DRaysBay Stadium Proposal, Part 3: Funding Solutions

Mike Ehrmann - Getty Images

This is a collaborative, three-part series by the writing team here at DRaysBay, looking at the Rays stadium debate in-depth. Part one addresses a possible stadium location, part two addresses a potential facility, and part three addresses possible funding avenues.

Up until now, it is all been fun and games while we have looked location and stadium ideas but in the end, these ideas have a price tag. Given the fact that in the past sixty years, just two baseball stadium have been 100 percent financed with private funds (Dodger Stadium and AT&T Park), it is safe to assume that if a new facility for the Rays is to happen, public dollars are going to have to be involved.

Just the mention of public dollars going toward multi-millionaire and billionaire's teams creates angst quicker that David Price's fastball gets to home plate. Field of Schemes by Neil deMause speaks to that angst and the weblog that allows the book to take on a new form as it continually documents this issue across all major sports and with rather impassioned commentary.

I really can't imagine why Sternberg thinks this is a wise strategy. With the Bucs' home sitting vacant across the bay due to the same greedy squabbles, myself and most of the people in this area are sick and tired of hearing more of this non-drama that only translates into more theft from the public. The Rays can stay or go - I could care less at this point. And I'm most likely never going to attend a game even with free tickets, since any concession or parking I pay supports those greedy pricks.

If we swapped out the topic with any other occupation than pro sports, we'd be laughing at these greedy deluded idiots. Extreme Frisbee, star trek fan geeks, yoga enthusiasts - everyone would understand what an absurd argument is being made to preserve the slim class of fanboys who value watching a game over money or free time.

Unfortunately I don't think the rest of the sporting public is going to learn their lesson. Instead of learning from the strikes/threats they'll go right back to sitting around and paying insane prices to watch mediocre talent.

That is one view of the current situation on a reputable national site, but the tone from the local communities is quite similar. Consider some of the comments from a recent story from TampaBay.com related to Tampa Mayor Bob Buckhorn throwing out a ceremonial first pitch during the series against the Reds:

oh please tell me this moron isnt going to want to spend millions of tax dollars on a baseball team,, theres only so many peices of pie, or in other words expendable dollars for citezens to spend on games of any type,, HELLO bad economy high ticket prices, 10.00 beers, what are you thinking,,

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What makes you think that people will not drive to St Pete, but they will fight the rush hour traffic to get to downtown Tampa. I love the rays, but if they think the problem will be soved with a new stadium let them pay for it.

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Jesus Christ this team is only 13 years old!!! The Rays ownership expects the attendence of an 80+ year old franchise in 13 years? The only idiots are the folks that buy into Stu's argument that the Trop is the problem....fan bases take several generations to build, regardless of their record on the field. You are being played like a violin.

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Bob is exactly right, all this is about is padding league owners' pockets at taxpayer expense. What Stu wants is what the Selig family got from the taxpayers of southeastern Wisconsin... a new venue that doubles the market value of the franchise, which is then sold. This is just a siphon of taxpayer money to the owners.

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Bingo... regardless of where the best location for the stadium is, it's still corporate welfare. if we can't afford to pay teachers a decent wage, or afford to build a proper regional expressway network or public transit, then we sure as heck can't afford to give 8 figure annual handouts to billionaires. They're wealthy beyond imagination, let them build their own stadium. and if they can't figure out how to pay for it, sell the team to an owner who can.

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Many of you are absolutely right. A new stadium would end up being corporate welfare. But what you don't get is that this corporate welfare is necessary because TAMPA BAY IS A BAD INVESTMENT FOR BASEBALL. Fans don't pay anywhere near enough to support even an average-priced major league baseball team, even with a big welfare check from the rest of baseball. It's questionable whether that's possible with a new stadium mostly paid for by the taxpayer while the Rays get most of the benefits. That's how bad the financial situation is with the Rays. But if you want a free-market solution, there's only one solution, the Rays leave. Anyone who tells you otherwise is lying.

Locations can be found, builders can be contracted, but dirt cannot be moved without funding and the comments above, while coming across as a bit extreme, represent the vocal majority in print and electronic media in this market. A bigger roadblock to attitude in the market would be the glaring spotlight on any stadium funding in the area after the suspicious ways the Marlins got funding before it was learned how much profit they were making each year and potentially none of this can happen without a public vote if a measure is passed requiring any expenditures over $100M in St. Petersburg be put to a public referendum.

In any stadium funding discussion, the trenches will be dug in WWI fashion between the public and private financing armies and the discussions between the two parties often resemble the stalemate battles that comprised most of that war. The public financing side would point to studies showing how much of an economic impact sports teams have on an area while the private financing crowd will hold up similar studies debunking those numbers in one hand and balance sheets with red ink in the other hand.

Residents saw this story play out somewhat in 2009 with mayoral candidate Larry Williams who quoted a study that stated the Tampa Bay Rays had an economic impact of $298M in 2008 while opponents such as the St. Petersburg Chamber of Commerce commissioned a study that found the Rays' economic impact to be $200M less in that same year. Further, a commissioned study for the initial new stadium proposal found an economic impact anywhere from $137M to $213M a year as yet another broad range that points to the inexact data in measuring a new stadium's impact.

At best, studying the economic impact of a sports team is an inaccurate if not biased science but at some point, parties must agree on a number because the amount of public financing on any project is directly tied to how scared the market is of the team taking that impact and those jobs to another market.

Since 1991, 21 different baseball stadiums have open in the United States, excluding Turner Field given its unique status as an Olympics-funded effort. Each of them were funded in a different way from the completely publicly-funded U.S. Cellular Field to the completely privately-financed AT&T Park. The table below shows how the money broke down for each of the stadiums.

Newtable_medium

*thanks for the correction, Cardinals nation*

In all, 54 percent of the funding for these projects came from public financing while 46 percent came from private sources. Those figures are influenced heavily by the massive cost to the new Yankee Stadium and its private funding bill as well as the entirely privately-funded AT&T park. If we remove those two projects from this group, nearly two-thirds of the dollars spent on stadium construction have come from public funds with just over one-third coming from private sources.

The chart below shows the parks in chronological order as well as by breakdown of public and private funding:

Newgraph_medium

Petco Park and Citizens Bank Pallpark represent the best examples of financial compromise of the stadiums with the first two and last stadiums on the chart represent the worst as the ownership groups of those three teams, one of which was Major League Baseball itself, spent a total of $24.4M toward the final bill. You might recall that the original new stadium proposal on the site of Al Lang Field was for $450M with Rays' ownership paying one-third of that costs plus taking on the responsibility for cost overruns which would put that old proposal right in line with the current 67/33 split that we see after taking out Yankee Stadium and AT&T Park.

In this current economic client, it would be a near-impossible sell to the public to ask them to foot 67 percent of the costs of a new stadium on the heels of cuts in education and an unemployment rate for the bay area that is still above the national average. That said, these other cities utilized many different funding streams to find the dollars necessary to build these stadiums anywhere from naming rights to tax increases. Examples include:

  • Phoenix: Implemented a quarter-cent increase in the county sales tax and allowed the Diamondbacks organization to keep all baseball revenue as well as a percentage of non-baseball event revenue.
  • Detroit: Sold naming rights for 30 years as well as taxed all rental car agreements two percent and hotel stays one percent. Additionally, revenue from Indian Casinos was utilized.
  • St. Louis: Long-term loan from St. Louis County was used as well as private bond sales, tax breaks, and bank loans.
  • Denver: Increased the local sales tax 0.1 percent in six of the Denver-area counties.
  • Cincinnati: Voters approved a half-cent sales tax increase to fund both a new baseball and a new football stadium and sold the naming rights to the baseball stadium for $45M.
  • Milwaukee: Passed a tax increase to five Milwaukee-area counties.
  • Houston: Taxed hotel stays and rental cars and received a $33M no-interest loan from local business leaders.
  • San Diego: Received $21M from the Port of San Diego and another $76M from the Centre City Development Corporation.
  • Pittsburgh: Implemented a county hotel tax, a surcharge on Pirates and Steelers tickets while both were still at Three Rivers Stadium, as well as a one percent performance tax on all visiting players that did not live in Pittsburgh.
  • Cleveland: Imposed a 15-year sin tax on cigarettes and alcohol within Cuyahoga County.
  • Seattle: Imposed a food tax and rental car tax in King County to foot $340M of the bill.
  • New York: Pulled money from parking facility revenues
  • Minneapolis: Passed a 0.15 percent sales tax increase in Hennepin County.
  • Arlington: Passed a 0.5 cent sales tax for a period of 12-15 years.
  • Miami: Imposed taxes on tourists on rental cars and hotels.
As it stands now, we have an owner who has said he is willing to pay $150M and cost overruns as part of an old proposal and wants the ability to explore sites in the entire Tampa Bay area and a mayor who said he is open to discuss the Rays moving within Pinellas County but nowhere else. That is where the trenches where dug in 2008 and that is essentially where they stay today. As WTSP's Noah Pransky pointed out yesterday, what current mayor Bob Buckhorn said about the Rays' stadium situation is essentially what current St. Petersburg mayor Bill Foster said before he was elected with the two disagreeing on where that new home should be built.

The good news is that business leaders from both sides of the bay are finally coming to the table to discuss the economic impact of the Rays as well as possible sources of public and private funding. Additionally, Hillsborough County is kicking around some ideas to help generate funding for a new stadium that would also help encourage private investment into the project and we hope that they are able to find creative ways to generate funding revenues as other cities have done. Stuart Sternberg's wealth is not easily discovered but given the shady experience in Miami, a doubting public may be more willing to participate in the process should the Rays open up their books. We know from leaked reports in 2010 the Rays are not exactly hiding profit and the 2008 post-season run is what saved them from being in a less-fortunate situation as they are today.

If a new stadium is to happen in downtown Tampa, it will take the communities in the area working together for the common good of the area. The St. Pete Times had a wonderful timeline back in 2010 that outlined what type of schedule needed to happen as well as how the financials in the discussion changed the longer this process was delayed. We highly recommend you click on the link for the full explanation of the process but a peek at the timeline itself shows you where this process is now and why it is time for action.

Timeline_medium

Enough bickering, enough postering, enough silence. If baseball has a viable and successful long-term future in the Tampa Bay area, a new facility is a necessity. One that will help generate the type of public and corporate support that has allowed other markets to shed their small-market labels and lessen the margin of error those clubs had to tolerate as they were hamstrung by limited revenue streams against aging stadiums that grew more out-dated season after season. Other markets have provided examples of creative public and private funding sources and now it is up to our local leadership to find the best mix of those examples as well as any new ideas they discover to find the magic recipe for a new solution.

Our goal in proposing a location for a new stadium, a model for a new stadium, and presenting funding histories for other stadiums was to generate discussion and interest to fill the void left by both team ownership and city leadership that seem to comment once or twice a season on the matter with little compromise between the two parties. It is our hope that this information can reinvigorate the local discussion on what is a third-rail topic and to better inform interested fans as they engage their local politicians as well as participate in the public part of the process.

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Data for these figured pulled from sources such as Wikipedia, ballparks.com, ballparksofbaseball.com, and shadowofthestadium.blogspot.com.

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