Rays – Something, Finally . . . Maybe
This week, something positive finally happened in the Rays saga: a proposed deal to let the Rays look in Pinellas AND Hillsborough for stadium location. First, the issue:
But speaking publicly on the proposal for the first time Tuesday, Sternberg upped the ante, indicating that he will look to sell the team and that a new owner would likely move it out of the region if the St. Petersburg City Council does not green-light the deal.
“If it doesn’t pass, we’re doomed to leave,” Sternberg said in San Diego, where he’s attending Major League Baseball’s winter meetings. “I’m not taking this team out of the area. But that’s me, and the chances of me owning this team in 2023 if we don’t have a new stadium are probably nil. Somebody else will take it and move it. It’s not a threat, it’s just the reality.”
Ok. Straight-forward enough. The comment may be a little posturing, but it has a lot of validity. (And there is a good chance it is not really posturing at all.) The fact is that given the attendance woes at the Trop and that the lease period is getting shorter and shorter, St. Pete has constantly diminishing bargaining power and, as long as St. Pete stonewalled/stonewalls, the Tampa Bay area will have diminishing bargaining power.
There is little appeal to the Rays and baseball in the status quo. The status quo will just lead to the Rays going to another metro area which does nothing for the taxpayers of St. Pete. So, as we have noted, dragging this on does not protect St. Pete taxpayers or the Tampa Bay area. The deal does more than anything else to protect them.
So what is the deal?
After years of deadlock, Mayor Rick Kriseman and Tampa Bay Rays owners have agreed on a deal to let the Rays explore new stadium sites in Tampa Bay in exchange for up to $24 million in compensation for the city.
Under the proposal, the Rays would compensate the city for every unfulfilled year of its contract to play at Tropicana Field through 2027 but would not have to pay a so-called “exploration fee” included in an earlier proposed deal. The agreement requires the team limit its search to Pinellas and Hillsborough counties.
Payments to the city — intended to compensate for the loss of economic activity around the stadium — would be made at the end of each baseball season and would decrease as the number of years left on the Trop contract dwindles.
The most the Rays could pay in one year is $4 million if they find and build a new stadium in time for the 2018 season. The following year, payments would drop to $3 million per year through 2023 and then to $2 million for the remainder of the original contract.
In addition to compensation, the proposed deal with the Rays would give St. Petersburg $1 million worth of in-kind promotion including signage at Rays games over the duration of the original contract.
Quite reasonable, especially given the relative negotiating power. (Sure, the terms could be harsher, but if St. Pete insisted on that why wouldn’t the Rays owner just walk, sell the team, and let the chips fall where they may?)
It should be noted that the St. Pete City Council still has to approve the deal. The vote was originally going to be this Thursday, but was put off for a week to give people time to comment and think about it. That is fine. None of the relevant facts will change in a week. And
Acknowledging that the deal is not yet approved, let us assume that is gets approved for the moment – what then?
Coincidentally (or not), right before the news broke, the Times ran a story on possible locations in Hillsborough. We are not going to go into all the details, but the locations considered are: Tampa Park Apartments site, Ybor Channel (with infill), ConAgra flour mill site, the cruise port area (if the cruise ships go away), Jefferson High School site, near Raymond James stadium, and (though the Mayor says “no” and we are not sure who is considering it) around Julian Lane Riverside Park. The Times article included this helpful graphic:
All the sites have some issues – some more than others. At this point, we are not going to say what we prefer because our preference may change depending on costs. However, the article tells us:
And so do we. (Anyone who has been to the newer baseball stadiums, with a few exceptions, knows this). We also favor an area where having the stadium actually helps support a vibrant area, rather than just fill parking lots. (The rumors have long been that MLB and the Rays favor somewhere in downtown Tampa. Said rumors probably being part of the cause of St. Pete’s past behavior.) That is especially true if there is public money involved.
Of course, there is also the question of cost.
Buckhorn is blunt: he doesn’t know how the stadium, which will cost hundreds of millions of dollars, will be financed. It will likely be a “creative” deal, Buckhorn said, requiring public and private money.
It will be interesting to see what Hillsborough comes up with (and Pinellas, for that matter). They have had years to develop the outline of a plan, so we would hope they have already done so (as a contingency plan) and things will move relatively quickly (though “relatively” is the key word. These things often take time.) In any event:
- Bob Buckhorn, Tampa mayor
- Ken Hagan, Hillsborough county commissioner
- Chuck Sykes, chairman of Sykes Enterprises
- Brian Lamb, Fifth Third market president
- Eric Hart, executive director, Tampa Sports Authority
Well, that is a start (though we are not sure what the great Switzerland thing is all about). Even more of a start is that two of those people were involved in a joint look at the issue by the Tampa and St. Pete Chambers of Commerce a couple of years ago. (Here is the report summary. This article gives a shorter summary for those not ready to read the official summary. )
Finally, here are the comments of the former manager of the Rays:
“A new ballpark is absolutely necessary. And it’s absolutely necessary in an appropriate spot where everybody can get to it at the end of a workday. It’s just common sense,” he said, referring to Tampa. “I hope I’m not offending anybody but I believe that’s true.”
Maddon did not mince words about the St. Pete stadium, which the Rays are contractually tied to through 2027. He also and hinted that attendance was part of the reason that the team could not retain top talent like David Price and James Shields.
“It’s been there how many years and how well has it been attended? It hasn’t been supported there. That’s the definition of insanity, doing the same thing over and over again, expecting the same result.”
Prior to his sudden departure, Maddon was a popular figure with Rays fans. Not only did he lead the team out of the basement and into the World Series, but he was an active participant in local charities — which he insists will not change.
“If the players really wanted to speak out, really lay it out there, it’s no fun. It’s no fun to be in your own ballpark and be entirely rooted against. That doesn’t happen anywhere else,” Maddon said. “We really thought that by going to the World Series and being involved in the playoffs so often that it would go away. But it never went away and it still exists.”
There is nothing surprising there.
It will be interesting to see how this all plays out.
Economy – How Is Employment?
It seems that employment growth was not so good last month.
“In something of a surprise, New York was the only one of the large states with job gains greater than October,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “Gains in Texas were roughly flat, while jobs added in California and Florida were down significantly.”
Throughout the year, Florida has trailed the two biggest job-generators: Texas and California. That trend continued in November as it produced roughly half as many private jobs as the top two. Texas added 29,700 jobs while California was up by 24,000 jobs.
October was a hard act to follow. According to the Labor Department, Florida added a total of 34,400 private and public jobs over the month while its unemployment rate fell to a six-year low of 6 percent.
We know California and Texas are bigger than Florida so they should create more jobs, but not that many more. And the kicker:
So October was good for raw numbers and November was not. And the quality of jobs is still an issue. Is there anything on that front?
Economic Development – St. Pete Gets an HQ
It was announced this week that a company was moving its HQ to downtown St. Pete.
The news is a major score on several levels for economic development efforts: Not only does it retain and create high-wage jobs topping $84,000 on average in St. Petersburg, but it makes the city home to another multinational company, one that boasts more than $1.5 billion in annual revenues with locations in 17 countries.
IQor first made its mark on Tampa Bay earlier this year when it bought the aftermarket repair business of St. Petersburg electronics manufacturer Jabil Circuit for $725 million. But Tuesday’s announcement, which comes after months of negotiations and a hefty tax incentive package, ratchets its presence to another level.
Up to $250,0000 in tax refunds from the Qualified Target Industry, or QTI, program, with 80 percent of the cost covered by the state and 10 percent each by Pinellas County and the city of St. Petersburg. The figure is based on $5,000 per job for creating up to 50 jobs paying at least 200 percent of the average annual wage in Florida.
Up to $1.025 million from the governor’s Quick Action Closing Fund, which is based on retaining 60 jobs plus creating 50 jobs at an even higher range than the 200 percent of average wages under the QTI program. A portion of the money is awarded in phases with the state and county allowed to claw back money if goals are not met.
The decision probably was influenced by the company having some roots (though the acquisition) in the Tampa Bay area. So what? It is a nice gain – not superlative (not enough to anchor a building), but definitely nice. One thing it shows is that creating a good built environment is very helpful to economic development.
Now it is Tampa’s turn.
Economic Development – Some Jobs
Speaking of Tampa, there was a jobs announcement there.
The information technology and consulting business currently has more than 900 employees throughout Florida, half of them based in Tampa. With headquarters in Teaneck, N.J., Cognizant has nearly 200,000 employees worldwide.
However, in June, Hillsborough County commissioners approved an incentive package offering local tax refunds totaling up to $494,400 for a then-unidentified IT operation in unincorporated Hillsborough if it created up to 412 higher-wage jobs.
Under the state’s Qualifed [sic] Target Industry program, companies are reimbursed through tax refunds after promised jobs are created. The state typically provides 80 percent of tax refunds and local governments cover the remaining 20 percent. That indicates the maximum QTI package for Cognizant may be worth nearly $2.5 million.
And that is all good, assuming the jobs are actually created.
There is one concern that to have a truly sustainable high tech economy and attract creative talent, we need to add developing products to servicing products and companies. (Ideally, we’d have both the manufacturer, which, in all honesty, the iQor deal, plus Jabil, essentially does.) We have some, but we need much more. That should be kept in mind when hunting an HQ – not that we would say no to any HQ but it should be considered when coming up with the optimal move.
Finally, we will note the expansion – not huge, but it is something – of Tampa Steel. Sometimes, just making things is nice.
Economic Development – What We Lost
Speaking of making things and technology, there was an interesting article in the Times entitled “Tampa Bay natives behind the first 3-D printing in space.” As you might have guessed, it tells the story of two guys from the Tampa Bay area who were involved with the first 3d printing in space, which is quite cool. Except:
Dunn went to the University of Central Florida and became a rocket scientist. Kemmer bounced between majors at the University of Florida, eventually settling on a concentration in communication and leadership development. They met in 2010 at Singularity University, a Silicon Valley program that encourages people to tackle “humanity’s grand challenges.”
Just another story of talent lost. For all the talk of attracting talent and innovation to this area (which we are all for and which is slowly – oh, so slowly – progressing), we need to remember what we lose because of what this area fails to provide. There are so many things on that list (innovative environment, critical mass of talent, proper business environment, proper political environment, proper amenities to make people want to stay, money, etc). Yes, we are getting better, but we are nowhere near being where we need to be.
Good for those guys for their achievement. Too bad they felt they needed to leave.
— And Another Thing
Speaking of which, we noticed this:
“What Silicon Valley is to tech startups, Orlando is to simulation,” said Armstrong, CEO and president of Engineering & Computer Simulations in Orlando. “It’s the place you want to be developing the technology and getting it out.”
Organizers say the conference set up shop in Orlando years ago because of strong resources in the field, from military-simulation companies to educational programs at University of Central Florida and other schools.
So what is our creative talent cluster?
How Many Playing Fields Do You Need – Cont.
Last week, we asked again how many playing fields do we need and whether playing fields are the best use of $15 million dollars for a County that keeps saying it is lacking money to do necessary things. Not surprisingly, there was an article in the Tribune regarding the push for fields in Hillsborough. At the risk of laying this out a bit backwards, we will quote the reality part before we get into the County’s pitch.
“Sports tourism is the only segment of the tourism industry that did not decline in any quarter during the recession,” Commissioner Ken Hagan said Wednesday, making his case for the complex. “It’s an estimated $7 billion industry, and is growing by 3-5 percent annually.”
But as in other cases where large sums of public money are spent for economic development, the benefits of sports tourism are open to question. Even proponents say the “build it and they will come” philosophy doesn’t always work, especially if athletic fields are not marketed properly.
“Sometimes it takes longer to get the long-distance travelers,” Caum said. “You don’t just have to build the facility; you have to build the interest in booking the facility. So it takes two levels of sophistication.”
In Pasco County to the north, promoters have been trying to get a sports complex built for nine years. A potential deal to build a $35 million baseball/softball complex with 19 fields fell through Friday when the development group, Pasco Sports LLC, couldn’t deliver a financial package.
In Bradenton to the south, the expansive IMG Academy provides athletic training for a host of sports, including baseball, football and soccer. But IMG also hosts tournaments, including the 2015 IberCup world youth soccer tournament in April. The international tournament will draw 600 teams and more than 8,000 players.
“Why should a group of teams that have been playing at a specific site for year after year, and have a good relationship with that site, play at a new site with people they don’t know? It’s a question that needs to be asked,” said Don Schumacher, executive director of the National Association of Sports Commissions.
Here is the County’s pitch:
But what will really set Hillsborough apart as it seeks tournaments is the area’s airport, thousands of motel rooms and attractions such as Busch Gardens, Ybor City and the Pinellas County beaches just 45 minutes away.
“You don’t often find all these things to do around a venue,” said Rob Higgins, executive director of the Tampa Bay Sports Commission. “This would really be the perfect background for hosting events, which is why it will separate us from the competition.”
Higgins noted that the commission has lured big-time amateur events to Tampa, such as NCAA conference football and basketball championships, the men’s collegiate hockey Frozen Four and the NCAA Women’s Final Four basketball tournament.
Not as well known is that the sports commission brings youth athletic tournaments to the county almost every weekend. Last year, those tournaments generated 150,000 hotel visitor room nights, Higgins said. A room night is a motel room occupied for one night.
But Hillsborough has lost three major soccer tournaments over the past four years because of a shortage of fields, Higgins said. The county’s principal soccer venue at Ed Radice Sports Complex has only nine soccer fields. Larger tournaments have had to schedule games at other sites, forcing teams and their followers to drive 30 minutes or more.
“The soccer market is something we could get back and the lacrosse market is one we haven’t really been able to capitalize on that we could go after,” Higgins said. “I think the versatility of this complex would allow us to pursue a lot of different sports markets that will bring a great return on investment in terms of tourism.”
Before we get into that we will note what we said last week – if we had the money and no other needs or a company was taking all the risk, we have no problem with the idea. However, right now, that is not the case.
Now to the pitch: IMG is closer to the beach (though farther from Busch Gardens, but anyone who knows what really competitive youth tournaments are like knows that theme parks – and the beach, unless you are staying there – are not really an issue. The people are there to play games, not play at parks). And the most prominent complex around is in Disney Wide World of Sports (private). There are also a number of complexes around Florida that have had issues (such as in Gainesville. See here ). Also, if you know where Ed Radice is (if you don’t, it is here), you know that most people visiting the area (not locals playing), and therefore actually contributing to tourism, have to drive something around 30 minutes to get there from their hotels (unless they are staying in hotels in Oldsmar, which is in Pinellas County or maybe a little closer in Pasco) anyway. (NCAA tournaments are irrelevant.)
The question is what will the real return of investment be and is it worth more than spending the money on other issues? And shouldn’t this all be a private initiative?
Downtown – First Glimpse at the Grant Block Concept
A few months ago, we discussed a proposal to build an apartment building on the Grant Block, just north of the Kress Block. A recent filing provided some line drawings (admittedly hard to make out) of the concept for the block.
It is hard to make out all the details in the line drawings, but it appears to be a large L shaped building with the corner of the L in the northeast corner of the block. We can’t say anything about the exterior or materials. We understand that not every building is going to be an architectural masterpiece and that the building plan has street interaction (which is good), but it seems a bit of a hulking building. Tampa should take care that what gets built now does not make it significantly harder to build other buildings nearby. That does not mean getting into every item of every proposal, but attentiveness, at least to some degree, to view corridors is a good idea.
We look forward to seeing something that is easier to make out to get a better idea of the plan.
The Heights – A First Look
This week, the Tribune had an article on the Heights project north of downtown. Much of the information was a repetition of what was announced before, but there were some new things.
Developers of “The Heights” neighborhood on the Hillsborough River this week unveiled their preliminary plans for the 43-acre mixed-use project — complete with a public food market, an apartment complex, office space, restaurants and lengthy expansion of the Tampa Riverwalk boardwalk from the city’s Waterworks park through North Boulevard.
It’s an expansive project, and rehabbing the Armature Works factory space alone could easily top $10 million, developers said. But once done, the Armature space will have at least three restaurants, several bars, a cafe/bakery called Ola Cafe, an open-air entertainment stage called “The Gathering” and the 14,000-square-foot “Heights Public Market” in the style of East End in Orlando or Eastern Market in Washington.
We are not exactly sure what the water tower will look like (that is quite tall for a water tower) but the article included this rendering:
That looks fine, but that does not tell us much about the project, really. So here are some reported details:
Overall, the general idea seems like a good one. The developers seem to get the concept of good urban development. Nevertheless, we are not sure about changing all the roads, especially making part of Palm private so it can be closed. It would be better to just build a private road in addition to Palm. As for the rest, we have not seen what the buildings are supposed to look like, so it is hard to comment.
Regardless, this is a major project that could, if done correctly, really transform that area (or mess it up for years, if done wrong). We look forward to learning more.
South Howard – So What Will the Reaction Be?
Last year, there was a proposal to build a four story apartment building on the site of the closed Xtreme Fitness on South Howard.
The project site covers a little less than 3 acres and would replace a largely vacant strip center on S Howard Avenue, north of W Morrison Avenue. The site once was home to Xtreme Total Health & Fitness, owned by Joe Redner, but also includes a laundry equipment supply company.
It died because the surrounding neighborhoods objected due to traffic and parking.
Now comes this news:
Paperwork recently filed with the city of Tampa show a development group backed by the Tampa Bay Lightning owner hopes to build a four-story, 46-unit apartment and retail complex at the corner of South Howard Avenue and West Morrison Avenue. That’s the site of the now-empty Xtreme Total Health and Fitness gym.
The Tampa Tribune recently confirmed Vinik’s involvement, as a partner in the company that purchased the site, led by Tampa developer Andrew Wright of Franklin Street. Wright has described Vinik’s role as a supporter and partial investor in the project, though the two have other partnerships underway. Wright is also helping Vinik redevelop the Channelside Bay Plaza complex in downtown Tampa.
In recent days, the developers of the Howard Avenue site filed permit applications for the South Tampa site, requesting meetings to review preliminary plans with departments such as water, fire and solid waste. The application describes two adjacent sites. The first is the main building along South Howard Avenue, with 46 residential units (listed as two-bedroom units), plus 6,950 square feet of office space, 3,350 square feet of retail space and 8,650 square feet of restaurant space.
The second area is a new, off-site parking lot along the adjacent South Eleta Street, with 26 parking spaces. In total, the project calls for 246 spaces, compared to the 245 required by city rules for such a project.
So it is a much smaller project with what appears to be a surface parking lot (and a big name attached). It will be interesting to see what the reaction will be.
University Mall – Are the Times Changing?
This week, it was announced that the long-suffering University Square Mall has been purchased.
So what do the new owners plan to do?
Paperwork issued by the developers suggests they’re looking for a grocery store, a warehouse club, and potentially a tower on the north end of the property for either medical offices or University of South Florida student housing.
New York-based RD Management purchased the property last week and according to papers filed with Hillsborough County, the purchase price was $29.5 million. That includes the mall itself, which county records describe as 456,700 square feet, plus several outparcel restaurants and maintenance shops.
The preliminary (what appears to be very preliminary) site plan sketch looks like this:
While we are happy someone wants to fix up the mall and we suppose they are partially limited by not owning the anchor (store) boxes, it is a shame that, if that is what actually happens, such a big, critical parcel, right next to USF will not be transformed into something much better. Hopefully, they will take more advantage of the opportunity. Time will tell.
List of the Week
We first saw mention of this week’s list in the Business Journal. It is Wallethub’s list of 2014′s Best and Worst Cities for an Active Lifestyle. The Business Journal tells us:
The methodology is here. As you can see, it measures things like the number of personal trainers, baseball fields, pool, and basketball hoops per capita. So let’s look at the Top 20.
Coming in best was Omaha, followed by Portland (OR), Pittsburgh, Reno, Orlando, Tampa, Irvine (CA), Tucson, Colorado Springs, Atlanta, Boise, Seattle, Cincinnati, St. Louis, Minneapolis, Albuquerque, Denver, San Diego, Buffalo, and Richmond.
St. Pete was 33rd. Miami was 49th.
So what made Tampa rank so high? It was 4th in sports facilities and outdoor environment. We will give them that. It is warm year round and we have many places to play (how many playing fields do you need?) Notably, Tampa was not in the top five of any specific category listed in more detail.
Of course, one has to wonder about a list that puts San Francisco at 44th not just because it is expensive (it is) but also ranks it low on sports facilities and outdoor environment. (Have they been to the other bay area?) And puts Buffalo in the top 20.
In any event, even if it is a bit odd, we’ll take it.