As many of the St. Petersburg City Council Members have asked what a better, fairer deal for St. Petersburg would be, we posted our suggestions in a previous blog - Let's pause the Rays Hines deal so everyone has time to review the facts.
But we thought it was important to emphasize to City Council Members the reasons we strongly recommend deferring a decision.
The following is our letter:
2/12/2024
To: City of St. Petersburg Council Members
From: Ron Diner
Re: The importance of City Council Members having sufficient time and complete information to: (1.) Review the Rays/Hines proposed deal, (2.) Complete proper due diligence with the assistance of suitable independent advisors (as permitted under the law), and (3.) Share their findings and any new information publicly prior to any vote.
Summary
Those of us who support the positions expressed at nohomerun.com believe that the City of St. Petersburg City Council Members have been put in an untenable position, pressured to make a rushed decision with only partial information.
Council Members have not had the time to complete a thorough due diligence including retaining independent expert advisors to help with that due diligence.
Considering the enormity of the impact on the city, and surveys consistently showing that a significant majority of citizens oppose the Rays/Hines proposal, we believe the Council is entitled to greater time to analyze this decision and share their conclusions with constituents to get their input prior to any vote.
There is insufficient time to accomplish the above by April 2024.
As a result, while we suggest you consider our recommendations for a rejection or renegotiation of the deal, we recommend any decision be deferred for at least 9 months.
Why do we believe a motion to vote on the Rays Hines proposal should be deferred?
Collectively, we have a lot of experience analyzing deals. And as residents of St. Petersburg, just like you, we only want the best for all of us and future generations. We don’t think the current proposed deal with Rays/Hines is fair to St. Petersburg and more than 70% of respondents to several surveys feel the same way. In addition, a great percentage of the citizens simply do not know the facts.
Our conclusions have been in the Tampa Bay Times St. Pete’s proposed Rays stadium deal is a strikeout for the city, and our Rays Hines Deal Analysis is available on nohomerun.com, which we have also sent to you. We have also sent you what we believe is a fairer deal - a deal that would result in $1.6 billion more St. Petersburg taxpayers' resources being available for other city priorities including housing, infrastructure, more significant commitment to the Black community, and tax relief (and $800 million to Pinellas County).
Just as I have had to evaluate every deal, I did at Raymond James to make sure we were confident it was in the best interest of our investors and then present our conclusions to them for their approval, you have the same fiduciary obligation to your investors – the citizens and taxpayers of St. Petersburg. Every deal we did required a presentation to our investment committee of all the facts, both positive and negative - facts that we evaluated ourselves or with the help of independent third parties with appropriate expertise. We did not do deals based solely on the data presented to us by the people who sought our investment.
I believe you will be having some Committees of the Whole meetings to help in your evaluation, but that cannot be enough. Collectively you need your independent due diligence. You cannot rely exclusively on the information that Hines, or the Rays, or even the city staff provides to you. City Council Members have a responsibility to provide a check and balance.
Below is the independent due diligence we believe you need.
There is no way you can complete this work in the next 60 days. Thus, you need to defer a vote until a future date.
Here is the suggested due diligence list.
A review of the strategic goals for the entire Gas Plant site – what are we trying to achieve:
Attract new businesses?
Develop some amount of affordable housing?
Define and achieve our commitments to the Black Community on site or off?
Review and conclude the uses of funds from a better deal?
Can and should the downtown CRA-TIF continue to direct 50-100% of its massive increase in downtown taxes towards building a stadium rather than infrastructure improvements citywide?
Other?
Hire a qualified third party (as permitted under the law) to do a complete analysis of the deal.
Can the property be developed successfully with or without the Rays.
The reasonableness of the city’s share of infrastructure costs.
From the development of the property what are the costs and revenues with and without a stadium, and with and without Rays/Hines.
Can the property be developed in partnership with other highly qualified developers at a lower cost.
Is it feasible for the city to employ outside experts to prepare the property for development without a master developer, with the city acting as the master developer.
A comparison of city financial/revenue outcomes for the Rays/Hines deal versus the “Do it Ourselves” concept outlined in our Analysis.
An appraisal of the property value, by a firm with significant relevant experience, based on the 64 acres being developed as proposed by Hines, and also the 22 acres stadium parcel but developed like the Hines mixed-use plan, assuming the property is subdivided, infrastructure having been completed, and assuming the planned zoning and density. (The most recent land sale in the area was priced at more than $20 million/acre.)
A study of traffic flows and potential congestion with proposed stadium and parking garages – the impact on proposed residential and office development on the site and in the surrounding areas, the impact on area residential and restaurants, and estimate of the average time it will take baseball game attendees to travel from the expressway and park and the time to get out of the parking garages planned and get to the expressway once games end.
A review of affordable housing - what does the city want to accomplish – on and off the site and servicing what income levels?
How a proposed $250 million Citywide Affordable Housing Trust would help to meet those needs.
An analysis of the impact of the bonds being sold to help pay for the project on the city’s future borrowing capacity and its credit rating. In addition, advice from independent counsel regarding the impact (a requirement for taxpayer approval) if the existing downtown CRA were to lose its status at any time due to no longer qualifying as a slum or blighted area, and thus losing its right to convert property taxes into TIF general revenue.
A third-party review and report of independent studies regarding the lack of economic impact of stadiums.
An analysis of the best location for baseball in the Tampa Bay area. Is the current location the best location to increase attendance.
A review of my proposal in a previous email to you regarding the terms of a fairer deal.
An analysis of the details of the current proposed deal:
The ability of Rays/Hines to sell parcels.
The city’s control or lack thereof of the development.
An independent review of the development agreement (spelling out the generalities in the Term Sheet) with an explanation of the benefits and drawbacks.
Specific development timelines and uses.
Enforcement provisions as to the timing of development.
The timing of city investments concurrent with Rays/Hines.
A comprehensive report of the city’s unfunded priority projects for the next 30 years, their costs, and the planned sources for financing.
I have sent you additional thoughts regarding hiring third parties and cited the laws permitting you to do.
The development of the Gas Plant property is the biggest deal that the city will probably ever do. The property is one of the best publicly owned parcels in the U.S. Three surveys (and more are underway) confirm citizens are largely opposed to the Rays/Hines deal – they especially do not like the use of $1.6 billion of taxpayer money when it is needed for so many other community projects.
As a result, while we suggest you consider our recommendations for a fairer deal, we recommend any decision be deferred for at least 9 months to allow greater time to analyze this decision and share the conclusions with constituents to get their input prior to any vote.
Take your time and meet your obligations to the people of St. Petersburg. Just as I did in leading Raymond James Affordable Housing, you need to do your thorough due diligence and share the results with your investors – your constituents – before you vote.
