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What is Tropicana Field worth if Tampa Bay Rays leave? That depends

The sale of the Tropicana Field property would include stadium demolition and environmental cleanup.
The sale of the Tropicana Field property would include stadium demolition and environmental cleanup.
Published Feb. 20, 2015

ST. PETERSBURG — If the Tampa Bay Rays leave Tropicana Field, how much would the property sell for?

That multimillion-dollar question has arisen as the Rays push to explore new stadium sites before their lease expires in 2027. City Council members — already leery of losing the team to Tampa — worry that the Trop contract could give the Rays a big slice of redevelopment revenue on their way out of town.

But valuing 85 acres of land is far more complicated than appraising the house next door. If other cities are any guide, the Trop's sale price mostly depends on elected leaders' ambitions for the city's future.

And as two side-by-side blocks just east of the Trop illustrate, top dollar can be a low priority.

Last year, a builder planning the 348-unit Hermitage apartments bought one of the blocks for more than $2.5 million an acre. Multifamily housing is taking off around the Trop, as it is in cities all over the country.

The block next door is owned by the city, which has offered it "for a nominal fee" if Jabil Circuit will build a corporate headquarters there. In fact, the city would pay Jabil to bring in 1,200 jobs.

"Multifamily housing is the highest and best use,'' said agent Paula Clair Smith*, who markets commercial real estate in the neighborhood. But the city may forgo profits, she said, to create public uses like a convention center or research incubator.

"It's not about getting the best price per square foot,'' Smith said. "The city has to say, 'These are our priorities' and let a developer phase it in.''

Acres and dollars

When the city and original Rays owner Vince Naimoli negotiated the Trop contract two decades ago, both sides thought a corner of the parking lot might one day include a small hotel. Since construction would disrupt team operations and replacement parking might be farther from the stadium, the city agreed to split any development proceeds with the team 50-50.

Fast-forward to December, when Mayor Rick Kriseman pitched his plan for letting the Rays look for new stadium sites in Hillsborough and Pinellas counties. Council member Karl Nurse asked a thorny question: The team would play at Tropicana Field for three years while building a new stadium elsewhere. If the city started redeveloping the Trop site, would the Rays still collect half of the development revenue?

The Rays' response to that question was muddled and Kriseman's deal fell through.

Now Kriseman wants a new stadium search vote before April 6, opening day. The sale value of Trop land could again play a central role in those discussions.

If top dollar is the goal, "you might get $2 million an acre for the first 20 to 40 acres,'' said Ron Weaver, a Tampa lawyer who specializes in land use. But you couldn't get such prices all at once, because the development would take seven to 10 years, he said.

Rather than market the land bit by bit, Smith said, the city would probably bid the entire property out to a master developer. The price would have to account for stadium demolition, any environmental cleanup and installation of new streets.

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St. Petersburg explored Trop redevelopment in 2008, when the Rays wanted a new waterfront stadium. Go-go real estate optimism prevailed then, and the city tentatively accepted a developer's bid of $65 million. Only the first installment — $15 million — was due while the team was still playing at the Trop.

That "EcoVerde" master plan, which later fizzled, called for $1.2 billion in construction over 13 years. It included 2,700 condo and apartment units, but was mainly driven by retail stores and office space. Maybe a Bass Pro Shops would move in, the developer said.

These days, residential needs propel private mixed-use projects, Tampa broker Bill Eshenbaugh said. People prefer to live in dense environments. Restaurants, stores and other places to spend money follow.

Eshenbaugh Land Co. is helping to package a 57-acre property, which includes bayfront footage, in Tampa's West Shore district, south of Gandy Boulevard. The project envisions condos and apartments on top of restaurants and retail outlets. The land owner reportedly hopes to attract a developer who will pay $1 million an acre.

Tropicana Field would struggle to match that per-acre price, Eshenbaugh said, because it is half again as large.

"The risk is bigger and the carrying time much more uncertain,'' he said. "With 1 acre, you can have a plan and get it built ahead of business cycles. With 85 acres, you are going to have to suffer through the next downturn, and you don't know when it is coming or how long it will last.''

Eds and meds

Cities revamping large neighborhoods often want parks, cultural amenities, affordable housing, academic institutions and solid jobs woven into a mix, said Ed McMahon, senior fellow at the Urban Land Institute.

Such public uses can revitalize a city, but also remove valuable chunks of land from any package offered to a developer.

"The projects that are most successful are the ones that reinforce the overall vision of where the city is going,'' McMahon said. "The city defines the parameters of what it is looking for, then works with a master developer who meets those guidelines."

In Texas, San Antonio extended its trendy River Walk and offered business incentives to help create the Pearl district out of a shuttered 23-acre brewery. The private mixed-use development includes amenities like the Culinary Institute of America, an amphitheater, music venues and a farmers market.

"Eds and meds" are two hot sectors for creating jobs, McMahon said, referring to academic and medical institutions.

St. Petersburg's growing medical and scientific community on the southern edge of downtown is just blocks from the Trop. Expanding west into a mixed-use project would make sense, McMahon said.

"In 62 of the 100 largest cities, the biggest employer is either a hospital or university,'' he said. "Nothing brings a neighborhood or city back to life like having lots of young people downtown.''

Across the bay, Tampa Bay Lightning owner Jeff Vinik wants to bring a new University of South Florida medical school to his $1 billion redevelopment project — but he will have to donate the land.

Another big trend is "park-oriented development,'' said McMahon, where large recreational and gathering spaces boost adjacent residential and retail values. St. Petersburg's Beach Drive and the newer Curtis Hixon Waterfront Park in Tampa can attest to that.

In Alabama, Birmingham converted about 30 acres of old railroad yard and surrounding property into parkland, civic meeting spaces and a minor league baseball stadium. The project connects the downtown core to the University of Alabama at Birmingham.

"Virtually every inch of land around it is now being developed, with all sorts of housing being developed in old industrial buildings,'' McMahon said.

Though big-box retail demand has shrunk, McMahon foresees chains like Walmart and Target fitting into a large mixed-use project. Those companies are now building smaller, multilevel stores in downtown cores. "We now have six multistory Targets in the Washington (D.C.) area,'' he said. "They are just like department stores used to be.''

Some city officials still hope for one familiar public use for the Trop site: a new stadium.

If the Rays stayed in St. Petersburg, a ballpark on the east side — supported by downtown parking — could leave room for mixed-use construction to the west.

Stadium or no, turning the Trop's parking lot into a hotbed of work, play and housing will energize the whole western edge of downtown, said Smith, the agent who markets commercial real estate in the neighborhood.

"People want to be where the action is.''

Contact Stephen Nohlgren at nohlgren@tampabay.com.

Editor's note: This story has been updated to reflect a correction. Real estate agent Paula Clair Smith's name was misspelled in an earlier version.