The $100 Million Jacksonville Jaguars ScoreboardsSeptember 29, 2014 86 comments Print Article
Take a deep breath. The new scoreboards at Everbank Field are cool and no one is taking them down. But, maybe, we can talk about the money behind the scoreboards (and a little about the stadium) without anybody feeling threatened or vindicated.
Take a deep breath. The scoreboards are cool and no one is taking them down. Still, maybe we can talk about the money behind the scoreboards (and a little about the stadium) without anybody feeling threatened or vindicated.
I'll do my best to not bias my language one way or the other. Then again, "Rage Against the Machine" is playing in the background...so this will be tough.
Last year Jacksonville agreed to fund the majority of the Everbank Field upgrades. The city is responsible for $43 million of the required $63 million (the Jaguars are slated to pay the remaining $20 million). The funds built, among other upgrades, the largest scoreboards in the world. There is one "world's largest score board" on either side of the field.
$43 million is a significant amount of money for a city with a little under $1 billion in annual revenues. If the improvements were funded by COJ's general budget it would represent around 4.5 percent of city expenses.
But, the renovations are not funded from COJ’s operating budget. The below quote is from the legislation approving other city dollars to pay for the scoreboards:
"...the City desires to finance the City Contribution in a way that will not affect the general fund budget which provides important services like public safety, parks, and libraries…"
-(COJ, Bill 2013-0694).
Instead, the funding will come via bonds - a loan to the city, which will be paid back via the "Sports Complex Capital Maintenance Fund" (SCCMF). The SCCMF is a Jacksonville funded account that holds revenues derived from "Bed Taxes", which is explained below.
Despite how the legislation reads COJ is in a “robbing Peter to pay Paul” situation. The original purpose of the SCCMF was to pay for stadium maintenance and upgrades.
In 2013 the SCCMF accrued nearly $5 million. According to David Decamp , Mayor Alvin Brown's Director of Communications, Jacksonville's payments on the scoreboards will be somewhere between $3.0 million and $3.5 million annually, over the next 30 years. The cumulative expense of the scoreboards if Jacksonville's annual debt payment ends up at $3.2 million a year for 30 years will be $96 million. This is an amount more than twice the actual cost of the scoreboards.
Since SCCMF money is now directed to service debt, this leaves the fund with only $1.6 million each year remaining for stadium improvements. It's very likely that this remaining amount is not sufficient to pay for additional upgrades to Everbank field when required. Already, since the last $43 million was approved in 2013 Jacksonville has agreed to pay another $3 million for stadium related upgrades.
On June 25, 2014 the city agreed to pay an additional $1.25 million for the "EverBank Field WiFi Project". Then in August of 2014, COJ was contractually required to pay an additional $1.6 million annually to provide funding for additional seats during the famous Florida-Georgia game. A consequence of the remodel was removing 9,500 chairs. Yet, Jacksonville is required to have those seats (and more) available for the the annual Gator-Bulldog event.
Where does the money for the additional expenses come from when there is not enough money in the SCCMF?
Explaining Bed Taxes
Florida law permits Florida counties to collect Transient Rental Taxes/Tourist Development Tax, AKA “bed taxes”, which is essentially a sales tax levied specifically on temporary living spaces, such as hotels, motels, timeshares, trailer homes...etc. Any rental that lasts less than six months is subject to a bed tax. .
Bed taxes are supposed to be earmarked to develop tourism within a county. The legislation describing how a county can utilize bed tax money has that special quality that only bureaucracies can create; the laws are both specific and opaque. Counties do have a lot of leeway on how to spend bed tax revenues. Certainly, the money does not have to go to a stadium. It can fund just about anything deemed as a tourist attraction including, as specifically stated in the statutes: museums, zoos, beaches, fishing piers and nature centers (Florida Statutes, Section 125.0104).
How Jacksonville Spends Bed Taxes
There seems to be a common misperception that the funds designated for the stadium improvements are somehow not taxpayer money simply because the money did not come directly from COJ’s operating budget. That is not the case. These dollars are tax dollars that belong to the City of Jacksonville and the State provides a lot of flexibility on how the funds can be spent.
COJ bed taxes total six percent of the rental fee. Of that six percent four percent is allocated specifically to subsidize the stadium debt. Two percent is used to pay for bonds that were issued years ago to build-out the stadium, when Jacksonville gained a franchise. Another two percent is dedicated to the SCCMF, which will be used to service the additional debt for the recent remodel.
COJ revenues from Bed Taxes total approximately $15 million.
Approximately $8.2 million of the $15 million of Bed Tax money is dedicated solely to funding the debt associated with the stadium. The rest of the Bed Tax money funds promoting and marketing Jacksonville (which deserves its own analysis) and some funds actually go to the beach communities and Baldwin.
The $8.2 million the city pays to cover stadium debt does not include the other stadium expenses. Jacksonville's 2013 Comprehensive Annual Financial Report states that Jacksonville spends a little over $23 million on the stadium (almost $2 million per month) while Jacksonville's take-in revenue from the stadium is $4.5 million. That's an 80 percent loss. As an FYI, the utility bill alone for Everbank Field is a six figures amount every month, August 2014's utility bill was over $230k.
Take another deep breath...it's okay to have a conversation about the costs surrounding Everbank Field. Discussing stadium expenses doesn't make anyone a less loyal fan of the Jaguars or even of Shahid Khan. Funding the stadium, the way we are, may be in the best interest of the community. It may or may not be "worth every penny". Either way, it is always okay to have a dialogue about how city money is spent.
Written by Arash Kamiar