Sunday, January 21, 2018
News Roundup

Trop site holds promise for area even if the Rays move outside Pinellas

The Tampa Bay Rays boost St. Petersburg's economy with every pitch at Tropicana Field.

Beer guys hawking Budweisers pocket some of the proceeds. Visiting teams stay at the Vinoy Renaissance hotel. Evan Longoria's Venetian Isles landscaper claims a slice of his $100 million contract.

St. Petersburg residents have cited this economic impact while opposing Mayor Rick Kriseman's plans to let the Rays explore new stadium sites in Tampa.

On the other hand, letting the Rays move across the bay could create new jobs and business because the Trop's 85 acres — now largely vacant — could be covered with new development and year-round activity. One 2008 plan called for $1.2 billion in construction.

This yin and yang of economic impact is difficult to pin down, experts say, and it clouds any attempt to reduce a possible Rays move to dollars and cents.

Studies about baseball tourism relate to Pinellas County, not St. Petersburg. Business activity from Trop redevelopment could fluctuate widely depending on what might be built there. Even the value of national media exposure is fuzzy. If the Tampa Bay Rays move to Tampa, would anyone in Des Moines, Iowa, even notice?

The St. Petersburg City Council will grapple with these uncertainties at a 9 a.m. workshop today on the Rays future. Here are some basics:

Direct revenue and jobs

The Rays employ about 300 people year-round, adding another 1,000 on game days.

According to Forbes magazine, the team earned $181 million in 2014, most of which came from outside St. Petersburg. Media contracts and communal Major League Baseball dollars provide the bulk of the Rays' income. Even the majority of fans come from outside Pinellas.

Compared to the impact of other industries, however, little of that Rays income spreads through the local economy, said Stan Geberer, senior associate at Fishkind & Associates, an Orlando economic consulting firm.

Minor league operations, player salaries and money retained by ownership flow quickly out of town. For every James Loney or Alex Cobb who lives in St. Petersburg, a Joe Maddon or Kevin Cash lives in Tampa.

"Probably 85 percent of revenues generated (by the Rays) have zero economic impact on St. Petersburg,'' Geberer said.

That's why three 2008 studies about the Rays' economic impact concentrated on spending by out-of-town fans on hotels, restaurants and other nonbaseball items. It's what's outside the stadium that counts.

Baseball tourism

Arduin, Laffer & Moore Econometrics used ticket sales to estimate that 245,000 Rays fans traveled from out of state in 2008. Because typical Florida tourists spent $775 per trip, the study said, the Rays created $212 million in new spending.

The study contained two major flaws.

Baseball tourists often attend two or three games per trip. If they averaged two games in 2008, then 245,000 tickets actually represented only 122,500 fans. Their spending would be half what the study estimated.

The Arduin, Laffer & Moore study also assumed that baseball attracted any tourist who bought a ticket. In fact, another 2008 study by Tampa's Research Data Services found that half of those fans came to Pinellas for nonbaseball reasons. They visited friends, conducted business, or hit the beach and just happened to take in a game. Spending by those tourists would occur with or without the Rays.

Arduin, Laffer & Moore did not respond to a request for comment about their study.

The Research Data study estimated that 250,000 tourists attended games, counting only those who came to town explicitly for baseball and spent at least one night. The study also accounted for tourists who attended multiple games, CEO Walter Klages said.

By those measures, the Rays brought in $70 million in tourist spending, plus another $37 million from "day-trippers,'' fans from Hillsborough and other nearby counties.

These per-year figures probably underestimate the Rays' lasting value to Pinellas tourism. One-third of Pinellas visitors are first-timers, and about 90 percent say they hope to return. A newbie coming down for a Rays game in August might return in January for the sunshine. The Rays would have generated two visits.

On the other hand, these tourist figures relate to Pinellas' economy, not St. Petersburg's. Beach hotels and restaurants soak up plenty of the Rays' economic impact.

Klages figures that most baseball tourists find food and lodging near the stadium. "You will find them at the Don CeSar, you find them very much in downtown St. Petersburg,'' he said.

How many would still locate in Pinellas if the Rays moved to Tampa? "Your guess is good as mine,'' Klages said. "But there is no question there would be an economic shift.''

Besides tourists, the Arduin, Laffer & Moore study calculated that visiting teams spent $1.5 million on food and lodging in 2008. Most stayed at the Vinoy hotel in St. Petersburg.

Trop development

If the Rays left, full-scale redevelopment of Tropicana Field could begin in earnest. Office, residential, retail, academic, and cultural uses could bring new jobs and spending to the city.

In 2008, when the Rays proposed a new waterfront stadium, the St. Petersburg Area Chamber of Commerce commissioned PricewaterhouseCoopers to examine the economic value of both the Rays and Trop redevelopment.

That study estimated that the team brings in $72 million from outside the city each year, from both tourists and Tampa Bay residents. Trop redevelopment would generate $60 million — an estimate the study based on $450 million worth of construction.

But when the city actually put the Trop acreage out to bid, the winning proposal called for $1.2 billion worth of office, residential and retail uses, which would have generated far more than $60 million in annual spending. It also supposedly would have generated $25 million a year in new taxes and fees to the city, county, and Pinellas County School Board.

"The most important thing for St. Petersburg to determine is what is the highest and best use for those lands,'' said Geberer, the Fishkind analyst. "What is the vision for that unique downtown area, which has access to two interstates and beautiful amenities in proximity to the water.''

Sports bring psychic value, Geberer said. "It makes people feel good about their city.''

But if economic impact is all that counts, then St. Petersburg should invite the Rays to leave, he said. Almost any successful mixed-use development at the Trop "would well exceed any economic impact of sports.''

Contact Stephen Nohlgren at [email protected]

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Published: 01/20/18