Tampa’s proposed $100m for Rays stadium is only worth half that (or not — see update)

There’s been lots more posturing over the possibility of a Tampa Bay Rays move from St. Petersburg to Tampa today — check out Shadow of the Stadium for a full rundown — but I’m more interested in a tidbit I hadn’t noticed before from a Tampa Tribune column: The $100 million in Community Redevelopment Area money (a slush TIF-style fund that earmarks downtown property taxes for development projects) that Tampa Mayor Bob Buckhorn wants to dedicate to a Rays stadium is actually worth $100 million over 30 years*, not up front.

That’s a huge difference. Paid out over 30 years, $100 million is enough to finance maybe $50 million or so in upfront costs, depending on what interest rate you get on stadium bonds. Which means that if you assume a $600 million stadium and that Rays owner Stuart Sternberg will put in $200 million — a number he seems to have managed to get reified in the sports media, though so far as I can tell he came up with it out of thin air — there’d still be $350 million unaccounted for, even if Buckhorn manages to wrest the CRA money away from other projects eager to tap it.

Plus, as St. Petersburg city council chair Karl Nurse points out, the Rays would also have to pay off his city for breaking their lease early, if they wanted to leave before 2027. Picking a stadium site in Tampa may turn out to be the easy part; finding the money to pay for one without soaking local taxpayers is going to be … I was going to say “harder,” but I guess the real question is less how not to soak local taxpayers than which local taxpayers to soak, isn’t it? Unless either Sternberg budges from that $200 million figure or somebody invents another solution.

*UPDATE 8/9: Buckhorn now says that Henderson’s report was wrong, and that the CRA actually could provide $10-13 million a year over 30 years, which would easily pay off $100 million in stadium bonds. More on this on Monday…

10 comments on “Tampa’s proposed $100m for Rays stadium is only worth half that (or not — see update)

  1. When the team proposed the sail design stadium in 2009, it committed to contribute $150M up front plus assume all cost overruns to the new stadium. The $200M likely comes from assuming $50M in cost overruns, which is rather conservative compared to the overruns Miami saw.

  2. Neil
    You’re certainly right that the TIF money spread over time would have to be discounted a lot. However, how do you come to your figure of $50 million?
    If you consider that TIF money is an annuity, then by my calculations $13 million/year over 30-year term is worth in present value terms about $190 million assuming a 5% interest and $120 million assuming 10%.
    You’re right that we in the media should be double-checking the mayor’s math, though.

  3. Why do I have this nagging feeling the Rays would be better off staying at the Trop until the lease runs out? Future 2023 Field of Schemes headline:
    “New Rays stadium now drawing as few fans as old Rays stadium”

  4. Michael:

    I’m wondering where the “$13m” per year comes from? As I read it, it looks like only about $3.5m p/a will be available from the TIF/siphoned off from other city projects.

    Am I missing something here?

  5. John,
    The downtown Tampa TIF district generates $12 million in a down real estate market, or more than $13 million in a better market.
    I think the assumption that Neil makes is that money is collected only after 30 years, and certainly the present value of $100 million collected in 30 years is very low. However, the money will accrue at a rate of $13 million or more every year for decades, not at the end of the period.

  6. No, I was assuming it calculating the present value of $100 million spread over 30 years, based on Joe Henderson writing (in the article linked above), “It’s worth about $100 million over 30 years.”

    If Henderson is wrong and Buckhorn wants to devote $13 million a year to a stadium, then as Michael say, that would be significantly *more* than $100 million. So somebody, if not everybody, is deeply confused here.

  7. “I guess the real question is less how not to soak local taxpayers than which local taxpayers to soak, isn’t it? Unless either Sternberg budges from that $200 million figure…”

    Or he could stick to the $200M, build all the stadium he really needs and Tampa can keep its $13M/year ;)

  8. Michael:

    I understand that the tif generates more than $3m a year. What I’m not seeing as anyone saying *all* that money is going to be available for a new stadium.

    If I recall the article correctly, the suggestion was that at least some of the TIF funding would be available after 2015 (when presumably whatever it is presently paying off will be paid in full). I suspect, the city would not want to funnel all of it’s redevelopment taxes into a single project (even a hey, look at me! stadium)… but who knows.

    Any idea what the BRZ/TIF/CRL funding is going toward now?

  9. John
    It’s going to pay off the Tampa Convention Center, which should be paid off by 2015. At that time some or all of the $13 million would be available

  10. Michael, then do you know where that $100m figure comes from? Because it doesn’t match either the nominal value or the present value of $13m over 30 years.