Tampa Bay Rays/Hines

This rendering from the Tampa Bay Rays and Hines shows a pedestrian walkway outside the team’s replacement for Tropicana Field, expected to open in 2028.
St. Pete’s proposed Rays stadium deal is a strikeout for the city

We couldn’t help ourselves. As longtime St. Petersburg residents who spent our Wall Street careers analyzing hundreds of deals, we had to dig into the Historic Gas Plant redevelopment deal between the Rays-Hines group and the governments of St. Petersburg and Pinellas County. Our examination reveals that while this deal may be a home run for the Rays-Hines owners, it’s a strikeout for the residents of St. Petersburg. We advocate for a robust renegotiation of economic deal terms, or a more conventional “do it ourselves” redevelopment path for our extraordinary Gas Plant site.

In our analysis, we found three big economic penalties inherent to the Rays-Hines deal.

• St. Petersburg is taking on significant new debt to pay for a portion of stadium construction costs and related infrastructure — $704 million, including interest. Strike 1!

• The 22 prime acres near downtown used for the stadium won’t pay property taxes for at least 30 years — $411 million gone. Strike 2!

• We estimate the 86-acre Gas Plant site is worth $700 million today, and St. Petersburg is losing most of that value by tying up 22 acres for the stadium for decades and giving the remaining 64 acres to the Rays-Hines group for just $155 million — $545 million gone. Strike 3!

Those financial penalties total more than $1.6 billion that St. Petersburg and the school system would otherwise have for other priorities. These same items will also cost Pinellas County coffers $808 million. The city and county are risking a staggering $2.4 billion combined.

To place the site’s value into proper context, the $700 million estimated value of the Gas Plant site is more than three times all the property taxes St. Petersburg will collect from all its residents and businesses this year. A city our size cannot afford a $1.6 billion mistake, especially when St. Petersburg has so many other financial needs, including transportation infrastructure, affordable housing, water supply/treatment and hardening the city against sea-level rise — none of which the city has set enough money aside to adequately address. To say nothing of the idea of further lowering property tax rates for residents facing today’s triple whammy of high housing costs, high mortgage interest rates and shocking increases in home insurance premiums.

A robust renegotiation is one alternative, with the city pursuing fair value for the land, and team ownership sharing a portion of stadium revenue streams big enough to allow the city to recover its construction costs and missing property taxes. However, even if a renegotiation were possible, we believe an alternative is better. The Gas Plant site is a remarkable, nationally significant property. Pro baseball is no longer the highest and best use of those 86 acres, nor is baseball needed to “activate” a site that is already adjacent to some of the most thriving walkable neighborhoods in all of Florida. If anything, traffic and crowd congestion associated with ballgames could negatively affect residential quality of life at the redeveloped site and surrounding areas.

The “do it ourselves” alternative starts with St. Petersburg proactively announcing that baseball at the site will end after the 2027 season. The city takes control of the creation of a master redevelopment plan, presumably this time using a design firm not conflicted by its own development interests, and guides key design decisions such as zoning densities, green spaces, street grid and affordable housing targets. The city builds the infrastructure and public-use areas (in the Rays-Hines deal, the city’s cost for this was $130 million), and sells the developable land parcel by parcel in an orderly, patient fashion for true market value. The independent developers, businesses and entrepreneurs that buy the parcels develop them using their own money according to their own visions of what would be most useful to St. Petersburg. The city gets more money for the land and collects more taxes. The city also retains the power to change development objectives over time, flexibility it loses if it goes forward under the Rays-Hines deal. The “do it ourselves” path is not novel; it’s the same philosophy that resulted in such diverse and authentic St. Petersburg neighborhoods as Grand Central, Edge, Beach Drive, Warehouse Arts and others.

The city’s initiatives toward the Black community would be better secured under this more organic approach. The reasons are straightforward. St. Petersburg’s municipal government and the school system would have more money to work with. Under the Rays-Hines deal, all the promises to the Black community rest on the success or failure of the single Rays-Hines corporate entity developing this single project. Compare that to our idea, where the city can employ Community Benefits Agreements to spread the responsibility among many different developers. Employment opportunities should be more numerous, as the full site gets developed with highest-use occupants, instead of seeing 22 of the 86 acres devoted to baseball, which drives low job creation. We also think it is likely that the pace of development will be faster under the “do it ourselves” approach.

As for baseball, the Rays are a terrific civic asset, and it should remain a priority to keep them in the Tampa Bay market. This next part won’t be easy: In the case of a civic asset like this — where it is certain that the region will never have more than one Major League Baseball franchise — we think all of the major area municipalities have an obligation to cooperate in locating the team’s stadium in a place that makes it convenient to the greatest possible number of fans, and not try to hog it to one distant corner of the region or another. We are not opposed to St. Petersburg participating in stadium construction costs for a venue outside of the city, under the condition that other major area municipalities also participate and collectively cut an economic deal with the Rays that allows them to recover their stadium investments in a reasonable time frame. There are multiple stadium sites in the Gateway area near the west end of the Howard Frankland Bridge and elsewhere that are much closer to the center of the Tampa Bay market. We suspect the odds of securing one of those for the Rays will go up if or when St. Petersburg gives notice that it is ending baseball on the Gas Plant site.

Ron Diner was the founder and former president of Raymond James Affordable Housing, the nation’s largest provider of equity capital for affordable housing developments. He also co-founded Lunch Pals, Pinellas County schools’ lunchtime mentoring program. Tom Mullins is a former Raymond James investment banker who headed the firm’s Transport & Infrastructure practice for 20 years. Their full 11-page analysis of the Rays/Hines deal can be found online at nohomerun.com.