Phillies stadium financing clears first legal hurdle

But opponents of the sports complex plan to appeal to the state Supreme Court.

By CHRISTINA HEADRICK

© St. Petersburg Times, published March 6, 2001

CLEARWATER -- The city's planned spring training complex has won the first round of a legal fight -- but a further challenge looms.

The city can issue $14-million in bonds as part of the financing for the stadium complex without holding a referendum, Pinellas-Pasco Circuit Judge Crockett Farnell ruled, rebuffing a challenge to the legality of the bonds brought by Clearwater resident Dennis Roper.

Both sides learned of the ruling Monday.

Pat Maguire, the Clearwater attorney representing Roper, said he will appeal Farnell's decision to the Florida Supreme Court.

City Attorney Pam Akin said she was pleased Monday by the news. The appeal, however, could still affect the city's deal with the Phillies to build the stadium, which city commissioners approved last week.

That's because the city has until Oct. 1 to produce financing for the stadium or the Phillies have an option to walk away from the deal. If that happens, the city has to pay all of the Phillies' costs up to that date in planning and designing the stadium.

A Supreme Court appeal could conceivably derail the financing plan. But the appeal may not be decided before Oct. 1. A recent "expedited" appeal to the Supreme Court challenging a bond issue to finance the roundabout took more than a year.

On this case, Akin guessed that a Supreme Court appeal would take at least four months with the city pushing for a quick review of the case.

The city plans to finance the stadium by borrowing $14-million and issuing bonds, which will be repaid with state and county revenues. The city plans to chip in $5.7-million. The Phillies plan to spend a minimum of $3-million and cover cost overruns. The project will cost at least $22.7-million.

Roper challenged the bonds in February, when the city asked Farnell to validate its right to borrow money for the Phillies project.

Roper is a member of a group of nearby homeowners who have objected to the city's plans to build the spring training complex at 2465 Drew St., an old landfill that St. Petersburg Junior College gave to Clearwater last year. The homeowners say they think the stadium will worsen traffic, noise, drainage and possibly sinkholes in their area.

"As long as they continue to pursue the SPJC site, we'll continue to pursue appeals," Maguire said. "We hope that maybe the new commission will evaluate what is truly the best location for the city. We think a stadium in the downtown core would be far more beneficial than the junior college site."

The city has to seek referendum approval for borrowing money for any project costing more than $1-million -- unless a project is deemed for the public's health and safety or is defined as "industrial development."

The city's attorneys found that under state law, the definition of the term "industrial development" could include financing for a sports stadium. Thus, they argued, the city didn't have to have a referendum for the Phillies complex.

But Maguire argued that if the city wanted to use a state definition for industrial development, then it needed to follow a series of other state regulations for such projects.

For instance, Maguire said, state law requires the lessee of a project financed with industrial bonds to pay for operating and maintenance costs of the project, and pay back the debt that financed the project with rent.

That's not happening with the Phillies deal, under which the city has agreed to shoulder more maintenance costs for the team. The bonds aren't being repaid with rent, but with other tax revenues.

The conclusion of Maguire's argument was that if the stadium project wasn't industrial development, as described by state law, then the city needed to have a referendum to okay the stadium deal.

On the other side, the city's attorneys argued that state rules for industrial development simply didn't apply to the city's deal with the Phillies.

"We'll just have to wait and see what happens now," Akin said, "and we're of course prepared to defend an appeal if that occurs."

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