By David McKalip, M.D.
$450 million – That’s the estimated growth in net value for the Owners of the Tampa Bay Rays since purchased. $400 million –that’s the amount that Florida Taxpayers have donated to the Rays to build a stadium and subsidize the team. Those numbers are from St. Pete City Council members Jim Kennedy and Ed Montanari respectively. It is clear that a large portion of profit for the rays is not from their business model, but from the money they can siphon from the wallets of the average, hard-working taxpayers. Rays President Matt Silverman (at the time) admitted publicly at the Tiger Bay Club on January 25, 2008 that they could not make a profit without taxpayer subsidies. Now the City of St. Petersburg has essentially agreed to make the taxpayers pay for a brand new stadium again for well over $500 million. What’s worse is St. Petersburg has given away most of their negotiating leverage. The team is now getting ready to pit multiple cities against each other in a classic intercity bidding war to see who can best rip off their taxpayers to build a stadium for unearned corporate crony profits.
The “Deal” – St. Petersburg taxpayers finance of new Rays stadium.
The City Council voted 5-3 last night to agree to give away the farm to the rays – well the taxpayers’ farm. If they stay in St. Petersburg, the deal would give 50% of “air rights” to the Rays for the “re-development” of the Tampa Bay Rays current site. The vision is for the 85-odd acres of land would be get a new stadium, condos, restaurants and office space. The tax dollars, lease money and more from this would go into a city owned account and 50% of that money would go to the Rays. The Tampa Bay Times estimates that there will be $1 billion available to split, but City officials admitted last night that no economic study has even been done yet! The Rays could easily demand – and likely receive – even more to build the stadium and keep their profit margin fat. Why not, the city is obviously desperate to keep the Rays here and will not want to lose, in their minds, the deal over a “little extra money”. “In for a penny, in for a Pound” will be the attitude.
The Deal – leverage gone, City Council irrelevant, Rays in control.
The city will lose a key tool in negotiation – leverage. Leverage is the power you have when you say to the Car Salesman – I am going to get up and walk away from this deal. Suddenly, they start to get reasonable. The deal would remove City Council from most future decisions on whether the Rays stay. There is nothing in the “Memorandum of Understanding” (MOU) that says the Rays must stay. They could go anywhere they want – including Canada – by paying at most $24 million, a number easily covered by another eager city. Council member Kennedy said they will only be on the hook for $10 million if they leave, an even easier hurdle. The MOU specifically says that the City Council “Must” approve a termination agreement (Rays decide to leave) and if they don’t, it goes to Court for a judge to decide. A Court in Manatee county, not even in Pinellas! Thus, the elected representatives of the people become irrelevant – the ones who write the laws, approve the contracts and are supposed to be our path to government control. Dr. McKalip, founder of this blog, pointed that out to the Council during public comment, and Council Member Ed Montanari agreed that the City is indeed giving up huge amounts of leverage and negotiating power – he called it a bad business deal.
The Rays keep Bilking Taxpayers
The rays always seem to get St. Petersburg workers –teachers, plumbers, lawyers, and garbage men- to pad their wallets for profit. Under Mayor Bill Foster, they were given $1.3 million for Stadium upgrades in 2013. That was in addition to the annual subsidy of about $1.1-$1.4 million. In addition, the taxpayers have spent other extra money for the Rays benefit, a list of recent examples include:
- $1.1-1.4 million/year total direct taxpayer Subsidies for Tropicana Field (page A-18, 2013 budget)
- 30,000 hours of police overtime to direct traffic.
- Free property and casualty insurance for Tropicana Field
- Free parking
- A shiny stadium – after land is stolen from Gas Plant Neighborhood.
- About $640,000 per year for “General Administration” bureaucracy that supports, in part, Rays short-and long-term Stadium Management (p G-5, 2013 budget)
- Free stadium Upgrades—
- $719,00 for staircase, floor sealing, safety rails and many other improvements (April 2013 “Capital Projects Fund”)
- $400,000 to repave parking lot, repair escalator and more (March 2011, Capital Projects Fund”)
- $250,000 for “Ring” repair (8/2011 from “Capital Projects Fund”)
- $50,000 for elevator and other repairs (9/13 from “Capital Projects Fund”).
The Taxpayers do NOT want to Pay for a new Rays stadium!
The days are gone when taxpayers support giving their money to private corporations for their profit. A 2013 poll showed that a large majority of Tampa voters were opposed to taxpayer funding of a stadium there, with only 36.4% in favor. In 2011, 78% of St. Petersburg Residents said they did not think the Rays needed a new stadium. Only 48% of Pinellas residents said they “care a lot of about keeping the team here” in a December 2015 poll. 57% of St. Petersburg voters stated (2/2013) the Rays should only look outside of St. Pete if they stuck with the terms of the CURRENT contract (not a new MOU just approved to basically build a new stadium for the Rays). Most polled St. Petersburg voters opposed using hotel bed tax to fund a new stadium for the Rays (11/2013). In April 2013, 63% of Pinellas County voters were against taxpayer funding for a new stadium. In 2008, 59% of St. Petersburg voters opposed the current debt payments they are making for the Stadium and 65% opposed moving the stadium within St. Petersburg with a price tag of about $650 million. St. Petersburg Residents well remember the efforts of POWW (Protect our WALLETS and Waterfont) to stop the $650 million new waterfront stadium.
Continued arrogance by St. Petersburg city government
The Mayor and five of the St. Petersburg City Council Members (Rice, Foster, Nurse, Wheeler-Brown and Gerdes) have contempt for the taxpayers of St. Petersburg. They know very well that St. Petersburg voters do not want more of their tax dollars going to the wealthy private corporation called the Tampa Bay Rays for a new stadium. They simply don’t care. As with Greenlight Pinellas, they are going to push their agenda at all costs even when the public sentiment is clearly against it. They are willing to “clear the decks” by making sure that the negotiating leverage is in the hands of the Rays, rather than the taxpayers who built them a stadium, gave them a team and their unearned profits. The better solution for St. Petersburg is for the Rays to stay and hold to their contract. If they want a new stadium, they can pay for it. The city should promote redevelopment of the entire site, but by private developers who take their own risks and don’t rely on the government for their profits too. But it is clear that for now, the City government is going to keep the taxpayers on the bench and throw the game so the Rays can have forfeited victory.