The St. Petersburg City Council is scheduled to hold another workshop this week to discuss Mayor Rick Kriseman’s most recently updated Memorandum of Understanding with the Tampa Bay Rays, and the mayor is hopeful that something substantive comes from it.
Last December Kriseman unveiled his much awaited MOU that would give the Rays three years to analyze possible sites in Hillsborough and Pinellas. The plan would also force the Rays at most to pay the city back $20 million for breaking their lease, with those dollars actually declining in value depending on the year they ended the lease, set to expire in 2027.
The Council rejected that deal in December, with complaints about development rights to the Tropicana Field’s 85 acres spurring that opposition. Kriseman then renegotiated that part of the deal with the Rays earlier this year, allowing the city to enjoy 100 percent of those rights if the team were to depart earlier. He was poised to have the Council vote on the new MOU in March, but he pulled back when it was apparent that the votes still weren’t there.
Council member Steve Kornell has said he will not support a new MOU if it did not include greater compensation for the city. Other council members have made similar comments. But Kriseman says it’s time for them to put up or shut up.
“What’s the amount?” he asks this reporter when queried about complaints that $20 million was insufficient for the city to pocket by allowing the team to break the lease. “Ask them what is the right amount, and they have a hard time giving you a number,” Kriseman said. “And if they do give you a number, they have a hard time stating where it came from.”
Kriseman says he hopes that the Council will stop focusing so much about the direct financial compensation that the city would receive from the Rays for the ability to break the lease and think about the development rights.
“That’s really the big piece that has the most value to it, far and away above anything more than they would write us a check for,” he says.
Buttressing Kriseman’s argument is how valuable the property where Tropicana Field sits along the western outskirts of the thriving downtown area. Take Fusion 1560, for example, the apartment complex situated just north of the stadium that opened in 2011. Earlier this month, the 325-unit complex was sold to an affiliate of Chicago-based Mesirow Financial Real Estate Value Fund for $57.5 million, or nearly $177,000 per unit.
Zaremba Group of Cleveland purchased the 3.2-acre lot in December of 2007 for just $9.7 million. That’s a profit five times their original investment.
Meanwhile, Tropicana Field is 85 acres.
“You simply do the math, and say what is the value of that 85 acres under our current use agreement if we don’t do anything?” asks the mayor.
A quick calculation shows that Mesirow Financial paid $17.9 million an acre. A similar deal to purchase all 85 acres would see a windfall of over $1.5 billion.
“We just say, ‘we have an agreement, you gotta honor it,’ well, that means we’ve got to honor it, too. And that means if we want to redevelop that land, we have to give the Rays 50 percent of the development rights. That’s a significant amount of money.”
That’s the status quo right now, but under the revised MOU that Kriseman was able to negotiate with the Rays, the city would retain 100 percent of those redevelopment rights if the Rays opt to leave before 2027, a concession made after Council members objected to the 50 percent provision that remains part of the original agreement with the city.
The City Council’s workshop discussing the Rays takes place at 2:30 p.m. on Thursday at City Hall.