If yesterday’s news had you thinking that city councils were just mindless automatons who would inevitably rubber-stamp any stadium deal set before them, then the St. Petersburg city council had a surprise for you: That body voted 5-3 yesterday afternoon to reject the proposed deal in which the Tampa Bay Rays could buy their way out of their Tropicana Field lease to move to a new stadium elsewhere in the bay area for a payment of at most $42 million.
Given that as recently as a week ago, all signs were that the council was going to approve the plan that Mayor Rick Kriseman had worked out with Rays owner Stuart Sternberg, this was a bit of a shocker. But according to the Tampa Bay Times, Rays execs shot themselves in the foot with their answer to questions about whether the team would agree to forgo a split of profits from development of land on the 85-acre Tropicana Field site if they were in the process of leaving anyway:
Council member Darden Rice, who voted for the agreement, said the Rays blew the deal with their presentation.
“I think at one point we had five votes,” Rice said. “But I was very disappointed by Auld’s response to Karl Nurse’s question about development rights. It was either tone deafness or arrogance.”…
Nurse had asked Kriseman earlier in the week to change the agreement so the city could retain all development rights in that situation. But the Rays declined to make any substantive changes to Kriseman’s deal.
Nurse still voted for the deal in the end, but this did not go over well with several other members of the council:
[Councilmember Bill] Dudley said he felt like the Rays were making ultimatums. “I don’t like arrogance,” he said.
“The deal breaker for me was the idea that they want us to abide by the use agreement for redevelopment purposes, where they can benefit,” [councilmember Amy] Foster said, “but they didn’t want to abide by the use agreement” by staying at the Trop.
“This is a common strategy,” she said. “They use their mobility in order to threaten cities in order to get more.”
Yep, that they do. But in most cases they don’t have an ironclad lease like the one that the Rays are locked into in St. Pete, which currently doesn’t allow the team owners to buy their way out, or even talk about leaving, until 2027. That’s a hefty piece of leverage that the council has at its disposal, and they just used it.
For Sternberg, the logical next step in this situation is to haggle: If the council wants a bigger share of development rights, throw them a bigger share of development rights. Or kick in an extra million or two a year in lease-breaking payments. But it seems like the council isn’t opposed to the principle of the deal, just the specifics, so the usual strategy would be to pick off a couple of councilmembers and find out what their price is.
Sternberg, however, has already declared that he won’t negotiate any more changes to the lease buyout, saying last week, “If it doesn’t pass, we’re doomed to leave.” This kind of paints him into a corner, with his only obvious options being:
- Try to pretend he never said anything about no further negotiations, and quietly resume talks in a few months. This would not only require swallowing a lot of pride at this point, but also leave him with a weakened negotiating position, since clearly his ultimatums wouldn’t be worth squat.
- Sit tight and wait — if not 13 years, then at least for a new city council to be elected next fall. And then hope like crazy that the new folks are more willing to give you anything you want.
- Sell the team and make it someone else’s problem. Forbes, which tends to underestimate team values, has the Rays worth $485 million, which would be a nifty 142% profit on what Sternberg bought them for in 2002. But presumably the Rays would be worth an awful lot more if they had a shiny new stadium to play in (especially if the shiny new stadium debt could be fobbed off on taxpayers), so Sternberg would be leaving a lot of hypothetical money on the hypothetical table if he took this route.
- Call Bud Selig and ask him to threaten to blow up the team on his way out the door, and hope that the courts will protect them from the inevitable antitrust lawsuit that would result.
So far, the Rays have just responded with a generic “You’re a bunch of poopyheads” statement:
— Tampa Bay Rays (@RaysBaseball) December 18, 2014
There’s still plenty of time — until 2027, really — for a deal to be worked out, so there’s no reason to start freaking out about the Rays moving to Montréal (unless you’re the Tampa Bay Times editorial board). The St. Peterburg council did send a message, though, that they’re at least aware that, as Jonah Keri puts it:
Up to Rays to incentivize St. Pete to cut 'em loose. City has a lease in place, and leverage, and is wisely using both.
— Jonah Keri (@jonahkeri) December 18, 2014
Public officials trying to negotiate better deals in the public interest. What’ll they think of next?