In July, I posted my comments below. Now, after two hurricanes, it is clear we cannot afford the Rays/Hines deal and the county commissioners should not vote to borrow funds for a new stadium. We need to save the money for the more frequent need to re-nourish our beaches - from the hurricanes that are likely to be in our future.
Here is my July, 2024 email to the County Commissioners -
County Commissioners:
I want to provide my thoughts on the workshop you had recently about the Rays/Hines proposal - why I remain confounded by this stadium deal.
For what problem are we trying to solve? Is it to use the TDT (1.) to keep the Rays in St. Petersburg at any cost, or (2.) to strengthen the county's economic and employment level by investing in innovative marketing programs (as spelled out by St. Pete Clearwater)?
I hope you will agree it has to be the latter.
How does spending $20 million of Tourist Development Taxes - every year for 30 years - on baseball fit into the goal of the TDT?
The facts say it doesn't. The facts speak for themselves.
Baseball does not drive economic development or job growth. That is an absolute fact. There have been 130 studies to prove it. In addition, look at the history of the Rays. The Rays have been playing at Tropicana Field for 27 years and nothing developed around the stadium for the first twenty. It was the other growth factors that have made St. Petersburg boom - the museums, the pier, the restaurants - and then all of the residential construction that has made St. Pete a great live-work-play city. And when Covid came, and work from home became the norm, people started moving to St. Pete because of all of the above, and because of the beaches and no income tax.
Tourism has flourished for all of the same reasons. And it is not because of the Rays. The Rays have had almost the worst attendance for all their existence. Why wouldn't they? The stadium is in the wrong location - not near the Tampa Bay population center and hard to get to. And why would tourists travel from cooler climates to watch baseball when it's so hot down here in the summer when most of the games are played? Per the St. Pete/Clearwater survey 40% of visitors come for the beaches, the pier, the museums and the restaurants. Only 3% come for sporting events.
Jobs? Does anyone really believe a stadium creates good jobs except for the players and the small team staff? All the rest are part-time, low-paying jobs selling beer and peanuts.
What drives job growth are knowledge-based industries - financial services (e.g. Raymond James), tech, health care (our hospitals), marine sciences and our universities.
The Gas Plant site is ready for development and a stadium won't speed the process. The county will get increased taxes no matter what. The property will be developed with or without the Rays and Hines. This property is one of the most valuable large-scale commercial properties in the U.S. A stadium does nothing to encourage the development of offices and residential - the likely key components of the development. The Rays/Hines proposal shows lots of "entertainment-type development is that really needed with all of the restaurants on Central? If anything, it seems obvious that the Rays want an entertainment district to hopefully increase attendance.
The City of St. Petersburg is giving away the developable land for no good reason, using valuable community resources so badly needed for what really matters including storm water and sewer repairs ($5 billion). It is giving up the land only because the Rays are demanding they give it up - so they can make a huge profit to pay for their share of the stadium.
So - why would we commit over 20% of the TDT for 30 years to build a stadium that will not provide economic or employment benefits? How is such an enormous share of the TDT focused on innovative marketing programs? Baseball is not innovative. Shouldn't we be spending the TDT to promote what is bringing people here?
Commissioners - as I have written before, I have no dog in this hunt. I am retired and I only care for what is best for my children and grandchildren and everyone's children and grandchildren. I only care for what matters to the people of Pinellas County. But I have over 30 years of experience leading Raymond James Affordable Housing, evaluating thousands of multi-million-dollar real estate transactions, acting as a fiduciary for billions of dollars of investors' money. This is the same for you. I could not allow myself to be swayed by pretty pictures. I had to rely on the facts. I hope you will do the same.
Commissioners - some additional thoughts after listening to your workshop.
The cost to the county is based on the fact that the city and the county are being dupped. The Rays get to buy all the development land way below value and that will pay for their share of the stadium. If the land is going to be sold so cheaply, why shouldn't the team pay for the whole stadium, saving all the county money.
No one is asking if Hines can sell its interest the day after the deal closes. The answer is yes. Then if this happens where is all the experience to develop the property that you are counting on to make this deal viable?
Here are the comments from City Council Member Hanewicz about transfers and other issues with the agreement: "I have included my public comments on the HGP vote for your reference. Obviously, I could not include everything and focused on some major issues. My guess is that the County Commission may focus on the opportunity costs with using bed tax money for the stadium vs. beach renourishment (and infrastructure). However, they may be interested in ensuring that there are enough guarantees that the development will proceed as planned and that we could hold their feet to the fire given that they are expecting property tax revenue based on the redevelopment of the land. It should be noted that the forecast ad valorem provided to the county and city originally is based on the target development plan (which is not required) vs. the minimum development requirements (which is what the agreement requires). I do not know what the forecast 30-year cumulative gross property tax revenue ad valorem is for the county if only the minimum development requirements are met under the agreement. For the target development plan, it was forecast at $415 million not taking account inflation. In contrast, the city was forecast at $475 million for target but only $340 million based on minimum development requirements also not taking into account inflation. Article 15 – Transfer & Assignment provisions. Although they added “as long as Developer remains a Hines Affiliate, a Rays Affiliate, or both a Hines Affiliate and a Rays Affiliate,” that still does not provide City Council oversight or guarantee a developer will come in that has the equivalent financial strength, experience, and reputation as Hines. The Rays or its owner do not have any development expertise, which is why they brought in Hines. As an example, I pointed out at our Committee of the Whole 2 days before the vote that the owner of the Rays, Stu Sternberg, could sell the team along with all or some of the rights to the redevelopment. Hines could be bought out. Our own outside counsel agreed with me. We do not know the terms of the agreement between Rays and Hines. I would not expect Stu Sternberg to give up all the rights of the redevelopment given that it is in an opportunity zone, which provides tax benefits to investors who elect to temporarily defer tax on capital gains if they timely invest those gain amounts. So, there is potential for the current owner and/or a new owner of the Rays to benefit from the tax incentive provided by opportunity zones, which I think increases the likelihood of a new owner wanting such a benefit and wanting to include in the negotiations getting a portion of the 65 acres. The approvals required by MLB as to any sale of the team (contained in the Stadium agreements) has nothing to do with the redevelopment of the land or protecting our interests. As you know, any sale and its terms would be negotiated by the parties and it could include a new owner wanting to bring their own developers if the purchase part of the land for redevelopment. If that were to happen, we have no oversight. I would expect all potential transfers to fall under the permitted transfers (given the types of transfers allowed) as opposed to under 15.1 Prohibited Transfers, which requires City Council approval. Also, the definition of excusable development delay (pg 7) gives them a lot of flexibility given the language and the lack of no drop-dead dates. Their assumption is that there is an inherent incentive to develop the land. So basically, any of the minimum development requirements could be extended based on this definition of excusable development delays, which means that any forecast ad valorem revenues will not materialize as expected."
There was discussion about all the events that will take place on the property. But the conversation glosses over the fact that the tourist will be coming to the proposed 5000 seat event building. Thus, it is not the stadium that will bring the tourism but this other facility. This Booker Music Center is not on the list of Minimum Requirements. That means that Hines has no obligation to develop or build this facility. In their proposal, Rays/Hines state that the benefactor of the Center could be an after school music program which is currently operating at a loss.
No one asked about how many parking spaces are being lost, how many parking spaces in the two planned garages, and then where are the the rest of the cars going to park. The traffic congestion in/out of the downtown area hasn't been analyzed. Commissioner Peters specifically pointed out her experience trying to get to WWE and back. The congestion that likely will result will hurt tourism.
$20 million a year for 30 years! How much do you have set aside for the risk of storms and beach re-nourishment? If a hurricane comes there will be no TDT. Do we have a complete analysis of revenue and potential expenses? Currently the beaches are badly eroded.
How is this project going to benefit the citizens? You say you have limited uses of TDT funds. Well, if building a stadium is not that important, lower the TDT and make the cost of tourism less. Or use the TDT to lower costs of parks, etc. Or use the TDT to promote what brings people here and helps jobs and businesses.
The CRA? This is one of the most valuable and viable property in the country. It is not blighted.
Why not require building a stadium to at least a category 5 storm?
The mayor mentioned the Florida Tax Watch report and said that this deal is in the middle of deals. Who cares? We need to do what is right - not just because others have made bad decisions. And the deal is not in the middle. The Tax Watch Report said that the team should (1) share revenues,
The mayor says he is not selling land for highest and best use to justify the $105 million land sales prices - over 30 years. That is true regarding the land set aside for affordable housing and a museum. But if there was a new appraisal and it showed that the rest of the land available for commercial uses - about 40 acres - was worth $15 million/acre that land would be worth $600 million! The appraisal was conducted before parcels were up zoned, before the city committed to paying $130 million in infrastructure, and before the city agreed to finance the developer's share of infrastructure. It also did not take into account that the City and County are paying for a stadium, which by the City's admission, is driving the value of the HGPD. The County is not meeting its legal obligation to sell its land, and this can open it to challenges.
