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Roundup 11-1-2012

November 1, 2012

Due to logistics, our Roundup is coming out on Thursday this week.  We should return to our normal schedule next week.

Streetcar, CSX, and Seeking a Fix

We have been noting over the last few weeks the issue of the cost of the insurance that CSX demands from the streetcar and wondering why the situation has persisted for so long. (see here and here). Apparently, efforts to change the situation are getting more organized.  A Tribune article this week explains some of the problem:

The TECO Line Streetcar System is paying a whopping $400,000 a year — more than a quarter of its annual budget — for liability insurance at a single CSX railroad crossing. The $100 million policy enables the streetcars to cross a track that eight freight and passenger trains use daily.

* * *

The insurance issue is all the more disconcerting because, on average, only four CSX freight trains and four Amtrak passenger trains use the crossing at 13th Street and Fifth Avenue daily. Streetcars use the crossing about 60 times a day.

The article then goes over some of the history of the issue and then says:

Before year’s end, a committee of streetcar board members expects to meet again with CSX officials to try to get the railroad to lower the $100 million coverage it’s demanded over the years.

The committee also is exploring a host of other options, including legislative changes such as giving CSX sovereign immunity from lawsuits over streetcar accidents at its railroad crossing. Committee members also want to see if Tampa’s streetcar is entitled to protections given other rail systems like TriRail in South Florida and SunRail in Orlando.

Another option could be asking the city of Tampa to assume responsibility for streetcar insurance payments, an accounting move that could help lower premiums.

Not surprisingly, that option could face hurdles.

“We’d like to find a solution so the city is not holding the bag,” said Mike Suarez, a Tampa city councilman and private sector insurance executive who sits on the streetcar board.

We applaud the creation of the committee and urge it to push very hard.

For its part, CSX is noncommittal:

For their part, CSX officials said their requirement for $100 million in liability insurance is reasonable. The crossing was created specifically for the streetcar.

“We are willing to continue discussions to explore various options, but we have re-evaluated the risk created by the (streetcar) crossing CSX tracks,” CSX spokesman Gary Sease said in an email. “Our assessment confirms that the risk requires $100 million liability insurance.”

As we discussed previously, this number seems a bit odd, given that SunRail only needs a $200 million policy for 61 miles of rail, compared to $100 million for one crossing.   Their assessment seems to have missed something.

Then there is this:

And then there’s this option, which CSX has suggested since the beginning:

Get rid of the streetcar track and switch to tires, in essence becoming a bus that looks like a streetcar.

Right, that is a bus, not a streetcar.

We still are not sure how this problem was not solved before CSX got a state subsidy in the SunRail deal, but at least it is now being pushed.  Push on.

Rays – The Bottom Line, Finally

When last we left the Rays, St. Pete had said it would sue (maybe) if they talked with Hillsborough County.  Since then, the Mayor of St. Pete released a letter he had sent to the Rays. (Because we could not cut and paste from it we had to type in the language.  We apologize if there are any typos)

First, the Mayor inadvertently points out one of the main problems with St. Pete’s attitude regarding the Rays from the very beginning:

Through the exclusive efforts of the people of St. Petersburg and Pinellas County, this region now enjoys Major League Baseball, and the fruits of their labor, together with a sizeable commitment of their tax dollars, have paid off with St. Petersburg proudly being Home of the Rays.

Kind of odd how he neglects to point out that the first owners of the Rays were from Hillsborough County – making it a regional effort.  It is also kind of odd how in this paragraph he ignores the NEED for the Rays to attract fans from Hillsborough County, and other counties, if they are to be successful.  (While we cannot find an article to reference, we remember clearly St. Pete’s reaction to the awarding of the Rays and the distinct tingle of rivalry in the pronouncements of City officials.)

Rather, the above quote is odd until he says the following, which we assume is an attempt to say to the explain to the Rays their bad position but really shows the problems with St. Pete.

The potential for attendance challenges was foreseeable in 1995, and discussed at length during negotiations, and thus, the City bargained away some of its interests in exchange for a thirty year agreement that could not be terminated on the basis of attendance.

This blurb points out that from the very beginning it was clear that a downtown St. Pete stadium would struggle.  Why else would negotiations have gone that way and discussions have been held about “attendance challenges?”  Moreover, the Mayor admits St. Pete gave away its rights (and, therefore, stuck the taxpayers, who are St. Pete and who the Mayor claims to be protecting.)  It also makes one wonder about his pronouncements that:

“If the region wants the Rays to stay in the region, then Tampa Bay needs to support this team this year by putting their backsides in the seat and going to the game,” Foster said.

(Obviously, the best way to get people to go to a game is by fanning a St. Pete/Pinellas v. Tampa/Hillsborough rivalry.)

And:

“Nowhere in our agreement with the Rays has the city accepted responsibility for attendance at the Trop or the marketing of the baseball team,” said Foster. “Per our agreement that runs through 2027, we build the house. We pay for the house and you play baseball.”

Maybe so, but they will play to poor attendance, that he knows will be poor – but that is not his concern.  (And, yes, the present owner of the Rays knew about the Rays’ attendance issues.  Maybe he assumed that a successful team would fix attendance – and was wrong.  Either way, for St. Pete, it is a pyrrhic victory.  Simply because it may be true does not get anyone one step closer to fixing the stadium issue or helping St. Pete taxpayers.)

After all that, the Mayor goes for the soft sell:

Not only are the Rays a source of great civic pride – you are a partner, employer, economic driver, tourist attractor, philanthropist, and, yes, a great escape as our residents get lost in the game of baseball. Make no mistake. This is not about money, and the City has absolutely no interest in “winding down” our relationship prior to 2027.

This is the money quote. Indeed, the entire Rays stadium issue is not about money.  It is not about what works best for the region and the Rays. It is not about what is best for St. Pete’s budget.  It is not about whether the Trop will ever work – or about the damage to the region and St. Pete from the Rays’ well reported poor attendance.  It is all about regional rivalry – St. Pete versus Tampa.  Pinellas versus Hillsborough.  In short, it is about pride.

And then this:

An optimal ballpark location and design for our region most certainly can be found in St. Petersburg and Pinellas County, and I am convinced that such a ballpark would be a source of great pride for generations of Tampa Bay residents.

Sure, a location may be found in St. Pete or the Gateway, but what makes it “optimal”?  And “optimal” for whom?  (Clearly the ABC Coalition viewed “optimal” differently than the Mayor.) And if it is so obviously “optimal,” why not allow the Rays to speak with Hillsborough?  Surely, they will see how “optimal” the Mayor’s location is.

Look, we did not expect anything less from the Mayor of St. Pete. At least now that the issue is about pride not practicality.

The bottom line is this: the stadium issue has to be worked out.  That requires looking all over the Tampa Bay area.  Maybe downtown Tampa is best or maybe there is no workable deal to build there.  Maybe Carillon is best or maybe it is not workable, either.  The problem is that, due to the Mayor of St. Pete’s pride, that cannot be figured out, and no one wins.  Apparently, that is what he means by “optimal.”

Economic Development – Florida

This week the Times had a column/blog describing a report on economic development in Florida – of course it was an outsourced (to South Carolina) report to our state outsourcing agency, Enterprise Florida.

A South Carolina consulting firm presented its study recommendations last week to Enterprise Florida that essentially says if the Sunshine State gives companies more money upfront and lets them pay less to Floridians, then more businesses will relocate to this state. “People just don’t think of Florida as a ‘top of mind’  place to do productive activity,” Mark Sweeney [] of McCallum Sweeney Consulting in Greenville, S.C., told Enterprise Florida last Thursday, the Orlando Sentinel reports.

Brilliant, spend more money and get less in return.  And while you are at it, make sure you are a low wage state.  Someone spent money on this?

In fact, yes they did. The report apparently was paid for by utilities:

The remarkable insights in this 178-page “competitiveness” report from Sweeney (and a few other consulting firms) cost $105,000 (yet again given to out-of-state businesses). It was paid for by this state’s major utilities, including Progress Energy, Seminole Electric, TECO Energy, Florida Power & Light and Gulf Power. The reports also recommends tax changes and more emphasis on green energy — an ironic idea given the most recent posting on this Venture blog being about BP’s abandoning its biofuels plant ambitions in Florida.

It makes sense in a way. To a large degree, it does not matter to a utility whether customers are high paying or low paying jobs.  They all turn on the lights and use energy.  And if the taxpayer pays for it, so what? (Sort of like giving money to Bass Pro Shops.)  However, it does matter to taxpayers that they get a proper return on their investment and use their money to attract good jobs.  Of course, the above speaker is not a Florida taxpayer, so maybe he doesn’t care all that much.

Thankfully, the Times is completely reasonable is seeing the foolishness of paying more and getting less.

More interesting to us is this:

“People just don’t think of Florida as a ‘top of mind’  place to do productive activity,”. . .

(Maybe that is why the State outsources its work to other states.) What does it say about our political and business culture that we are not that kind of place already?  What are the causes of that impression? Instead of just giving money away for low paying jobs, maybe we should invest that money in universities and attracting and retaining companies so that we become a “top of mind” place.

Economic Development – the RNC

This week the Tampa Bay Partnership revealed a survey of RNC attendees (performed by a company from San Diego).

Researchers talked to 200 delegates, 400 media representatives and 600 convention attendees by phone three weeks prior to the RNC and again two to three weeks after.

Respondents were asked about 27 key attributes to measure overall familiarity, quality of life and perceptions about locating or expanding a business here. Rankings were done on a scale of 1 to 10, with 10 being “excellent.”

Each attribute increased from before to after the convention, 15 significantly, the partnership said. Seven categories showed major improvement, meaning an average improvement of 2 or more. They were:

·         A region I would recommend to a friend or business associate, up an average of 3.89.

·         Air quality, up 3.34.

·         Ballet, theater, arts, museums, range of cultural activities, up 3.34.

·         A region I would like to work in or relocate and/or expand a business to, up 2.70.

·         A region I would like to live in, up 2.32.

·         Overall quality of life, up 2.21.

·         Public safety, up 2.03.

Hey, that’s all good.  Of course, it does not tell us who these people were, what kind of business they have or, most importantly, if anything will come of it, but it is good.  We have a nice area, even if it is in need of serious improvements and proper economic development.

However, before celebrating too much, keep in mind:

Less than half of those polled were “very or “somewhat familiar” with the region before the convention, according to the survey. International respondents had no familiarity.

In other words, to a large extent the respondents were a blank slate.  At least they did not get a negative impression.

One question: how come so many people knew little or nothing about the area?  What does that say about our economic development efforts?

Fairgrounds Happenings

The Tribune reported that the proposal to develop the Florida State Fairgrounds is back in play.

Republic Land Development of Fairfax, Va., has wanted to redevelop the fairgrounds property, at U.S. 301 and Interstate 4, since at least the fall of 2009. It proposed building hotels with as many as 2,600 rooms, shops and restaurants, a sports complex with soccer fields and tennis courts and even a monorail to shuttle people around.

It promised to leave enough space for the annual Florida State Fair on the fairgrounds’ roughly 355 acres. The Florida State Fair Authority, which oversees the fairgrounds, considered the idea for much of 2010.

* * *

Most members of the fair authority supported it, but the project couldn’t overcome some legal hurdles and the reservations of former Department of Agriculture and Consumer Services Commissioner Charles Bronson. The project went dormant in 2011 and this year.

On Monday, Republic Land resurfaced at a meeting of the fair authority’s long-range planning committee.

We admit that we have very mixed feelings about this.  On the one hand, they want to capitalize on the growth of the Hard Rock Casino, which makes sense, and it could be a major development.  On the other hand, the fairgrounds have a large plot of public land.  We are not sure this is what we want there.  Moreover, there is a lot of land in other places closer in to Tampa that can and should be redeveloped.  The real question is what do you want – a city or a string of “entertainment complexes” completely detached from each other and contributing nothing to each other and the areas around them.  Really, what spin-off development will come from this – either nothing or another SR 60 in Brandon?  It surely will not be anything urban.

One last point – if anyone has driven by the Fair or Casino when they are busy, it is clear that getting in and out already is a pain.  If anything gets built on the fairgrounds, serious improvements to the roads and interstate should be a requirement.

In sum, we are dubious, but we are open to being convinced. We are curious to see the full plans.

Post Hyde Park

Continuing with dead (or hibernating developments) coming back, Post announced that its plans for a complex at the corner of Swann and Howard are back. One change to the plans is to have more apartments and less retail space.  We have not seen the plans, but hopefully Post has looked at the Epicurean for hints on what they should do – not their suburban complex a few blocks away on Swann.

This is an important corner that could really transform Howard.  We hope they do it right.

List of the Week

Our list this week is the “10 US Cities with the Best Job Growth Right Now.” Not surprisingly, San Jose, CA is number one.  Houston is next, followed by Austin then, shocker, Detroit.  The rest are usual suspects.  Of course, no Florida cities are on the list.  Must be because we are not handing out cash fast enough.

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