ST. PETERSBURG — The city's iconic Pier is on such wobbly financial footing that taxpayers would save $1 million a year by simply closing it, according to a new city analysis.
The analysis creates questions about the city's long-held plans to spend $50 million to rebuild the Pier's deteriorating infrastructure.
Since 2001, the Pier has cost city taxpayers nearly $12 million, budget figures show. Last month, the city further reduced rents for about a dozen struggling tenants who threatened to close.
City officials acknowledge there is no plan to ever break even, let alone turn a profit.
The sobering financial outlook surfaced during a discussion about rebuilding the Pier's quarter-mile-long approach and pier head. The project would not include replacing the Pier building, which opened in 1973. The Pier is owned by the city but managed by a private company.
"In the private sector, nobody would spend $50 million with an operating subsidy (on top of) that," said City Council member Karl Nurse. "Nobody in their right mind would build it. Except the government."
City officials have not decided what to do, and a decision could be years away. Mayor Rick Baker is forming a citizen task force to recommend a course of action.
A 5-year-old engineering study determined that the Pier's approach and base must be rebuilt by 2014. Exposure to saltwater has weakened it, requiring costly maintenance and ongoing repairs. If the $50 million overhaul is approved, work is expected to begin in 2012.
The project would be paid for through a process called tax increment financing, which dedicates city and county property tax dollars for capital projects downtown.
While no one wants the Pier to disappear, economic realities suggest something might have to change. The city faces a possible $20 million budget shortfall next year.
Baker has asked each city department to plan for budget reductions up to 3 percent, and City Council members have discussed switching some employee work schedules from five eight-hour days a week to four 10-hour days.
Despite its cost, some defend the Pier as a treasured piece of city history.
"The Pier is an attraction," said City Council member Leslie Curran. "Love it or hate it, it does draw people not only to St. Petersburg, but Pinellas County."
But the Pier has seen attendance drop by almost half this decade — from nearly 2 million visitors in 2001 to just over 1 million in 2008.
The complex's small retail spaces have made it unattractive to regional and national chains, and uncertainty about the Pier's future make current tenants hesitant to improve their stores.
Negative perceptions of the kitschy shops have kept locals away.
Keeping it open indefinitely would cost taxpayers almost $1.5 million a year, plus the $50 million in needed infrastructure repairs.
Closing and fencing off the Pier would cost about $500,000, according to city officials. Demolishing the Pier and its approach would cost $6 million.
"These are the doomsday scenarios that have to be said," said City Council member Herb Polson. "You could spend $50 million and not see a thing differently. That's hard for the common man to understand."