Devil Rays 1995-2005: What went wrong?

Baseball didn't bring business

While sports officials tout an ability to spur the local economy when they need buildings built, try convincing the business owners around the Trop.

By LOUIS HAU
Published March 7, 2005

[Times photo: Michael Rondou] Baseball hasn't been a boon for Dome District business owners. “I thought baseball was going to be the main driver,” Ferg’s owner Mark Ferguson says.

GRAPHICS: Recent St. Petersburg development Best place for a baseball stadium?

Photo gallery What went wrong: What the fans say 400 telephone interviews conducted from Feb. 2 – 12, 2005, from randomly chosen households in Citrus, Hernando, Hillsborough, Manatee, Pasco and Pinellas counties of people who describe themselves as “baseball fans.” What do you think? Post your thoughts in our guestbook Is anyone watching? The Devil Rays are hoping to rebuild their attendance. Here is how they have drawn for games at Tropicana Field. Seven-year itch Through their first seven seasons, the Rays stack up as one of the least successful expansion teams in baseball history. Here are the seven year records. Keeping pace A big reason the Devil Rays can’t compete with the Yankees on the field is that they aren’t even in the same ballpark in terms of payroll. Here is a look at how the disparity has grown over the years.

When the Tampa Bay Devil Rays opened their inaugural season at Tropicana Field in March 1998, Mark Ferguson figured that all the long hours he had put into his business were about to pay off in a big way.

He opened Ferg's Sports Bar 5 1/2 years earlier in the 1300 block of Central Avenue, just beyond the shadow of what was then known as the Florida Suncoast Dome. Now that the dome was about to host 81 Major League Baseball games a year, Ferg-uson anticipated a huge influx of new customers and a bright future for the surrounding neighborhood.

It didn't quite turn out that way. After the initial euphoria of having a local baseball team receded, attendance at Rays games began to sink. And the pre- and postgame crowds at Ferg's never quite reached the levels that its owner had hoped.

While Ferg's managed to build a loyal clientele over the years, a revolving door of other neighboring bars, clubs and restaurants came and went.

"A lot of people came in here and thought they could make money just off of baseball," Ferguson says today. "And that's just not the way it is."

Central Avenue's Dome District near the Trop embodies unfulfilled potential. The results of a seven-year streetscape renovation - including colorful sidewalks, stylish street lighting and a traffic roundabout at the 11th Street intersection - exude an eager-to-please hopefulness that appears at odds with the neighborhood's thin pedestrian traffic and vacant storefronts.

It wasn't supposed to be like this. The arrival of baseball at the Trop was supposed to provide a much-needed economic boost to the Dome District and to downtown St. Petersburg.But the district has languished - while the rest of downtown, especially along the waterfront, has thrived.

Ironically, the Dome District is just now seeing a flurry of proposed residential and retail construction projects, the most ambitious of which is St. Petersburg developer Grady Pridgen's plans to build a Central Avenue complex near 16th Street that will house 326 condominiums and 50,000 square feet of retail space, and provide a new home to the Florida Sports Hall of Fame.

While construction hasn't begun yet on any of the proposed projects, some believe the plans demonstrate that the neighborhood is finally turning a corner.

Ferguson and some of his fellow business and property owners argue that the Dome District's improved prospects have little to do with the baseball team, but rather are just a natural extension of the booming growth that began along St. Petersburg's waterfront area, the early stages of which preceded the team's arrival.

Other observers, including St. Petersburg development administrator Rick Mussett, credit the Rays with having been an important growth catalyst.

"For the majority of the last 10 years, the St. Petersburg economy has been very, very strong," Mussett says. "Part of that is the investment confidence that comes from having a Major League team in your city. Does somebody open a restaurant on Central Avenue and Third Street because they think the team will fill their seats? Not necessarily. But they may open a restaurant because of the belief that the presence of the team adds to the overall stability and positive outlook of the future economy of the downtown area in particular, and the city in general."

Inflated expectations

Craig Sher, president and chief executive of the Sembler Co., the developer of Bay Walk, also believes that the Rays have been an important factor in reviving the St. Petersburg economy. But he acknowledges that disappointing attendance at the Trop has constrained the ballclub's impact.

"Expectations were probably overly generous," Sher says, adding that "I think everybody thought they had won the lottery."

Sher points to two fundamental problems that have blunted the Rays' ability to generate more economic activity in its backyard: lagging attendance - a reflection of the team's struggles on the field - and the fact that the Trop is a "destination stadium" with its own food court, restaurants, bars and other amenities. That, he notes, keeps many fans, who might otherwise wander to nearby establishments, inside the ballpark.

It's a common pattern at most modern sports venues, according to Stanford University sports economist Roger Noll, who notes that the concept behind destination venues like the Trop is to capture as much fan spending as possible.

"It's to have all the business associated with a game happen inside the stadium so the team gets the revenue," Noll says. "They sell (stadiums) on the basis of spillover but then they design them to minimize spillover and nothing ever happens in the surrounding area. There's never any spillover because it's all taking place inside the stadium."

Dome District property owner John Warren recalls that by the time the Rays began playing at Tropicana Field, "I think it was recognized nationally that it was necessary for team owners to find more revenue streams inside the facilities they had."

Still, Warren says, there was optimism among Dome District businesses and property owners that the team would increase foot traffic in the area and that the city would provide further infrastructure improvements beyond the initial streetscape renovation along Central Avenue.Warren argues that the neighborhood's growth has been constrained by the lack of additional parking facilities. "It prevented a lot more experienced business owners from coming in," he says.

While Warren has been frustrated that the Rays haven't had a bigger impact on the Dome District, he adds that "their goal is not redevelopment, but to put together a winning team and satisfy their fans. (Neighborhood redevelopment) is not their responsibility, so I can't fault them for something that isn't their responsibility."

Not a growth engine

Back in 1992 when St. Petersburg was trying woo the San Francisco Giants, a study by the investor group looking to bring the team to town claimed that Major League Baseball would generate "a minimum of $100-million" in new business for the area. Then-St. Petersburg Mayor David Fischer proclaimed that "this city is ready to take off and I'll just say buckle your seat belts."

Today, seven years since the Rays started playing, Fischer strikes a less exuberant note."As far as the stadium itself goes and as far as the team goes and what's going on around there, I'm sure it's not what the fathers who decided to go for Major League Baseball thought about," he says. "They must have had much higher projections."

The 1992 study typified the hard sell that would-be team owners try to push on local public officials, according to Philip Porter, an economist at the University of South Florida in Tampa.

Money spent at professional sporting events doesn't enhance the economic well-being of a community the way patronizing locally owned restaurants can, Porter argues. Rather, he says, pro sports revenues are far more likely to be spent outside the local community, noting that the bulk of ticket sale revenue goes toward paying off the team owners' debts and the salaries of players who don't live year-round in the area.

"Baseball or sports in general is not an economic growth engine," Porter says. "It's an end-use consumption item, it's not like dredging a port, building an airport or improving your schools."

Moreover, he says, the stadium construction projects typically needed to bring in a sports franchise are usually a fiscal drain on local governments.

Indeed, the city of St. Petersburg's share of the annual debt service on Tropicana Field hovered around $6-million in 2004, composed of $4.1-million on the original debt for the stadium's construction and $1.83-million for subsequent renovations, according to city treasurer Jeff Spies.

And even though the Devil Rays are responsible for the day-to-day management and upkeep of the Trop, the city's subsidy of stadium costs - which includes property insurance and traffic-control expenses - continues to saddle it with an operating deficit at the stadium of nearly $1-million a year, according to Joe Zeoli, the city's managing director of development administration.

The city's 2004 revenues from the Trop included about $550,000 from the 50-cent-per-ticket surcharge collected during every event; about $300,000in naming-rights fees; and about $100,000 from its share of the parking receipts. But the first $250,000 of both the surcharge and naming-rights revenue are required to go into a capital account to offset the cost of major repair projects at the stadium.

That left the city only about $450,000 in operating revenue from the Trop, far short of the amount needed to cover the city's annual operating costs at the facility. Those expenses include about $1-million in property insurance premiums and $400,000 to cover the cost of off-site traffic control before and after events at the dome.

Still, Zeoli points out that the city's subsidy used to be twice its current level before the Rays moved into the dome.

"It's helping us financially because that's at least half of our subsidy," he says. "So that's a good thing. Certainly everyone would love to see it diminish more, but we're not doing too bad considering where we were."

Still a believer

After years of disappointment over the lack of greater economic benefits from the Rays, those doing business in the Dome District are operating under more realistic expectations.Kevin McCullough opened Pickled Frank's Roaring Seahouse restaurant in the 1100 block of Central Avenue in November 2003, long after it became apparent to others in the neighborhood that it was all but impossible to build a business focused on drawing Rays fans.

"When we opened our restaurant, one of the things we said is that good things that come from the baseball team, it's going to be gravy," McCullough says. "I was a firm believer in not putting all your eggs in one basket. We can't solely survive just on that."

Ferg's owner Mark Ferguson says he also has learned his lesson.

"Initially, I thought baseball was going to be the main driver," he says. "You learn. You've got to have a daily business, you've got to have a happy hour and you've got to have a night business. You have to have all three."

Still, Ferguson doesn't accept the argument that sports teams can't lift the fortunes of their neighbors. He still believes the Rays will ultimately benefit the Dome District, recalling fondly the crowds of customers he enjoyed when the ballclub was in the midst of its 12-game winning streak last June.

"We're going to have retail, offices and condos, and we've got the dome on top of that," he says. "All of the sudden, one day, you know what's going to happen? We're going to have a winner. And everybody's going to say, "What a great area."'

-- Damian Cristodero contributed to this report, which also includes information from Times files. Louis Hau can be reached at hau@sptimes.com or 813 226-3404.#

[Last modified March 7, 2005, 05:51:01]