Tax ramifications of tennis, events center

EDITORIAL
Copyright 2001 The Tribune Co.
Article date: July 24, 2001
 

Many Pasco officials have reacted enthusiastically about a proposal to build a stadium in Wesley Chapel for tennis tournaments and other public events using a large accumulation of tourism tax revenues - and for very good reason. The idea is the best to come up since the tourism tax was adopted 10 years ago.

Teaming with Saddlebrook Resort in Wesley Chapel, which has an outstanding reputation in professional tennis and is home to many well-known players, the county would finally be able to find its elusive niche in tourism. Tennis, combined with other events, would draw people to Pasco for overnight stays, resulting in still more tourism tax proceeds and improving the economy.

And in a big plus for taxpayers, Saddlebrook has pledged to pay any operating costs not covered by events at the stadium. The proposal is further enhanced by the decision of the Women's Tennis Association, the governing body of women's professional tennis, to relocate its headquarters to Saddlebrook.

By all means, the project is a perfect fit for Pasco. But as county administrators, commissioners and consultants gather details on the proposal, they must consider what could be very costly tax ramifications and proceed cautiously when deciding operating and ownership issues.

The Tampa Sports Authority is facing this dilemma - and millions of dollars in property taxes - because it owns Raymond James Stadium, home of the Tampa Bay Buccaneers, and Legends Field, where the New York Yankees train in Spring. So is the city of St. Petersburg, which owns Tropicana Field, where the Tampa Bay Devil Rays play.

The issue is whether publicly owned venues are subject to property taxes when a private person or entity profits from them - even when the facilities benefit the public.

The state Supreme Court said yes in April in a case brought by Sebring International Raceway, which operates on land owned by the Sebring Airport Authority, a public entity. The court upheld a 1998 2nd District Court of Appeal ruling that Sebring International isn't exempt from property taxes because it is a for-profit, private entity that does not meet the definition of "public purpose."

What this means for Pasco officials, who must avoid a property tax bill on the stadium and events center, is very clear. The county not only must own the facility, it also must operate it. Saddlebrook cannot, unless, of course, the county wants to pay property taxes. The facility also must be extremely accessible to the public.

"The key," says Pasco Property Appraiser Mike Wells, "is ownership and use." If county government, while owning and operating the facility, "hosts" tennis tournaments and other events and receives proceeds from them, it probably would be exempt from property taxes, Wells says, giving county officials their best scenario.

The tennis and events center could seat between 5,000 and 13,000 people, depending on configuration; have 18 to 20 courts; and cost $5 million to $10 million, according to a consultant's report. More than likely, an annual property tax bill would exceed $100,000.

"They're going to have a difficult time avoiding taxes on this thing," says Wells. But he also says there could be a way to avoid taxes and that he'd be happy to discuss the tax side of this exciting project with county officials. They'd be wise to pay him a visit soon.
 

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