TAMPA ó Whatever work is under way on financing a new Tampa Bay Rays stadium remains hush-hush for now as the clock ticks toward Dec. 31.
Thatís the day the window closes on a three-year deal with current host St. Petersburg allowing the team to explore across the bay.
But itís safe to say stadium backers are looking at a combination of ways to pay the projected $892 million cost for a ballpark in the teamís preferred Ybor City location ó among them, a community development district, tourism tax revenues, naming rights, corporate sponsorships and a team contribution.
And one other option, called an Opportunity Zone, that has captured the imagination of deep-pocketed investors, developers and politicians interested in reviving depressed inner city neighborhoods.
The creation of bipartisan congressional sponsors as part of the sweeping 2017 GOP tax cut plan, the Opportunity Zone legislation is so new the Internal Revenue Service hasnít issued final rules yet on how to use it, although further guidance was issued by the federal agency on Friday.
The new rules allow corporate capital gains to be invested in the zones and lengthens the time period of investment. Additional rules are expected by the end of the year.
Those changes could make the Ybor City zone even more of a financing solution for the Rays ballpark.
No one knows exactly how it would work, but it could mean that hundreds of investors seeking to reduce their tax payments would end up owning a piece of the ballpark.
And the absence of IRSís final say on the subject hasnít stopped money managers like David Sillaman from setting up an Opportunity Zone fund aimed at spurring investment in the new areas ó including one that takes in the proposed stadium site at State Road 60 and Channelside Drive.
"With these new rules, I firmly believe there is no reason why the stadium couldnít be fully funded by opportunity fund investment," said Sillaman, president of Ybor City-based Sikari Luxe Opportunity Fund, a real estate and investment firm.
Sillaman said heís heard plenty of interest among investors since he set up the fund in August, but he declined to say how much money has been committed. The Rays have told him itís too early to discuss the potential of the zone, he said.
In the city of Oakland, though, where the Major League Baseball team is also angling for a new stadium, theyíre already trying to figure how the new tax incentive might fit into a financing plan. One of two sites under consideration, now the location of the Oakland-Alameda County Coliseum, lies within an Opportunity Zone.
"The Aís and the city are aware of this designation and are working to understand how it may be leveraged," city spokeswoman Karen Boyd said in an email.
Hereís how Opportunity Zones work: If you sell off an investment, say 100 shares of Apple stock, you can delay paying the tax you owe on the profit by investing it in an opportunity zone. If you leave your money in the zone until 2026, you get a tax break of up to 15 percent.
Another option is simply investing cash directly. If you leave the money alone for 10 years, you donít pay any federal capital gains tax on it.
In either case, the value of your investment might grow or shrink, as would any other security.
Opportunity Zones were created by Sens. Cory Booker, a New Jersey Democrat, and South Carolina Republican Tim Scott. Governors in each state identified a total of 8,761 areas and they were approved in June by the U.S. Treasury Department.
In Florida, Gov. Rick Scott recommended 427 zones, including 60 in Hernando, Hillsborough, Pasco and Pinellas counties. Tampa Mayor Bob Buckhorn included the Ybor City site on his list but it was rejected until Buckhorn appealed to Scott and the state reversed its decision.
"I think it provides a great tool to incentivize developers to come in," said Buckhorn, whose priority is reviving an economically depressed area ó baseball stadium or not. "I think there is a big upside for developers to build in these opportunity zones once we figure out what the rules are."
Some critics of the zones complain that encouraging private investment in low-income areas will speed gentrification, giving advantage to big-ticket, up-market development at the expense of affordable housing and locally owned businesses. Even sponsor Booker has raised these concerns.
In Tampa, stadium backers like Ron Christaldi ó a leader in whipping up private support for the project ó have expressed optimism that Opportunity Zones might play a vital role in paying for a new ballpark.
Christaldi did not respond to an interview request for this story. In fact, with less than three months remaining before the St. Petersburg deadline, none of the key players from the Tampa business community, the Rays and Hillsborough County are returning requests for information about their progress.
The Opportunity Zone option introduces the possibility that a third party, not the team or Hillsborough County, might own a new stadium, Buckhorn said.
"Thatís the challenge in this circumstance," he said. "The Rays may or may not be comfortable with that. Thatís entirely a decision they will have to make."
An Opportunity Zone, Buckhorn said, could work in tandem with another geographic tool for reviving depressed areas ó community development districts. In these districts, bonds can be issued to fund improvements like a baseball stadium and repaid with taxes and fees generated by the added economic activity from the improvements.
Someone would have to guarantee those bonds, though, and Buckhorn sees little appetite for the city to take on that responsibility.
He said private investors might be willing, though ó maybe even Brightline, a railroad and development company that operates service between Miami and West Palm Beach and plans to reach Orlando by 2021.
Tampa may be next. Brightline has until Nov. 7 to submit a bid for a Tampa rail extension.
The company will identify a specific site or sites at that time, said Bob OíMalley, a Brightline spokesman. Talk of anchoring a Rays ballpark or taking the lead in financing is premature, OíMalley said.
"Itís a little early in the process."