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Could Tampa Bay Rays stadium be funded by sixth cent of tourist tax?

 
Tampa Mayor Bob Buckhorn, left, and St. Petersburg Mayor Rick Kriseman talk with Rays president Matt Silverman before Buckhorn threw the ceremonial first pitch at a September game. A sixth cent on tourism taxes could be crucial if the Rays want to build a new bay area stadium.
Tampa Mayor Bob Buckhorn, left, and St. Petersburg Mayor Rick Kriseman talk with Rays president Matt Silverman before Buckhorn threw the ceremonial first pitch at a September game. A sixth cent on tourism taxes could be crucial if the Rays want to build a new bay area stadium.
Published Dec. 14, 2014

The Tampa Bay Rays face nothing but obstacles in searching for a new home in Tampa.

The St. Petersburg City Council has yet to bless a deal to let the Rays look outside Pinellas County. A baseball stadium won't be an easy fit in Hillsborough County, either. Taxpayers seem to have little appetite for helping to pay for a new stadium.

Politicians, though, always seem to find a way. One of those ways may involve tourists.

That's where the sixth cent comes in.

Visitors to Pinellas and Hillsborough counties pay a 5-cent tax for every dollar they spend on hotel rooms, rentals, RV parks and campgrounds. That 5 percent bed tax funds marketing efforts to attract more tourists and supports popular bay area attractions and events.

But what if tourists paid 6 cents instead? Under state law, tourist taxes can help pay for infrastructure projects — like, say, a new professional sports stadium.

Tampa Mayor Bob Buckhorn explained why the sixth cent has become a popular option for elected officials hoping to lure — or keep — the Rays on their side of the bay.

"It takes a significant portion of the burden off the local taxpayers," he said, "and puts it on those traveling here."

• • •

Florida counties that are designated a "high tourism impact county" can charge tourists that extra, sixth cent.

There are only eight such counties in the state.

Pinellas is one. Hillsborough wants to join them within three years.

Florida law says that if visitors to a county spend at least $600 million on accommodations within a calendar year, then it can be designated as one of the state's "high tourism impact" counties. A 5 percent tax on that would produce $30 million, which is the figure officials cite when they talk about becoming a "high tourism impact" county.

That "high tourism impact" designation would then allow a supermajority of the County Commission — a majority plus one — to raise the tourist development tax to 6 percent.

While Pinellas has qualified for that designation, the County Commission has taken no steps to raise the bed tax. Were commissioners to do so, they would also decide how to spend that tax money.

That's where a baseball stadium enters the picture. Officials from both Hillsborough and Pinellas county governments said that state law would allow an expanded bed tax to help finance a stadium.

Elected officials have acknowledged that, though the sixth cent does not yet exist, they're already considering it as a possible funding source for a baseball stadium.

"Absolutely," said Hillsborough County Commissioner Ken Hagan.

He said tourist taxes are a good funding source for a new stadium because there are limits to how they can be spent. Using those taxes, he said, wouldn't deprive local taxpayers of more important services.

"The thing I stress to folks is, the statutes are very specific about how that money can be utilized," Hagan said. "It can't be used for law enforcement or fire-rescue or libraries.

"But it can be used for debt service for infrastructure."

The sixth cent alone cannot build a new stadium, however. It could pay off $80 million to $100 million of the construction costs. But a new baseball stadium is expected to cost at least $500 million. Other public and private financing would be needed.

Buckhorn said there will be no repeat of the Community Investment Tax, the 1996 referendum that Hillsborough voters approved to enact a 30-year, half-cent sales tax to help build a new stadium for the Tampa Bay Buccaneers as well as schools, roads and fire stations.

"The financial package will be a layered strategy with multiple sources all coming to bear," the mayor said. "It will not be any one individual source."

• • •

The sixth cent has another advantage: No one has dibs on it yet.

The same cannot be said for the existing 5-cent tax.

In Pinellas, tourist tax dollars fund the marketing efforts of the public tourism agency, Visit St. Pete/Clearwater, and beach renourishment, and helps pay for Tropicana Field and spring training facilities.

In Hillsborough, bed taxes fund the county tourism agency, Visit Tampa Bay, support venues such as Lowry Park Zoo and the David A. Straz Jr. Center for the Performing Arts, and help pay the debt on sports facilities such as Amalie Arena, George M. Steinbrenner Field and Raymond James Stadium.

So lots of interests already depend on the existing 5 percent bed tax. Further complicating that situation: Old and new players alike are lining up on both sides of the bay for that money.

"The number of suitors for that number grows exponentially every year," Buckhorn said. "Some are deserving. Many are not."

The situation has become especially complicated in Pinellas, where the tourist tax has almost finished paying off the Tropicana Field bonds and could free up additional funds in the future.

Last month, the Pinellas Tourist Development Council capped how much of the current bed tax can be spent on capital projects so that it doesn't take money away from tourism marketing.

But St. Petersburg Mayor Rick Kriseman worried that the TDC was restricting the county's ability to fund future capital projects such as, say, a new baseball stadium.

The Rays say they want to explore stadium sites throughout the Tampa Bay region. If the ideal site turns out to be in Pinellas, that's where the sixth cent could come into play.

"If we just keep it in our back pocket," TDC member Tony Satterfield, who voted for the cap, said last month, "then if the Rays do come and say we want to build a stadium in Pinellas County, that gives us another option."

• • •

Officials said they would need input from the tourism-related businesses that would charge that higher tax before deciding whether to raise the bed tax to 6 percent.

"We have to get the signoff of the hospitality industry," Buckhorn said, "and all the other players in the tourist development world."

Tampa Bay has certainly learned how to lean on tourists. In April, the Hillsborough County Aviation Authority doubled the $2.50 rental car fee to $5 to help finance Tampa International Airport's $943 million expansion plan.

Will higher taxes and fees scare off visitors in the midst of a bay area tourism boom?

Hillsborough County Hotel & Motel Association executive director Bob Morrison said it depends on what rival destinations charge. Orlando charges a 6 percent bed tax, and so does Austin, Texas.

Morrison pointed out that Hillsborough's bed tax already helps pay for a football stadium and a hockey arena. Both facilities have paid off for the hospitality industry.

"The market would have to believe that the benefits coming outweigh the negative potential of an increase," he said. "Think of the four Super Bowls we've hosted and the Outback Bowl. Those events have been outstanding returns on our industry's investment."

Buckhorn put it this way: "I stay in a lot of hotels, and I've never once looked to see what the local taxes are."

• • •

Ron Barton, Hillsborough assistant county administrator for economic prosperity, said that talk of raising the tourist development tax is very premature.

"The question — could it be used for a stadium? — is a lot of conjecture," Barton said.

"Our challenge is not: How do you spend a sixth cent? Our challenge is: How do you get to a sixth cent?"

That's because Hillsborough has yet to reach that $30 million bed tax threshold to qualify. The county set a new bed tax record in fiscal year 2014, garnering $23.7 million. But that lags behind Pinellas, which collected a record $35 million in the same year.

But Hillsborough's top tourism official, Santiago Corrada, has vowed that his county will qualify as a "high tourism impact" county within three years. It would take 10 percent growth in each of the next three years. The 2014 bed tax record beat 2013 by 12 percent.

Though Hillsborough lacks the state's customary beaches, Corrada wants to prove that it can be as popular a destination as any in Florida.

"At the end of the day, it's a numbers situation," Corrada said. "But it's also a pride situation."

Times staff writer Stephen Nohlgren contributed to this report. Contact Jamal Thalji at thalji@tampabay.com or (813) 226-3404. Follow @jthalji.