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Rays stadium deal could cost public nearly twice what officials say

With interest on debt, St. Petersburg and Pinellas could pay more than $1 billion on a new stadium, a draft finance plan from the city says.
 
An artist's rendering of the proposed Rays Stadium and redevelopment of the historic Gas Plant District.
An artist's rendering of the proposed Rays Stadium and redevelopment of the historic Gas Plant District. [ Courtesy of Hines and the Tampa Bay Rays ]
Published Oct. 5, 2023|Updated Oct. 6, 2023

St. Petersburg officials have sold the public on a simple split.

The Tampa Bay Rays will pay for more than half of their new stadium, they’ve said since announcing a development deal more than two weeks ago. And the city and Pinellas County will divide the remaining $600 million.

But the public could ultimately pay nearly double that amount for the stadium once the city and county pay off the debt they incur to finance their share of the project at today’s rising interest rates, public records show.

On Tuesday, city officials released an outline that put some figures on paper for the first time. They were familiar to anyone who’s been following the development deal: $1.3 billion for the stadium itself, with $600 million in public money, roughly evenly split between the two, and the rest coming from the Rays. The terms specified that the city would spend up to $130 million more for what it’s referred to as “infrastructure” for the redevelopment of the Historic Gas Plant District surrounding the stadium.

But the city did not initially disclose a draft of a finance plan it has circulated to city and county officials. The plan, obtained Thursday by the Tampa Bay Times in a public records request, is an early look at how the city and county could take on debt to fund the development.

Based on its projections, the city and county contributions alone — not counting the Rays’ portion — could hit a combined $1.29 billion.

Here’s how the city and county could finance the project, according to the plan:

  • The city has pledged $287.5 million toward the new stadium. According to the finance plan draft, it would contribute that money by issuing bonds at two separate offerings. It would pay off both, with interest, by 2054, for a total of about $507.3 million toward the stadium.
  • The city has also said it will pay up to $130 million toward infrastructure in the redevelopment of the Historic Gas Plant District around the new stadium. It would take out that money through four bond series between 2024 and 2035, according to the plan draft. It would finish paying for the bonds in 2055, having spent a total of about $196.6 million.
  • Between the stadium and infrastructure costs and interest, projected at 4.75%, the plan puts the city’s expenses at about $703.9 million. The interest is considerably higher than the record-low rates just three years ago, when the Rays were still actively flirting with relocating to Tampa.
  • The county, meanwhile, would put $312.5 million toward the new stadium. The plan assumes that it would take out that money through bonds all at once, in 2024, then pay the debt off over the next 30 years. With interest, that total would come to about $586.8 million.

Pinellas County Administrator Barry Burton cautioned that the city-created finance plan, at least as it applies to the county, is not likely to become reality. It assumes that the county would issue bonds to fund the entirety of its $312.5 million portion of the stadium. But Burton said the county will aim to pay for some of the project up front, thanks to its robust tourist-tax reserves, which will reduce the amount of debt the county has to take on.

There are too many factors at play to say that the projections are accurate, he said. One major variable is what happens with the nourishment of the county’s eroded beaches. Should the county and the U.S. Army Corps of Engineers resolve a dispute over the nourishment process in the next year, Pinellas would likely have to spend less to restore its beaches and would have more tourist-tax money available to put down on the stadium.

“As we get along, we’ll make a decision on how much we fund through bond proceeds and how much we’ll pay with cash up front,” he said. “I want to see what’s happening with beach nourishment before I make that decision.”

City spokesperson Erica Riggins said in a written statement Thursday afternoon that the finance plan “is still in draft form and subject to change as we move ahead. We look forward to presenting this draft plan to City Council members at the Council’s Committee of the Whole meeting on Oct. 26.”

J.C. Bradbury, a sports economist at Kennesaw State University, said the document was largely pro forma, similar to others he’s seen at this stage of stadium developments. Parts of it didn’t entirely make sense, including a section on revenue, but it was clear that the finance plan was still coming together.

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“There’s not a lot binding here,” he said. “There’s still a lot of questions.”