TAMPA - A judge ruled Tuesday that though it cost more than $150-million to build the St. Pete Times Forum, the hockey arena today is worth about $25.5-million.
The decision effectively slashes the property tax bill on the arena by more than 75 percent, giving a boost to Tampa's financially ailing Lightning hockey team.
Circuit Judge James Barton II found that the 7-year-old concert arena and hockey venue is worth less than a quarter of its appraised value. Subtract the land beneath it, he said, and the value falls to $7.8-million, a little more than Tampa's priciest homes.
"It's a shame for the taxpayers," said county Property Appraiser Rob Turner, who had argued the building was worth $110-million in the current market. "Apparently the opinion is that their investment is worth pennies on the dollar."
County taxpayers footed the bill for most of the arena's construction in hope that it would stimulate downtown redevelopment. The Lightning agreed to pay property taxes on the building, but the team has been in dispute with the county over the amount.
Barton said he based his ruling on purchase prices of similar arenas around the country, as provided in testimony during a June trial.
Barton faulted Turner's office for not seeking those sales figures and using only the construction cost of the building, minus wear and tear, when the county decided in 2001 that the building's taxable value was $110-million.
"The sales of the Forum and similar arenas throughout the country during the past dozen years reveal that costly and recently built facilities are greatly devalued when they are sold," Barton wrote.
"The stark reality of this perverse economic market is that sports franchises, even chronically losing ones, sell for millions and millions of dollars while beautiful facilities that house the teams' home games are sold for a fraction of their cost."
Indeed, expert witnesses during the four-day trial in June provided average arena sales figures that reinforced Barton's ruling.
Since the team and Turner agreed that the land beneath the Times Forum is worth $17.7-million, Barton's ruling effectively places the value of the arena at about one-twentieth of the cost of building it.
Lightning officials praised the judge's finding, which will save the team roughly $6-million in property taxes for the three years in which they sued to challenge Turner's assessment - 1999-2001.
But they were quick to add that the tax issue is only one of many challenges to putting the team on solid financial ground.
"If you're losing $10-million and you just picked up $2(-million), that doesn't end the tide," said Lightning president Ron Campbell. "It certainly turns you in the right direction."
The Tampa Sports Authority technically owns the Times Forum, formerly called the Ice Palace.
Palace Sports and Entertainment, parent of the Lightning, owns the operating rights and is responsible for paying its property taxes.
Since taking ownership, Palace Sports has argued that it has a less favorable deal than other franchises in the National Hockey League, causing it to lose millions annually.
In the past year or so, Palace Sports has sold naming rights for the arena to the St. Petersburg Times, refinanced some of its debt and enjoyed a trip to the National Hockey League playoffs. The newspaper is paying Palace Sports $2.1-million in the first year and $30-million over the life of the 12-year contract for marketing opportunities that include putting the Times' name on the building.
However, the Lightning continues to lose money, according to an analysis paid for by local government.
The team is negotiating with city of Tampa and Hillsborough officials to acquire parking revenues around the Times Forum, stave off a planned ticket surcharge and gain other concessions. So far, those talks have not borne fruit.
The Times Forum also faces future competition from a planned amphitheater at the Florida State Fairgrounds.
Palace Sports has an option to take a partial equity interest in the amphitheater being built by Clear Channel Entertainment. However, Campbell said Tuesday he is "not optimistic" a deal can be struck.
Still, he said the judge's ruling and other minor victories help.
"It's positive momentum," Campbell said.
Judge Barton's ruling could put money in the Lightning's pocket.
State law requires property owners who challenge their tax bill to make a good-faith payment. The Lightning paid more than what the judge's ruling says they owe.
The Times Forum is in a special taxing district. That means most of its tax bill goes to the city of Tampa and is channeled back to the area around the arena. So Hillsborough County and other taxing authorities will not lose money because of the judge's decision.
Tampa officials don't expect the property tax ruling to create a big hole in the budget because of the good-faith money the Lightning already was paying. That was money paid to the county and set aside while the dispute was being settled.
"It's not like we were definitely counting on that anyway," said Bonnie Wise, the city's director of revenue and finance.
The money from downtown property taxes goes to pay off the cost of building the Tampa Convention Center. But the decrease in the Times Forum's taxes should not significantly affect the city's ability to pay off the bonds, Wise said.
- Times staff writer Jeff Harrington and David Karp contributed to this report. Bill Varian can be reached at 813 226-3387 or email@example.com