Category: Tampa Bay Rays

Negotiating is a funny business: You simultaneously want to hold the line in hopes of getting the best deal for your side, while also offering concessions as an enticement to get a deal done. It’s a tricky dance, and requires knowing when to bluster and when to accede, in the hopes of vanquishing your enemy while also making them feel like they’ve won a reasonable victory.

Or, you can do like Tampa Bay Rays CEO Ken Babby, and just tell the people you’re negotiating with that your offer is final:

“Collectively we are not reopening a discussion on the economics in the MOU approved by the county commission and city council,” Babby told the Tampa Bay Times at Yankee Stadium. “We do recognize that there are many unresolved issues, and we will begin focusing on that this coming week.”…

The numbers in the stadium deal, Babby said, “are what they are,” with the team unlikely to make further concessions or additional contributions.

This is a bit of a bold move, given that Babby and company appear to have some work cut out for them winning over elected officials in the wake of last week’s narrow approvals by the city and county of a nonbinding MOU. Tampa city councilmember Bill Carlson, who cast that body’s swing vote to approve the MOU, subsequently told the Tampa Bay Times he only did it to keep talks alive, and that he “will definitely vote no” on any final proposal. That leaves Rays execs having to flip one of three other no votes: Charlie Miranda, who called the Rays plan “a terrible one for the taxpayers”; Lynn Hurtak, who warned that the Rays’ plan could force the city to sell bonds at high interest rates; and Guido Maniscalco, who asked Babby if the Rays would consider reimbursing the city for Community Investment Tax money that voters had been promised wouldn’t be used for stadiums, and got told nope, the Rays don’t plan to pay for anything more than the $1.3 billion (less $1.1 billion or so in free land and tax breaks) they’ve already committed.

This wouldn’t matter so much if the Rays could go ahead and use the nonbinding MOU to get state funding approved now and come back to the city and county later, as seemed to be the initial plan. But while the Florida legislature has put $50 million into the state budget for “campus improvements” to Hillsborough College — read: rebuilding its classrooms in one corner of its Dale Mabry campus to make way for a Rays stadium — state senate appropriations chair Ed Hooper still says he’s opposed to final approval of the $50 million until the city and county have signed off for real on their parts, and adds that Gov. Ron DeSantis is too: “He will get the budget eventually, and I believe the local governments are in a position where they’re not going to take forever to make these decisions.”

It seems unlikely that DeSantis is really trying to sandbag the stadium dreams of his pal and donor Rays owner Patrick Zalupski, so maybe this is just a move to pressure the city and county to commit to something binding before the end of their sessions this week? And maybe Babby is attempting the same? It’s so hard to tell 4D chess from hubris, even with Hanlon’s razor in hand.

As expected, the Hillsborough County Commission voted yesterday to approve the nonbinding MOU put forward last week for a $2.3 billion Tampa Bay Rays stadium (and unspecified other development) on what is currently Hillsborough College’s Dale Mabry Campus. The final tally was 5-2, with the two sure no votes, Donna Cameron Cepeda and Joshua Wostal, in opposition, while all the predicted yeses and maybes voted yes.

Some of the comments by commissioners during the voting session, courtesy of the Tampa Bay Times:

Chris Boles, yes: “It has to be about what comes with it. Does it create real jobs? Is there real taxable value? Does it expand our economic base? Those are real questions that we need to ask.”

Donna Cameron Cepeda, no: “We have so many important infrastructure projects that would be pushed back and also there’s mention of ‘no general revenue funds would be used’, but yet we’re showing that reserves and cash of $103 million would be used.”

Harry Cohen, yes: “This really can be a transformative project, but it can only be a transformative project if we have a little bit of courage and a little bit of faith. And that means saying ‘yes’ today. This isn’t a final yes. It’s a conditional yes.”

Ken Hagan, yes: “At the end of the day, regardless of where you stand on the issue, today’s vote is on a nonbinding [memorandum of understanding]. There’s zero downside with letting [County Administrator Bonnie Wise] and staff continue to negotiate in order to reach the best possible deal for the county and the taxpayers.”

Christine Miller, yes: “Our city would not be on the entertainment map, being compared to the likes of Nashville, Atlanta, New Orleans or any other hub without these investments. Champa Bay was not built overnight.”

Gwen Myers, yes: “This is an opportunity bring almost 12,000 jobs to the community. … I’m gonna support this deal. This is a good deal only for us only to move forward until … the county administrator can bring us back a final document that we can approve.”

Joshua Wostal, no: ”This [memorandum of understanding] absolutely imposes risk and harm, not only to law enforcement and first responders, but also the general taxpayers, and nobody can suggest otherwise. … Any move for approval of our taxpayers’ funding should be made to put on the November ballot.”

That’s some pretty lukewarm enthusiasm, but you know that Rays officials don’t care so long as they get their (nonbinding) approval. Team CEO Ken Babby declared himself “grateful” to the commission but also noted that “it is only the first of several crucial steps this week to keep the project on track and ultimately make it all come to life.”

The next step was for the Hillsborough College board of trustees to approve a ground lease for the stadium project, which they did yesterday as well. A third will come this morning, when the Tampa city council is also expected to approve the MOU.

The baton will then pass to the state legislature, which will have to decide whether to approve its share of around $2 billion worth of public subsidies for the deal, mostly in terms of free state land but also some actual state cash, without knowing if the city and county are fully on board. That’s the only piece of the deal with a real deadline, as Gov. Ron DeSantis, old pal of Rays owner Patrick Zalupski and to a large degree the impetus for this deal, leaves office at the end of 2026.

After that, it’ll be back to the county commission and city council to ask those “real questions” and come up with a final deal, likely later this year. (One piece will involve coming up with a way to show what return the public will get on its $2 billion-plus expense, something county staff are confident they can do even if it takes a whole stack of clear plastic binders.) It certainly looks like the skids are at least partially greased for ultimate approval at this point, but we said much the same thing in 2024 in St. Petersburg, so everyone involved surely knows that it ain’t over until it’s over.

The Hillsborough County commission and Tampa city council look set to vote tomorrow and Thursday, respectively, on a nonbinding MOU for a Tampa Bay Rays stadium project requiring about $976 million in city and county tax dollars plus $839 million in property tax breaks and at least $250 million in free land for the stadium site, coming to just over $2 billion in subsidies for a stadium that will cost $2.3 billion. Let’s hear what some of the main players have to say for themselves:

• Tampa council chair Alan Clendenin wrote an op-ed in the Tampa Bay Times declaring that this one will be different, because unlike when Tampa gave money to the Buccaneers owners for an NFL stadium and the New York Yankees owners for a spring training facility and the Lightning owners for an NHL arena, this is “an expansion of that successful public-private model to an entirely new level” and “a city building deal” that will “create tens of thousands of jobs and generate new tax revenues that can help improve parks, roads, infrastructure and future transit opportunities” [citation extremely needed].
• Rays CEO Ken Babby got a column worth of softball questions from Florida Politics (with “assistance from AI,” okay then), which he used to assert that the stadium district will generate “$55.5 billion in economic impact” (as reported previously, this is a largely meaningless number based entirely on assuming the team’s projections are correct), that “there will be no new taxes to fund this project” (only true if Tampa and Hillsborough County don’t have to raise taxes to fill in the resulting budget holes, which LOL) and that it would be “the largest private investment by a sports team in Florida history” (also the largely public investment in a privately controlled sports stadium in Florida history, but who’s counting?). Babby also got his own TB Times op-ed space, alongside Hillsborough College president Ken Atwater, to assert: “This is not merely a ballpark project. This is the definition of transformation” (but in which sense of the noun?).
• County commissioner Joshua Wostal, also speaking to Florida Politics, said of the new MOU, “if anything, it may have gotten worse,” and that the increase in county Community Investment Tax spending from $272 million to $360 million would eat up more than half of the tax’s revenue between 2027 and 2030, with the result that “we’re going to have to delay a significant amount of projects.”
• Tampa council member Charlie Miranda told Florida Politics that the new MOU is “all about pie in the sky and that everything is going to work out. Well, that’s not the way I do business.”
• Tampa Mayor Jane Castor assured residents in her weekly newsletter that the nonbinding MOU is “less like a contract and more like a handshake with a witness,” so all good to agree to it and then figure out what it actually means later.
• UPDATE: Late addition to the TB Times op-ed section this morning: Five former local elected officials say current elected officials should “just say no”: “The owners of the Rays need to be in the Tampa Bay market much more than we need them to stay. So, elected officials, call their bluff.”

It seems likely — though by no means certain — that the county and city will okay the nonbinding MOU this week. After that, it’ll be up to the state legislature to decide if that’s enough local skin in the game for Florida to hand over state land and funds, or if it will wait until there’s a binding MOU. And after that, it’ll be up to the city and county to turn that handshake into a contract — something that could go more smoothly once the project gets state approval and seems like a fait accompli, or could run into even more opposition if, I dunno, Tampa Bay gets hit by another hurricane, say. But don’t worry, that probably won’t happen unless … oh. Oh. Maybe don’t place your prediction market bets on a new Rays stadium just yet, at least until you see the fall water temperatures in the Gulf of Mexico.

If Tampa Bay Rays owner Patrick Zalupski’s Plan B now that the city of Tampa and Hillsborough County won’t vote on stadium subsidies by the end of this legislative session is to go get state money first and figure out the rest later, uh, he may need a Plan C:

Sen. Ed Hooper, a Clearwater Republican who leads the Senate budget committee, told reporters that he didn’t think the state should be assigning any money to the effort until local governments reach agreements with the Rays.

“The locals, Hillsborough County and the city, there seems to be some heartburn at the request,” Hooper said Tuesday. “And until they resolve that, I don’t think the state needs to be involved.”

So, would the city and county signing nonbinding memorandums of understanding be enough to get Hooper and other state senators to free up the state funds? Would the Tampa council and Hillsborough County commission even go for that by June 1? And then what would it take to make the nonbinding bind?

Today’s brief Tampa Bay Times report doesn’t go into that level of detail, but Florida Politics hints that the state money could still come via a side door, citing the old “sources familiar with the situation” — which could be anyone from top legislative leaders to the reporter at the next desk — as saying that “the funding will probably still come, most likely through the Public Education Capital Outlay report that is part of the budgeting process.” That would imply using state higher education capital funds to pay for the state’s share of the Rays project on the grounds that it’s really a project about improving Hillsborough College by cramming it into a corner of campus to move it out of the baseball team’s way; this sounds potentially even more controversial than siphoning off disaster relief money to spend on a stadium, but I guess the legislative heart wants what the legislative heart wants, heartburn be damned.

Everybody likes round numbers. If we have the choice between reading about a stadium that will cost taxpayers $600 million and one that will cost “hundreds of millions,” we know which one we’ll prefer, and for good reason: Specific numbers stick in your head, and you can repeat it to your friends and on the socials, whereas just providing the number of zeroes at the end feels vague and unsatisfying. It’s one reason why so many of us are attracted to LLM chatbots that can give us confident, definitive answers, even if those answers are very often wrong.

On this site, I’m always striving to provide numbers where I can, while acknowledging where we don’t really know for sure. It’s why yesterday, I cited the proposed Tampa Bay Rays stadium project as having a minimum taxpayer price tag of $2.1 billion, but noted that it “could” be billions more. That’s a huge range — can we narrow it down any more?

To that end, I spent a chunk of yesterday messaging with Michael Bishop of the Tampa Monitor and University of Colorado Denver economist Geoff Propheter, trying to suss out more of the knotting financial details of the Rays deal. And while there remains a lot we don’t know — spoiler alert, you’re still not getting one nice, satisfying round number at the end of this — we were able to determine more than we knew yesterday:

• On the central question posed yesterday — will the Rays pay property taxes on their mixed-use “stadium district” — the answer appears to be: yes, but not necessarily 100% of what they’d normally pay. In the city of Tampa’s feedback summary attached to the Rays’ proposed MOU, it’s noted that team owner Patrick Zalupski intends to pay enough in property taxes to cover payments on Community Redevelopment Agency bonds being used for the stadium. If the property taxes fall short, the Rays owner will pay “rent” (scare quores in original) to make up the difference. (Note: These “rent” payments are likely meant to assuage concerns that the city would be selling CRA bonds and counting on the property taxes from potential future development to pay them off; this way, Zalupski covers the bond payments even if he never erects a single building in the stadium district.)
• The CRA bonds have previously been reported to be for only $224 million, and full property taxes on an $8 billion development should generate a lot more than that. And there’s no guarantee in the MOU that the Rays will make tax payments equal what a private developer would pay on private land, so there could still be tax breaks involved here.
• The stadium district would be built in the Drew Park CRA — a TIF district, basically, that siphons off increased property taxes and uses them for development costs — so the city would already get no new tax revenues from that area through the expiration of the CRA, currently scheduled for 2034. Rays officials want to extend the CRA through 2056, meaning, yep, additional tax breaks.
• How big would the additional tax breaks on the Rays’ mixed-use development be? The state-owned land under it would not be taxed; Propheter estimates about $21 million worth of foregone property taxes there, starting in 2034. The real value, though, is in whatever the Rays build on top of the land, and one of the many unknowns about the project is that team execs still haven’t committed to what that would be. Propheter, at least, guesses that any foregone property taxes there would likely be more in the hundreds of millions of dollars than the billions, though without more details about what would be built and when, he can’t be sure.

So where does that leave us? The Rays calling their project “fully taxable,” it appears, is misdirection: They’ll be paying some property taxes, but they’ll be paying them to themselves, to pay off bonds for their own stadium. The good news, such as it is, is that that $224 million worth of future money is already accounted for in the team’s initial $1 billion subsidy ask, so it’s not an additional public cost on top of that. Any property taxes they get to skip out on in addition to the CRA bond payments would indeed be a new cost, likely in the tens to hundreds of millions of dollars. Plus there’s still at least $1.1 billion in free land and tax breaks on the stadium itself — which would be owned outright by the county, and so completely tax-free — to contend with.

All of which is an extremely long but hopefully instructive way of saying that the conclusion of yesterday’s post still stands: Tampa and Hillsborough county officials need to decide whether to commit upwards of $2.1 billion to a project with many unknowns in order to avoid even the possibility of the Rays moving down the road to Orlando, maybe. Given that even $2.1 billion would be easily the most expensive MLB stadium subsidy in history — at least until the next one — that number should be good enough for government work.

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.