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County likely to delay Times Forum surcharge
By BILL VARIAN, Times Staff Writer TAMPA -- A $3.75 surcharge on tickets to concerts, hockey games and other events at the St. Pete Times Forum is unlikely to happen soon. A comfortable majority of Hillsborough commissioners said Tuesday they will support a recommendation from staff members today to delay an automatic quintupling of the surcharge. They said they need more information on the Forum's financial picture. The commissioners are awaiting the outcome of a lawsuit by arena operators Palace Sports & Entertainment that challenges a 2-year-old property tax bill for the Forum. The case is expected to go to Circuit Court early next year. "I'm trying to be realistic about it," said Commission Chairwoman Pat Frank. "Right now, I'm not sure how they could sustain an increase." Frank and Ronda Storms are the commissioners who have expressed the least sympathy for Palace Sports' losses on the arena and its Lightning hockey team, which plays there. But Storms said she also will probably agree to delaying a decision on an increase from the current 75-cent surcharge. Storms said she is giving county staffers the benefit of the doubt, particularly debt management director Mike Merrill. Merrill, aided by an independent consultant's report, says an increase likely would drive events away from the Forum, which could further reduce the revenue the county reaps from the surcharge. He is recommending that commissioners wait at least six months, or until the court case is concluded, so they can make a decision knowing the full financial picture at the arena. "I'm going to give Mike the tools he needs to get done what he needs to get done," Storms said. In all, five of the seven commissioners said they would support the staff recommendation. Commissioners Chris Hart and Stacey Easterling could not be reached. Lightning officials are hoping commissioners agree to a delay. The issue is scheduled for a discussion today at County Center. "The only thing I'm focusing on is getting everyone to understand our finances," said Sean Henry, the Lightning's vice president of administration. "The biggest step is getting this deferred so we can work on a solution." The county uses proceeds from the surcharge to make annual $1.5-million payments on bonded debt used to help build what was formerly called the Ice Palace. But the county's 50-cent share of the current surcharge pays only a fraction of the debt. (The city gets the other 25 cents.) A 6-year-old agreement between the county and Palace Sports allows commissioners to raise the surcharge Oct. 1 to make up the difference. That would cost customers an additional $3 a ticket. Palace Sports officials say that will chase business off, worsening the situation. The Forum is owned by the Tampa Sports Authority but is operated by Palace Sports, which keeps all of the revenue from it. But Palace Sports lost about $21-million on the Lightning and arena operations in 2001. Adding to the difficulty is a court dispute between Palace Sports and Hillsborough Property Appraiser Rob Turner. Palace Sports is responsible for the tax bill on the arena. Turner says the facility is worth $120-million, rather than the $30-million Palace Sports says it's worth. The disparity represents about a $2.25-million difference in property taxes owed annually. Palace Sports gained $2.1-million in annual revenue two weeks ago when it signed an agreement with the St. Petersburg Times for naming rights to the building. Commissioners are all too aware of a provision in the contract with Palace Sports that allows the company to abandon the arena with little penalty. If ticket sales for Lightning games, on average, fall below 80 percent of arena capacity for two consecutive years, then Palace Sports can break the agreement. Ticket sales have been below the 80 percent threshhold every year since the 1996-97 hockey season. If it walked away, Palace Sports would be liable for the difference between current surcharge proceeds and surcharges collected by its successor. In its worst-case scenario, Palace Sports would have to pay $418,000 annually through 2025 to break the agreement, assuming no one is willing to assume the contract. That would ultimately leave the county and city of Tampa responsible for paying off the debt on the arena. Some commissioners want to discuss restructuring the deal, perhaps capping any increase on surcharges in exchange for a guaranteed long-term lease. That part of the discussion may not happen until after the property tax dispute is settled. "We've got to lock them in long-term," said Commissioner Jim Norman. "The numbers work for them to leave. Then we're stuck with the facility."
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