Thursday, December 14, 2017
Business

Next step for Tampa ballpark dreams: Deciding how to pay for it

TAMPA — Now that Hillsborough County leaders have said where they would like to build a Tampa Bay Rays ballpark, the debate turns to a familiar question:

Who will pay for it and how?

The proposed site, announced by County Commissioner Ken Hagan on Tuesday, is in the Channel District-Ybor City area, where there’s an opportunity to build an urban ballpark with, perhaps, waterfront views and access.

The Rays have not yet said what they envision for the 14-acre site, or how much it will cost. But if recent history is an indicator, building a new ballpark will run between $500 million and $650 million.

And that doesn’t include the cost of acquiring the land, building roads and parking lots, rerouting sewer lines and adding new exit ramps off highways or new stops on transit lines. Hagan also dreams of installing a marina on the nearby Ybor Channel that can bring visitors to the ball game by water, which won’t come cheap either.

These projects are almost always paid for by taking out long-term debt, and the interest on those bonds often puts the final price tag well above a billion dollars.

The Rays have not said how much they’re willing to put toward a new ballpark, but it is unlikely ownership will offer to pay for a stadium outright. And already, the Hillsborough County commissioners who must approve any deal are promising to shield taxpayers from the bill.

"I am not in support of putting any taxpayer dollar commitments for building a stadium," Commissioner Les Miller said.

"I do know one thing: No taxpayer dollars can go to subsidize this stadium," Commissioner Sandy Murman said.

That would seem to put the county and Rays at a likely impasse. But there’s a caveat. What constitutes "taxpayer" dollars is open for interpretation.

Several possible ways to pay for a stadium include the county using money that is either generated by new construction near the ballpark or by taxing visitors. Either would be more palatable to commissioners, who don’t characterize them in the same vein as property taxes.

For example, Hillsborough is close to being designated a high-tourism impact county, meaning it generates more than $30 million a year in tourist development taxes, commonly called bed taxes. The county expects to pass that mark in 2017.

Once it does, it can raise the current 5 cent bed tax to 6 cents. Bonnie Wise, the county’s chief financial officer, said the bonding capacity on that extra penny is about $75 million.

"Let’s look at that," Miller said.

A portion of the ballpark site falls in one of two community redevelopment areas, or CRAs, for Ybor City. Under a CRA, any additional property tax revenue generated as a result of new development there goes directly back into that area.

County officials hope a new ballpark will generate tens of millions of dollars in development around Ybor. The resulting property tax growth could be bonded to help pay for the stadium, though Wise could not estimate how much because it depends on what is built.

It’s an attractive idea because the stadium will spur "more robust" development, Murman said. But she warned that a ballpark can’t suck up all the CRA revenue

"How much can still go to the actual Ybor entities?" she asked.

The third major source is an entertainment tax that would be charged on purchases made at or near the ballpark in the hours leading up to and after a game.

Florida law, however, prohibits governments from levying a sales tax on only some parts of a county. So the businesses there would have to volunteer to collect an additional fee.

The concept is not without precedent. Hotels in downtown Tampa have agreed to charge their customers an extra fee to pay for tourism marketing.

In the past, communities could look to Tallahassee for help. But the appetite there has diminished for assisting professional sports teams owned by the mega-rich and valued at over a billion dollars. Already, a House committee has passed a bill to prevent new stadiums on public lands, and some Republican lawmakers have discussed banning any taxpayer money for arenas.

The county could help offset the cost by trading public land to acquire the site. That’s still giving up a taxpayer asset, but proponents say it could generate more revenue for the county if developed by the private sector.

Wise said the county is looking to other stadium financing deals for creative ideas. Earlier this year, Wise and Hagan visited the Atlanta Braves, who recently opened a facility in Cobb County that included new residential and commercial development.

"Even if it’s not a big money generator … we want to consider it," Wise said.

Hillsborough’s hurdles to putting together a financing package have St. Petersburg Mayor Rick Kriseman believing the Rays will stay on his side of the bay. Kriseman has offered to build a new ballpark at a redeveloped Tropicana Field.

Hagan acknowledged the hardest part lies ahead.

The Rays "would like to move quickly," Hagan said. "But it took a year and a half just to identify the preferred location and get site control, and determining a financial plan is going to get even more challenging."

Times senior news researcher John Martin contributed to this report. Contact Steve Contorno at [email protected]

     
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