Memo outlines incentives to ice deal with Lightning

Providing property tax relief and sharing tourism tax funds are proposed as ways to keep the team at the Times Forum.

By JEFF HARRINGTON and ALICIA CALDWELL
© St. Petersburg Times
published April 10, 2003

TAMPA -- What might it take to convince the money-losing Tampa Bay Lightning and its owner, Palace Sports & Entertainment, to stay at the St. Pete Times Forum?

Start by transferring ownership of the Tampa building to Hillsborough County so Palace Sports wouldn't have to pay property taxes. Then let the company keep any revenue from ticket surcharges.

Give Palace Sports a sales tax rebate, money from a higher tourism tax and revenues from advertising displays throughout the Channelside district as well as inside the Tampa Convention Center.

And, as icing on the cake, impose a surcharge whenever patrons throughout Channelside buy a beer or a burger, funneling part of the take to Palace Sports.

All of those incentives, adding up to more than $10-million a year in tax relief and subsidies, are included in a draft proposal of a new 30-year deal with the Lightning owners that was prepared by a county-hired consultant, Turnkey Sports.

The proposed "memorandum of agreement," obtained Wednesday by the St. Petersburg Times, is based on extensive talks the past three months involving officials from the city of Tampa, Hillsborough County, the Tampa Sports Authority and Palace Sports.

Local government officials downplayed the memo as merely a starting point for a deal, and some doubted much of it would be approved. Yet even as a starting point, it offers a revealing glimpse of the extent to which the city and county may be willing to barter to keep the key tenant of the Times Forum from leaving.

Palace Sports, owned by Detroit billionaire Bill Davidson, hasn't issued ultimatums about relocating the Lightning, but the company has said it can't keep losing so much money. Palace Sports estimates it will lose $10-million to $15-million on the hockey team and the Forum this year.

But executives with the privately held company have refused to open their books to close scrutiny, even as they have pressed Hillsborough County for relief from paying ticket surcharges and battled in court to reduce or waive property taxes.

Since January, city and county officials have huddled with Palace Sports more than a half-dozen times to craft an agreement, often using the Tampa Sports Authority's offices inside Raymond James Stadium as neutral turf for negotiations.

Palace Sports had sought to wrap up a deal by the end of March while Dick Greco was still mayor of Tampa. Now, new Mayor Pam Iorio and her team will have to be brought up to speed and on board any deal. Asked about the consultant's draft, Fred Karl, Tampa's interim city attorney and a top Iorio adviser, said, "I didn't even know it existed."

Lightning owner Davidson is expected to be at the Times Forum tonight as the team competes in its first playoff game in seven years. In comments before news of the memo surfaced, Davidson said the arena "has never been properly, if you will, supported, by governments." Sean Henry, vice president of operations for the Lightning, said he was unaware of the memo but "pretty encouraged" that it included revenues and tax relief that his company was seeking.

Already, some county officials have doubts the proposal will get far in its current form.

Indicating that the consultant's far-reaching proposal overshot its assigned mission, Timothy Simon, the county's debt finance manager, said, "What we were expecting was a two-pager as opposed to almost a legal document. At this point we're not even considering that report."

Turnkey, a sports consulting firm based in the Highland, Md., was initially commissioned by the county for $50,000 to help commissioners determine whether to increase the county's surcharge on tickets. The county, city of Tampa and Tampa Sports Authority have since commissioned Turnkey to do a more thorough analysis of Palace Sports, paying the consultant an additional $90,000. Officials with Turnkey referred all questions to the county.

Even though the draft document was written as a contract -- complete with blanks for appropriate authorities to sign -- Mike Merrill, Hillsborough County debt management director, said it was intended simply "to give us some options from which we can pick and choose."

Henry Saavedra, executive director of the Tampa Sports Authority, said the Lightning owners may be pressing for hard-to-approve elements of the deal -- such as taxing Channelside restaurant patrons extra, raising the tourist tax and providing a sales tax rebate -- to give themselves an easy out. Under the draft memo, if revenue from those three sources fails to reach $5.3-million annually by 2009, Palace Sports would be free to leave town and take the Lightning with them.

Members of the Hillsborough County Commission said they had not seen the report. Shown the broad brushstrokes, they quickly expressed criticism.

"Whatever," Commissioner Ronda Storms said dismissively.

"What do the kids say? 'Talk to the hand?"' said Commissioner Pat Frank.

Commission Chairman Tom Scott said any deal presented to him would have to have a provision in which the Lightning commit to stay in Tampa at least 25 to 30 years. "I'm not willing to tax our community to death to save a sports team."

Commissioner Jim Norman, a member of the Sports Authority who has been the leading advocate of trying to find a way to keep the Lightning in town, said he wants to weigh the ultimate cost of a revamped Lightning deal against the cost of losing the team. "It's all got to be dropped to the bottom line."

Other elements of the memo quickly stirred resentment and confusion.

The administrator of the Tampa Convention Center said the draft's reference to transferring advertising opportunities at the center to Palace Sports is "puzzling to me." The convention center, said John Moors, doesn't sell advertising.

Then there's the proposal to create a "dining district" around the Times Forum, forcing businesses inside its boundaries to collect a surcharge on food and beverage sales. That money would go, in equal shares, to the city, county and Palace Sports.

Jamie McCormick, manager of Stump's Supper Club in the Channelside district, said a surcharge would be a bad idea for an area that already is struggling to attract patrons. While he said Stump's, a 300-seat restaurant, is doing well, a surcharge might hurt those that are struggling to develop a customer base.

"They're forcing something on people who either don't care about the Lightning or go to an occasional game," McCormick said. "I know I'd be upset if I was charged extra for the team."

The Times Forum, originally known as the Ice Palace, was renamed last year after the St. Petersburg Times signed a 12-year naming rights deal with Palace Sports. The newspaper is paying $2.1-million in the first year and $30-million over the life of the contract.

-- Times staff writers Damian Cristodero and Bill Varian contributed to this report.

© 2006 • All Rights Reserved • Tampa Bay Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111

Contact the Times | Privacy Policy
Standard of Accuracy | Terms, Conditions & Copyright