Rays stadium subsidy could top $1.5B counting tax and land breaks

In a better example of showing your math, two Tampa Bay financiers wrote an op-ed in Sunday’s Tampa Bay Times arguing that St. Petersburg’s plan for a new Rays stadium is a bad one because of multiple hidden costs, in so doing providing answers to a bunch of the outstanding questions about the deal’s finances:

St. Petersburg is taking on significant new debt to pay for a portion of stadium construction costs and related infrastructure – $704 million, including interest. Strike1!

The 22 prime acres near downtown used for the stadium won’t pay property taxes for at least 30 years – $411 million gone. Strike 2!

We estimate the 86-acre Gas Plant site is worth $700 million today, and St. Petersburg is losing most of that value by tying up 22 acres for the stadium for decades and giving the remaining 64 acres to the Rays-Hines group for just $155 million – $545 million gone. Strike 3!

That’s the kind of handwavy language that’s required in an op-ed, where you’re limited in word count. But fortunately affordable housing funder Tom Mullins and investment banker Ron Diner provided a link to a more detailed analysis, so we can establish what the numbers they arrived at actually mean:

• The city of St. Petersburg would be putting up $704 million for the stadium and infrastructure, while Pinellas County would be kicking in $587 million. That’s “including interest,” so it appears we’re talking about adding up the nominal cost of payments over 30 years here; if we translate that back into present value dollars, we get more like $660 million, which is about what was estimated previously.
• The Rays and their developer partners would be exempted from $411 million in city property taxes and $222 million in county property taxes over 30 years, which comes to around $320 million in present value.
• That $545 million land price break is all real present-day money. So if Mullins and Diner’s estimate of the actual value of the land is correct — they didn’t show their math on that one — that’s an actual $545 million that the city is giving up by cutting the Rays a deal on the stadium land.

Add it all up, and we’re looking at right about $1.5 billion worth of public cash, tax breaks, and discounted land being offered to Rays owner Stuart Sternberg and his development partners, which could set a new record for the most expensive stadium subsidy ever, at least unless Virginia beats St. Petersburg to the punch. That’d be an impressive haul for a guy who has no real other options for where to put his team — but then, it’s less about having actual alternatives than about convincing the right people that you do.