St. Pete Pier Con Job to Hurt Taxpayers

Which of these will cost the most for taxpayers?  Why do taxpayers have to pay for it at all?

Which of these will cost the most for taxpayers? Why do taxpayers have to pay for it at all?

In a classic story of political distraction, the government of the city of St. Petersburg is working to put their taxpayers on the hook for another loan. The city seeks to rebuild the aging St. Petersburg Pier and has been engaged in a lengthy effort to hold a design competition for the preferred choice. While most have focused on the choice of designs, the real concern should be the price tag and who pays.  As always, the taxpayers be bearing the costs for more expensive infrastructure that could be better built by the private sector.  Of course, since the government is involved, the true potential for economically productive and highly functional development is lost. Instead, the taxpayers will have yet another park, this time a very expensive one over the water that happens to have a bar and grill on it. A better plan would involve private development as was done with the highly popular “Chelsea Piers” in New York City.  This story has all the ingredients of a classic distraction-based con job to get the money!

The pier design committee recently endorsed the “Pier Park” design out of its three finalists. Even though an overwhelming percentage of polled residents desired the “Destination St. Pete” design, the political panel had its own goals in mind.  This is just one of the many reasons that the entire concept of funding a pier with taxpayer dollars makes no sense – politics reigns over common sense and serving the market.  The better solution would be for the city to change laws so that a long term lease could be signed by a private company for development rights. There could be some basic guidelines on development the city could approve, but it would be the private company that would determine the final structure. They would do so based on what the community would use and what could pay for itself and generate a profit that would sustain the company and the project for decades. Further,  a private company is likely to spend 3-4 times more than the $40 million or so left over for this project. Doing this would require our political leaders to place an initiative on the ballot for a long term lease and encourage voters to approve it – to protect their own pocketbooks and allow more market-friendly development. (Current law unexplainably only allows five year leases of waterfront sites).

Instead, of a private company spending its own money and taking its own risks to build what consumers would want, the city will require taxpayers to bear the costs. Contrary to the deception that has been pedaled by the government, well-connected politicos and popular press, there is no $50 million for this project (about $10 million has already been wasted in consultant fees and the prior failed “lens” project!). The money will come from a loan that is backed by future property tax revenues. There will be interest and principal payments to make – all paid for by the taxpayer. Of course if future property tax revenues fall with decreasing property values, then the citizens of St. Petersburg will be taxed further to pay for the loan. Property values dropped for years after the collapse of the housing bubble in 2007. The financing scheme has been well described here in this blog and is known as a Tax Increment Finance (TIF) plan based in a “community redevelopment area” (CRA).

The Sunbeam Times will be carefully evaluating the finances for construction and maintenance of the projects. One thing appears clear already for the “Pier Park”, there will be many government workers employed to maintain a massive grass lawn sitting in the middle of Tampa Bay.  When the floating docs are damaged with daily Tampa Bay thunderstorms, it will be the taxpayers on the hook. This appears to be a massive boondoggle in the making. That is pretty typical for St. Petersburg where the well-connected cronies siphon money from the taxpayers to build projects for politicos who continually and arrogantly ignore the taxpayers and common sense.

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4 Replies:

  1. Sharon Russ

    The St, Petersburg City Council , Mayor, County Commission, and the Agenda 2020 Plan crew sold the Community Redevelopment Area and Tax Increment Financing to South St. Petersburg residence under the guise of redevelopment which would remove blight and slum, create new development, and improve the economy of the most impoverished area of the county. Residents of Midtown’s blighted impoverished area believed that by Midtown becoming a CRA , TIF would bring finances which would help improve schools and economic development to break the cycle of poverty for the next generation of children. There was numerous meeting with the City Council and the Pinellas County Board of County Commissioners that encouraged Midtown residents to support the CRA and TIF . No TIF will be designated for housing development to alleviate the impoverished areas filled with blighted, slum houses that are unsafe for dwelling, filled with lead poison, and do not meet city codes. Yet, again in the history of the city’s dealing with residents of Midtown the CRA and TIF is a farce.

  2. Tom D

    Such a grand opportunity to create a special icon for the city. All options should be considered including a public/private partnership. But, needless to say, there will be ” incentives ” to our local leaders on a deal like that too. Public/Private partnership could be the most fruitful for our city if done right. I don’t think the city has considered consulting anyone with experience in this area yet. I am surprised no one has really pressed this issue. Seems like so much opportunity being overlooked due to lack of experience with a unique project like this.

  3. Jon Banner

    This is a classic example of why many people do not want to come downtown. The Lords of St. Petersburg ignore their choice, then take their tax money to build something their own citizens don’t won’t. So why would they come down and support something they don’t want? Every time people see it it will feel like a poke in the eye!

    What is iconic about an elevated patch of grass near the water?

  4. Pingback: David McKalip jumps back into Pier debate with more tax consequence fear mongering - SaintPetersBlog

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