Just catching up with this Tampa Bay Times article from last Friday, which proposed a list of ways that Rays owner Stuart Sternberg could pay for building an $800 million stadium without either dipping much into his own pocket or dumping all the costs on taxpayers. As you might imagine, that doesn’t leave much else:
How about making the stadium a showcase for local food? Or using training facilities as a community wellness center? Or letting a culinary school use the ballpark’s kitchens? While we’re at it, how about a water slide?
How about a water slide! The article doesn’t actually explain how a water slide would help pay for anything, but moving on:
“You want those who use it and go there to help pay for it,” said Hillsborough County Administrator Mike Merrill, who is at the center of the Tampa-Hillsborough effort to study stadium financing options.
Getting warmer, but how exactly is “make users pay” going to work? After all, that principle has been used for everything from ticket surcharges (which mostly come out of team owners’ pockets, and so are a pretty good deal for the public) to kickbacks of taxes in a “stadium district” (which don’t and are not).
“We’re aggressively looking for private capital, private developers, to build a stadium,” [Hillsborough County Administrator Mike Merrill] said.
We’ve heard this before, too, but a private developer is only going to invest in somebody else’s stadium if they can get a cut of the stadium revenue, right? At which point Sternberg may as well just put up the money himself and repay himself with those revenue streams.
At SunTrust Park, which opened last year, the Atlanta Braves spent $400 million developing The Battery Atlanta, a multi-use destination next to the stadium with a hotel, two office buildings, 550 apartments, a theater and about 20 restaurants. Still, the public contributed $400 million toward a ballpark that cost $622 million.
Ayup. And closing libraries to help pay for it.
Tampa Mayor Bob Buckhorn recently outlined one possible scenario. The city could create what’s been loosely described as an entertainment district around the stadium. Inside the district, a surcharge on sales of food, drinks and merchandise could generate revenue that would be used to help pay off stadium construction bonds.
“Because a stadium is there,” Buckhorn said, “restaurants are going to do better, alcohol sales are going to be higher, T-shirt sales, whatever it may be. The hope is that monies generated by construction of the stadium — be it commercial, residential or retail — be used to pay some of the debt service on the stadium, so you shift the burden from the taxpayers to either tourists or to folks who are benefitting from the construction of the stadium.”
Okay, so there’s an actual idea! Not a great idea, mind you — local restaurants aren’t going to do that much better as a result of having a stadium open 81 days a year nearby, so you’re quickly going to run into problems of whether to raise the tax surcharge to pay off more of the stadium or keep it low enough so people will actually want to open more businesses nearby — but it’s something.
Variations include creating a community development district (there are lot of CDDs for suburban Hillsborough neighborhoods already) or a special district similar to what the Legislature approved this spring for the $3 billion Jeff Vinik-Cascade Investment project known as Water Street Tampa.
Those are very different models, so different that “variations” isn’t really an accurate term. CDDs are basically TIFs: Public improvements are repaid by the projected future rise in regular property tax payments, a plan that can fail in two ways — either if property values don’t actually rise that much, or if they just cannibalize development you would have gotten anyway, either on that site or elsewhere in your city. The Vinik-Cascade project is a special tax surcharge on property owners, which at least doesn’t dip into money the public would be collecting anyway, but which also presupposes a lot of property value increase just from a stadium being built nearby, which doesn’t have a great history of coming true.
“A stadium is a magnet for, arguably, development that might not otherwise occur,” Merrill said. “What you’re trying to do is assess growth, new development, within a district that benefits from a stadium.”
That’s one heck of an “arguably” there.
The problem, ultimately, is that Sternberg is trying to find ways to equitably slice up a giant piece of nothing cake: There are only two ways to pay off a stadium, and one is through the increased revenues that come in from one — which isn’t likely to pay off anything close to the full construction cost, because new stadiums are usually not good financial deals , and if it were Sternberg could finance it with something called a “bank loan” — while the other is with public subsidies. “Let’s charge all the business and property owners who’ll be riding for free on our stadium” isn’t a terrible idea — New York state is considering using it to build more subways — but given past Florida experience with baseball-related development, you might maybe want to temper your expectations a bit.