The lastest proposal to settle the tax bill would reclassify the Raymond James Stadium.
By BILL VARIAN
Published August 19, 2003
TAMPA - The Tampa Sports Authority is trying a new strategy to resolve a 2-year-old dispute that has Hillsborough property owners paying the tax bill on Raymond James Stadium.
The Sports Authority board voted unanimously Monday to craft the legal documents necessary to turn the stadium, home to the Tampa Bay Buccaneers football team, into a condominium.
What may sound like a dream come true to diehard Bucs fans - a window view of home games - is actually a legal maneuver that authority officials say will make the tax bill go away.
No one will be living at Raymond James.
The approach would mean that more than 95 percent of the stadium would be turned over to Hillsborough County. County governments don't have to pay taxes.
The Bucs would have to pay taxes on the remaining 5 percent, about $10,000 a year for a few suites and a storage area the team uses. But that's considerably less than the overall $4.3-million tax bill on the stadium, said Sports Authority general counsel John Van Voris.
As far as the Sports Authority can tell, the Bucs would not have to sign off on the proposal, so there's little risk they could use their signature as a bargaining tool.
"There's no way they can challenge it," Van Voris said. "They've been informed that this is going to be an option we were seriously going to consider, and they said they didn't care. They're just not affected by it."
That was not the case the last time the authority tried to end the tax issue by having the county take over ownership of the entire stadium. Under that scenario, the Bucs would be asked to paythe authority an amount equal to the annual tax bill each year, a so-called "payment in lieu of taxes."
But that proposal needs the Buccaneers' approval because it would require amendments to the agreement that spells out how Raymond James is owned and operated. When the proposal surfaced, the Buccaneers raised concerns.
After the Sept. 11 terrorist attacks, the Bucs wanted the Sports Authority to purchase insurance that would cover replacement if Raymond James was destroyed by terrorism or violent weather. They also wanted increased security.
"Really, those are separate issues," said Henry Saavedra, executive director for the Sports Authority. "The condo idea can be actually done without the Bucs' approval. We'll still have landlord-tenant issues over the next 30 years."
In a letter to Saavedra and copied to Bucs officials, County Administrator Dan Kleman assured the team that the county has the reserves, financial stability and resources to start repairing Raymond James Stadium within three months of any damage.
The team has not officially responded to that letter, communicating orally that it is analyzing the matter.
So Kleman advised the Sports Authority to keep negotiating with the team on that issue while preparing legal documents and surveying needed to make the condo agreement work as a backup.
Buccaneers spokesman Jeff Kamis said the team is interested in continuing talks on both proposals.
"We want to listen to any idea they have," Kamis said.
The Sports Authority and the county have preferred the option of a straight ownership transfer, rather than the condo approach, because transferring ownership of the entire stadium to Hillsborough County would be relatively easy and cost-free.
"It's simple and it's clean," Van Voris said.
As a backup, the board agreed to spend up to $75,000 to prepare the legal documents necessary and up to $11,000 for surveying work for the condo approach. Van Voris thinks the cost may be much less.
He said if the Bucs exercise options to build more team space inside the stadium, those areas would also be carved out and taxed. And the team would have to pay all taxes on practice fields and team offices if they build them outside the stadium.
The stadium tax dilemma began in April 2001, when the Florida Supreme Court ruled that sports facilities owned by certain types of governments and leased to private teams were taxable. Previously, it had been presumed that such arenas, because they are owned by a government entity such as a sports authority, were exempt from taxes.
The court's ruling meant that the Tampa Sports Authority was responsible for the tax bill on Raymond James. Because it didn't have the money to pay the bill year after year, the tab fell on the city and county, and ultimately taxpayers.
But the court ruling didn't apply to counties. So if Hillsborough takes ownership of all or part of the stadium, the tax bill disappears.
Hillsborough commissioners initially resisted taking ownership of the stadium until all other options were analyzed. Some commissioners still resent that Community Investment Tax dollars were spent to build the stadium in the 1990s.
Some of the same commissioners worried that a tax bill bailout would be perceived politically as one more sweetheart deal for the Glazer family, which owns the team. Under the original stadium agreement, however, they had no leverage to ask the Glazers to foot the bill.
So they stalled on taking action, even as the county takeover emerged as the main solution. Meanwhile, commissioners in Pinellas County voted last year to take over Tropicana Field, which was in a similar pickle.
Now it's the Bucs who are stalling. So Monday's vote gives the Sports Authority a second option to fix the problem once and for all.
