Pinellas County imposes a six (6) percent Tourist Development Tax, also referred to as the 'Bed Tax', which short-term renters are required to pay while staying in the county. The revenue collected is utilized by Visit St. Pete/Clearwater for tourism promotion, beach restoration post-storms, support for attractions such as the renowned Salvador Dali Museum, and emergency reserves.
St. Petersburg and the Tampa Bay Rays are asking the county to spend $20 million a year for 30 years to pay for part of a new baseball stadium using a portion of the Bed Tax. Here are the facts:
Tourist Development Tax Averages. The average annual bed tax revenue over the past three years has been approximately $90 million, reaching up to $98 million in 2023.
30-Year Repayment Obligation. The cost of the stadium to Pinellas County, including interest, means the county will need to borrow $587 million to cover its portion of the stadium expenses. This loan is expected to be repaid at an annual rate of about $20 million over 30 years. Calculating the figures, $20 million annually from the $90 million average collected each year from the county bed tax revenue amounts to approximately 22%.
Variability Risks. In the event of a shortfall in bed tax revenues, possibly due to a storm or red tide, the loan repayment would likely consume a larger fraction of the total tourist tax revenues. Talk to anyone in hospitality in Fort Myers Beach.
Baseball Not Important to Tourists. A survey conducted by Visit St. Pete/Clearwater revealed that a mere 3% of visitors are interested in attending sporting events, whereas more than close to half show interest in exploring restaurants, beaches, museums and the pier.
Attendance Unlikely to Meaningfully Improve. Even sports pundits are skeptical that the Rays can meaningfully improve attendance at the same location, after being consistently in the bottom 5 in attendance of the entire MLB in 20 years. Fans vote with their feet. They don't want to make the drive over the bridges. Moreover, despite St. Pete's population density increase all around the stadium land (ironically making that land more valuable) their poor attendance has not budged.
Little Chance of Non-Baseball Uses: Throughout the U.S., non-baseball uses of baseball stadiums are less than 5 non-game event uses per year. And it is widely known in the stadium funding advocacy world (the James Carville's of stadium public dollar fleecing) to promote this as a way to secure even more public dollars. It's a ruse. *If you don't believe us, we have economist friends willing to tell you how this scam works. The current stadium has almost never been used besides baseball. Why would a new one be any different?
No return on investment. While the county will be spending $20 million each year for 30 years, the Rays won't share any of their revenue with the county.
WHAT MAKES SENSE? WHAT ARE THE RISKS?
What clearly doesn't make sense would be to spend 22% of the Bed Tax revenue (and be committed to do that for 30 years) on something of interest to only 3% of tourists.
Logic says... that we should invest in and promote what brings people to St. Pete. And that's of course, the beaches.
To our Pinellas County Commissioners - we need your leadership. Spending a hugely disproportionate amount of Bed Tax revenue on a stadium is a bad business decision when we know only about 3% of visitors have an interest in baseball. We should spend more of our budget promoting the great variety of restaurants, the amazing beaches, the museums, and shopping - all of which are of interest to more than half of tourists - baseball does not even make the short list.
In particular, we all know our beaches are unquestionably critical to the vitality of our tourism industry and have suffered tremendously in recent years. Moreover, with Pinellas County and the Army Corps of Engineers locked in a years-long battle over the restoration of the county’s badly eroded beaches, we need to save for beach damage repair, as well as plan reserves that may be needed after any additional storms that are sure to come.
Out of the 35 miles of Gulf beaches in Pinellas County, 21 miles are currently designated as "critically eroded."
Stalled renourishments have raised the risk of significant flooding even with comparative small storms or limited surge. Emergency dunes placed after Idalia have already been damaged by winter storms and would be at risk of failing completely in another storm. The result is that sand elevation is six feet lower than previous years along beach communities, leaving almost all at risk of inundation in a major storm.
Reference: Hello, hurricane season: Is Pinellas County ready? St. Pete Catalyst; quoting Pinellas County Commissioner Kathleen Peters.
"The bottom line is we've got one piggy bank, and we're all trying to draw a lot of money out of it," Public Works Director Kelli Levy said. "And when there's nothing left, you know, we're going to be struggling to find ways to pay for all of these things that people want."
"We're going to have decisions, potentially in the next several weeks, months, that really rely on a portion of the bed tax, that, you know, really can't be made," Commissioner Charlie Justice said. "You can't make any of those in silos and then the next day wake up and go, I wish we had this money to spend on the beach. We don't have it anymore."
We are as concerned as Public Works Director Levy and County Commissioner Justice regarding the proposed funding for a new baseball stadium for the Tampa Bay Rays and the impact on important tourist development needs. Their statements underscore the fiscal challenges confronting the county, urging us to carefully evaluate the long-term impacts of allocating a significant portion of bed tax revenue to baseball.
REAL RISKS TO TOURISM AND TOURIST DEVELOPMENT TAX
Remember the Consequences of Natural Disasters.
In the event of the next significant storm, our county will likely see a sharp decline in bed tax revenue, all while still needing to allocate $20 million each year for stadium debt repayment. At the same time, we will also have to make a substantial investment in beach re-nourishment, which is a key draw for visitors to our region.
Learning from Neighbors: Fort Myers experienced significant economic impact due to Hurricane Idalia, with reports indicating that the city lost more than half of its Tourist Development Tax (TDT) revenue. The area is still in the recovery phase almost 2 years out...and working to rebuild its tourism industry. This substantial reduction in TDT revenue highlights the challenges faced by the local economy, which heavily relies on tourism.
County Commissioners - exactly how confident do you feel about $20M a year and 30-year commitment in monies to a baseball centric district - in light of the recent trends in storm intensification and still funding the needs of our vulnerable coastline, for general maintenance and after any storm that the area receives? Will we have the funds?
The property is not being developed into a tourist destination.
The majority of the property is being developed into housing and office uses. However, the Pinellas County Tourist Development group has been planning for a newly redeveloped Historic Gas Plant District serving as a 'travel destination' driving TDT increases resulting from new heads in beds. However, knowing that people generally do not travel for baseball, what other element of the district will attract tourists for an overnight stay? Museums do not do this, we know. The arts visitor is more typically a day tripper.
Taylor Swift and Other Hopium.
Baseball stadiums are only used for a few hours a day and for only 80 days a year. The data show that other than NBA/NHL arenas, most sports venues are rarely used outside of regular-season games.
In fact, in an average year the typical NFL, MLB, or MLS facility plays host to fewer than 5 (five) major entertainment or sporting events other than regular season games played by the primary tenant.
The County Cost Could Be a Lot Less
To make the deal work for the Rays, St. Petersburg has agreed to sell the land for development (the land not including the stadium) for $105 million - about $2 million/acre. The city has entered into an agreement to sell the former police headquarters, one block away, and has an appraisal for those 2 acres of $28 million - $14 million/acre. Why is the city not getting a new appraisal and negotiating a fair price? With a fair price, the county might not have to pay anything for a new stadium
No Traffic or Parking Study.
Traffic and parking congestion are known tourism killers. As yourself, just how many tourists booking their holidays at our beaches would want to navigate through the traffic downtown on big game night (like when the Yankees are in town) or if a headliner concert plays here... to patron downtown restaurant or visit a museum. They wouldn't after reading the many Yelp reviews from prior tourists warning them to just stay at the beach. No tourist staying beachside wants to spend precious vacation time sitting in traffic to get downtown for our restaurants and museums, esp. if parking is a problem.
Case in Point. During a County Commission discussion of the popular WWE event held in St. Pete this past year, Commissioner Peters hailed the event a success... but that she had concerns about the traffic getting there and back. Peters said that her normal travel time from her home to downtown - generally 20 minutes - became a 2 1/2-hour ordeal each way to get to the WWE event and home again. Peters suggested that traffic studies need further review to make this viable. Additionally, she said that the Sun Runner was stuck in traffic w/ her, and in that situation, didn't improve travel times.
Parking makes the problem worse. Currently there are 6,000 surface parking spaces for the stadium. Once the property is developed there will only be about 1,000 spaces in two new garages. The Visit St. Pete/Clearwater study shows that 40% of people say they come to the area for the restaurants. Where are visitors going to park?
The County Loses $222 Million
That's not all. The estimated cost of the proposed stadium exceeds $1.2 billion, and, as proposed, the Rays would be exempt from paying real estate taxes. If the property were repurposed for a higher usage, the county would receive an additional $222 million in real estate taxes over 30 years - money for general county needs and for education.
WHAT SHOULD THE COUNTY DO?
Vote No. We're asking the 8 Pinellas County Commissioners to go into this commitment with open eyes and not a fantasy portrayed in renderings or bought economic impact studies. There is a known MLB playbook in securing public dollars for stadium financing - we're asking you to not fall victim to it with our valuable tourism tax dollars, that we need for so many purposes.
Make the Proper Business Decision: A proper business decision would allocate bed tax revenue to promote what is most important to visitors.
Allocating 22% of bed tax revenue to an activity of interest to only 3% of visitors is wildly disproportionate and cannot yield the desired return on investment.
Remember - Fiscal Responsibility and Sound Business Judgment: Pinellas County residents are looking to our county leadership to be fiscally responsible and to use sound business judgment in determining how to allocate revenue designed to increase tourism. Prioritizing investments that align with visitor preferences and offer a higher potential return on investment would be a strategic and responsible approach.
Be Mindful of Redundancy in Attracting Visitors: The county does not have to spend its bed tax to encourage people from Boston or New York to come to town to watch the Red Sox or the Yankees. Those are the fans that result in higher attendance on game days. Fans of these teams are already aware of the game schedules.
Consider the Seasonal Challenges of Baseball: It's not surprising that baseball only receives 3% interest in the survey. Since baseball is mainly played during the summer when it's hot, those interested in watching the sport are more likely to seek out venues in cooler climates.
No guarantee that Hines will be the project developer. The development agreement does not require that Hines remain part of the development team and the city cannot prevent them from being bought out. Hines has the development expertise - who will the city wind up with? How will that affect what is built?
Avoid Being Distracted by Discussions on Additional Revenue from Development: Some individuals argue that utilizing bed tax revenue for a new stadium is beneficial due to the potential development of additional acres, which would result in the generation of county real estate taxes. The remaining property, being prime land, will inevitably be developed, thus generating taxes regardless of the stadium's presence. The county is not required to allocate $20 million annually towards stadium debt to capitalize on the revenue potential from land development.
County Commissioners
Take a comprehensive approach to the allocation of bed tax funds.
Prioritizing investments in sectors that resonate with the preferences of our visitors, coupled with a clear understanding of the potential challenges tied to baseball's seasonal appeal and climate considerations, is crucial.
Make your Voice Heard Today!
Time is running out.
The County Commissioners meet tomorrow - Thursday 7/25 and vote on 7/30..
Email Pinellas County Commissioners - click on each Commissioner and send your thoughts. They need to hear from us.
*Slide provided by Visit St. Pete/Clearwater
