No, Rays owner can’t pay a “penalty” to move out of Tampa Bay before 2027

I don’t usually like to respond here to things that were only raised on Twitter, but this seems like an important one: Boosters of baseball in Montreal have seized on this week’s announcement that Tampa Bay Rays owner Stuart Sternberg has given up on a new stadium in Tampa for now as a sign that the team could be headed for relocation. And sure, their lease says that the Rays can’t move before 2027, but either Sternberg or a new owner can just get out of that by paying a lease penalty and then skedaddling.

Except that’s not what the Rays’ lease says at all. Here’s the MOU signed by the Rays and the city of St. Petersburg in 2016 to amend the team’s lease, and here’s the relevant sections:

And then a whole bunch of dollar figures, which comes down to $3 million a year if the team leaves before 2023, and $2 million a year if it leaves before 2027.

That wouldn’t be much of an obstacle if Sternberg wanted to move the team — but note that this only applies if the team wants to move to “another location in Pinellas or in Hillsborough” counties. There is no provision in the MOU that will allow Sternberg to move anywhere else in the world other than those two counties. Sure, he could try to negotiate one with St. Pete officials, and might even be able to do so once 2027 is getting closer and it’s a matter of “I’m gonna leave anyway, let me pay you some cash to let me do it a year or two early,” but there is no mechanism currently in place for him to demand to be allowed to do so.

St. Petersburg got a lot of things wrong when it built its dome back in the 1980s — building a stadium without first securing a team was the worst move, since it allowed the city to be used as a stalking horse by MLB owners seeking to extract stadium cash from their home cities for a decade before the Rays finally arrived in 1998 — but it did a hell of a job negotiating one of the most stringent stadium leases in the world. Let’s all remember that as we hold our fun debates over whether the best relocated team name would be the MonterRays or the Charlotte Raes.

Rays owner throws in towel on Tampa stadium, now stuck at Tropicana Field through 2027

We finally have an answer to the question of what Tampa Bay Rays owner Stuart Sternberg’s plan is for finding someone other than him to pay for most of the cost of a new $900 million in Tampa before a December 31 lease opt-out deadline and it is: He doesn’t have one. Yesterday Rays baseball operations president Matt Silverman announced that the team was giving up on its Ybor City stadium plans for now, and would not seek an extension of its option to seek a stadium elsewhere in the region, meaning the Rays will be locked into Tropicana Field through 2027:

“As much as we want this to move efficiently, three years wasn’t enough time,” Rays President Matt Silverman said. “Now it’s time to regroup and all options are on the table in Tampa Bay.”

While the timeline as reported is a bit unclear, it looks like the Rays’ announcement was at least partly prompted by a letter sent yesterday from MLB commissioner Rob Manfred to stadium negotiation Irwin Raij, in which Manfred pointed out that as Sternberg didn’t have any details on how either the public or private portion of the stadium tab would be paid for, he couldn’t take a position on it. Not that Sternberg wasn’t aware of this, but it would have been difficult to keep on plugging away for a last-minute stadium financing deal what with your own league commissioner saying, I’m not seeing this, guys.

That “all options are on the table” comment from Silverman presumably means that the team owners will now consider St. Petersburg sites as well; St. Petersburg Mayor Rick Kriseman issued a statement saying, “I stand ready, if asked, to continue the conversation related to the organization’s future in St. Pete,” which coyly didn’t specify whether this would mean a new stadium or an extension of the team’s lease at Tropicana Field. Either way, Sternberg has nine years to make a decision now — okay, more like six or seven years, since it’ll take a while to build a new stadium if that’s what he wants — so he has plenty of time to regroup and try to find someone to stick with the bill.

Resetting the clock for 2027 also changes one other thing, of course: While his current opt-out clause only allowed him to move elsewhere in the Tampa Bay region, in 2027 he’ll be free to move anywhere else in the world. There are plenty of reasons why a Rays relocation is unlikely — it’s still a larger market than most other alternatives, and other cities like Montreal and Portland aren’t promising to throw any more money at him than Tampa is — but you know he’ll be rattling that saber, anyway.

Finally, this announcement almost certainly slams the brakes on any thought of MLB expansion anytime soon, since Manfred has said he wants to get the Rays and Oakland A’s stadium situations resolved — which translated means “get them new stadiums without their owners paying more than they want to” — before considering adding new teams. You can stop holding your breath, Monterrey.

Hillsborough County proposes going halfsies on $892m Rays stadium, unspecific about how public’s share would be funded

WTSP’s Noah Pransky reported yesterday afternoon that Hillsborough County Administrator Mike Merrill has finally provided some plans for how to pay for a new Tampa Bay Rays stadium. In a memo Friday to the county commission, Merrill laid out the following:

  • Rays owner Stuart Sternberg pays half the cost of an $892 million stadium.
  • “The remaining 50% funding would come from some, or all, of the following sources: private investment via an Opportunity Zone Fund; private investment by Ybor landowners via a Community Development District(s), authorized by the City of Tampa; and Community Redevelopment Agency (CRA) property tax revenues.”
  • Cost overruns and future maintenance costs would be paid for by Sternberg, who would also pay rent, but not property taxes.

On the face of it, that doesn’t tell us a ton, since those three public funding sources are very different in where the money would come from. The Opportunity Zones are a Trump creation that allows land development to be used as a tax shelter on capital gains taxes; it’s not entirely clear how the county would monetize this, though it’s certainly possible. CRAs are effectively tax increment financing, where any rise in tax receipts in an arena gets kicked back to pay off a project’s construction bonds. CDDs are similar, but are a tax surcharge, not cannibalization of existing taxes, so are somewhat easier on the current public purse.

Clearly those are all different kinds of subsidies with different pros and cons — the CRAs are the most straight-up of a cash grant, while with CDDs and OZs the concern would be more if the county would have to promise to backstop any shortfalls if the new revenues didn’t turn up, which is a thing that happens. On Twitter, Pransky took a guess at what the breakdown might look like:

And as for the likelihood of all this actually working to pay for a nearly billion-dollar stadium cost:

There are other options as well, including a 1% hotel tax increase that the county could put in place, which as Pransky notes would raise less than $100 million, but every drop counts.

The concern here is that Tampa is going to get caught focusing on “How can we find enough money to make this happen?” instead of “How much is it worth to taxpayers to make this happen?”, which as any experienced eBay bidder knows is a great recipe for paying more than you wanted to. There are some potentially not-terrible funding ideas here, but none of them are likely to get anywhere close to the kind of public money Sternberg is looking for — which raises the question, if Sternberg doesn’t think it’s a good investment to put more than a couple hundred million into a new $900 million stadium, are we sure that building one is a good idea in the first place?

County leaders demand Rays owner commit to extremely vague stadium terms before, well, sometime

Hillsborough County administrator Mike Merrill has declared that it’s time for Tampa Bay Rays owner Stuart Sternberg to declare whether he’ll accept the county’s plans for financing a new stadium:

“Our mission was to build a framework for a deal and this is the best we could come up with. We really need to hear from the Rays.”

If you weren’t aware there was any “framework” for a Rays stadium deal, this apparently happened on Friday, when Merrill sent a memo to the county commission outlining some extremely general terms. As reported by the Tampa Bay Times:

It says the Rays, the city of Tampa and Hillsborough County may each have to put up a reimbursable guarantee not to exceed $50 million.

The team would be required to pay for any construction cost overruns and to make annual rent payments. The Rays would also have to pick up the tab for stadium repairs, maintenance and future ballpark upgrades.

Like Raymond James Stadium, Amalie Arena, and Steinbrenner Field, the memo states, the baseball stadium would not be subject to property taxes except for private sections controlled by the Rays.

Those are all interesting pieces, but the memo entirely leaves out the biggest elephants in the room, which are who will pay how much toward the stadium’s construction cost, how much the team’s rent would be, and how the team and public would split any naming rights and other revenues from the venue. Without establishing those, it’s impossible to know how good a deal this would be for the Rays and for Tampa residents — and, honestly, impossible for Sternberg to say whether this is a framework that would work for him, though I suppose he could always say, “Sure, I’ll pay cost overruns,” figuring if he gets enough up-front cash and estimates high enough on the initial price tag he can cover any unexpected expenses.

Ken Hagan, the county commissioner who’s taken the lead in Rays negotiations, says he hopes for an actual term sheet spelling out funding to be ready by March. He also said that “it’s always been assumed the team would have to invest at least half of the cost,” though apparently “the team” could include private investors, and maybe naming rights money could count toward the “private” half, and really we don’t know enough about the missing pieces in any deal to tell what the public statements so far do mean in terms of who’ll pay for what.

Meanwhile, Hagan is threatening to sue TV station WTSP for reporting how Hagan’s maps of the proposed stadium site made their way to a Hagan-connected developer before the rest of the county commission even saw them, allowing him to start buying up properties in advance of the county securing the land. Hagan says he didn’t directly give the developer the maps; from the sound of things, the maps were actually passed along either by the Rays or by Irwin Raij, the county’s outside consultant.

Oh, and who’s set to be negotiating the Rays deal for the public?

Hillsborough leaders plan to create a negotiating team that will include: County Commissioner Ken Hagan, the county’s designated point person on a new stadium deal; Tampa Sports Authority President and CEO Eric Hart; a representative from the city of Tampa; and New York attorney Irwin Raij, who specializes in stadium deals.

This is going to go just great!

Tampa Bay Times got $1.5m loan from Rays stadium partner, insists this was nothing worth disclosing to readers

WTSP’s Noah Pransky is at it again, uncovering that Tampa developer Darryl Shaw — the guy who got secret advance notice of Tampa Bay Rays stadium plans from Hillsborough County commissioner Ken Hagan, then donated cash to Hagan’s re-election campaign — is also one of the mystery investors who loaned the Tampa Bay Times $1.5 million each last year. The Times had only revealed four of the eight names originally; the four mystery investors turned out to include both Shaw and Tampa Bay Lightning owner Jeff Vinik.

Times CEO Paul Tash has previously said that all of this is cool, because the loan terms do not “give the investors a stake in the Times’ ownership, or a say in the Times’ news coverage or editorial commentary,” and noting that the paper already covers its own advertisers, so there’s no conflict of interest here. But this is exactly why journalism codes of ethics require that news outlets disclose any potential conflicts of interests: It’s easy for readers to see who a newspaper’s advertisers are (though admittedly less so when there’s no physical paper to flip through and see all the ads), but it’s tough to determine whether a paper’s coverage of the Rays’ proposed stadium development, say, is swayed by the paper’s owners feeling beholden to one of the beneficiaries when there isn’t even a boilerplate notice to say “(Shaw is one of the paper’s eight main creditors).”

Anyway, we can all agree that none of this matters so long as the Times continues to do hard-hitting reporting on all topics affecting its loan partners. Now let’s sit back and enjoy this interview by Tampa Bay Times sportswriter Marc Topkin with former Rays (and current Chicago Cubs) manager Joe Maddon where he says a new stadium in Tampa is necessary “for the survival of major-league baseball in this community,” with no rebuttal or followup questions about whether the Rays would really leave and to where if they didn’t get a stadium approved. Though this actually is the kind of thing Topkin was doing long before the Times got its loans, so I guess maybe the funding looks less like a potential bribe to do puff-piece coverage and more like a reward for already doing so.

Friday roundup: Tampa won’t divert road money to Rays stadium (probably), Columbus may spend $100m on Crew stadium, Anaheim signs Ducks lease extension as new mayor vows to placate Angels

You know who the real turkeys are this week? Nah, my heart isn’t in making Thanksgiving puns, just read the news, folks:

  • Three of seven Hillsborough County commissioners have promised that a new sales tax for transportation projects won’t mean diverting money from the existing transportation project to, say, a Tampa Bay Rays stadium, which the mathematically inclined will notice isn’t actually a majority of the county board. It’s still not super likely that the county will try to raid transportation funds to pay for a stadium, unless maybe it’s for transportation costs related to one, and there’s still several hundred million dollars in construction costs unaccounted for, but anyway it’s worth keeping at least half an eye on as we head toward the team’s December 31 lease opt-out deadline.
  • A paid consultant working on a new downtown arena for Saskatoon says it could have a “catalytic effect,” because of course he does, really, Global News, you ran an entire article that’s just interviewing one guy employed on the project? For this you want me to disable my ad blocker?
  • Forbes’ Mike Ozanian reports that “a person with knowledge of the deal to keep Major League Soccer’s Columbus Crew in that city” says the new owners will pay $150 million for the franchise and spend $150 million toward a new downtown stadium, while “the public would foot the other $100 million.” Nobody else seems to be reporting on this, so maybe we should wait to be sure that Ozanian didn’t get his plus and minus signs mixed up again.
  • The Atlantic’s Rick Paulas suggests that we end stadium extortion by forcing pro sports leagues to massively expand and then institute promotion and relegation, which would sort of work, if there were an easy way to accomplish this through antitrust legislation, which you’d think if Congress could manage that they could manage the much more straightforward measure of taxing sports subsidies out of existence, but who knows, maybe a “market-based” solution would go over better in these times, sure, what the hell. “Of course, cities could also elect leadership that will defend them against bad deals,” notes Paulas, which isn’t a bad idea either.
  • Anaheim has signed a lease extension to keep the Ducks in town through 2048, involving the city selling the team 16 acres of land for $10 million — which if the stymied Angels deal is any guide would probably be a small discount, though Anaheim officials claim it’s market value — but the city will get a cut of arena profits after the first $6 million a year instead of the first $12 million, a threshold that’s never been hit. There are a lot of (small) moving pieces here, but I’m willing to say this is probably not too bad a deal, especially compared to some of the much, much worse lease extensions that cities have agreed to. Next is to to see about getting Angels owner Arte Moreno to accept the same logic, now that newly elected mayor Harry Sidhu is vowing to change “the hostile political environment in Anaheim” and “keep the Angels in Anaheim where they belong,” okay, Anaheim residents are probably going to have to settle for just a good Ducks deal.
  • Atlanta Falcons COO Greg Beadles tells NPR it’s not team owner greed that causes stadium food prices to be so high, it’s just that after teams force concessions companies to bid as high as possible for stadium contracts, the only way they can make money is to charge through the nose for food! Anyway, NPR gets busy talking to fans at a Falcons game about whether they’re happy the team lowered its food prices, and they’re happy about it, so no time to fact-check whether team execs’ statements make any damn sense. Free refills on soda, woohoo!

Tampa commissioner shared secret Rays stadium site plans with developer who later donated to his campaign

In case you need reminding why WTSP-TV reporter (and former Shadow of the Stadium blogger) Noah Pransky is the best, he spent two years looking into Hillsborough County commissioner Ken Hagan’s behind-closed-doors talks with Tampa Bay Rays owner Stuart Sternberg on a new stadium deal — including following him around for an entire day while Hagan refused to answer questions — and yesterday came up with this:

However, the secret details of where Hagan and the Rays were planning to put a new stadium were not secret to every member of the public – one key developer was given access to the information that should have been available to all. Hagan had a county staffer draw up maps of the exact location in Ybor City, where the team is now campaigning to put the stadium, as far back as 2016.

The developer used that information to buy land at a discounted rate, put himself in position to profit off the new stadium announcement, then became a significant contributor to Commissioner Hagan’s re-election campaign. At no time were Hagan’s fellow commissioners – or members of the public who requested the public documents – provided the maps.

That is … holy crap, that is borderline solicitation of bribes, if Hagan actually leaked the information to the developer — Darryl Shaw, who got the information via Hagan’s paid consultant, Irwin Raij — with the intention of getting kickbacks from Shaw’s profit on the stadium land via Hagan’s campaign fund. And even if Hagan was just doing a favor for a friend and didn’t expect to get several thousand dollars in his campaign tip jar as a result, it’s an extraordinarily dereliction of public duty, and one that could conceivably result in criminal charges:

Ben Wilcox, research director for watchdog group Integrity Florida, says ethics violations are civil in nature and punishable with fines of up to $10,000. However, if law enforcement finds evidence of a quid pro quo where favors were exchanged, criminal corruption charges could follow.

“This should be thoroughly investigated,” Wilcox said. “The public’s money is being used to facilitate this deal, and for the public to have confidence their money is being used above-board, there needs to be complete transparency.”

Hagan has also received campaign checks from Sternberg and Major League Baseball officials, Pransky has previously reported. Even if all this isn’t technically illegal, hiding information from the public and your fellow commissioners while giving it to a pal who could turn a profit on it is technically icky, and should be prosecuted to the fullest available extent of our ridicule.

Friday roundup: Possible Suns arena renovation funding plan, A’s and Rays still promising stadium news by year’s end (but don’t hold your breath)

When it rains, it pours, and this week provided a deluge of stadium news:

Tampa voters approve sales tax hike but elect new anti-subsidy commissioners, this is probably a wash for the Rays’ stadium plans

One more election result from Tuesday, and it’s a mixed one for the Tampa Bay Rays, who saw voters approve a sales tax hike for transportation project that could benefit a baseball stadium, but also elect new county commissioners who may be more opposed to sports subsidies.

The sales tax hike first:

While money from the newly-approved new one-cent sales tax for transportation cannot be used to construct a stadium, it could provide much-needed funds for infrastructure around the stadium. It could also free up other county money to fund stadium-related expenses.

I’ve discussed previously here how broad tax pools can serve as slush funds for development projects, and there’s some concern here that this could happen with the transporation fund as well. Still, it would be tough to use either the money itself or other moneys it freed up for anything more than infrastructure, and a new Rays stadium would need a lot of money for things that weren’t infrastructure, so we’ll see.

Then there are the new Hillsborough County commissioners:

In District 5, Mariella Smith bounced Republican incumbent Victor Crist, who had been open to Hagan’s stadium dealings. Smith told 10News no general revenue funds should be used for a new Rays stadium but kept other possible funding mechanisms on the table.

She has also been critical of the secrecy surrounding the stadium talks.

In District 7, Democrat Kimberly Overman defeated Republican Todd Marks, who said he opposed subsidies for the Rays. Overman seemed more open to the possibility but said it wasn’t a “core issue” to her campaign.

It won’t be easy to get four commission votes to approve a new stadium deal if it involves any county money; conservative Republican Stacy White won re-election Tuesday in District 4, and several sitting commissioners have expressed hesitations about spending money from a tight county budget on a new Rays ballpark.

tl;dr version: Hillsborough may have a bit more money to spend, but it’s also likely to be less inclined to spend it. That December 31 deadline for Stuart Sternberg to opt out of his Tropicana Field lease is getting more and more interesting.

Friday roundup: Election Day could have big consequences for Rays, Blue Jackets, Clippers

Happy last week before Election Day! Unsurprisingly, we lead off with a bunch of vote-related news:

  • Tampa Bay Rays president Brian Auld says he’s confident team execs will be able to meet a December 31 deadline for stadium funding without having to ask for an extension, even though right now there’s currently a $300 million funding gap. Frequent FoS commenter Scott Myers has theorized that the Rays ownership is hoping Hillsborough County voters will pass a 1% sales tax hike for transportation on Tuesday, which would free up other public money to pay for transportation improvements for a Rays stadium; that doesn’t seem like it’d provide $300 million, but every hundred million dollars counts, so everybody watch the ballot results carefully. (Which you should be doing anyway. And voting!)
  • The Columbus Blue Jackets owners, who have been criticized for being the main beneficiaries of a proposed 7% ticket tax in the city because their arena would get the lion’s share of the proceeds, surprised everybody this week by coming out against the tax, saying it “would materially harm our business.” Maybe this is reverse psychology to get residents to vote for the bill, since they’ll no longer think it’s a sop to the hockey team? Okay, probably not.
  • Madison Square Garden has given $700,000 to the campaign of the chief challenger to Inglewood Mayor James Butts in an effort to block plans for a new Los Angeles Clippers arena that could compete for concerts with MSG’s Forum, and the Clippers have fought back with $375,000 in spending to support Butts’ campaign. Poor grass.
  • In non-electoral news, the University of Connecticut is building a $45 million hockey arena on campus even though its team will continue to play most of its games in Hartford’s XL Center, just because its new NCAA conference requires an on-campus arena. (It also requires that the arena have at least 4,000 seats, but UConn got a waiver to only build 2,500 seats.) Since UConn is a public university, this technically means that public money will go into the project (though the university says it can pay for it from its own reserves), but mostly it’s bizarre to see an entire arena being built just to meet a technicality — what do you think the carbon footprint will be for this?
  • Transit experts are worried that the 2020 Olympics will overwhelm Tokyo’s already-crowded subway system, though they may not be anticipating how much the Olympics tend to cause anyone not interested in the Olympics to stay the hell out of town. The government has been encouraging local businesses to stagger work hours and open satellite offices to accommodate Games traffic, since “everybody call in sick for three weeks” would be anathema to Japanese work culture.
  • Opponents to Nashville SC‘s stadium plans are seeking a court injunction to block construction of a new expo center to replace the one that would be torn down to make way for the soccer stadium on the grounds that it would interfere with parking for a flea market, which is a first in my book.
  • Louisville is officially not bidding for an MLS franchise (yet), which unofficially makes it the only city in the whole U.S. of A. that isn’t. How is MLS ever going to meet its dream of a franchise for every individual person in North America if these keeps up?

That’s all for this week — go vote! And try to fight your way past the journalism extinction event to educate yourself about all those downballot races and initiatives and such, since as we cover here every week, they can have huge consequences.