A Legal Viewpoint

To: City of St. Petersburg Mayor Ken Welch, Council Chair Deborah Figgs-Sanders, Council Member Copley Gerdes, council Member Brandi Gabbard, Council Member Lisset 

Hanewicz, Council Member Gina Driscoll, Council Member John Muhammad, Council Member Richie Floyd, City Attorney Jackie Kovilaritch

The New Stadium Project and the Historic Gas Plant Development Projects are inextricably connected. When these projects were presented October 26, 2023, by Mayor Welch, his staff, and representatives of the Rays and the Hines organizations, the explicit message to City Council and the public was that neither project would be successful without the other. When the below appraised value sale price for the mixed-use development real estate was questioned by Council members, the city staff responded that the deal had many interlocking parts and that the land price was offset by other parts of the deal beneficial to the city. One of those other parts was the promise that all cost overruns incurred in the New Stadium Project would be paid for by the Rays. 

On July 18, 2024, City Council, voting 5-3, adopted “A RESOLUTION APPROVING THE TWELVE (12) AGREEMENTS IDENTIFIED IN THIS RESOLUTION RELATED TO THE REDEVELOPMENT OF THE HISTORIC GAS PLANT DISTRICT INCLUDING A NEW STADIUM FOR THE TAMPA BAY RAYS.” Agreement number 9 was the “Development and Funding Agreement between the City, Pinellas County, and the Rays Stadium Company, LLC (StadCo). Recitals J, K and L of this agreement established that: (J) the city and the county would each “contribute” a specified contribution amount to partially fund the New Stadium’s cost of construction; (K) that the city and the county would each issue bonds to partially fund portions of their respective contribution amounts; and (L) that StadCo, “will be responsible for the remainder of the Project Costs, including Cost Overruns in accordance with the terms of this Agreement.” Section 7.4 (Project Budget) of this agreement states that: “StadCo is responsible for all Cost Overruns that may be experienced with respect to the Project Improvements, including those due to unforeseen conditions.” 

Hurricane Milton created an unforeseen condition when it ripped the roof off Tropicana Field creating a near certainty that the Rays would not be playing their 2025 season there. The Rays apparently concluded that they would have substantial unforeseen costs including relocation expenses, lost revenue, and a likely increased cost for the new stadium. They also, apparently, did not consult their legal counsel before sending on November 19th a letter to the Pinellas County Commission Chair Kathleen Peters which included a statement that “… we have made clear at every step of this process, a 2029 ballpark delivery would result in significantly higher costs that we are not able to absorb alone.” That announcement, in the opinion of this retired lawyer, looks like a classic anticipatory breach of contract. This was not a trivial breach. It was a material breach that went to the core of the Historic Gas Plant District Redevelopment plan described in the twelve agreements. 

Here is what Google Al has to say about that: “An ‘anticipatory breach’ of a contract occurs when one party clearly indicates, through words or actions, that they do not intend to fulfill their contractual obligations before the agreed-upon performance date, essentially giving the other party a “heads-up” that a breach is likely to happen in the future, allowing the non-breaching party to take legal action even before the actual breach occurs.” The City and County response to the Rays November 19th letter – a demand for clear and prompt statement by the Rays of whether they will reaffirm their obligation to cover all cost overruns, was appropriate. The Rays responses have ignored this core issue. The Rays demands for immediate performance of obligations by the city and county are perverse when the Rays have repudiated a core element of the Historic Gas Plant District Redevelopment agreement package. 

City and County leaders should not commit more public funds to this project when the counterparty to the deal has demonstrated an unwillingness, a financial inability, or both, to honor a core obligation it assumed under the Stadium Development and Funding Agreement. Wasting public funds to appease the Rays would not be a responsible plan, it would be an irresponsible act. The city’s stance should be that it will honor its commitments under the twelve related agreements but, under the present circumstances, it has real concerns as to what its rights and duties are under these agreements. 

Attached is a copy of Section 86.011 Florida Statutes 2024. I urge the city to initiate an action for declaratory judgment as provided by this statute. It would enable the court to apply legal and equitable principles to resolve the disputes which Hurricane Milton precipitated. It is a forum in which the fairness of a party’s actions may affect outcomes. 

Council members, I urge you to query our City Attorney as to the pros and cons of the City initiating a declaratory judgment action to resolve these post Milton disputes. If the City Attorney cannot provide you independent advice on these issues, I urge that Council, pursuant to Section 3.06 of the City Charter, adopt a resolution appointing a Special Assistant City Attorney to provide Council advisory opinions on these disputes. 

WCB 

William C. Ballard 

Member of the Florida Bar (Retired) 

5560 Bahama Shores Dr. S, Unit 608