last 26 years, what is changing now? Studies show that virtually every stadium sits vacant almost every day there is no a game.

Myth #5: The $50 million commitment in intentional equity will restore promises made to the Black community.

Reality: The deal terms specify that Ray/Hines will commit $50 to intentional equity. However, the deal terms do not commit to a timing for that commitment. Furthermore, $50 million is only 4% of the public funds and public owned land taxpayers are contributing to the development.

Myth #6: A great public-private partnership.

Reality: The city and county are paying for half the stadium, and over 30 years not collecting any taxes on the value of the property. Here's the clincher.... the Rays are not willing to share in the team profits, or profits if the team is sold. And the city is selling Rays/Hines the extra 64 acres (the current parking lot area) at a fraction of its current value. Where is the "partnership"?

Myth #7: If the city does not agree to the deal as proposed, the Rays will leave the area, and the Gas Plant property will sit fallow, and never be successfully developed.

Reality: First, it is highly unlikely that the team will leave the Tampa Bay area as it is one of the biggest TV markets in the U.S. Major League Baseball is not going to lose this market. And, as we hear it MLB want to expand, not relocate and move around its existing teams. In addition, the team would be more successful if it was closer to the population center where the majority of its fan live, and that's nearer to or in Tampa, where there are 2.4 million people within 30 minutes of downtown. The team can find a better location to increase attendance by considering other locations in the area. The Historic Gas Plant District property is prime for development - with or without baseball. Land in the area has been selling for up to $20 million per acre. If the Rays choose not to make the current deal work by offering better terms, the Gas Plant land can be successfully developed without Hines. St. Petersburg can simply hire another master development firm to draw up plans, in the same way that Hines has done working with the Rays. And in so doing, we cut out the middleman (the Rays) skimming money off the land deal. An additional benefit is that the city can control the development.

Myth #8: The proposed deal will not increase taxes but instead increase prosperity of the entire community.

Reality: The Rays/Hines deal will cost the City and County $2.4 billion in taxpayer resources that would otherwise be available for high priority needs, putting pressure on budgets, taxes and impact the cost of living. There are no independent facts that explain how betting $2.4 billion on a stadium will return increased prosperity for anyone - except the Rays and Hines economic impact studies that they funded as part of their proposal.

Myth #9: There is a great deal of support for the proposed plan.

Reality: Most people don't know the facts of the deal. But when they do, they don't like it. A survey conducted by the League of Women Voters of the St. Petersburg area found that of nearly 800 registered voters who responded, 80% said no - the city and the county should negotiate a better deal. Letters to the Tampa Bay Times are also overwhelmingly opposed.

Myth #10 - Resident sports teams confer 'Big League Status' to the cities where they are located, making the Rays and a new stadium important to provide status to St. Petersburg.

Reality: Cities don't become big league because they have a stadium. It's the opposite. Sports team owners want to build stadiums where the population is growing, and they have more economic opportunity. For example, no one would argue that Los Angeles wasn't a big-league city when it did not have a professional football team between the years of 1995-2016. Then the owner of the Rams recognized how valuable the Los Angeles market was and built the SoFi stadium because of the tremendous opportunity to be there - and they even built it with their own money. And as for St. Pete, the Rays were less than enthusiastic about a new stadium in their current location until the city and county offered a $2.4 billion subsidy.

 

Why does all this matter?


Neither St. Petersburg nor Pinellas County has endless resources to spend, and at the same time they have high priority needs. Why would we transfer $1.6 billion of St. Petersburg's resources and $800 million of Pinellas County's resources to Hines and Rays, both owned by billionaires, when there are no reasons to do so and when we have so many other high priorities that need funding to help our community grow, provide opportunities to everyone, control the cost of living, and continue to attract tourists?


Flooding: St. Petersburg has immediate needs of $760 million for the Stormwater Master Plan to alleviate flooding. At the rate the city is currently able to commit funds, it will take 75 years to correct all the problems. If you live in one of the areas affected it certainly matters. But it should matter to all of us if we care about our neighbors. It also should matter, because if we don't fix these problems, real estate valuations will go down in impacted neighborhoods, fewer taxes collected there... , and increased taxes for the rest of us. With a saving of $1.6 billion, we could address the flooding issues much more quickly.


Property Taxes: First and foremost, there is no way that real estate taxes won't be impacted. Like everything else, government costs are going to continue to go up. And when you take $2.4 billion of city and county resources and divert them to a recreational amenity that won’t be used by the majority of the taxpayers, where it the money going to come from to pay the city's bills?


Affordable Housing: St. Petersburg has huge demands for affordable housing. It clearly matters to residents who are facing increasing rents or the cost to buy a house. But it should matter to all of us because if the people who are employed by our hospitality industry (ex: restaurants and hotels), cannot afford to live here, this will impact tourism, and our economy. With a saving of $1.6 billion, we could create a $250 million Citywide Affordable/Workforce Housing Trust to underwrite new construction and help residents buy and fix up homes, which would also provide jobs to local contractors.


Support for Children and Families: St. Petersburg has too many kids who aren't able to achieve their full potential, get a great education and secure good jobs. It matters to these kids and their parents, but it should matter to all of us. First, because it's the right thing to be concerned about, but second because it affects all of us. When kids don't get good jobs, and then don't have insurance and wind up using the emergency rooms for health care. That raises health care costs for all of us. Worse, is if these kids get in trouble - we all pay for the cost of jails, courts and increased police protection. With a saving of $1.6 billion, the city could create a $50 million College Opportunity Fund, providing post-secondary scholarships for 2,500 kids who would not otherwise go to a college or a training program, and to pay for additional support for the public schools.


These are just a few of the areas where a saving of $1.6 billion could be spent on important priorities that matter - priorities that I hope everyone would agree should be addressed before giving St. Petersburg's limited resources away to a private business.


Pinellas County is in a similar situation. Almost $600 million of its commitment will come from the Tourist Development Tax collected from short term renters. The county will be spending $20 million per year for 30 years, about 22% of the annual tax collected. This matters as the tax is meant to be spent on promoting tourism and Pinellas County's own Visit St. Pete/Clearwater survey, shows that only 3% of tourists express interest in attending a sporting event, while over 40% are most interested in the beaches, museums and the restaurants. Without a commitment to a stadium, it can allocate these funds to promote what matters to tourists.


 

Baseball is a civic asset and retaining the Rays within the Tampa Bay market is desirable. However, the Rays/Hines proposal is not a fair deal. It should be renegotiated, or St. Petersburg should and can develop this very valuable property without them. The City Council Members and the County Commissioners need to take their time and due their due diligence – so what matters to our community come first. And once they have the facts – share them with constituents and get their input before any votes. 

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1 Comment


Guest
Apr 09

Dear Mr. Diner,

Will you consider running for city council or county commissioner? I look forward to seeing your name on the ballot.

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