ATLANTA -- Now that St. Petersburg, Fla., has lost its bid for an expansion baseball franchise, city and rating agency officials yesterday said they are concerned about the impact on the city, but they said debt service on the $120 million of bonds sold to build a domed stadium remains secure.
Mayor David J. Fischer said the city must now continue to tap city funds to cover the Suncoast Dome's operating deficits.
Baseball Commissioner Fay Vincent announced this week that Miami and Denver had been chosen over four other cities, including St. Petersburg, as the host cities for expansion teams.
For the current fiscal year, which ends Setp. 30, he said, that deficit will be about $2 million.
Mayor Fischer said, however, that even though St. Petersburg can not longer count on the $1.3 million to $2 million in direct stadium revenues that would have come from a big-league team, the city will not have a problem meeting debt service on bonds issued to build the domed stadium.
"There is no question it was a tremendous disappointment to us when we didn't get the nod this week, and we will continue to have problems covering expenses on the stadium," he said in a telephone interview. "But covering the debt service is just not an issue."
Mr. Fischer said taxes pledged to back the $85 million of special revenue tax-exempt bonds sold by the Pinellas County Sports Authority in December 1984 and the $34.9 million of public improvement revenue debt sold by St. Petersburg in August 1989 are more than sufficient.
The debt service on the $85 million issue, which is insured by Financial Guaranty Insurance Co., is covered by one-half cent of the city's sales tax, a 2% hotel-motel tax levied by Pinellas County, and a guaranteed entitlement from the state of Florida. The $34.9 million borrowing, insured by MBIA Corp., is backed by revenue redevelopment, parking, and electric franchise levies. On the basis of the insurance, both issues are rated triple-A by both Moody's Investors Service and Standard & Poor's Corp.
Mayor Fischer said the city will now turn its attention to wooing a current baseball team to the 45,000-seat stadium, which was completed in March of 1990.
"This stadium was built for baseball, this city is the right place for baseball, and I believe we will eventually get a team," he said. "It's a matter of going out now and pursuing the opportunities."
Mr. Fischer noted that the Houston Astros are for sale and that the Cleveland Indians and Seattle Mariners might also be possibilities. But he said negotiations had not yet begun with any existing team. "It is just too early yet after the decision was made [on the expansion franchises]. This is something we will be working on this summer."
Jerry Oliver, tha stadium's general manager, explained that the city was especially eager to get a baseball team because it would anchor the stadium's revenue stream during the summer months, a difficult period to book profitable events.
But until then, he said, the stadium will work to continue bringing in a wide variety of events that now range from arena football, which is played on a fifty-yard field, to tractor pulls and concerts.
John Incorvaia, a vice president at Moody's, said his agency was monitoring the continuing burden the stadium imposes on St. Petersburg's finances.
"Of course we are worried when the city has an operation from which year after year it is not deriving sufficient revenues to cover expenses," he said. "Down the road this could pose problems if the city has other serious drains on revenues."
Mr. Incorvaia said the second bond issue in 1989 gave the stadium the flexibility to offer events other than those envisioned in the original plans.
At Standard & Poor's Corp., Robert F. Durante, an assistant vice president, said the prospect of continuing operating deficits from the stadium were a negative for the city, but not enough to justify a downgrading of St. Petersburg's A-plus rating. He also said tax revenues were sufficient to cover the stadium bonds.
"The fact that the general fund is subsidizing the stadium to the tune of $2 million a year is a negative factor, but there are some offsetting positives for the city. If current general trends remain in place, we will continue with our A-plus rating," he said.
Steven Murphy, a vice president at Standard & Poor's, noted the stadium is likely to be a long-term plus for the city because it will help revitalize the downtown area.
Mr. Murphy also noted the city has a healthy and expanding economy and -- with only $22.2 million of general obligation debt and $206 million of revenue debt outstanding -- a relatively modest debt burden.
According the city's 1990 annual financial statement, St. Petersburg paid debt service of $6.8 million on the sports stadium bonds, including $700,000 for principal repayment. That expense was covered by dedicated taxes and interest earnings from the excise tax fund, which generated $3.7 million, and additional $4.1 million transferred from a special revenue tax fund.
Mr. Oliver said the stadium is expected to book 34 events this year, including 12 sporting events, 9 concerts, and 11 trade shows.
All told, he said the stadium is expected to bring in about $2.8 million for fiscal 1991, which ends Sept. 30, to cover expenses of about $5 million, some of which will eventually be recouped.