The Tampa City Council held the first of two scheduled workshops on a Rays stadium development yesterday, with both councilmembers and members of the general public asking whether a proposed deal isn’t being rushed through too fast before all the details have been spelled out. Whether or not to use money from the Community Investment Tax sales tax surcharge that officials had promised wouldn’t be used for stadiums is one open question, as is whether the CIT would even raise enough money and which sofa cushions to look under if it doesn’t.
Meanwhile, Axios, in one of its trademark fusillades of bullet points, raises yet another known unknown:
- It’s still unclear how much of the new stadium’s total footprint, including the surrounding mixed-use district, would be subject to property taxes. [Rays CEO Ken] Babby declined to address the question, as it’s still being negotiated.
- Yes, but: The Rays told the county that they intend for the planned mixed-use district surrounding the stadium to be “fully taxable,” while the stadium would be county-owned and therefore tax-exempt.
Those are two different answers! If the ancillary development around the stadium will be fully taxable, then that’s not still being negotiated; if it’s still being negotiated, we don’t know if it’ll be fully taxable. Furthermore, the college campus where the development would take place is state-owned, so that normally wouldn’t pay property taxes unless there’s a payment in lieu of taxes agreement.* Or maybe Rays execs are willing to allow it to be fully taxable, but only in exchange for some other concession, like the property taxes (or PILOTs) going to fund some part of the development? Totally speculating here, which is all we can do when team officials won’t answer questions directly.
How much of a difference would the Rays paying property taxes on their surrounding development make in terms of total public costs? What exactly team owner Patrick Zalupski would build around the stadium and when is another question team officials won’t answer, but there has been talk of it costing $8 billion. Property tax expert Geoffrey Propheter has already estimated that the cost of a full property tax exemption on a $2.3 billion stadium would be $742 million; while there’s no way to know what the tax valuation of a mixed-use development would be without knowing exactly what uses would be in the mix, it’s reasonable to expect that exempting it from taxes could cost a fair bit more than the stadium tax break, which could get us into the billions.
The total taxpayer shopping list for the Rays stadium-and-other-stuff project, then, now stands at:
- $750 million in county cash toward ballpark construction
- $250 million in city cash toward ballpark construction
- Between $250 million and $1.7 billion worth of free state land
- $742 million in property tax breaks on the stadium
- $97 million in foregone parcel fees on the stadium
- Between $0 and $??? in property tax breaks on the surrounding property, plus possibly other costs of that bigger project, given there’s still no memorandum of understanding covering it
That leaves the total public cost at $2.1 billion, minimum, and possibly billions more, maximum. It’s a ginormous error bar, and a huge pile of tax money either way, so you can see why Tampa and Hillsborough County officials might not want to rush into anything. Though on the other hand:
“People know the cost of everything but the value of nothing,” supporter Christopher Palermo said during public comment, primarily directing his remarks at [councilmember Charlie] Miranda. “If we lose this team, let’s not forget one thing: this is a competition to be the preeminent city in Central Florida. Orlando wants what we’ve got.”
(Palermo, for the record, is a construction and personal injury attorney who once spent $9,000 running ads telling then-Rays owner Stu Sternberg not to move half the team’s games to Montreal, something that turned out to be either a bluff or something that he’d failed to run past the league office.)
There is presumably a value to being the preeminent city in Central Florida — assuming the presence of a baseball team is how that crown is awarded — but is it $2.1 billion, let alone potentially billions more? That’s for Tampa and Hillsborough legislators to determine, and so far they seem content to wait for Zalupski’s side to cough up more info first.
*UPDATE 12:27 pm ET: Florida does have a provision for taxing leased property, though what rate it’s taxed at depends on a whole bunch of factors. (Thanks to Michael Bishop of the Tampa Monitor for pointing out the clauses in the proposed Rays MOU — see the tax memo at the end — governing this.) More to follow, eventually, on what exactly this would mean in terms of the possible value of any tax breaks for the mixed-use development.
See? You should have given Stu everything he asked for and another $500m just for being a good guy. Now, you’re not even arguing about how much less you can spend, you are arguing about how many more billions (literally) you are going to give the new guy. Don’t say I didn’t warn you, schmucks.
Don’t all you little people ever marvel at how we can get hundreds of millions, even billions, of dollars thrown at us for a game when many of you can’t feed or clothe your children properly (and certainly can’t cover healthcare for them, barely even a visit to the dentist).
And forget about buying tickets to the sports palaces you people were dumb enough to build for us. You’ll never afford those. Pretty soon, you won’t even be able to afford to watch us entertain our rich friends (gratis, naturally) in extreme comfortat the games on TV because streaming/RSN prices are so high.
And we just laugh and laugh and order up another round of Crystal (which you are also paying for, one way or another).
Is this a great country or what?
Feels like this will eventually happen, it will be a financial disaster, and by the time that becomes obvious even to the Christopher Palermos of the world, the people who voted for it will be long gone and the owner who is a crony of the government will be raking in money from the surrounding development that he didn’t have to use his own money to build.
And the next city up in the rotation will claim their situation will be different.
*crony of the Governor, autocorrect.
I think its a stretch valuing the community college land at that price. Its not like anyone is lining up for it. Add to that if its currently not generating property tax revenue then how is the tax break worth so much?
The same way letting someone build skyscrapers all over Central Park without paying property tax would be a huge subsidy.
Who would want to build skyscrapers on an island that Peter Minuit proved was only worth 60 guilders? That’s just throwing good money after bad.
I live in Orlando. There is absolutely no value to being the “pre-eminent city in Central Florida.” No matter how much the two metro areas grow, most of the domestic and (especially) international attention when it comes to Florida will forever be directed toward South Florida, specifically toward Miami.
The idea that Orlando “wants” the Rays also isn’t reflected at all in the day-to-day lives of the average Greater Orlando resident, most of whom are from somewhere other than Orlando — in a similar way that most everyone from Tampa Bay is from elsewhere — and whose baseball rooting interests reflect the realities of a heavily transient city/metro.
A few of the impossibly tiny cohort of people in Orlando with money *would like* to bring an MLB franchise to the area (which isn’t actually equipped in any way to support one at all, but that’s a whole ‘nother conversation). That’s not at all the same as the entire city being desperate for its own team.
Would it be fair (whatever that is in the present world…) to suggest that the overall cost to the taxpayer will at a minimum be in the $2.5Bn range over the course of non-relocation agreement/bribe?
As you say, there are alot of numbers being thrown around (and many others that may be thrown around as future asks come to the fore). As I look at your numbers above I’m seeing a few things that may increase but that certainly won’t decrease:
$1Bn in combined cash from the city/county
$700m in ‘free’ land (admittedly, it’s an avg picked in a wide range)
at least $700m in property tax abatements
That is more in public money than John Fisher’s ArmadilloDome is going to cost in total.
So we can certainly say it’s going to be $2.5Bn. Whether it ends up being more and how much more is hard to say. But isn’t that true of practically every stadium built in the past decade or two?
I’m more comfortable with “at least $2.1 billion.” But if you wanted to say “likely $2.5 billion or more,” I wouldn’t argue would that.