TABLE OF AUTHORITIES ii
 
 

INTRODUCTION 1

STATEMENT OF THE CASE AND STATEMENT OF THE FACTS 2

SUMMARY OF ARGUMENT 23

ARGUMENT 26

i

TABLE OF AUTHORITIES

FLORIDA SUPREME COURT

Bailey v. City of Tampa,

Workers v. Jacksonville Port Authority,

Development Authority,

Facilities Authority,

Authority v. State,

Recreational Facilities District,

Development Authority,

Development Authority,

Development Authority,

Adamson v. State,

Bazell v. City of Cincinnati,

530 A.2d 245 (Md. 1987) 38

Libertarian Party of Wisconsin v.

Matter of James Wilson Assoc.,

Art. VII, § 10, Fla. Const. (1968) 2, 23, 26, 28, 29, 30, 31, 38, 50

FLORIDA STATUTES

§ 90.604, Fla. Stat. (1995) 47

§ 90.701(1), Fla. Stat. (1995) 47

§ 90.701(2), Fla. Stat. (1995) 48

§ 90.704, Fla. Stat. (1995) (Sponsor’s Note) 45

§ 90.705, Fla. Stat. (1995) 45

§ 196.199(2)(a), Fla. Stat. (Supp. 1996) 36

§ 288.1162, Fla. Stat. (Supp. 1996) 35

INTRODUCTION

Throughout this Initial Brief, Appellant/Cross-appellee William F. ("Bill") Poe, Sr. will be referred to as "Poe." Appellees/Cross-appellants Hillsborough County, the City of Tampa and the Tampa Sports Authority will be referred to, respectively, as the "County," the "City" and the "TSA," or, collectively, as the "governmental agencies" or the "government."

Upon agreement of all parties to this appeal, and in addition to the Appendix filed with their respective briefs, the parties have filed a Joint Appendix with this Court. The first ten (10) Volumes of that Joint Appendix consist of the trial transcript (Volumes I through X) and the transcript of the hearing on the government’s Motion for Rehearing (Volume X, Tab A). The remaining six Volumes of the Joint Appendix contain the exhibits received into evidence at the trial, the Final Judgment and the Order denying the Motion for Rehearing. References to the trial transcript contained within the Joint Appendix will be by Volume number, page number and witness’s name (i.e., II, 6, Jones). References to the exhibits will be by Volume number, tab number and page number (i.e., XII, 8, 6). References to Poe’s Appendix will be designated as "Poe App.," followed by the tab number and the page number (i.e., Poe App., A, 6).

STATEMENT OF THE CASE AND STATEMENT OF THE FACTS

This appeal is from the Final Judgment rendered on March 21, 1997, by the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, Judge Sam D. Pendino (Poe App. A), and the Order on Plaintiffs’ Motion for Rehearing rendered on March 27, 1997 (Poe App. B). This Court has jurisdiction pursuant to Article V, Sections 3(b)(2) and (7) of the Florida Constitution. See also Rowe v. Pinellas Sports Authority, 461 So.2d 72, 74 (Fla. 1984).

These consolidated proceedings began on September 27, 1996, with the filing of Mr. Poe’s Complaint for Declaratory Judgment and Permanent Injunction, as amended on January 30, 1997 (Poe App. C). That Complaint sought a declaration that the actions of the County, the City and the TSA with regard to incurring debts, using the taxing power and pledging public credit for the construction and operation of the proposed new Tampa stadium project, as envisioned by various project documents and interlocal agreements, violate Article VII, Section 10 of the Florida Constitution. The Complaint further sought an Order permanently enjoining and restraining the governmental agencies from unconstitutionally incurring debts, pledging tax monies and credit and expending public funds for the construction and operation of the new Tampa stadium project. On December 26, 1996, the TSA, the County and the City filed a Complaint seeking to validate a series of revenue bond issues in the total principal amount of $204.5 million for the construction and equipping of a new stadium, the acquisition and construction of a practice facility and the demolition of the existing stadium. Upon agreement of all parties, the two complaints were consolidated for trial and appellate proceedings. The consolidated trial commenced on March 3, 1997, and continued on March 4, 5, 7 and 12, 1997.

The existing Tampa stadium (renamed "Houlihan’s" in 1995) presently hosts approximately 40 major events per year, including ten home games of the Tampa Bay Buccaneers ("BUCs"), a National Football League ("NFL") franchise. (IV, 544, Saavedra) It has been used by the BUCs since 1976 (III, 367, McKay), and it has been the host for Super Bowls in 1984 and 1991. The existing stadium contains 74,000 seats, including approximately 960 seats located within luxury suites or sky boxes. (III, 424, McKay) Thirty-six of those luxury suites, containing 576 luxury seats, were added to the stadium in 1981, and were paid for entirely by the BUCs through an industrial development bond guaranteed by the Culverhouse family. (IV, 551-52, Saavedra) The existing stadium is encumbered with over $11 million in outstanding bonded debt for which the governmental agencies are responsible, and its worth is at least $80 million. (IV, 615-18, Saavedra) The cost of operating and maintaining the existing stadium is approximately $3 million to $3.5 million per year. (IV, 557, Saavedra) From 1990 through 1994, the TSA had an operating surplus at the end of each year. Due to the current agreement with the BUCs, the TSA will have an operating deficit. (IV, 614, Saavedra) It is estimated that the cost to demolish the existing stadium will be $4 million. (IV, 620, Saavedra)

Current users of the existing stadium, in addition to the BUCs, include the Tampa Bay Mutiny (a professional soccer team), the Outback Bowl, the Florida Classic, the new University of South Florida football team (commencing with the 1997 season), one or two tractor pulls and motor sport events, equestrian events and various other single event users, such as concerts. (IV, 543-44, Saavedra) All the events which are anticipated to occur in the proposed new stadium are presently taking place in the existing stadium. Unlike the other current users of the existing stadium, the BUCs pay no rent for 1996, 1997 or until such time as they play in the proposed new stadium. (III, 430, McKay) No current or intended user of the existing stadium, other than the BUCs, expressed a need for the construction of a new stadium and, in fact, a new stadium is not needed for other events. (I, 67-8, 75-6, Greco; V, 714, Kleman; IV, 262-66, Saavedra)

BUC season ticket prices at the existing stadium are between $234 and $432 for regular seats (or $23 to $43 per game) and between $35,000 and $55,000 for a luxury suite. The BUCs currently make $6 million or $7 million a year from the sale of luxury suites and from concessions and parking at the existing stadium. (III, 413-14, McKay) In the proposed new stadium, there will be an increase in the regular seat ticket price and the luxury suites will cost between $65,000 and $85,000 per season. In addition, 12,000 of the formerly regular seats will be converted to club seats at the proposed new stadium, and those club seats will be priced at between $950 and $2450 per season (or $95 to $245 per game). (III, 419-426, McKay) From the club and luxury seats in the proposed new stadium alone, the BUCs will earn $15 million to $23 million in revenues. (IV, 569, Saavedra; III, 416, McKay) The BUCs projected that if the new stadium were not completed by their 1997-98 NFL season, they would forego $25 million in lost revenue opportunity. (III, 418, McKay)

The existing stadium, built in 1967, is in need of some repairs and renovations. In order to have a structurally sound, functional and safe facility and to extend its useful life for another 30 years, the cost of such renovations will be approximately $52 million. (XI, 9; III, 439, 457, Bryant; III, 476, Schwanaveck) However, the existing stadium is not unsafe for patrons or users, is currently being used and will continue to be used in its present condition for several years. No evidence was presented that the existing stadium constitutes any present danger to the health, safety or welfare of the public or that the needed repairs could not be accomplished over a period of time. Likewise, no evidence was presented that the three forms of taxation intended to be utilized in the current bond validation proceeding (the infrastructure surtax or the community investment tax, the tourist development tax and/or the state sales tax rebate) could not be utilized to pay for the cost of repairs to the existing stadium. If the improvements identified in the 30-year serviceability report were made, the existing stadium can be properly maintained for the next 30 years for about $455,000 a year. (III, 463, Bryant)

In mid-1995, the BUCs team was purchased for $192+ million by an entity or entities owned or controlled by an individual named Malcolm Glazer. (I, 48, Greco) Immediately after that acquisition, the new owner informed the TSA and the community that a new stadium was necessary to enable the owner to generate higher profits. (III, 370, McKay) Mr. Glazer required additional revenue in order to pay off the acquisition debt and to recoup his investment for his purchase of the team. (I, 66-7, 69, Greco; III, 410, 412, McKay) The new owner further informed the TSA and the community that if his demand for a new stadium were not met, the team would be moved to another city. The evidence established that if a new stadium were constructed, the BUCs would generate, from club and luxury seats alone, from $8 million to $16 million in additional annual revenues beyond the total revenues which they presently generate in the existing stadium. That amount does not include other revenues they will earn as a result of the terms of the Stadium Agreement. (IV, 568-69, Saavedra; III, 413-17, McKay) By adding other revenues payable to the BUCs under the Stadium Agreement, the BUCs will receive total revenues from the new stadium in excess of $40 million per season (IV, 629, Saavedra), or $1.2 billion before inflation over the initial 30-year term of the lease. The BUC’s demands were predicated upon their assertion that they were losing money in the existing stadium and needed to earn higher revenue levels to remain competitive. During negotiations with the new owner of the BUCs, neither the TSA, the County, the City nor other community leaders made inquiry into the financial condition of the BUCs, nor did they make inquiry as to whether the BUCs were making a profit from the existing stadium. (I, 67-8, 75-6, Greco; V, 676, 717, Kleman; IV, 567-68, Saavedra; II, 256-57, Wilson) Neither the TSA, the County nor the City had any evidence that other binding offers were made to the BUCs for relocation to another city, nor did they inquire as to the terms of any potential offers. (V, 703-04, 719, Kleman) Indeed, the evidence establishes that one of the two alleged relocation proposals, neither of which constituted binding contractual offerings, was not available to the BUCs after November of 1995, and that neither proposal was as favorable to the BUCs as the Stadium Agreement entered into by the BUCs in Tampa. (VII, 1094-95, 1102-1112, Zimbalist; X, 8) In addition, if the BUCs were to leave Tampa, they would have had to pay a relocation fee to the NFL ($29 million), a fee to the Culverhouse estate (approximately $15 million), $11 million for the repayment of the existing stadium bond indebtedness, moving costs and they would not be entitled to share any expansion revenue if an expansion team replaced them in Tampa. (VII, 1107-11, Zimbalist; III, 372, McKay) In fact, the BUCs never submitted a relocation application to the NFL, which requires approval by ¾ of the member teams, and the NFL preferred that the BUCs remain in Tampa. (VI, 841-42, Goodell)

Without knowledge as to the financial condition of the BUCs and without knowledge as to whether there were real and existing incentives for the BUCs to leave Tampa and relocate to another city, the governmental officials nevertheless believed that they must do and, in fact, did "everything in our power" to keep the BUCs in Tampa. (I, 35, Greco) The immediate past-Chairman of the Greater Tampa Chamber of Commerce was aware of no similar offer by local government (the expenditure of over $400 million in public monies) to keep a business in Tampa. (II, 256, Wilson)

During the stadium lease negotiations in 1995, the TSA conveyed to the BUCs, without consideration, the naming rights of the existing Tampa stadium. The exercise of those rights, resulting in a change in the name of the Tampa Stadium to "Houlihan’s," have an economic value to the BUCs of between $500,000 and $2 million per year. (III, 401, McKay) As discussed below, the BUCs were later granted the naming rights to the proposed new stadium and premises.

In order to meet the economic demands of the BUCs, who threatened to move to another city, the TSA, the County and the City agreed in April of 1996 to demolish the existing 74,000-seat stadium; to construct and equip a new 65,000-seat stadium containing 12,000 club seats, club lounges and 100 luxury suites for an estimated construction cost of $168.5 million; to continue the BUC’s exclusive naming rights to the new stadium; to contribute $12 million for the acquisition and development of a new practice field for the exclusive use of the BUCs and at a design and location to be determined by the BUCs; and to grant the BUCs commercial development rights to an approximately 35-acre parcel of public property located upon the stadium premises. The reason for building a new stadium was to enable the BUCs to earn more revenues so that they would remain in Tampa. (I, 48, Greco) The focal point of the stadium design was to satisfy the BUCs. (IV, 516, Boyle) The BUC’s primary concern was luxury boxes, club seating and lounges and other fan amenities (IV, 518, Boyle), from which they could earn greater revenues.

In May of 1996, the Greater Tampa Chamber of Commerce commissioned a poll of Hillsborough County voters to determine whether a stadium-only tax would be approved by the voters of Hillsborough County. The result of that poll was that if a stadium-only tax were placed upon the ballot, it would be defeated by a margin of two (2) to one (1). (II, 257-59, Wilson; V, 714, Kleman)

On July 10, 1996, the Hillsborough County Board of County Commissioners passed an Ordinance levying a one-half cent local government infrastructure surtax for a period of 30 years "to acquire infrastructure for general government purposes, public education, and public safety." (XIV, 19, 2 and 3) As required by law for the passage of an infrastructure surtax, the Ordinance provided for a referendum. The purpose of the half-cent sales tax, as presented to the electorate, was

Subsequent to the execution of the August 28, 1996 Stadium Agreement, the TSA sold to the Hillsborough County Aviation Authority ("HCAA"), another governmental entity, approximately one-half of the stadium property for $19 million. In return, the TSA will pay the HCAA $150,000 per year, adjusted by the Consumer Price Index, (or at least $4.5 million over a 30-year period) for parking privileges upon that land which it formerly possessed. (IV, 593, Saavedra) Construction of the new Tampa stadium began in October, 1996, and the TSA is currently utilizing $9 million of the $19 million received from the HCAA to finance those construction efforts. The TSA initially planned to use the remaining $10 million as an O & M reserve for the deficits it would incur in the new stadium. However, $3.5 million of that remaining $10 million will be needed to pay the O & M deficits for the existing stadium created by the current agreement which charges the BUCs no rent. The remaining $6.5 million will be placed in a reserve fund to pay for O & M deficits in the new stadium. The TSA does not expect to earn any revenues from the new stadium for at least three years, and possibly five years. Even after that period of time, the BUC’s rental payments, ticket surcharges and the TSA revenues from other stadium events will not be sufficient to offset the costs of O & M at the new stadium. (IV, 575-76, Saavedra)

Over the 30-year period of the Stadium Agreement, and utilizing an inflation rate of only 3%, there will be a deficit in O & M expenses of at least $24 million. (IV, 584-88, Saavedra; XVI, 2, Poe App. D) That amount does not take into consideration the $3.5 million of the $10 million reserve fund which will have previously been spent for O & M deficits in the existing stadium. (IV, 588-90, Saavedra) In addition, based upon an analysis of inflation rates over the past 30 years, a more appropriate inflation factor for O & M expenses over the next 30-year period is 5.4%. (IX, 1321-22, Baade) A 5.4% inflation factor results in an 80% greater O & M deficit for the proposed new stadium. (IX, 1324, Baade) Due to the terms of the Stadium Agreement with the BUCs, the TSA will not derive from operation of the new stadium sufficient revenues to pay the O & M costs of the new stadium (IV, 574-75, Saavedra), and will lose money every year, which loss must be made up by the County and the City with public funds. The BUCs, on the other hand, who pay a fixed rent not based upon inflation, will derive from the new stadium greater than $40 million in revenue annually, or $1.2 billion before inflation, over the initial 30-year term of the Stadium Agreement. (IV, 629, Saavedra)

While the BUCs pay a fixed rent for each year of their lease, the O & M costs of the stadium will increase due to inflation, and the O & M deficit will be in the "tens of millions" of dollars. (IV, 580-81, Saavedra) Other users of the stadium, unlike the BUCs, will pay higher rental or license fees throughout the years due to inflation, and the BUCs will receive the first $2 million from such other user fees, as well as 50% beyond the first $2 million. (IV, 629,Saavedra)

Although public officials did not know, and made no prior inquiry to establish, the value of the development rights awarded to the BUCs (V, 721-12, Kleman), the development rights are worth at least $2 million, based solely upon land values. (VI, 856, Pallardy) That $2 million does not include the amount of revenues the BUCs can generate by developing the publicly-owned property and operating it for private commercial use, or by assigning such rights to other private entities. (VI, 865, Pallardy) The parcel upon which the BUCs are granted development rights (basically, the entire TSA parcel not covered by the new stadium footprint) is zoned for any type of commercial or retail development and is described by the government’s appraiser as the best location in Hillsborough County for commercial and retail development. (VI, 882, Pallardy) Mr. Pallardy opined that anyone who developed property in that location would be able to make a significant return on the development. (VI, 882),

The existing stadium contains 74,000 seats, which includes 73,040 regular-priced seats. The proposed new stadium will contain 65,000 seats, with only 51,400 regular-priced seats. The remaining 13,600 seats will be club and luxury seats. (IV, 555, Saavedra) According to NFL standards for a Super Bowl, the TSA will be required, at its sole expense, to add to the new stadium 5,000 additional temporary seats, which would not be required at the existing stadium if a Super Bowl is played there. (V, 762-65, Clark)

In order to pay for all or a portion of the cost of the acquisition, construction and equipping of the new stadium and related facilities and improvements, including the practice facility and the demolition of the existing stadium, the TSA proposes to issue bonds in the principal amount of $204.5 million. (IV, 530, Saavedra; XIII, 14) Interest costs will be greater than the principal amount of the bonds, approximately $212-$220 million (IX, 1326, Baade), and with reserve funds and issuance costs, the total amount of the bond indebtedness will be far in excess of $400 million. (IV, 612, Saavedra) The bonds are guaranteed solely by the taxing power of the County and the State, through local infrastructure, tourist development and Florida sales taxes. Revenues generated from the proposed new stadium will not be utilized to guarantee or pay-off the bonds. The BUCs pay no part of the costs or bonds associated with the construction of the new stadium, and their rental payments will be used solely to reduce, but not pay for, the costs of O & M. (IV, 552-53, Saavedra; XII, 70) In addition to the $400+ million for the bonds, the TSA must, pursuant to the Stadium Agreement, provide $15 million for the stadium capital improvement fund. That $15 million will also be funded with public tax monies. (IV, 612-13, Saavedra)

The County is obligated to pay to the TSA two-thirds (2/3) of any budgetary shortfalls of the TSA related to the financing of the new stadium project and the operation and maintenance thereof. The City is likewise obligated to pay to the TSA one-third (1/3) of all such budgetary shortfalls of the TSA. (IV, 591, Saavedra; XIII, 13)

Expert economists offered their opinions regarding the economic benefits and costs associated with having an NFL franchise team in the community. Lay and expert witnesses alike agreed that there are other private businesses located in the Tampa Bay area which have much larger revenues, a greater number of employees and a greater direct economic impact upon the community than the BUCs, and that the BUCs constitute only a small to medium-sized business, compared to other private businesses in the area. (I, 62, 75-78, Greco; II, 252, 257, Wilson; IX, 1325, Baade; II, 221, Shils) Indeed, the BUCs represent only .00027% (or twenty-seven/ten thousandths) of the effective buying income in the Tampa Bay area. (VII, 1076-77; Zimbalist)

A 30-year retrospective analysis of objective statistical data concerning the economic impact in all cities with professional sport teams, including the City of Tampa, reveals that the presence of a professional sports team had no statistically significant impact upon those metropolitan or regional economies. (IX, 1311-14; Baade; VII, 1073, Zimbalist) A more recent time series regression analysis of such data demonstrates that there has been no measurable or appreciable difference in personal income, personal income per capita, the number of jobs, wages or salaries since the BUCs came to Tampa in 1976. (VIII, 1184-85, Porter) Expert testimony demonstrates that professional sports realigns leisure activity spending within a community rather than adding to it. (IX, 1316-17, Baade) Most spending which occurs in a ball park is spending that would have occurred in the community on other leisure activities had there been no game. (VII, 1079-80, Zimbalist)

An analysis of objective statistical data recording sales tax transactions for Hillsborough County also demonstrates that the 1984 and 1991 Super Bowls held in Tampa had no discernible or measurable impact upon the local economy. (VII, 1186-88, Porter) Indeed, hotel occupancy rates during the January 1991 Super Bowl were lower than occupancy rates in the months of January of the years immediately before and after that Super Bowl event. (V, 778-79, Clark) It was admitted that Super Bowls do not effect the January monthly hotel occupancy rates in Hillsborough County. (V, 781, Clark)

Each of the government’s witnesses who testified regarding the economic impact of the BUCs in Tampa, the economic impact of a Super Bowl and the economic impact of new stadium construction rendered subjective opinions based upon methodologies which utilized a "multiplier" to reach their ultimate conclusions. In each instance, the multiplier was supplied by an unknown third person not called as a witness in this proceeding, and none of the government’s witnesses were able to explain how the multiplier was derived. (I, 103, 110, 193-94, Shils; II, 284, 309, 313-21, Barton; VI, 932-35, 946-47, Hogan) Neither Dr. Shils, Mr. Barton nor Dr. Hogan have any expertise in the manner of choosing an appropriate multiplier for the purpose of analyzing the economic impact of a professional sports team or a Super Bowl in the community, nor do those witnesses have experience or expertise in writing the mathematical models which produce the multipliers utilized by them or in calculating the model results. (I, 197,201, 206-08, Shils; II, 311-21, Barton; VI, 946-47, 958, Hogan) It was established that there is no unanimity of opinion among economists as to the correct multiplier for professional sports events or other activities, and, in fact, there is disagreement among economists as to the validity and applicability of various models. (I, 203-05, Shils; VII, 1080-81, Zimbalist; IX, 1317, Baade) Yet, over objection by Poe, Dr. Shils, Mr. Barton and Dr. Hogan were permitted to offer their opinions regarding economic impacts based solely upon the use of multipliers supplied by out-of-court persons or entities, and the trial judge relied on those opinions in his Final Judgment. In addition, neither Dr. Shils nor Dr. Hogan were able to relate their prior Philadelphia and Arizona studies, which also used multipliers supplied by third parties, to the Tampa Bay community.

There are some qualitative, immeasurable benefits and/or costs associated with having a professional sports franchise located within a community. Such intangible considerations can include civic pride (or shame), media coverage (positive or negative) and impacts upon other services provided in the area (positive or negative). (IX, 1327, Baade)

Although educated and regularly and consistently engaged in the business and practice of financial planning and analysis for over 17 years, Poe’s witness, Jim Wurdeman, was excluded from testifying as an expert witness in those areas. (IX, 1230-53, Wurdeman) Had he been allowed to render his opinion, he would have testified that the total taxpayer costs of the stadium project over 30 years is $601,389,683, and that the total revenues received by the BUCs over 30 years is $1,139,011,200. Neither of these amounts include the values of the development or naming rights lost by the TSA and gained by the BUCs. (X, 1533-39, Proffer)

SUMMARY OF ARGUMENT

The issue before this Court is not whether local government may build a community stadium. The issue is not whether a professional sports franchise serves a public purpose or whether a stadium serves a public purpose. Instead, the issue before this Court is whether local government may, with the use of hundreds of millions of taxpayer dollars, tear down an existing community stadium and build and operate a new stadium for the predominant and paramount purpose of providing a private business entity with the means to increase its profits and earn over a billion dollars in revenues. But for the BUC’s demands for greater revenues and their threat to relocate to another city, the proposed stadium project would not exist. The local government’s desire to retain the BUCs at all costs and at a windfall from the public purse is not constitutionally permissible.

The Florida Constitution, Article VII, Section 10, prohibits the government from using its taxing power or lending its credit to aid private persons or entities. When a project proposed for public funding has elements of private economic benefit, as is clearly and overwhelmingly the case herein, the public purpose must predominate, the private benefit and use must be incidental and the project must be paid for by revenues derived therefrom. None of these conditions are present herein.

The predominant purpose of the proposed stadium project, as demonstrated by the testimony and the terms of the Stadium Agreement, is to provide substantially greater revenues to the BUCs. The revenues derived from the project will not be used to retire the bonds for the project nor will the TSA’s share of such revenues be sufficient to operate and maintain the project. Instead, those revenues will go directly into the hands of the BUCs, a private entity. The Florida Constitution prohibits such a result.

The trial judge correctly refused to validate the bonds and correctly granted, in part, Poe’s request for a declaration that the Stadium Agreement is unconstitutional. However, he erroneously interpreted the law by limiting such conclusions to only one of the unconstitutional provisions of the Stadium Agreement—that which grants the BUCs the first $2 million of revenues from all non-BUC stadium events, thereby leaving intact all the remaining provisions (summarized on pages 10-14 of this Brief) which grant to the BUCs, not only 50% of all non-BUC revenues, but over $40 million per year, not counting the values associated with the naming rights, the development rights or the practice facility rights. Constitutionality cannot be measured in degrees. An expenditure of public funds to benefit a private business is either constitutional or it is not. The same rationale the trial judge applied to the first $2 million of non-BUC revenues applies equally to numerous other elements of the Stadium Agreement such as giving a private entity the public’s right to use and derive revenue from public lands, giving a private entity the public’s right to derive revenues or other benefits from naming a publicly-owned facility and giving a private entity $12 million to construct a private training facility. The Florida Constitution, as interpreted by this Court, mandates that the entire Stadium Agreement be declared invalid and that the issuance of bonds secured by tax monies and the pledging of the government’s credit for this project, as set forth in the Stadium Agreement, be prohibited.

In addition to his erroneous interpretations of the Florida Constitution, the trial judge had before him no competent evidence upon which to base the factual and legal analysis contained in the Final Judgment. His evidentiary rulings constituted an abuse of discretion, violated Poe’s rights to due process of law and formed the basis for numerous impermissible and erroneous factual and legal conclusions. The trial court improperly allowed into evidence testimony from expert witnesses which was clearly inadmissible, improperly permitted lay witnesses to render opinion testimony, improperly excluded opinion testimony from a qualified expert, and improperly made findings which were not based upon any competent evidence of record—all in violation of the Florida Evidence Code and all at great prejudice to Appellant Poe. The competent substantial evidence adduced at trial establishes that the private entity exclusively selected by the local government to receive well over $400 million of public taxpayer dollars, resulting in a windfall to that private business of well over one billion dollars, has no greater impact upon the Tampa Bay area economy than other similar-sized private businesses in Tampa and, indeed, has less impact than larger private businesses which receive no public funds for their facilities or operations.

This Court should reverse the Final Judgment, refuse to validate the proposed bonds, and declare the entire stadium project, as evidenced by the Stadium Agreement and other project documents, to be in violation of the Florida Constitution.

ARGUMENT

POINT I. THE TRIAL COURT’S FACTUAL AND LEGAL ANALYSIS OF THE ISSUES IS INCOMPLETE, ERRONEOUS AND DOES NOT COMPORT WITH FLORIDA LAW.

While the trial judge correctly refused to validate the bonds for the new stadium project and correctly declared that the stadium project, as constituted, violates Article VII, Section 10 of the Florida Constitution, his factual and legal analysis of the issues is incomplete, erroneous and does not comport with Florida law. The trial court found unconstitutional the fact that the BUCs will receive the majority of net revenues from non-BUC events at the new stadium. However, that conclusion was limited to the sole fact that the BUCs will receive the first $2 million in revenues from non-BUC events. The trial court failed to address and declare unconstitutional the additional terms of the Stadium Agreement which award to the BUCs no responsibility for the costs of construction, financing, operation, maintenance or capital improvements for the new stadium which the BUCs alone have demanded for the sole purpose of generating greater revenues; complete control over the design and construction of the new stadium; rent-free use of the existing stadium while continuing to earn revenues, both from their own events and other events; exclusive control of and profits from the leasing of luxury suites for all stadium events; naming rights; merchandising rights; advertising rights; concession rights; parking rights; Team Space rights; stadium expansion rights with no increases in rent; a $12 million practice facility; private commercial development rights to public property; and the right to retain 100% of all revenues of any kind from their own events and to retain, not only the first $2 million, but an additional 50% of all revenues from all other stadium events. The revenues which the BUCs derive pursuant to the Stadium Agreement are revenues which are precluded from being earned not only by the government (the TSA, County and/or City) and taxpayers who pay to construct and operate the stadium, but also by other public agencies (the University of South Florida) and other private entities who use and pay rental or license fees for their use of the "community" stadium. It is clear, as evidenced by the Stadium Agreement and the testimony of every government witness in this proceeding, that the paramount, if not the sole, purpose of the entire stadium project is to subsidize a private entity operated for profit - the BUCs, and that the project constitutes an improper diversion of public funds, credit and privileges for the primary benefit of a private entity. The BUC’s right to retain the first $2 million of non-BUC event revenues is only one small portion of the stadium deal which renders the project unconstitutional.

The trial court was presented with one central issue in these consolidated proceedings: Does the expenditure of at least $424 million in taxpayer dollars or other public funds for the construction and operation of the new stadium project, under the facts established in the record of these proceedings, constitute a violation of Article VII, Section 10 of Florida’s Constitution? In analyzing the numerous cases of this Court which have interpreted that constitutional mandate, its history is instructive. In 1875, the following provision was added to the 1868 Florida Constitution:

When confronted with proposals to issue public securities in which the private interests to be served by the project were apparent, this Court consistently required that the public purpose of the project be "paramount," and that the private interest be only "incidental." Time and again, this Court has reiterated:

In the 1960’s, these decisions began to have a significant effect upon Florida’s economic development due to Internal Revenue Code provisions and rulings by the Internal Revenue Service which made the interest on industrial revenue bonds exempt from federal income taxation. Florida was placed at a competitive disadvantage with other states which could offer tax exempt, non-recourse revenue bonds to private entities for capital projects. Thus, in 1968, the Florida Constitution was rewritten to recognize that the public interest could be served by facilitating private economic development in certain instances. Such instances are, however, limited to those in which the revenue bonds are payable SOLELY from revenues derived from the project to be financed.

The gist of this Court’s post-1968 decisions is that the "paramount public purpose" test is applicable where the pledge of public credit or the use of the taxing power is involved. If private interests are not involved in the project, the prohibition of Article VII, Section 10 does not apply. When a project proposed for public funding has elements of private economic benefit, the public purpose must predominate, the private benefit and use must be incidental and the project must be paid for by revenues derived therefrom. While there are conflicting decisions as to the degree to which the public purpose must be demonstrated (compare Linscott, supra, with Orange County Industrial Development Authority v. State, 427 So.2d 174 (Fla. 1983)), there is no disagreement over the mandate that a publicly funded project which involves a predominant private benefit or use must be repaid from revenues derived from the project.

This Court has not approved a single bond or project secured by tax dollars or the public credit when there was a private interest readily apparent to reap the benefits of the project and the indebtedness was not to be repaid from revenues derived from the project. Instead, this Court has approved the use of public funds to finance a project only when there has been no private leases or private interests involved or, when private interests were involved, only when the sole source of repayment of the public funds or the bond indebtedness are the revenues derived from the project.

Concomitantly, this Court has refused to approve projects financed by public funds absent a paramount public purpose when the project was not paid for by revenues derived from the project. In Bannon v. Port of Palm Beach, 246 So.2d 737 (Fla. 1971), a long-term lease between a port authority and a private developer was approved because there was no public expense involved. The Court specifically noted that if the project involved the issuance of revenue bonds or some other form of public financing to construct a facility for the use of a private concern, the result might be different. Orange County Industrial Development Authority v. State, 427 So.2d 174 (Fla. 1983), refused to validate industrial development bonds for the expansion of a television station by a private corporation upon a finding that the project, even though the bonds were to be repaid from the project revenues, did not satisfy the "paramount public purpose" test. While recognizing that jobs would be created by the project and that local news coverage would be improved, thus producing a more informed citizenry in the area and advancing the general welfare of the people, this Court nevertheless concluded that such "broad, general public purpose[s], though, will not sustain a project that in terms of direct, actual use, is purely a private enterprise." Orange County, at 179. This Court specifically ruled that if "the benefits to a private party are themselves the paramount purpose of a project, then the bonds will not be validated even if the public gains something therefrom," and even if the project is self-sustaining from the revenues produced thereby. Orange County, 427 So.2d at 179. In Baycol v. Downtown Development Authority of the City of Fort Lauderdale, 315 So.2d 451 (Fla. 1975), this Court refused to approve a parking project which was predominantly for the benefit of a private shopping center. The Court noted that the public purpose may not be simply incidental to a predominantly private purpose. The argument advanced in support of the required "public purpose" was basically "if you build it, they will come." It was argued that once private industry (a shopping center) was allowed to come in, then the necessity for parking in connection with it will thereafter develop. The Court replied that "this is getting the cart before the horse," and allowing the "tail to wag the dog." The Court held that a "public benefit" is not synonymous with a "public purpose" which will justify governmental action to support a project. Baycol, 315 So.2d at 457.

In Brandes v. City of Deerfield Beach, 186 So.2d 6 (Fla. 1966), this Court was asked to validate a $1.5 million bond issue, secured by a pledge of certain tax revenues by the City of Deerfield Beach, to acquire property and construct facilities to be used as a spring training headquarters for the Pittsburgh Pirates, a major league baseball team. The lease with the Pirates provided that the City was to pay yearly the sum of $58,000 for all maintenance and utilities of the facility and provide police protection during all games. In return, the lessee was to pay an amount equal to the debt service on $1.36 million attributable to the project, as well as 50% of the net profits. This Court declined to validate the bonds, holding that

The government’s case in this proceeding rested almost entirely upon their claims of alleged economic benefits to the community from the presence of the BUCs. The accuracy and reliability of their economic assessments and predictions were pivotal issues in this case. However, the government’s three expert economists (Dr. Shils, Mr. Barton and Dr. Hogan) were incompetent to render an expert opinion regarding the driving factor for the ultimate conclusion reached from each of the methodologies utilized by them to access economic impact. Each of these three witnesses relied upon a different methodology which utilized a different "multiplier" (the driving factor) derived from a different computer model prepared by a different person or entity to reach their different ultimate conclusions.

Dr. Shils, utilizing the same methodology and the same multiplier he utilized in Philadelphia studies conducted in the 1980’s, applied a 2.6 multiplier to the 1994 total revenues of the BUCs, and concluded that the annual economic benefit of the BUCs was $183 million. (I, 125-30, Shils) Mr. Barton applied a 1.86 multiplier to the adjusted 1994 expenses of the BUCs, and derived an annual economic benefit of $83 million. (II, 283-89, Barton) In another analysis performed by Mr. Barton to reach his opinion regarding impacts associated with construction of the proposed stadium, he applied a different multiplier from a different computer model. (II, 301-02, 309, Barton) In evaluating the economic impact of the 1996 Phoenix Super Bowl upon the entire State of Arizona, Dr. Hogan used yet another computer model with a 1.88 multiplier and applied that to information gathered from attendees and community organizations regarding their spending patterns during that Super Bowl event. (VII, 929-33, Hogan)

Each of these three economists relied upon a different computer model to derive a multiplier factor which they then applied to a different multiplicand through their different methodologies. In each instance, the multiplier was supplied by a third person or entity who was not called as a witness in this proceeding. Neither Dr. Shils, Mr. Barton nor Dr. Hogan were able to explain the derivation of the multiplier upon which they relied to reach their respective conclusions. (I, 103, 110, 193-94, Shils; II, 284, 309, 313-21, Barton; VI, 932-35, 946-47, Hogan) None of these witnesses have any experience or expertise in developing a mathematical model for deriving a multiplier for economic impact purposes nor do they have any expertise in determining the factors or coefficients which go into such a model. These witnesses made no independent calculations, evaluations or verifications as to the appropriateness of the multiplier chosen by a third person and utilized as a basis for their ultimate conclusions. (I, 197, 201, 206-08, Shils; II, 311-21, Barton; VI, 946-47, 958, Hogan) They simply called upon a third person or entity to tell them which multiplier to use. Indeed, by their own admissions, none of these witnesses had the expertise to independently verify the multipliers or their application to the Tampa Bay area.

Dr. Shils admitted that there is no unanimity within the profession of economics as to a specific multiplier to be used when analyzing the economic impact of a professional sports team or event in a particular community. (I, 203-05, Shils) Poe’s economic experts confirmed that there is disagreement among economists as to the validity and applicability of various models and modeling techniques. (IX, 1317, Baade; VII, 1080-84, Zimbalist) The extent of that disagreement is reflected by the $100 million difference between the opinions of Dr. Shils and Mr. Barton as to the supposed impact of the BUCs in Tampa, as well as by the fact that each of the government’s three witnesses utilized both a different multiplier and a different method of applying the different multipliers selected for them by different out-of-court witnesses. Moreover, Dr. Shils testified that the multiplier can range between 1.0 and 3.0, or higher (I, 195, Shils), thereby producing a wide variety of results. Thus, while the use of a multiplier concept is accepted within the profession of economics, the specific multiplier applied and the method of its application varies depending upon the particular industry or business evaluated, its location and other considerations, and the person who actually does the modeling to determine the multiplier. There is no single multiplier commonly and reasonably relied upon by economists.

The multipliers relied upon by Dr. Shils, Mr. Barton and Dr. Hogan are pure hearsay. The Florida Rules of Evidence permit expert reliance upon hearsay evidence, but only when "the facts and data are of a type reasonably relied upon by experts in the subject to support the opinions expressed." Section 90.704, Fla. Stats. As explained in Department of Corrections v. Williams, 549 So.2d 1071 (Fla. 5^th DCA 1989), in its discussion of Bender v. State, 472 So.2d 1370 (Fla. 3d DCA 1985),

Here, the multipliers were the catalysts for reaching the conclusions and opinions expressed by Dr. Shils, Mr. Barton and Dr. Hogan, and there was no competent evidence before the Court regarding their derivation, accuracy or reliability. There was no independent testimony about how the multiplier models were prepared, what data went into the models or even, in the cases of Dr. Hogan and Mr. Barton, the identity of the person responsible for preparing the models or supplying the multipliers to the testifying witnesses. If the government wished to substantiate the use of a particular model or multiplier, it was incumbent upon it to produce a witness who had expertise in the derivation of an appropriate one. The witnesses presented did not.

Witnesses Shils, Barton and Hogan made no independent analysis of the correct multiplier to be applied, nor did they have the expertise to do so. They simply assumed the validity of the multiplier supplied by third persons, and the facts assumed were not demonstrated in the record of this proceeding. A determination of economic impact was wholly dependent upon the correct multiplier being applied, and the government did not meet its burden of proving the underlying assumption of the conclusions reached. By assuming the correctness of the multiplier, without any basis in fact or expertise for making such an assumption, witnesses Shils, Barton and Hogan assumed the very matter at issue upon which they were called to express an opinion, and their opinions were clearly inadmissible. TK-7 Corp. v. Estate of Barbouti, 993 F.2d 722 (10^th Cir. 1993). An opinion based upon unconfirmed assumptions and an absence of underlying facts is also inadmissible under Section 90.705(2), Florida Statutes. Dempsey v. Shell Oil Co., 589 So.2d 373, 380 (Fla. 4^th DCA 1991).

There was certainly no evidence in the record of this proceeding that other economic experts would typically or reasonably rely upon the multipliers or the methodologies utilized by Dr. Shils, Mr. Barton or Dr. Hogan. Indeed, as noted above, the evidence is to the contrary. Consequently, Rule 90.704 of the Florida Evidence Code cannot supply the foundation for this inadmissible and incompetent testimony. The trial court abused its discretion in allowing, over objection, the opinion testimony of Dr. Shils, Mr. Barton and Dr. Hogan regarding the economic impact to the Tampa Bay area as a result of the BUCs, past or future Super Bowls and construction of a new stadium. The trial court’s factual and legal conclusions based upon such incompetent testimony are clearly erroneous and constitute reversible error.

The record of this case establishes that the BUCs constitute only a small to medium-sized business, compared to other private businesses in the Tampa Bay area, and that their direct economic impact upon the community is no greater than other similar-sized businesses and much smaller than larger businesses in the area. (I, 62, 75-78, Greco; II, 252, 257, Wilson; IX, 1325, Baade; II, 221, Shils; VII, 1076-77, Zimbalist) Other businesses in Tampa do not receive huge subsidies from local or state government. (II, 256, Wilson) Analyses of previous Super Bowls in Tampa show no measurable impact upon the local economy. (VII, 1186-88, Porter; V, 778-79, 781, Clark) Barton’s analysis concerning the economic impact of construction, which does not consider the offsetting impact of higher taxes in the community, if correct and carried to its logical extreme, "would unlock the secret of economic success. We could simply build a stadium, tear it down, built it again, tear it down, and each time there would be this multiple event magnifying the local economy." (VII, 1115, Zimbalist)

POINT III. THE TRIAL JUDGE ABUSED HIS DISCRETION IN ALLOWING LAY WITNESSES TO GIVE OPINION TESTIMONY AND IN RELYING UPON SUCH TESTIMONY IN HIS FACTUAL AND LEGAL ANALYSIS, IN MAKING FINDINGS NOT SUPPORTED BY COMPETENT, SUBSTANTIAL EVIDENCE AND IN EXCLUDING OPINION TESTIMONY FROM A QUALIFIED EXPERT.

In disregard of the fact that the government’s witnesses Kleman, Wilson, Clark and Goodell were not offered or qualified as experts in this proceeding, nor were they disclosed as such in pretrial discovery, the trial court, over objection, allowed these witnesses to render expert opinions. For example, Kleman was permitted to render opinions as to the economic value of having a Super Bowl in Tampa (V, 704-05), the intangible benefits of keeping the BUCs in Tampa (V, 707-09), an interpretation of the Internal Revenue Code (V, 676-80, 725-27) and the nature of modern NFL leases (V, 700-02). Wilson was permitted to render opinions regarding the economic feasibility of renovating the existing stadium (II, 242-44, 246-48) and the intangible benefits of having the BUCs in Tampa (II, 249-51). Clark was allowed to render opinions concerning the economic loss to Tampa were the BUCs to leave Tampa (V, 747) and the intangible economic impact of having an NFL franchise team in the community (V, 741-43). Goodell was permitted to render opinions as to whether a Super Bowl award would be withdrawn if the proposed new stadium were not constructed. (VI, 851-52) The Final Judgment (Poe App. A) demonstrates that the trial judge relied upon such opinion testimony from these lay witnesses as the basis for his factual and legal analysis.

The trial court abused its’ discretion in allowing these lay witnesses to offer opinion testimony. These witnesses were neither tendered nor qualified as experts and, indeed, had no expertise in the areas in which their opinions were sought and given. As such, they were not competent to render the opinions offered at trial, and the trial judge erred in relying on such incompetent evidence as the basis for his factual and legal analysis. Husky Industries Inc. v. Black, 434 So.2d 988 (Fla. 4^th DCA 1983); Laffman v. Sherrod, 565 So.2d 760 (Fla. 3d DCA 1990).

The opinion testimony referenced above was not based upon first-hand, personal knowledge of facts within the meaning of Section 90.604, Florida Statutes, nor was it in the nature of perceptions based upon personal observations, so as to fall within Section 90.701(1), Florida Statutes. National Communication Industries v. Tarlini, 367 So.2d 670 (Fla. 1^st DCA 1979); Somerville v. State, 584 So.2d 200 (Fla. 1^st DCA 1991); Fino v. Nodine, 646 So.2d 746 (Fla. 4^th DCA 1995). Instead, the opinions expressed by each of these lay witnesses concerned matters of specialized knowledge, skill, experience or training which required an expert witness to draw the conclusions reached. Accordingly, they were inadmissible pursuant to Section 90.701(2), Florida Statutes. Kelvin v. State, 610 So.2d 1359 (Fla. 1^st DCA 1992); Adamson v. State, 569 So.2d 495 (Fla. 3d DCA 1990).

In addition, the trial court made several findings which find no support whatsoever in the record of this proceeding. For example, the Final Judgment contains a finding that even if the existing stadium were repaired, some users might relocate to a competing venue. (Poe App. A, 3) The sole inference in the record to such a finding came from lay witness Kleman, who stated: "I suspect at some point it might be more difficult to attract some of the large gate shows . . . " (Emphasis supplied) (V, 715) Such conjecture and speculation was inadmissible and certainly can not form any basis for the trial court’s finding. Likewise, the trial court’s finding that "without an NFL team the community would find it more difficult to compete with other cities for new business" (Poe App. A, 8) is not only unsupported by any competent evidence of record but is, in fact, contrary to the admission of Kleman that he was not aware of a single business that moved to Tampa because it had an NFL franchise team. (V, 720)

Finally, the trial judge abused his discretion by precluding Poe’s witness, Jim Wurdeman, from providing expert testimony in the areas of financial analysis and planning. While allowing witness Barton (who was neither an economist nor an accountant and who had no degree in the area tendered) to testify as an expert in conducting economic impact studies of a professional sports team (Vol. II, 264-68), the trial judge disparately refused to accept Jim Wurdeman (who has a degree in accounting and finance, was previously licensed and practiced as a Certified Public Accountant, has consistently practiced in the areas of financial analysis and planning in Tampa for the past 17 years, and has operated his own financial consulting firm since 1986) as an expert in financial analysis and planning. Mr. Wurdeman was not offered as an expert accountant or economist, yet he was disqualified because he was not presently licensed as a Certified Public Accountant. (IX, 1244, 1253) Mr. Wurdeman’s knowledge, skill, experience, training and education clearly qualifies him as an expert under Section 90.702 of the Florida Evidence Code, and his qualifications clearly meet the four-prong test for the admissibility of expert testimony, as set forth in CSX Transportation, Inc. v. Whittier, 584 So.2d 579, 584 (Fla. 4^th DCA 1991), rev.denied 595 So.2d 556 (Fla. 1992). The exclusion of Mr. Wurdeman’s expert testimony regarding the actual costs of the proposed stadium project and the actual economic benefits which the BUCs will receive over the 30-year term of the Stadium Agreement, matters clearly within the realm of financial analysis and planning, constitutes reversible error.

CONCLUSION

The proposed new stadium project clearly constitutes a violation of the Florida Constitution, which prohibits the government from using its taxing power or lending its credit to aid a private person or entity. The trial judge erred in his legal analysis and interpretation of Article VII, Section 10 of the Florida Constitution; and also erred in his evidentiary rulings, thereby resulting in his erroneous factual findings and legal analysis. While the Final Judgment’s ultimate adjudications are correct (the denial of the governments’ Complaint to validate the bonds and the granting of Mr. Poe’s Complaint for a Declaratory Statement), the factual and legal analysis contained within the Final Judgment constitute reversible error. This Court should declare the entire Stadium Agreement in violation of Florida’s Constitution, and refuse to validate the proposed bonds and other documents which are dependent upon the Stadium Agreement.

Respectfully submitted this 17^th day of April 1997.

• And-

THOMAS K. MORRISON, ESQUIRE

I HEREBY CERTIFY that the original and seven copies of the foregoing have been furnished by Hand Delivery to Mr. Sid J. White, Clerk of the Supreme Court, Supreme Court Building, 500 South Duval Street, Tallahassee, Florida, 32399-1925; and a true and correct copy of the foregoing has been furnished by Federal Express to Emeline C. Acton, Esquire, and Christine M. Beck, Esquire, County Attorney’s Office, 601 E. Kennedy Boulevard, Tampa, Florida, 33602; James Palermo, Esquire, and Jerry Gewirtz, Esquire, City Attorney’s Office, City Hall, 6^th Floor, 315 E. Kennedy Boulevard, Tampa, Florida, 33602-5211; Donald Gifford, Esquire, and John Van Voris, Esquire, Shackleford, Farrior, Stallings & Evans, 501 E. Kennedy Boulevard, 17^th Floor, Tampa, Florida, 33602; and J. Michael Hayes, General Counsel, State Attorney’s Office, Thirteenth Judicial Circuit, 5^th Floor County Courthouse Annex, Tampa, Florida, 33602, this 17^th day of April, 1997.

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