Follow Up: Tampa Bay Rays Stadium Deal Falls Through

In a series of articles over the past few years this forum has followed the progress (or lack thereof) for the Tampa Bay Rays of Major League Baseball in their pursuit of a new stadium in the greater Tampa area.

The team currently plays in Tropicana Field, an indoor domed stadium facility built in the late 1980s and opened in 1990, which has been renovated several times at the personal expense of the Rays’ principle owner, Stuart Sternberg, to bring certain modern amenities to the fan experience.

The team has been locked into a lease that prohibits them from relocating the team or pursuing alternatives for a new facility outside of the St. Petersburg city limits. The team has stated numerous times in the past, with MLB executives backing it up with similar statements to the media, that the team cannot compete with larger market teams because of the current stadium.

The revenue streams from the agreement with the city is unfavorable to the Rays and with Mr. Sternberg using so much of his own money to maintain the facility, the St. Petersburg municipal government decided to grant the ownership of the team a three-year grace period in which to pursue proposals for a new stadium within the Tampa Bay area.

The ownership of the team and MLB executives in New York have long maintained that the location of Tropicana Field relative to the population centers in downtown Tampa is what has hurt the attendance of the club, causing them to lose money. The argument is that, from their perspective, a location that was more central or conveniently located to the downtown area of Tampa would be ideal for a new facility.
The Rays ownership pursued a few different locations and stadium concepts that I have detailed over time on this blog. The team’s ownership found their best opportunity in a proposal around a parcel of land in an area of downtown Tampa known as Ybor City.

That neighborhood was at one point very unsafe and was near the waterfront which was riddled with drug related activity and crime. The Tampa city officials, about twenty years ago, started a revitalization plan for the Ybor City neighborhood. This resulted in the area becoming a destination for nightlife, restaurants, bars, and retail.

The Rays were working with the neighborhood in Ybor City to construct a new $900 million baseball stadium on the parcel of unused land that was agreed upon with Hillsborough County officials. The three-year window referenced earlier to get the framework of a stadium deal agreed upon is expiring in three weeks.

However, the proposal was filled with uncertainty and vague commitments from the county government on funding. The proposal was also lacking many major infrastructure details to the point where MLB and the Rays had to announce on Tuesday that the Ybor City stadium plan would not move forward.

The Rays ownership has spent millions of dollars in trying to get a new facility built in the Tampa area over the course of the past thirteen years. The facility in Ybor City, had it progressed from proposal into an approved agreement would not be ready for play until 2024. The clock is literally ticking for the Rays in the Tampa area because each day that passes means that the timeline of the project gets pushed further into the future.

That is where the press conference on Tuesday during the MLB Winter Meetings took on a feeling of weary acceptance of the reality that the club will most likely remain playing in Tropicana Field until the troublesome lease term ends in 2027. The team will literally not have a home after the 2027 season if some other developments do not take shape in the next three years.

The post-2027 timeline is another direction that this story has inevitably taken with speculation that the Rays will ultimately seek to relocate to another city. The current ownership group remains committed, at this point at least, to trying to make a stadium deal work in Tampa. However, once those options are exhausted they may be left with no other choice but to consider relocation.

The Rays ownership has certainly built the case for relocation out of the market with repeated attempts for close to fifteen years to get an agreement on a new facility which would have easier accessibility for fans (according to them and to MLB assessments) and would provide them with a better revenue situation for competition with larger market teams.

The Rays have difficulty historically with getting top free agents because of their market size and revenue situation with being able to compete for top talent with other teams that have better attendance or that play in new facilities. The situation with the Rays is very similar to the struggles that the Oakland Raiders of the NFL had with Oakland and trying for several years to get a new facility built there, before ultimately deciding to relocate the franchise to Las Vegas in 2020.

The rumor mill is spinning with relocation ideas of the Rays going to Charlotte, Nashville, or Montreal. Those three cities would work from a geographical sense with the Rays playing in the American League East division. The move to Charlotte makes sense from a demographic perspective, with so much growth there and people from all over America relocating to that city. The city also has great corporate sponsorship opportunity with Honeywell just relocating their main headquarters as an example of the growth potential of Charlotte.

Nashville is an up and coming city with a population boost and with a demographic of young people that MLB is trying to attract to their sport. The league does not have a presence in that part of the southeast except for the Atlanta Braves, so this could serve as an American League outpost in the region.

Montreal will always make the most sense for a relocation or expansion franchise for MLB because of the history of the Expos. The most worrisome variable for a professional sports team that is started through relocation or expansion is in building the fan base. The “x factor” that Montreal brings to the equation is a ready-made base of loyal fans of the Expos which also would solve for the marketing aspect of the scenario as well. Expos gear and apparel still is sold in Montreal and the nostalgia for that team will bring a diversified group of fans back to the sport.

It is a long-shot to start planning the Rays move to Montreal or anywhere else because the team does have fans in Tampa and they have been in that market for 20 years. Most professional sports leagues are very sensitive to moving teams because it will alienate a group of people that have invested time, energy and money into supporting their product (in this case: baseball).

In my view, I have covered many sports teams’ relocations from the L.A. teams being moved into that market by the NFL, to the Raiders move to Las Vegas, the Coyotes potential move out of Arizona in the NHL, and the move by the owner of the Columbus Crew in MLS to move a soccer team to Austin. The common themes there are unfortunately present in this case with the Rays in Tampa: ownership that is trying and willing to spend money to commit funds to a new facility and being fought every step of the way by the politicians or residents that do not want public money spent on an asset like a sports stadium (which I completely understand).

I have visited the Tampa area and I know the area around the downtown and throughout the area to St. Petersburg. I have written previously about how Tropicana Field is an adequate facility and that maybe the focus should be a major renovation to that facility to retro-fit it to the standards of the new facilities within MLB.
In the cost-benefit analysis if the renovation was too inefficient, then another idea would be to build a new facility on the same parcel of land right next to the current facility like many other professional teams have done in recent years.

The news on Tuesday means that the Rays will be playing in their current home for the foreseeable future, what comes next is a mystery, and only time will tell whether or not their next home is nearby or very far away from Central Florida.

Money Grab: Cobb County & Atlanta Braves New Stadium Deal

The report that NBC News ran on Monday about Cobb County not having enough money to fund the expansion of their public parks because of the huge sum the county has committed to the new baseball stadium for the Atlanta Braves ; served to conjure up some distinct emotions that I have had regarding this issue.

Cobb County, under the terms of the stadium agreement, will pay $400 million toward the cost of constructing the Braves new stadium, which will be called Sun Trust Park (because Sun Trust Bank purchased naming rights to the facility) which will be located on a parcel of land near the confluence of several freeways in that area about 15 miles outside of downtown Atlanta.

The Braves will be moving out of downtown Atlanta for the first time in the history of the team which now spans 50 years. The team will leave their current ballpark, Turner Field, which is just a 20 year old facility that was created by retrofitting the Atlanta Olympic Stadium used in the 1996 Summer Games held there. That setup was never ideal from the nexus of the plan and the team has cited the increased costs that they have had to shoulder in maintenance on a facility that was not built specifically for baseball as one of the primary reasons for the move.

I must preface all of this by stating that I grew up a Braves fan watching all of their games back when I was a boy on TBS when they were the main TV broadcast outlet for the team. I remember when Tom Glavine, John Smoltz, and Chipper Jones (among many others) came up through their early years and through the prime years of their outstanding respective careers with the Braves. Hank Aaron was, and remains to this day, as my favorite player of all time.

It has not always been easy being a fan of that team and living in New Jersey, but so many other people I know in the Northeast became Braves fans for similar reasons at that time period in the mid to late 1980s because the Phillies were a last place team at that time, the Mets moved all their games to the old Sports Channel platform (which was an added cable charge that my parents would not pay for) and I do not know why but I just could not attach myself to the Yankees. I preferred the National League and so I gravitated to the Braves because I could see all of their games on TBS and I could not be a fan of a team I could not watch on a regular basis.

Whenever the Braves would come to New York or Philadelphia I would try to go to at least one game per season, and in 2006 I was able to attend a game at Turner Field during the 40th anniversary season of the team being in Atlanta. That game and the tour I took of the stadium beforehand remains one of the best sports related memories I have in my life.

However, in recent years I have become very busy writing and covering different sports which overlap with the baseball season. I have been involved in writing extensively about the NBA, the New Jersey Devils and the NHL Stanley Cup Playoffs, and the New York Red Bulls soccer team which has the same regular season as baseball from March to October. It became very difficult to follow the Braves every day and keep up with all of my other responsibilities.

Then I received the news of the stadium deal in Cobb County and I saw it from the day it was announced as being a money grab by everyone involved. The team did not truly “need” a new facility with Turner Field being just 20 years old, and the location chosen in Cobb County is far from the downtown area where the team has all of their history.

Moreover, the site selected in Cobb County is going to create a traffic nightmare and has very limited access to public transportation. The move out of the downtown area is going to create very difficult conditions for fans of limited economic means to be able to attend a game. The team seemingly neglected to consider all of that in a move to the suburbs which has been extremely polarizing for residents in the Atlanta metro area.

The counterpoint to this situation is that the Braves have always felt that they have played “second fiddle” to Atlanta’s NFL team, the Falcons, who recently leveraged the city into a sweetheart deal on a brand new stadium downtown. The Falcons are moving out of the Georgia Dome which was also built for the 1996 Olympic Games into a state of the art retractable roof facility that was recently awarded by the NFL to host a future Super Bowl.

The Braves took the city government’s reluctance to help finance a new stadium or even help improve Turner Field and the accessibility to that facility as a “slap in the face” and made the deal with Cobb County very quietly behind closed doors. The almost secretive nature of the decision to move the team to Cobb County set the stage for some residents in the area to become very upset about the decision.

Furthermore, at the center of that situation was the fact that the area residents felt that they had no input in the decision which has a huge impact on the quality of life in Cobb County. The first issue is the increased traffic on game days and evenings. The ancillary issues came to light much later such as public funding shortages in areas such as education and the parks and recreation maintenance. These are all issues that continue to plague the public perception of the new stadium deal. It is because the move was made due to the influence of greed driven activities.

The Braves took this opportunity in a greed motivating way as well to get a brand new stadium in where they have labeled “a more desirable location for our fan base” which I will allow you to draw your own conclusions from that statement. It was not a necessary move for the team to leave Turner Field and downtown Atlanta at this point, while I do recognize that location had issues too with limited access to public transportation and a bad traffic flow from the parking areas to the freeways. However, the team management will now take this opportunity to increase the prices for tickets, parking, and concessions at the new facility.

The officials in public office in Cobb County have announced that they will have to raise taxes on residents in order to cover the costs of the maintenance of public parks. This is the central issue of what I know upsets me the most about this situation. I have covered the business side of sports for a while now, and I have investigated or detailed the reporting of new stadiums/arenas or proposed new stadiums/arenas for professional teams across all of the major leagues.

Here is the issue I have: in all of that reporting I do not recall any other project that was done at the detriment to other public services or public works to a community such as this one particular deal with the Braves and Cobb County. It is an absolute disaster because it is a short sighted agreement which focuses on greed for both of the key parties involved.

The new stadium is nearing completion at this point but the disappointment I have for the Braves organization after years of being a loyal fan still remains. The manner in which they went about making this deal and the cascading effects from the greed driven nature of this agreement with regards to the residents of Cobb County will be the residue in which the situation will be ultimately judged. In the end, time will tell whether this bold new project will serve to help the organization take a turn toward being a championship caliber team again, or whether it will serve to completely alienate and galvanize their fan base.

San Diego Chargers Downtown Stadium Proposal News

In a follow up to earlier news stories on this topic, the San Diego Chargers of the NFL have advanced their proposed stadium plan for the downtown waterfront site in details that were leaked to the media on Tuesday. Several local news sources in San Diego have reported on this development, and the full proposal is expected to be formally released at some point this week.

The new stadium for the team is being sent through a process called citizens initiative which in the State of California is similar to a referendum voting mechanism. In this process if a certain amount of votes is gained on the proposed issue at hand then the measure will gain approval. The Chargers and the City of San Diego municipal officials are utilizing this mechanism because if the stadium proposal passes via citizens’ initiative, then the exhaustive environmental review of the land being used for these developments will be bypassed.

In California, the environmental review process could add extensive time to the completion of the project. In the event that the initiative is approved by the majority of the general public then the stadium development will take a huge step forward. It should be noted that the Chargers new stadium, under the details of this plan, would be attached to a new convention center for the city. Therefore, the vote will be for approval for both projects.

In an ironic twist, this initiative is the same procedural mechanism that the Chargers used to accelerate their stadium proposal in the LA suburb of Carson in order to “fast track” the land there in the race to LA with the Rams. Carson approved the measure, but the Chargers/Raiders joint proposal was voted down by the full league ownership panel in February.

I will outline the terms of the proposal, the “high points” and then to differentiate the other reporting on this topic, I will focus in on the potential issues with the proposal and the perspective of the parties involved in how this situation got to this point. A comparison will be made to the new stadium deal for the Chargers and what the agreement would look like if the team used the option to move to Los Angeles as a tenant in the Rams new stadium there.

Leaked Proposal

The proposal calls for the following in terms of the financing for the new stadium and convention center:

1. The San Diego Chargers will contribute $650 million to the development of the stadium (important note: the NFL contributes $100 million to any new stadium project and the Chargers will get an additional $100 million from the league as part of an incentive stay in San Diego that was granted to them when the NFL voted against their proposed move to Los Angeles)
2. The government will contribute $350 million to the development of the new stadium and will set up a Joint Public trust essentially to establish municipal ownership of the stadium. Translation: the city will own the stadium. The municipal government will also raise the $800 million for the new convention center.
3. The San Diego Chargers will get all stadium revenues for the 10 – 13 game days that they operate within the facility (includes preseason and playoffs).
4. The City will get all revenues from the rest of the events held at the stadium throughout the remainder of the year.
5. The Chargers will be responsible for all construction cost overruns that may occur.
6. The City of San Diego will finance their portion of the project through bonds and the increase of the hotel tourism tax which will increase from 12.5% to 16.5% this will be for the stadium and the convention center.
7. The increase in hotel tax will “sunset” after a period of 33 years. Then it will decrease to 13.5%
8. The stadium will have 65,000 seats and expected completion date is 2022

Some of that division of asset allocation is pretty standard in the stadium development deals. The construction overruns are usually covered by the team involved in these projects. In the current state of affairs in California where residents feel squeezed by high property taxes and increasing costs of living against flat wage increases, makes the public appetite for a tax increase to build a stadium a complete nonstarter. Therefore, the hotel tourism tax increase was the obvious pathway for both sides in this situation, the team and the politicians, to ensure the best chance for approval of the initiative.

Definite Issues

There are some definite issues with the proposal though which may be more readily discussed in the next few months. The most critical of all is the fact that the neither the Chargers nor the city own the land that the proposed stadium is supposed to occupy. In recent years similar arena or stadium proposals have faced that critical issue as well. In Seattle there is a struggle over land to build a new arena to attract an NBA or NHL team. In Sacramento, the Kings faced some of that push back in their quest for a new downtown facility. The most public dispute was in Brooklyn back when the Nets proposed the Barclays Center in the Atlantic Yards area and the local residents fought back. The government used imminent domain to push people off their property to build the arena.

The assumption could be drawn here that if the proposal has advanced to this stage that one or both parties involved has some kind of “inside track” on gaining the land for this potential use, but that is not always the case. In my view, a huge part of positioning a proposal for development is to make sure you have control of the land in the first place. However, the politics of the situation dictates that if they get this “ball rolling”, then the public will back them to gain control of the land, and that is the card that might be played in this case.

The second issue here is that the Chargers may not have the public approval sentiment necessary to get the citizens’ initiative passed successfully. The public perception of the team took a major negative blow when the team and their owners, the Spanos family, decided to pull up stakes and set their sights on moving to Los Angeles. Some residents feel that the team which has been based in San Diego since 1961 abandoned them for a better potential scenario in LA. The Spanos family now has to return to San Diego and gain a two-thirds majority in this ballot initiative to move forward with the stadium plan. That may not occur, which would set the stage for the team to either explore the longer route to the downtown stadium or exercise their option and move to Los Angeles in 2017.

In the event that the ballot initiative is successful, in fact, in the opinion of others regardless of whether it does or not – the politicians were always more in favor of the Mission Valley stadium proposal because the city owns that land. However, the attached convention center project with the stadium downtown being one component of a larger project which could benefit far more residents, could be the reason that this measure may gain approval.

Charged Up

The Chargers are viewing this situation in two ways: they have always favored the downtown site over the Mission Valley option, and they view the convention center being attached to new stadium as a way to compete with LA and other cities for Super Bowls and other large scale events.

That is a good segue to another point that was neglected from the leaked proposal yesterday: it does not state whether the stadium will have a roof or some kind of retractable cover to it. That type of feature adds a great deal of cost to a stadium development project, but it also enhances the functionality of the facility to be able to host political conventions, NCAA basketball Final Four, and other big revenue generating events.

The proposed new Rams stadium in Inglewood, CA will have a roof to be in consideration for just those sorts of events. The San Diego proposal should consider that design feature for the same rationale, however it could add around $200 million in estimated new costs to the project.

The Chargers, as was mentioned earlier, lost their bid to build a stadium in the LA suburbs, but they still have the opportunity to join the Rams in LA if they cannot get a long term stadium deal brokered in San Diego. The Chargers would be a tenant in the Inglewood stadium which means they would not have an equal share in all the revenues in that arrangement. They would essentially lease the building from the Rams and operate it on game days in that scenario.

Greed Wins

This is the main reason why I have maintained the belief that the Chargers are going to remain in San Diego and get the downtown stadium deal completed. In this agreement with San Diego, the NFL is subsidizing $200 million of the $650 million that the Chargers are contributing to the project. That means that the Spanos family will spend $450 million to get a $1 billion dollar new stadium that they will not have to share with any other team. The Chargers will reap all the football related revenue as well as the profits from any naming rights agreement to the stadium.

The Chargers will also remain in a market where they have established relationships with corporate sponsors and an established fan base of season ticket holders and they would not have to compete with another team for those audiences which they would have to in the event they moved to Los Angeles.

It comes down to greed. The reason why the Chargers will stay in San Diego if this deal gets approved is because they will not have to share revenues with anyone, and the city wants to keep the Chargers and have the new stadium and convention area to lure the Super Bowl and other big events back to San Diego. It is the same reason why the NFL approved the Rams ambitious new Inglewood colossal stadium and real estate venture: greed.

I am not a proponent of cities or counties paying for stadiums or arenas, I think the teams and the leagues involved should finance a portion of it and have private financing for the remainder. The Rams project, for what it is worth, will be fully privately financed. The City of San Diego wants to own the stadium though and has decided that is the right way for them to move forward. There is inherent risk in owning structures of that size and magnitude. That risk must be mitigated by the potential revenue return on the investment. In this case, the studies must have proven that out for San Diego to move ahead with this type of arrangement.

In the end, the November ballot measure will be the next big hurdle for this project to clear. Then, the land ownership piece will come into play. The stage could be set for the Chargers to remain in San Diego in a world class new stadium. The NFL will inevitably be the ultimate winner in that scenario, which I have reported about in the past, and it remains a valid point. Then, the league would just have to figure out what to do with the other team that whiffed on going to Los Angeles: the Raiders, but that is a whole other saga for another time. In the end analysis between the money and power of all of this politics is greed, the fans are used as pawns, in the end the pursuit of greed always wins.