Taxpayers Beware! Sales Tax Hike Is For A New Baseball Stadium

Tampa, Fl

From: Eye On Tampa Bay

Posted by: Sharon Calvert

County Commissioner Ken Hagan, Mayor Bob Buckhorn and unelected bureaucrat Mike Merrill have been the biggest champions of pushing another transportation sales tax hike.

As we posted here, Hagan jumped the shark last April when he came out for a 30 year transportation sales tax hike smack in the middle of the Go Hillsborough campaign before funding options were even being discussed.

Why? 

It must be because Hagan and Buckhorn want the Rays and a new baseball stadium in Tampa and they want some tax dollars to do it. 

After St. Petersburg allowed the Rays look for a baseball stadium in Tampa in January, immediately Mayor Buckhorn and Commissioner Hagan jumped on the new baseball stadium bandwagon. 

Ken Hagan maintains funding for any new stadium must come primarily from the team. “Any stadium deal is going to have to be primarily funded by the team and the private sector.

Then just a couple of months later in March SaintPetersblog reports Hagan states:

As negotiations continue between Hillsborough County and the Tampa Bay Rays about a potential new stadium, Commissioner Ken Hagan said on Wednesday he wants county staff to put out a request for proposal to have an underwriting team ready to sell stadium revenue bonds.

We know Hagan's passion is baseball so let's go back in time and connect some dots.

May 19, 2010 (ironically right after Hagan voted with 4 other commissioners to put the 1% rail tax hike on the ballot that went down in flames) A Baseball Coalition group presented to the county commissioners:  

In Tampa, nearly all the Commissioners who spoke went out of their way to insist that the County had no intention of poaching the team from St. Petersburg, and certainly not with any taxpayer subsidies

Every other commissioner echoed Hagan's comments on the possibility of public financing for a ballpark, such as Mark Sharpe, who said "I don't want to in any way give any indication that I'm supporting funding a new stadium when we're working on emergency services and basic core services."

June 9, 2011 Tampa Bay Times reported:

The approach is called tax-increment financing, and Hillsborough County Commissioner Ken Hagan put it center-stage this week as an idea to help the Tampa Bay Rays make a new home somewhere in the county.

"It's just one of what I'm sure will be, if we get to that point, 20 different financing options that will be available," he said. (The money to build the stadium itself, Buckhorn has said, needs to come from private equity and a "significant" contribution from team owners.) 

Tax-increment revenues, Buckhorn said, would work best downtown, which is where he would hope to see a ballpark built if it ever came to pass. Additional property tax revenue generated by new hotels, restaurants and stores built nearby could repay infrastructure bonds.

Monday, Buckhorn had drinks at a downtown bar with Hagan and Beth Leytham, a public relations consultant who is friends with both, and the three discussed the idea. 

"It was purely a social visit," he said. "Inevitably business comes up, but it wasn't designed for that." 

Two days later, Hagan brought up tax-increment financing for baseball during a County Commission workshop that was partly about finding ways to pay for needed infrastructure improvements. At the moment, commissioners were talking about using tax-increment financing for other stuff, including road improvements needed around the Florida State Fair.

February 1, 2013 Tampa Bay Times reported:

Hagan has said he is not proposing any public financing if the Rays' stadium ends up in Hillsborough County.

A poll was done by St. Pete Polls in August 2013 showing little appetite for public funding of a new baseball stadium for the Rays. The poll reflected opposition to public funding of a new ballpark by a 56 to 36 percentage margin. 

Yet at the same time at a news conference Hagan and Buckhorn wanted to use growth of property tax revenues in a Community Redevelopment District (CRA) to fund a new baseball stadium. 

Most estimates of a new retractable ballpark in the Tampa Area are around $600-$650 million. Previously, Rays management has talked about paying up to a third of that amount. Another possible source of revenue could come from having the park inside an area that is already zoned as a Community Redevelopment Agency (CRA) which could conceivable leverage up to $100 million.

But that would still require hundreds of millions of dollars, and both men said they are intent on not raising anybody's taxes. Hagan said there are "creative ways" to fill that gap, including stadium naming rights, using the EB-5 program (where foreigners who contribute millions of dollars to a development can get citizenship in the U.S.), and parking revenues. 

"I believe, Mayor Buckhorn believes, that we can get to the magic number," Hagan said. "The challenge that we have now ... is that there's not one specific model that will be utilized in every location. The location will determine to some degree what financing options we have." 

That is using public funds. Hagan's previous statements about not using any public financing for a new Rays stadium came with an expiration date.

According to the transcript of the July 18, 2013 budget workshop where the commissioners were discussing public-private partnerships aka P3's, Hagan stated:

>>KEN HAGAN: MM-HMM. WELL, I'VE STATED THIS REPEATEDLY OVER THE LAST SEVERAL YEARS AND I'LL SAY IT AGAIN BECAUSE IT NEVER SEEMS TO GET THROUGH, BUT HILLSBOROUGH COUNTY'S NOT GOING TO BUILD A BASEBALL STADIUM. I MEAN, THAT'S JUST THE WAY IT IS.  

AND I DON'T THINK THERE ARE VERY MANY COMMUNITIES AROUND THE COUNTRY THAT WILL FINANCE STADIUM CONSTRUCTION, SO THAT'S WHY I'M ASKING IS A P3 OPTION A POSSIBILITY, BECAUSE WE'RE NOT GOING TO BUILD ONE.   

>>KEN HAGAN: AND I DON'T WANT TO KEEP BEATING THIS -- BEATING THIS HORSE HERE, BUT YOU SAID IT, BE -- CREATIVITY.
WE'RE NOT GOING TO ASK THE TAXPAYERS TO PAY FOR A STADIUM (emphasis mine), WE'RE NOT GOING TO FUND A BASEBALL STADIUM, SO WE'RE GOING TO HAVE TO BE CREATIVE, AND I BELIEVE A P3 OPTION…

At a county commission meeting on October 1, 2014, it was reported

Following the lead of County Commissioner Ken Hagan, the Hillsborough County Board of County Commissioners today voted to have a small working group be the lead agency to work with Tampa Bay Rays officials, if and when the St. Petersburg-based baseball franchise can work out a deal with St. Pete to speak to officials in Hillsborough about a potential site for a new ballpark.  

That working group would consist of Hagan, Tampa Mayor Bob Buckhorn, Tampa Sports Authority CEO Eric Hart, and a member of the private sector to be named later.

Hagan not only made the motion to create this baseball stadium working group at the October 1 BOCC meeting, he also made a motion to approve 7 firms to do bond underwriting services for the county. According to the HTV transcript Hagan stated:

A MOTION ON IS B-3 FOR BOND UNDERWRITING SERVICES. THIS IS A GROUP OF SEVEN FIRMS THAT WE CAN UTILIZE OVER THE NEXT FIVE YEARS TO ASSIST IN BOND UNDERWRITING TO MEET FUTURE DEBT FINANCING NEEDS. THE BACKUP IDENTIFIES AREAS WHERE WE MAY NEED THESE SERVICES OF THESE FIRMS. IT INCLUDES COMMUNITY FACILITIES. IT INCLUDES COMMUNITY FACILITIES.  

WHILE IT DOES NOT SPECIFICALLY LIST A BASEBALL STADIUM, THIS IS CERTAINLY ONE AREA WHERE WE WILL NEED THE EXPERTISE AND EXPERIENCE OF A WORLD-CLASS FIRM (emphasis mine). AND BY APPROVING A POOL OF POTENTIAL UNDERWRITERS, THE COUNTY WOULD BENEFIT FROM EACH FIRM'S EXPERTISE, BECAUSE WHAT WILL EVENTUALLY HAPPEN IS THAT THEY WILL COMPETE WITH EACH OTHER FOR THE WORK, AND IT SAYS SO IN SO MANY WORDS IN OUR BACKUP WHEN IT STATES, THIS WILL PROVIDE MAXIMUM IDEA FLOW AND COMPETITION.  

BUT TO CONCLUDE HERE, BY HAVING A TEAM READY TO NEGOTIATE WITH THE RAYS AND BY HAVING FINANCIAL EXPERTS ONBOARD, THE MESSAGE WE ARE SENDING TO THE RAYS AND MAJOR LEAGUE BASEBALL IS THAT HILLSBOROUGH COUNTY IS READY. WE ARE PREPARED TO HIT THE GROUND RUNNING ONCE AN AGREEMENT IS REACHED.

When Commissioner Sharpe chimed in that stadiums tend to be successful when it comes to redevelopment projects, walkability and public transportation, Hagan's actual response to Sharpe (from the meeting transcript):

YOU’LL SEE THAT MOST OF YOUR RECENT STADIUMS ARE LOCATED IN URBAN AREAS, NOT NECESSARILY DOWNTOWN, BUT IN AN URBAN AREA. THEY'RE SMALLER FACILITIES, AND TRANSIT IS ESSENTIAL.  

I CAN TELL YOU FROM PERSONAL EXPERIENCE, THERE'S NO LESS THAN A DOZEN BASEBALL STADIUMS I'VE GONE TO AND TAKEN RAIL THERE, THAT'S CRITICALLY IMPORTANT (emphasis mine), REGARDLESS OF WHERE THE STADIUM IS ULTIMATELY LOCATED, BUT TRANSIT'S GOING TO BE A NECESSARY INGREDIENT

At the very next BOCC meeting on October 15, 2014, the commissioners voted to hire a law firm with ties to Major League Baseball. This was done through the Consent Agenda - no discussion allowed  - in a hush-hush manner not to attract any attention.

This action taken by the commissioners on October 15 was finally reported in the media by the Tampa Bay Times on January 15, 2015. 

One of the most notable steps Hillsborough County has taken toward its desire to woo the Tampa Bay Rays to the county was also one of the quietest: County commissioners in October agreed to hire Foley & Lardner, a law firm with extensive ties to Major League Baseball and a partner who is a former MLB president. 

Under terms of the one-year contract, the firm will be paid a flat monthly fee of $4,500 and attorneys can bill an hourly rate of up to $395. 

The firm's ties to baseball were not discussed at the Oct. 15 meeting where Hillsborough commissioners agreed to hire the firm. A description on the commission's public agenda said only that Foley & Lardner was being hired to provide "specialized legal services . . . related to public private partnerships and other complex transactions."

But other county officials indicated the primary reason to hire the firm was the Rays. Commissioner Kevin Beckner said he was told as much in a briefing by county staffers before the Oct. 15 vote.

October 2014 was conveniently right after the county handed the Parsons/Letham team a million dollar no bid contract to create the phony Go Hillsborough campaign to market another transportation sales tax hike referendum. Remember Leytham was with Buckhorn and Hagan talking tax increment financing back in 2011.

November 4, 2015 Tampa Bay Times reported 

Hagan said there won’t be a tax hike to pay for a stadium, and “were not going to have a sweet-heart deal such as what happened with Raymond James Stadium,” the home of the Tampa Bay Buccaneers. Hagan is a board member for the Tampa Sports Authority, which owns Raymond James. 

Hagan envisioned a public-private partnership where the county helps pay for infrastructure improvements to support the stadium, and the Rays and the private sector pay for the new building.

So what now? 

Yesterday the Tampa Bay Times reported Rays discuss nine potential ballpark sites with Tampa, Hillsborough officials

Tampa Bay Rays executives met with Tampa and Hillsborough County officials Tuesday for their first discussion of specific potential baseball stadium sites in the county. 

Rather, the two sides discussed how each site might connect to a regional transit plan, how each might promote walkability, which ones might have easier access to parking and the ways that each site could "contribute to our goal of having the facility open 365 days a year and active to the public at large," Auld said. 

Based on where a stadium was built, officials have said there could be up to 10 different sources of funding. Along with money from the team, those could include property taxes earmarked for community redevelopment in areas like downtown Tampa, rental car surcharges, some hotel bed taxes, money authorized by the Legislature, ticket user fees and foreign investment available through the federal government's EB-5 visa program.

What exactly is going on here? 

Hagan wants to be creative about how to fund a new baseball stadium. He and Buckhorn have proposed basically the same tax-increment financing (TIF) concept Commissioners Murman and White have brought up for transportation. While Murman and White have proposed using the growth of our existing property tax revenue to fund our #1 issue transportation that would benefit us all, Hagan and Buckhorn want to use a TIF to fund (bond out) a baseball stadium that benefits another wealthy sports team owner. 

While there is talk of 10-20 different funding sources for a baseball stadium, Hagan insists an unnecessary sales tax hike is the only funding solution for our transportation needs. We previously reported here and here Hagan's attempts to take every alternative funding option off the table except a sales tax hike.

No wonder Hagan and Buckhorn have been stomping their feet every inch of the way demanding a sales tax hike. They want their baseball stadium and somehow use our existing revenues and some public money to fund it at the same time they want taxpayers to raise our sales tax for money the county already has to fund for our #1 issue - transportation. This is bad governance, bad policy and tone-deafness.

Sometime between now and 2026, the Community Investment Tax (CIT) that built Raymond James will be put on the ballot for reauthorization. The CIT reauthorization must be considered as part of the transportation funding discussion.

We believe the CIT should not be reauthorized for any term longer than 10 years when it expires in 2026. However, the MPO's Long Range Transportation Plan (LRTP) states

Extending the CIT beyond 2026 could generate an additional $2.4 billion through 2040 for infrastructure projects.

Hillsborough MPO's CIT revenue forecast if extended thru 2040

Reauthorization of the CIT will bring another boatload of tax dollars. Between our growing existing revenues and new CIT monies, the county will be swimming in plenty of tax dollars. 

Any new sales tax hike will simply create a huge county slush fund for a new baseball stadium, to subsidize more special interests, fund more pork projects and grow county government even bigger.

Taxpayers should never allow that to happen.

Much of the transportation initiative was orchestrated over the last 3 years and so too has Hagan's efforts to entice the Rays with a new stadium in Tampa. We posted here how Leytham, Hagan and Merrill were scheming behind the scenes about a sales tax hike.

The local power brokers know is going on and the media is fed sound bites for the public to munch on but Hagan was quoted in a March Tribune article:

Talks between Hillsborough County leaders and the Tampa Bay Rays will be held behind closed doors to shield the team’s thinking about possible stadium sites and protect its negotiating position. 

The Tribune reported more scheming in March:

New ideas floated Friday included a state-of the-art training center that could double as a community wellness center, perhaps in partnership with local universities, Auld said.  

The many kitchens where game-day food is cooked for fans could be used for a culinary institution or training facility. 

“We call it reconstructing the ballpark,” Auld said. “We’re going to look at every single piece of the stadium, ask the community how can we make that part effective for you year round?”  

Hagan said that perhaps could make the use of tax dollars for part of the stadium cost more palatable for the public(emphasis mine). 

“They’re looking at other areas where a ballpark could really help to assist with various community needs and taking advantage of our cultural assets,” he said. “It’s a new paradigm with respect to the facility."

The scheming and lack of transparency associated with both efforts should be disturbing to all. 

The scheming proves that Hagan knows the public has no appetite for publicly funding another stadium for a wealthy sports team owner.

Noah Pransky's Shadow of the Stadium blog has been following the shadowy movements and undertakings by those pushing for the Rays and a new baseball stadium in Tampa.  

Noah's latest blog post titled Hillsborough, Rays Talk Stadium Locations; Still Pretend $200+M is Hiding in Sofa Cushions sums things up quite nicely: 

So to summarize, Hagan hasn't figured out how to pay for a new Rays park in Tampa; he hasn't figured out how to redirect general revenue funds toward baseball without anyone noticing; and he hasn't figured out how to weasel his way out of his "no new taxes" pledge. 

 Cross Posted with permission from: Eye On Tampa Bay