The tag on the Trop: $233M and climbing
As the Rays bid for a new $450M home, it's worth looking at what the old, "$85M" one really cost.
By Aaron Sharockman, Times Staff Writer
Published March 9, 2008
To thunderous applause, the St. Petersburg City Council took a historic leap on a hot summer day 22 years ago.
The city would build a domed stadium for baseball. The cost to taxpayers: $85-million.
"Great ventures have never been undertaken without some risk," then-council member J.W. Cate said moments before green-lighting the project.
Today, the price of the stadium has almost tripled, according to a St. Petersburg Times examination of city and county records.
And the bill, which now is at least $233-million, will rise to $323-million by 2016 whether or not a new stadium is built.
The detailed analysis, compiled from 20 years of city budget and financial statements, is the first attempt to calculate the true local contribution to lure Major League Baseball to Pinellas County.
The numbers have no direct effect on the Tampa Bay Rays' proposal to build a new $450-million waterfront ballpark. The money is gone, or will be, and it all was budgeted before Mayor Rick Baker took office in 2001 or the Rays new ownership group took over in 2005.
But the costs raise questions about how much taxpayers should be on the hook should negotiations toward a new stadium continue.
"I do think that if this goes forward, it's very important that the city, the county, everybody, have their arms around what their exposure is up front, and what the limits of it are," Baker said. "That is, to me, basically a critical point."
Money hard to track
No one document in City Hall can answer the simple question: How much did it cost to build and maintain Tropicana Field?
One government analysis does not account for interest. Another only adds future payments.
Different financial statements did not factor in the million-dollar property tax payments the city once was required to make or the costs of the lawsuits over stadium construction.
But that's not all. Over time, the financing for the stadium was altered, as was the city's accounting and budget policies.
The inconsistencies, large as they are, do not appear underhanded. Rather, they emphasize the volatility of construction costs, the rigidity of government budgeting and the lack of a common vernacular when it comes to defining a stadium expense.
As a result, dozens of direct, and possibly hundreds of indirect, costs related to the Rays and baseball have never been added together.
Said former City Council member Bill Foster:
"The more paper that you turn over, and the more you stick your nose into the details, the more you find that you've only uncovered a percentage of what it has actually cost to construct and maintain the 85 acres known as Tropicana Field."
Stadium costs soar
The construction of Tropicana Field, as expected, is the biggest cost to taxpayers, records show. Interest payments on stadium construction loans is second.
When the city and county portion of the stadium is fully paid off in July 2016, local taxpayers will have spent $148.5-million before interest. With interest, the bill jumps to $293.3-million.
About $30-million was spent either attracting baseball to the bay area or operating the dome once it was built.
"I tried to break it down for them," said Dean Staples, one of three City Council members to vote against building Tropicana Field in 1986. "It was a very high number for a city the size of St. Petersburg. But people were convinced the stadium was going to turn the city around."
Between 1986 and 2003, the city issued seven government bonds backed by local tax dollars to pay for the construction and renovation of the dome.
Four bonds have been paid off, three are still being repaid.
The city's contribution for the stadium, which will total more than $205-million, largely comes from its share of sales tax revenues. None is coming from property tax payments.
The county, meanwhile, is making payments from tourist development tax revenues. The county already has paid $75.5-million toward the stadium financing, and the contribution is expected to reach $117.9-million when the county's commitment expires in 2015.
"When you look at these kinds of investments, it's very hard to carve out the investment and measure it against the return," said Rick Dodge, who as an assistant St. Petersburg administrator helped bring the Rays to town. "If you go back to the point in time of the early 1980s, downtown St. Petersburg was in cardiac arrest. Now look at it. But how do you measure that success?"
The financial arrangement is typical, said Hal Canary, a Fort Myers financial consultant with the firm Public Financial Management. So is the fact that the stadium cost more than expected. In 2005, the Washington Post reviewed nine publicly financed Major League Baseball stadiums.
Six had overruns - ranging from $30-million for the Philadelphia Phillies, to $115-million for the Arizona Diamondbacks. In all but one of the cases, the newspaper reported, the team paid the extra costs. But Tropicana Field had other issues. For the first eight years, it had no baseball team to share the burden.
Operation in the red
Operationally, the city hasn't fared much better.
After running more than $1.6-million annual deficits since the stadium opened in 1990, city officials believed baseball would end the need for city subsidies.
Under an agreement with the city, the Rays would absorb the costs for running the dome. Further, the city would collect a portion - starting at 50 cents a ticket - of the attendance revenues.
In the team's first year, the arrangement worked. The Rays sold more than 2.5-million tickets and, after other expenses, the city made $152,769.
But as attendance sagged, so did the city's main revenue stream. Overall, the city has lost $26.7-million operating Tropicana Field. Last year it was more than $2-million.
"When we got the franchise, by the time that came, the folks that were in charge didn't have a great bargaining position," Baker said. "They had a stadium and they needed a team. They put together the best deal they could."
City officials were caught off guard by the cost of property insurance. Premiums rose 1,700 percent between 1998 and 2007, from $127,544 to $2.3-million.
For all the extra money, the city actually has less protection.
Also, the Florida Supreme Court ruled in 2001 that cities were required to pay property taxes on publicly owned sports facilities. St. Petersburg spent close to $4-million on property tax payments before transferring ownership of the facility to Pinellas County, which is not under the same requirement.
The city also is spending $400,000 a year on stadium traffic management, which roils David McKalip, president of the antigovernment group Cut Taxes Now. "The message is it always costs more than you think."
While the cost may have been great, the dome has backers.
City officials point out that property values in downtown have nearly quintupled since 1986. And senior development administrator Rick Mussett said the stadium signaled to developers that St. Petersburg was ready for the next step. It helped prime the area for projects like BayWalk and the restoration of the Vinoy hotel, Mussett said.
"I don't think the whole story's written yet," Baker added. "We're only 10 years into the franchise. A lot of the momentum that came ... started with the search for Major League Baseball."
Rays' side of the story
For their investment in baseball, the city and county have gotten back three tangible things:
Tropicana Field, the parking lots that surround it and a Major League Baseball franchise.
The Rays, who want to relocate to Al Lang Field on the St. Petersburg waterfront, are asking voters to sell the first two assets to keep the third viable.
Put another way, the city and county will have invested $323-million in baseball at Tropicana Field by 2016. Not including $60-million from the state in the form of a sales tax subsidy.
The Rays' plan to take that investment - the property - and sell it. The proceeds would fund a new ballpark.
The public investment in baseball would not have to increase, they say. In fact, Rays executives believe local taxpayers would come back a winner. The team will know for sure when developers' proposals for Tropicana Field are heard March 18.
Rays senior vice president for development and business affairs Michael Kalt said the team will absorb any cost overruns for a new stadium, as long as they manage the construction of the new stadium.
The problems related to the construction of Tropicana Field came because there was no team to help guide the process, Kalt said, and because the city relied on the cost estimates of architects, not builders.
Not this time, he said.
"They did it because of the very specific needs of St. Petersburg at the time," Kalt said. "But it came at the cost of building a big, multipurpose dome not really suited for baseball."
The Rays say their new stadium, coupled with redevelopment of Tropicana Field, could transform St. Petersburg when both projects are open in 2012.
By then, the city and county will owe $46.9-million on Tropicana Field, once billed as the cornerstone of an emerging city.
Aaron Sharockman can be reached at firstname.lastname@example.org or (727) 892-2273.
Spent so far
Renovations for baseball:
Air conditioning replacement: $4,448,573.39
The anatomy of the debt
The city and the county already have spent more than $233-million on baseball, and they're on the hook for $89.6-million more.
Excise Tax Secured Revenue Bonds
Issued: 1986, refinanced in 1993
Purpose: Original construction
Principal owed: $54,825,000
Interest owed: $13,123,275
Who's paying: City, county
Final payment: Oct. 1, 2015
First Florida Governmental Financing bonds
Issued: 1996, partly consolidated in 2001
Purpose: Baseball renovations
Principal owed: $1,035,000
Interest owed: $63,150
Who's paying: City
Final payment: July 1, 2009
First Florida Governmental Financing bonds
Purpose: Refinancing of baseball renovations
Principal owed: $16,105,000
Interest owed: $4,467,637.50
Who's paying: City
Final payment: July 1, 2016
* The city estimates it may save $1.5-million on future payments because of interest earnings.
[Last modified March 8, 2008, 23:24:13]
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