The Pinellas County Board of Commissioners should not vote Tuesday to approve the sale of bonds to help pay for a new stadium. The Rays say the deal no longer works for them.
WHERE WE’VE BEEN AND WHERE WE ARE…
St. Petersburg’s Mayor Ken Welch presented the St. Petersburg City Council and the Pinellas County Board of Commissioners with a deal to build a new $1.3 billion stadium for the Rays. The county would pay $312.5 million, the city $287.5 million, and the Rays $700 million. The Rays also agreed to guarantee any cost overruns. The agreement includes a lucrative opportunity for the Rays to acquire 64 acres of prime development land at a price that many believe to be significantly below-market (estimates range from a $500 million to $800 million discount off fair-market value). This substantial discount was rationalized, in large part, based on the team’s willingness to shoulder the financial risk of any cost overruns to build a new stadium.
Both the city and county approved the deal. Since both would be paying mostly by selling bonds, the deal also required approval of that sale by the County Commissioners and the St. Petersburg City Council. The Rays asked for those approvals now so they can count on the money before they start running up millions of dollars in costs. That request was reasonable before the Rays said the deal has changed. Now that request is unreasonable and unwise.
Before the city or the county could vote, the Rays wrote saying that they can’t meet their guarantee. They said, costs have gone up and they can’t afford to pay them alone.
So where does that leave us today?
- Since the current deal no longer works for the Rays, and they can longer agree to the key provision of the deal to pay for any cost overruns, there is no deal. And while the city voted to approve the sale of bonds, the county should not.
- There is no vote for the county to take on Tuesday. In fact a yes vote could be construed to mean the deal is OK without a cost overrun guarantee.
- The county should advise Mayor Welch to attempt to negotiate a new, fair deal with the Rays and if he can, present it to the county and the city for a vote. If they vote yes, then and only then, would it be appropriate for the Rays to ask the county to approve the sale of bonds for this new deal. But not before.
- Additionally, there are reports that the Mayor is already working on a new deal behind the scenes. But until that new deal is presented and approved by the county and the city, there is nothing for either of them to do. The county should feel under no pressure to do anything until Mayor Welch lets them know the next step.
If the Mayor and the Rays can’t reach a new agreement, the city and the county should move on without a stadium, and the Rays should relinquish their rights to the 64 acres. If the Rays don’t agree, the city should take the Rays to court. A deal without baseball will save the city and county $2.4 billion in taxpayer resources. Money the county needs to repair the beaches, have funds in reserves for future repairs, and to promote what actually brings tourists. Money the city needs to spend to protect our homes from future hurricanes.
THE HURRICANES, THE TROP AND THE RAYS PREDICAMENT.
The two recent hurricanes caused significant damage to Tropicana Field, rendering it unplayable for the 2025 season and a strong likelihood it would not be ready for 2026, creating new issues for the Rays. Furthermore, the Rays have said that a new stadium would now take longer to build and be pushed back from 2028 to 2029.
And while the city and the county were deliberating whether to issue bonds to pay for their share of a new baseball stadium, the Rays wrote that they cannot fulfill a key term of the agreement to build the stadium – that is, the Rays’ guarantee to pay any construction cost overruns. It is not entirely clear what delays, or other conditions caused the apparent increased costs that resulted in the Rays saying they are “not able to absorb” the increased financial burden (those are their own words). Was it a result of the three-week delay in voting by the county commission? Doubtful. Did the development plans require modification, and added costs, given the new reality of Cat 5 hurricane preparedness? Perhaps. Either way, the landscape has changed dramatically. By the Rays own declaration, without the provision for cost overrun guarantees, the agreement is effectively terminated.
With the Rays and the city no longer having an agreement, clearly the city should not have moved forward authorizing the sale of bonds. And while the county has yet to vote, they most certainly should not vote to authorize the sale of bonds.
NEGOTIATE OR MOVE ON – OR IF NECESSARY, GO TO COURT
Mayor Welch needs to attempt to renegotiate a fairer deal. In any renegotiated agreement, the city needs to be able to review the financial resources of its partner and have confidence that it can absorb the financial commitments it makes in an agreement. Whether it was Milton now or an unforeseen circumstance in the future, the city needs a partner with the financial strength to weather any storm, nature or otherwise.
And any new agreement needs to be fair to St. Petersburg and Pinellas County, so that instead of committing a total of $2.4 billion, those resources will remain with the city and county to focus on what truly matters. (You can read the full analysis of $2.4 billion HERE)
If he can’t renegotiate, the Rays, the city and the county need to move without baseball in St. Petersburg.
And if the Rays won’t agree to move on, including giving up their rights to the 64 acres, he should take them to court to cut through the confusion.
In the opinion of William (Bill) Ballard, former President of the St. Petersburg Bar Association (and who in his career represented Pinellas County Schools, the FDIC, the Resolution Trust Corporation, among others), the Rays letter sent to the Commissioners stating that they cannot absorb the now anticipated higher costs of a stadium, was a material breach of the agreement. Bill goes on to state the city and the county should not commit public funds when the Rays have demonstrated an unwillingness, and/or a financial inability to honor a core obligation of the agreement to build the new stadium.
Bill says the appropriate next step is for the city to seek guidance from the courts – to initiate an action for declaratory judgment to clear this up – have the Rays terminated the agreement. (You can read Bill’s complete opinion HERE.)
The St. Petersburg City Council did not listen to Bill’s advice and voted to approve the sale of bonds. The Pinellas County Board of Commissioners should not.
The county should take no action until either the city presents a new agreement for the Commission’s consideration, or advises the county there is nothing for them to consider.
LETTERS FROM THE RAYS
Letter One: the first letter from the Rays to Pinellas County stated:
“As we have made clear at every step of the process, a 2029 ballpark delivery would result in significantly higher costs that we are not able to absorb alone.”
The statement is easy to understand. Two hurricanes have delayed everything, including pushing back a new stadium by one year, resulting in higher costs. And another storm could cause even more delays. If the Rays are not “able” to absorb cost overruns, they should not have represented in the deal that they could or would. (As a reminder, the Rays have long refused to share their financials, so the city had no way to judge their financial capacity other than by accepting their stated contractual commitment.)
The problem is that the Rays’ recent statement is in direct conflict with the signed agreement, which requires the Rays to cover cost overruns. By declaring their inability to absorb these costs, the Rays have walked away from a key commitment in the contract. They’ve acknowledged they can’t live up to it. The result – the Rays, the city, and county don’t have a deal.
Letter Two: When pressed for clarification by the county and the city as to whether they will pay for overruns, the Rays’ second letter said:
“The Rays have fulfilled their obligations to date and continue to wait for decisions and actions by the City of St. Petersburg and Pinellas County.”
This response avoided directly addressing the question about their obligations to cover cost overruns. It also introduced a new narrative: that the viability of the project depended on bond approval before the November 2024 elections – a condition not included in the agreement.
“While, as a technical matter, under the agreements, there are no longer outside dates for a variety of conditions to be satisfied, the Rays have always made it clear that the viability of the project depended on having certainty about the project’s approval and funding prior to the 2024 November elections.”
Why didn’t the Rays include this pre-election deadline in the original agreement? The agreement clearly outlines responsibilities, timelines, and contingencies, including the provision that bonds would need approval. Yet, it does not specify that such approval must happen before the November 2024 elections. “Always made it clear” that early bond approval was critical? These are sophisticated dealmakers who have negotiated multimillion-dollar contracts for players and large-scale development projects. If this deadline was so essential, it should have been explicitly written into the agreement. Their claim that a condition so vital to the project’s success was always clear strains credulity since it was not formalized in writing.
But let’s give the Rays the benefit of the doubt – somehow they forgot to negotiate this deadline into the deal. If they suddenly realized this was a dealbreaker, they had ample opportunity to raise the issue publicly or with officials before the scheduled votes. Wouldn’t it have been better if the team owner came to the county and the city and said :”the deal no longer works – give us time to see if we can come back with a deal that works for the Rays, the county and the city. Until then there is nothing for you to do.” Instead, he said we don’t have the money for the stadium (but made no mention of giving up the sweetheart 64-acre land development part of the deal).
Baseball, while a bit unique, is a business like any other business, and as such it is reasonable for the Rays to look out for their interests first. But when you leverage the goodwill of a community, and in this case tremendous public funding, you take on certain civic responsibilities. And it is admirable that the Rays have demonstrated through years of philanthropy and community support that they understand a community’s many needs. Their charitable work has shown a recognition of St. Petersburg’s broader challenges and a willingness to help. But since they can no longer do the deal as agreed upon, the Rays should have just stepped up and said so. It is understandable; two hurricanes spoke up changed everything.
MOVING ON WITHOUT BASEBALL? WHAT DOES THAT LOOK LIKE?
If a new deal can’t be negotiated, isn’t it time to move on without baseball?
St. Petersburg and Pinellas County have had a long and complex relationship with Major League Baseball. But, assuming it’s not possible to negotiate a fair deal that works for everyone, it’s time to move on – for the benefit of the city, the county and the Rays. The reality of two hurricanes – leaving thousands of people homeless, stripped families of everything, and our beaches destroyed. We now realized what we knew all along – St. Petersburg and Pinellas County are subject to hurricanes.
We need to prioritize our community’s recovery and future resilience now more than ever. The economic strain brought on by these disasters demands that our resources be directed toward rebuilding our infrastructure, supporting our businesses, and ensuring the safety and well-being of our residents.
The storms revealed vulnerabilities long overlooked. Pinellas County beaches face escalating risks from hurricanes. Consider the damage from Hurricane Helene even though it stayed 100+ miles offshore! And St. Petersburg faces issues with its infrastructure. Mayor Welch emphasized the need to reassess the city’s resiliency strategy, noting current efforts, such as the $70 million to protect the Northeast sewage plant, fall short against Hurricane Milton’s 15-foot surge projections.
The city must focus on the $6 billion costs for sewer, stormwater and seawall improvements, while the county faces $130 million in beach repairs.
We can’t count on avoiding future storms or the federal government bailing us out, and we can’t rely on steady tourist tax revenues to fund recovery efforts. Crises like red tide, a recession, or another pandemic could sharply reduce tourism, leaving the county unable to repair beaches or meet other urgent needs.
While some point out that 2% of the 6% Tourist Development Tax (TDT), (the source of revenue for the county’s share of the costs) has some restrictions, this portion can be used to promote tourism. Redirecting these funds to promote what actually brings tourists here can free up the remaining 4% for storm repairs and reserves.
Moving on can be a win-win scenario, for both St. Petersburg, Pinellas and the Rays .
The Rays will play next season in Tampa and have expressed a desire to stay in the Tampa Bay area. A move to Tampa, with a more central location offers the team access to a broader fan base, better transportation options, and more corporate sponsorships. Tampa, already home to the Buccaneers and Lightning, is well positioned as the region’s sports hub.
For St. Petersburg, moving on means focusing on resilience, infrastructure, and its unique strengths – beaches, museums, restaurants, and the arts. Pinellas and Hillsborough counties could collaborate to promote the entire metro region, enhancing cross-county access for tourists and residents alike.
For Pinellas County, moving on means it will have the funds to repair the beaches, set up reserves for future beach repairs, and promote what brings tourists.
The economic realities of baseball
Tropicana Field, built in the late 1980s, in hopes of attracting a team, finally became home to the Rays in 1998. While the team has consistently performed well on a modest budget, attendance has remained low. In 2023, the Rays ranked 27th in average attendance, with just over 17,000 fans per game despite making the playoffs.
St. Petersburg’s small population and geographically isolated location have always posed challenges. While the Tampa Bay region has over 3 million residents, water and congested bridges make reaching Tropicana Field inconvenient for many. Florida’s hot, humid summers further deter attendance, particularly for tourists.
Tropicana Field has failed to generate significant economic activity. Baseball, by its nature supports few jobs, most of which are not career-track opportunities, and provides limited economic impact, with activity confined to fewer than 85 days a year. St Petersburg’s growth has been driven by tourism, finance, health care, technology and the universities – not sports.
When it comes to tourism, according to a Visit St. Pete-Clearwater study, tourists visit for beaches (44%), restaurants (68%), and museums (42%) – not baseball (3%). Investing in these areas will better serve the community than subsidizing a new stadium.
A Better Development Plan
The Gas Plant site, now an 86-acre redevelopment opportunity, can become a transformative project that reflects the city’s character. Council Member Copley Gerdes, a strong supporter of the stadium deal stated: “Whether the Rays are there, whether they’re a part of it, whether they’re not there, I’ve to believe that vision of economic development still exists for that site.”
And whether the Rays and Hines are there, or another development plan is implemented, the 64 developable acres will generate the same or more property and sales taxes. And as Commissioner Peters has stated, these funds can be used for general fund expenditures, including improving infrastructure.
Rather than turning the entire property over to a single developer, the city should consider hiring a nationally recognized master planner to design a comprehensive site plan, establishing the framework for streets, green spaces, infrastructure, and public amenities. Then, it would sell parcels incrementally at market value which would allow diverse developers to shape the area into a vibrant, mixed-use community, preserving St. Petersburg’s unique character.
A Reason to Feel Optimistic
Moving on from the Rays unlocks tremendous opportunities:
- Saving Public Funds: St. Petersburg will save as much as $700 million in public funding, including interest, with the county saving another $600 million, including interest.
- Unlocking Higher Land Value: Selling the Gas Plant land at market value could generate $500 million or probably even more in additional revenue.
- Commercial Development Opportunities: Developing the site initially earmarked for the stadium for commercial use would yield as much as $600 million in tax revenue for the city and the county.
- Focusing on Priorities: Resources can be directed toward infrastructure, beach repairs, affordable housing, education and commitments to the Black community.
A Path Forward
The hurricanes taught us a vital lesson: preparation and resilience are essential. St. Petersburg and Pinellas County must prioritize readiness, infrastructure and what makes the city and the county special.
The Rays, meanwhile, can thrive in Tampa with a centrally located stadium that draws larger crowds and ensures long-term financial success.
While it is possible (but unlikely) that the city and the Rays can renegotiate a deal, wouldn’t it really be better for St. Petersburg, Pinellas County and the Rays if everyone moved on – focusing on what truly matters for each?
The county’s bond vote is tomorrow. There are still too many question marks. Please write the Pinellas County Board of Commissioners today and ask them to Vote No on the stadium bonds.
