The Tampa Sports Authority's $5.4-million budget will let it run a stadium but not pay taxes on it.
The Tampa Sports Authority has all the appearances of a public agency with a fat budget: a luxury suite at Raymond James Stadium, marble tabletops in the office lobby, $500 catering bills for guests at every Bucs game.
But when faced this month with a $5-million property tax bill, the authority said it didn't have the money and might need help from the Hillsborough County Commission next year to pay the bill.
How could an agency with so many trappings of power be so cash poor?
"Where are the taxpayers' dollars going?" County Commissioner Pat Frank asked at a recent commission meeting. "It is as if the money is going down the tube."
Actually, most of the authority's operating budget is going to benefit the Bucs.
The 1996 lease with the Bucs, which began their second season at Raymond James Stadium on Saturday night, allows the football team to make millions from concessions, parking, tickets, advertising rights and sponsorship agreements, while the authority is left with only enough money to cover expenses. Just running the new stadium saddles the authority with millions in added maintenance and operations costs. This year it will cost about $5.4-million _ most of the authority's operating budget _ to run the stadium, compared with about $3.7-million in 1997 to operate the old Houlihan's Stadium.
The electric bill, for example, rose from $60,000 to $750,000 because the Bucs wanted far more air-conditioned lounge space in the new stadium.
The phone bill more than quadrupled from $32,000 to $135,000 because Raymond James has far more phone lines than Houlihan's _ about 2,000, mainly for the press box. Insurance costs for Raymond James almost doubled from $160,000 to $300,000.
And to raise money to build the stadium, the Sports Authority sold land it owned south of the stadium that had been used for parking. Now, the authority pays $150,000 a year to rent the land for parking _ and the Bucs get all the parking revenue.
The team pays the Sports Authority $3.5-million to rent Raymond James, but that doesn't cover the agency's escalating costs.
Booking more concerts and sports events at the stadium wouldn't help much, either. The Bucs get the first $2-million after expenses from any non-Bucs events at the stadium, and then half of any profits beyond that first $2-million.
Which is why the Sports Authority has vigorously fought attempts by the Hillsborough property appraiser to assess taxes on public sports arenas. While the private businesses that profit from the arenas would normally be stuck with the bill, the lease the county signed with the Bucs stipulated that the team be exempt from paying any stadium taxes.
When the lease was signed, few anticipated a change in the law that would allow property appraisers to tax public arenas. But that happened last year, and now the Sports Authority, which holds the title to the stadium, is on the hook for a $5-million tax bill.
"I am sure that we cannot generate enough revenue or cut expenses to pay a $5-million tax bill," authority Executive Director Henry Saavedra said.
Some of those expenses:
+ More than $209,000 this year to Shackleford, Farrior, Stallings & Evans for legal work, including the property tax issue. The legal bills show that two lawyers at the firm billed about 1,672 hours since January at $125 per hour.
+ A $4,100 catering bill last year for a luxury suite at Raymond James Stadium, where board members entertain elected officials and prominent residents.
+ A $5,500 annual catering bill for a luxury suite at Legends Field, where the New York Yankees play during spring training.
+ About $1,600 for air fare, a hotel room and a ticket to the 1999 Super Bowl in Miami for former authority chairwoman Sue House. The authority also sent nine employees to the Super Bowl to prepare for the 2001 game in Tampa.
"You would think they would be looking for every possible way to cut corners," said Commissioner Jan Platt.
Platt questioned why the authority needs to spend any money on suites, entertainment and trips.
"Who really benefits?" Platt said. "The authority members themselves. Period. I mean, enough is enough. It just is out of touch with how the taxpayers feel about this whole situation."
But Saavedra said the bills are part of the cost of running the stadium, considered one of the finest in the country.
"We are on television throughout the country and the world, and we need to have a first-class facility," Saavedra said.
Even if he cut some expenses, it would not produce an extra $5-million a year for taxes, Saavedra said.
"If you take all the nickels and all the dimes, it will not add to $5-million," he said.
The 11-member authority, whose members are appointed by the County Commission, Mayor Dick Greco and Gov. Jeb Bush, never has tried to profit from sports operations, Saavedra said. As a public agency that relies on other governments for support, the authority just tries to break even.
Even so, some authority members said the agency should start looking for new sources of money. One idea: more concerts.
But few bands can fill a stadium.
"It's not quite so easy," said Gary Bongiovanni, editor of Pollstar, a trade magazine that covers the concert industry. "The stadium concert business is very limited. In any given year, there might be no acts. In a watershed year, there were five stadium tours."
"You can't make money out of nothing," authority member David Mechanik added. "You have to have something to work with."
Of course, the Florida Supreme Court could still bail out the authority. It will decide in Septemberwhether to uphold a state law that would make stadiums such as Raymond James exempt from taxes. A lower court struck down the law last year as unconstitutional.
The County Commission also could have helped. But earlier this month, the board refused to take possession of the stadium, effectively exempting it from property taxes.
For now, authority members are still scratching their heads.
"If you come up with any good ideas," said member and investment banker L. Garry Smith, "let me know."