Keeping the Rays in Tampa Bay: Why time is already starting to run short
2027... is when the Tampa Bay Rays' contract to play at the Trop expires, so why all this talk of a new stadium? Can't we just relax and enjoy some good baseball? Not for long if the region wants to keep its team. Without opening a new stadium years before the current contract expires, the Rays will give up on St. Petersburg -- maybe Tampa Bay altogether -- and try to buy their way out of the contract. The Rays, though clearly determined to leave the Trop early, won't talk publicly about what they want. City of St. Petersburg officials, short of cash, keep pointing to 2027 with no apparent plan to either keep the Rays or reap the financial benefit of letting them go. As this analysis shows, time is already running short if the Tampa Bay area wants to stave off the Portlands, Charlottes and Monterreys. Complex stadium projects take years, even without regional rivalries. To keep the team somewhere in Tampa Bay, St. Petersburg and the Rays need to begin serious negotiations by ...2011

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[CHRIS ZUPPA | Times]
Story by Stephen Nohlgren | graphics by Don Morris | of the Times

The risk of delay | Two timetables for keeping the team

Here are two timelines that show how the four phases of a stadium project could play out. The top timeline (A) illustrates a tardy unfolding of events, in which each milestone comes at the last possible moment. It is high risk because there is no room for error and because it assumes the Rays will wait a long time before giving up on St. Petersburg. The bottom timeline (B) lists dates that allow for some margin of error -- in other words, takes the real world into account. Within each of the zones, the color gradually changes from green to red to indicate an ever-rising danger as the years pass and each dropdead deadline approaches.

Timeline


How the dollars play out | The public's diminishing financial leverage

The cost of keeping the Rays in the region rises as 2027 approaches and the team can consider outside options. Meanwhile, St. Petersburg loses its best chance for financial gain from letting the team move to Tampa or elsewhere.

chart

A. Rays' likely contribution to new stadium when financing package arranged
The going rate for team contributions to midsize market stadiums is now about $150 million. That's what the Rays offered toward their waterfront proposal. But this contribution may vanish from the negotiating table soon. Even if vigorous planning were to begin next year, a final financing package could easily take until 2014 to 2015 to arrange, followed by at least a year for a referendum and three years for construction. If several years pass with no movement toward a stadium, it's safe to assume the Rays would lose enthusiasm for committing any money to St. Petersburg and will wait for another city to make a better offer.

B. Buyout price
As soon as the Rays lose enthusiasm for St. Petersburg, $150 million becomes a good starting point to buy their way out of the Trop contract. It's what they would have to contribute to a new stadium anyway. A suitor city and any of its corporate citizens could grease the deal by underwriting some, or all, of the buyout price. No matter who pays, the offer would drop steadily to zero by 2027.

C. City's likely net gain
for letting Rays leave
Developers bid $60 million to buy the Trop site two years ago before the economy collapsed. When it improves, a similar deal is foreseeable. Huge, vacant urban plots of land are rare. By putting developed Trop acreage back on tax rolls, St. Petersburg should gain something like $7 million a year. If bonded out, that supports $90 million to $100 million in new spending. Not building a new stadium saves another $80 million to $90 million. Add in $150 million from a buyout and the city could net about $400 million by letting the Rays go. The Pinellas County School Board would also reap millions of dollars by putting developed Trop acreage back on tax rolls. Gains to St. Petersburg diminish along with the buyout price.

D. Payoff amount on main Trop bonds
The primary bonds that built the Trop could be paid off today for about $50 million, which drops to $0 in 2017. A minor debt to the state extends through 2027. Citizens dislike the idea of financing a new stadium while debt remains on the old one. The Rays would also have to pay off bonds before leaving St. Petersburg, making 2017 an important milestone.

E. Rays' legal risk from breaking Trop contract
A judge could forbid the Rays from leaving St. Petersburg before the contract expires in 2027, but a settlement is likelier and the thorniest issue would be quantifying contract language that says baseball brings "diverse" benefits to the city. One concrete estimate of a team's value to a community is the cost of building a new stadium to keep them. Miami-Dade taxpayers recently put up $480 million for a 35-year lease with the Marlins. By that yardstick, baseball's value in 2010, with 17 years left on the Trop contract, would be about $235 million, dropping to $140 million by 2017. While primary bonds would be paid off in 2017, the Rays could also be responsible for secondary Trop bonds -- worth about $13 million by then. On the other hand, St. Petersburg also would gain the equivalent of about $150 million by developing the Trop and putting it back on tax rolls. Considering both the city's losses and gains would expose the Rays to substantial legal liability if they broke the contract today, but dramatically less by 2017.


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