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Rays could take cue from planned ballpark district in Atlanta

It’s still up in the air as to whether a new Tampa Bay Rays ballpark will land in Pinellas County or Hillsborough County.

More certain is that any new stadium will be one part of a much larger and more complex real estate deal.

With the era of standalone, isolated stadiums largely over, sports team owners increasingly are taking on the role of developer and using their stadiums as anchors for entertainment districts or retail and residential developments.

That includes the Detroit Redwings, whose plan for a new $450 million hockey arena is being combined with a $200 million project to build a hotel, office space, stores and restaurants.

Tampa already has one sports franchise that scrutinizes nearby property deals as closely as Draft Day prospects. Strategic Property Partners, the real estate arm of Tampa Bay Lightning owner Jeff Vinik and his business empire, is moving ahead with $1 billion in development around Amalie Arena.

Another such project the Rays likely are watching closely is SunTrust Park, a ballpark and entertainment district in Cobb County, Georgia, now under development by the Atlanta Braves that will include up to 1 million square feet of retail, residential and hotel space.

Building a ballpark with surrounding development is thought to be a first for Major League Baseball and is a model that local leaders expect the Rays may follow if they build a ballpark in the Tampa Bay area.

“We are certainly studying the Atlanta model, particularly with respect to creating an entertainment district,” said Hillsborough County Commissioner Ken Hagan, a cheerleader for moving the Rays to Tampa. “We’re thinking of a stadium that goes far beyond the traditional model of a ballpark. It will need to be part of a larger entertainment venue that appeals to everyone and is really going to be the place to be.”

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Branching out into the development market makes sense for professional sports teams, said Sharianne Walker, a professor of sports management at Western New England University in Springfield, Massachusetts.

Turning the area around a stadium into a destination helps strengthen a team’s place in the community and builds team loyalty.

More importantly, an entertainment district opens up revenue streams for teams that have maximized TV and concession revenue, allowing them to make money in December as well as July, she said.

“There clearly is an ‘arms race’ when it comes to sport facility construction,” Walker said. “Everyone wants to build bigger, better, more high-tech, more fan-friendly and with more high-end amenities. These facilities are expensive to build and to run, and so owners are seeking new ways to generate revenue year-round.”

Like the Rays, the Braves are in a long-term contract with their home city to play at a city-owned stadium. Its deal with Atlanta to play at Turner Field is set to expire in 2016.

The team decided to move out of the city after failing to get an agreement to make major stadium improvements. It struck a deal with suburban Cobb County to relocate to Cumberland, about 10 miles north of Atlanta.

The 74-acre tract the team secured was big enough to allow the team to plan not just a new ballpark but also a whole district.

“We decided instead of watching restaurants and bars and other enterprises make money off fans coming to our games, it would be a smart thing for us to not only recognize that but to be able to plan it and be in partnership and ownership of that part of our business,” Braves President John Schuerholz told the Tribune.

To do that, the Braves have partnered with retail and residential development firms and with the hotel chain Omni.

“It adds to the overall quality and uniqueness of our project,” Schuerholz said. “For 365 days a year, the mixed-use development will be operating.”

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The extra revenue the Braves will generate does not mean taxpayers are off the hook for stadium construction.

The 41,000-seat stadium, scheduled to open for the 2017 season, will cost $672 million, with the Braves contributing 55 percent and the remainder paid by Cobb County taxpayers through a combination of bed- and car-tax revenue and long-term construction loans taken out by the county.

As with Tropicana Field, the stadium will be publicly owned, meaning taxpayers will be on the hook for maintenance.

That reignites the debate about whether ballparks are a good investment for taxpayers, said Phillip Bess, a professor of architecture at the University of Notre Dame and the author of “City Baseball Magic: Plain Talk and Uncommon Sense About Cities and Baseball Parks.”

Turner Field, which cost $209 million, opened in 1997. Too often, what drives new stadium construction is the opportunity of making more money rather than any sense of stadiums as good long-term urban investments, Bess said.

“If it was likely that mixed-use development would offset stadium construction costs, then teams should be eager to finance and develop their own stadiums in the context of such mixed-use developments,” Bess said. “But they are not. That should tell municipalities and public agencies something.”

The Braves counter that Cobb County will benefit in other ways, with more than 5,000 new construction jobs and more than 3,000 jobs in and around the ballpark. The investment also will mean improved quality of life for residents and more tax revenue for the county.

Though the stadium will be publicly owned and generate no property taxes, the entertainment complex is being built with private dollars and will be owned by the Braves, so it will be subject to property taxes.

Rays officials declined to comment on whether they will seek to combine a new ballpark with other development. But the team does have development expertise on its executive staff.

Melanie Lenz, senior vice president of strategy and development, previously was vice president of real estate development for the New York City Economic Development Corp. In that role she oversaw deals that resulted in more than 15 million square feet of development, according to her bio on the team’s website.

Lenz oversaw development of the Rays spring training complex in Port Charlotte.

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A combined ballpark and entertainment district would require a site of about 40 or more acres.

That would keep in play some of the sites touted as potential locations for a ballpark, such as Derby Lane on Gandy Boulevard, Toytown in Pinellas County and Tampa Park Apartments between Channelside Bay Plaza and Ybor City. But it would rule out the ConAgra Foods flour plant on Finley Street, Hagan said.

In St. Petersburg, Mayor Rick Kriseman is still touting the 85-acre Tropicana Field site as offering the best development potential, although it’s unclear how the city might partner with the Rays to redevelop publicly owned land.

“Downtown is booming, and new businesses and restaurants are opening along the Central Avenue corridor all the time,” Kriseman said. “The possibilities around the current Tropicana Field site are nearly endless.”

For the moment, the Rays are precluded by law from exploring stadium sites, with the St. Petersburg City Council’s rejection of a deal brokered between the Rays and Kriseman.

That has not stopped Commissioner Hagan from trying to lay the groundwork for a ballpark and entertainment district in Hillsborough. Hagan has discussed how such a deal could work in meetings with County Administrator Mike Merrill, Chief Financial Administrator Bonnie Wise, county attorneys, and lawyers with Foley Gardner, a firm with ties to baseball which the county hired to advise it on public-private partnerships.

Hagan said the speed with which the deal between the Braves and Cobb County was approved — commissioners signed off on it just eight weeks after it was announced — shows that it need not take up to two years to get a deal done once the Rays get permission to look.

“The Atlanta model was very different,” he said. “That is encouraging to me, that with all the due diligence we’re doing on the front end, once we’re given the opportunity to sit down with the team, it will not take as long as it historically has to determine a location and a fundraising package.”

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