Decision On Building Stadium In Ybor City Now Rests With Rays

TAMPA, FL -- The decision is now in the Tampa Bay Rays' ballpark.

Hillsborough County Commissioner Mike Merrill told commissioners Wednesday that he presented the Rays with the "framework" of a deal for the Major League Baseball team to build a new stadium on Adamo Drive in Ybor City.

Now he's waiting for a response from the baseball team.

County commissioners have been anxious to hear details of plans to build a new Tampa Bay Rays stadium in Ybor City but, until now, Merrill said he didn't have anything to report.

"In just the last few weeks, we have been able to put together a proposed framework," he told commissioners.

That's because the main component of the deal involves creating Opportunity Zones, an aggressive incentive program designed to encourage private investors to invest in redevelopment areas like Ybor City.

The national program was created under the Obama Administration and activated under President Trump. However, the Internal Revenue Service didn't release guidelines for Opportunity Zones until last month, said Merrill.

"That (Opportunity Zones) was really the heart of putting together a deal with the Rays," said Merrill.

Creating Opportunity Zones in Ybor City, he said, would make it possible to build a new stadium without using taxpayer money, a stipulation that the county commission insisted on.

Private investors, including at least two in Ybor City, have been eager to take advantage of the tax breaks allowed in Opportunity Zones, Merrill said. But they couldn't move forward with their plans until the IRS set the ground rules.

An Opportunity Zone is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.

Opportunity Zones also resolve concerns about gentrification. In many communities where redevelopment has occurred, longtime residents could no longer afford to live in the community.

Opportunity Zones are intended to benefit the existing community by creating jobs and affordable housing, said Merrill.

Merrill said Opportunity Zones are one of three programs the county proposes to use to finance the Rays' new stadium.

Under the proposal Merrill presented to the Tampa Bay Rays on Friday, the Rays would bear 50 percent of the cost of purchasing the 14-acre property and constructing the $900 million stadium, and would pick up 100 percent of the cost of any overruns.

The other half would come from Opportunity Zone investors, land owners in Ybor City who would voluntarily form Community Development Districts and existing Community Redevelopment Areas that the city of Tampa created in 1988 and 2004.

The Rays would also be responsible for stadium maintenance and repairs just as the Tampa Bay Buccaneers are responsible for repairs and maintenance of Raymond James Stadium. Their funds would come from naming rights, stadium advertising and other revenue sources,

However, the entire deal hinges on the county commission's willingness to give the Rays property tax exemption immunity, said Merrill.

"If they're not exempted, the formula doesn't work," he said. "There are an awful lot of pieces to the puzzle, and any missing piece would make the entire thing undoable."

If the county grants the Rays property tax immunity, the Rays would save $23 million a year.

"The commission holds all the cards because it can grant property tax immunity," Merrill said. "It's an opportunity for the commission to make demands and binding agreements."

The proposal outlined by Merrill is the opening pitch in negotiations with the Rays.

"This is the first written proposal to the Rays outlining the framework," said Merrill. "It’s the guts of the deal and the first hurdle."

Merrill said he's received no word from the Rays since sending his proposal on Friday. But the Rays have until Dec. 31 to accept or reject the proposal. If need be, said Merrill, that deadline can be extended.

If the Rays agree to the county's deal, Merrill will put together a detailed finance plan called a term sheet, which will be a binding agreement for the Rays, the county commission, the Tampa City Council and the Tampa Sports Authority.

If the Rays don't agree, "we don't have a Plan B," said Merrill.

And there's a distinct possibility that the Rays will turn down the county's proposal.

A deal like this has never been done before, Merrill said.

Most sports stadiums have been constructed with public subsidies.

The city of Arlington, Texas, is contributing $500 million to build a new $1 billion stadium for the Texas Rangers. The city plans to use a half-cent sales tax, 2 percent hotel tax and 5 percent car rental tax to fund its portion of the stadium.

The city of Miami and Miami-Dade County contributed $488 million in bonds to build Marlins Park, home of the Miami Marlins, which opened in 2012. That represents 80 percent of the entire cost of the facility.

Tropicana Field, built at a cost of $138 million, was entirely funded with public money, mostly tourist development taxes, since there was no Tampa Bay baseball team when the stadium was completed in 1990.

Financing wasn't discussed when the Rays revealed plans for the new stadium in July.

See related stories:

Tampa Bay Rays Owner Endorses Tampa Site For New Ballpark

Rays Reveal Design Of Proposed Ybor City Ballpark

Images via Tampa Bay Rays

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