Bill Poe's Very Fine Day With The "Supremes"
In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other.
--Voltaire --
By John F. Sugg
Brought to You By: Tamarind Associates Inc.
TALLAHASSEE – He’s not an actor, but Jerry Gewirtz was very much on stage May 7, giving a performance he hoped would bring the house down.
Behind him in an auditorium that is part sanctum sanctorum, part theater and wholly unconvincing in its attempt to imitate a classic Greek motif, the audience was divided by both a center aisle and philosophy.
To the left, approval-nodding heads floated above a sea of well-tailored blue and gray suits. It was a power gathering of two dozen – Tampa’s mayor and first lady, Hillsborough’s administrator, two county commissioners, the Tampa Sports Authority’s newly appointed boss, a half-dozen current and past TSA members, miscellaneous well-connected sports boosters, a former Florida Cabinet officer, business executives and dealmakers, the city’s most influential sports columnist. Plus lawyers, lots of lawyers.
Across the aisle was a smaller group, more casually attired – a sport shirt, sartorially heretical in this solemn hall, was evident. There sat a former Tampa mayor, his wife, son, brother and few friends. They intently listened to the speaker, polite disagreement evident in their frowns.
Bill Poe, the former mayor – a tall, slightly awkward man with deep lines on his face marking his 65 years -- kept shaking his head as Gewirtz spoke. Poe occasionally tugged at a companion’s wrist – a nervous habit he has for emphasizing points – and whispered a word or two. He was the producer of that day’s show. He wrote the opening lines in an evolving and free form script, he anted his own money to get the show on the stage, his challenge beckoned the audience.
Unlike conventional drama, the critics for this performance did not hide among the crowd. They were on a second stage beyond where Gewirtz was delivering his lines. Raised about three feet above the main floor, the seven late-middle-aged and elderly men, six white and one black, looked down from a level that was a bit shy of majestic but certainly magisterial.
These were, as some lawyers call them in a tiny insider’s joke, Jerry and the Supremes. That’s Chief Justice Gerald Kogan and his six associates on the Florida Supreme Court. It was a busy week for the justices. The court was celebrating its 150th year, and a reception was scheduled for those still living among the 75 men and one woman who have donned the justices’ black robes. An art exhibit in the court building’s rotunda needed a bit of fanfare for its opening. There were classes to be taught new lawyers to be sworn in, a pro-life demonstration to be endured, and elementary school children to be awed with a mock hearing. Oh, yes, and cases to be pondered.
One man, suffering from AIDS, wanted the justices’ approval to die. Another man beseeched the court to stop the state from cooking him in Old Sparky. The blood bank industry sought to establish its liability, or lack thereof, in AIDS-infected products. Education advocates wanted to add an amendment on school funding to the state’s constitution.
The constitution under fire
But if the court’s high point that week can be measured by the size of the media pack, Bill Poe’s drama was the trophy event. TV trucks, their antennae beaming minute-by-minute updates to Tampa, staked out the parking lots around the Supreme Court building.
After the curtain fell on Poe’s 45-minute, one-act play, street theater ensued on the court’s steps that sweep down to South Duval Street. Broadcast journalists – bodies canted forward, microphones brandished high like bayonets, cameras pushing between, under and over for that elusive best shot -- scurried en masse, chasing Tampa officials and lawyers exiting the building.
Amid the pushing and jostling, the questions were breathless: "How do you think the justices reacted…" "What will you do if you lose…" "Can you explain…"
It was a thoroughly entertaining spectacle, with small plays within plays. Mayor Dick Greco, his lines delivered with the slightly weary tone of many repetitions, was lecturing two reporters on how "Bill Poe approved adding skyboxes to Tampa Stadium when he was mayor, and $6 million in (federal) funds to help build ..."
Poe, at that very moment, walked behind Greco, overheard the mayor’s declaiming and paused. "Phony, that’s phony," Poe grumbled. "(The Bucs’ former owner Hugh) Culverhouse paid $2 million a year to help pay for the improvements to the stadium and for maintenance. That’s completely different from this case."
Greco blinked. Had he heard? Perhaps, but if he allowed a distraction before his lines were all spoken, the reporters might move on and pay heed to the enemy. So, he never turned around, and completed his sentence with only a heartbeat of a pause: "…the Hyatt downtown."
For most, the issue that day was simple: Will Tampa get a new stadium for the Buccaneers? Or will Poe’s lawyers, uttering arcane legal incantations, kill the stadium funding and send the National Football League team packing off to another town?
More than a "game" is at stake
There’s far, far more at stake, however. Behind this case is a massive -- some would say monstrous – change in the way government does business. For decades, corporations and their patrons among government officials have sought to undermine a straightforward passage in the Florida Constitution -- Article VII, Section 10:
"Neither the State nor any county, school district, municipality, special district, or agency of any of them, shall become a joint owner with, or stockholder of, or give or lend or use its taxing power or credit to aid any corporation, association, partnership or person…."
The politicians point to many laudable projects accomplished, they say, by a modern interpretation of a 120-year-old ban on mixing governance and entrepreneurship. There have been dozens of court decisions addressing this issue, many of them "bond validation" cases where, as with the Bucs’ stadium dispute, governments seek a judicial nod for their contention that aiding private business is occasionally constitutional. The sum total of the decisions is murky, to say the least.
"The Supreme Court has really made a mess of Article VII, Section 10," says University of Florida law professor Joe Little, one of the state’s foremost constitutional scholars. "The court went wrong when it deviated from plain wording."
The court’s decision in the Poe case, expected before July 1, could further muddy the issue. Or, it could, as Little suggests, establish a "much-needed cleavage between public financing and private business."
And that brings us back to Gewirtz, an earnest Tampa assistant city attorney who was making his maiden appearance before the Supreme Court. His was not the only performance at the Poe hearing; County Attorney Emeline Acton and Poe’s lawyer, Chris Bentley, had the starring roles. And Gewirtz’s recitation may not have been the best. But it was pivotal.
Portent of things to come?
During a soliloquy extolling the financial benefits of a new stadium – "The trial judge conservatively estimated a $3 billion to $6 billion…" Gewirtz was saying – a justice interrupted. Such events are not uncommon during arguments before the court; supplicant lawyers don’t dare regard them as rude, just routine.
Justice Harry Lee Anstead, the junior jurist on the high court, leaned forward and mused that if Gewirtz was correct in his assessment of what was an acceptable use of public monies to aid private businesses, "Can there be a deal too sweet?"
Gewirtz verbally dodged left and then feinted right. Relaxed and at ease, his oratorical dance was almost elegant. He skillfully evoked his side’s oft-stated legal buzzwords and arguments: "Intangible benefits ..." "…clearly economic benefits outweigh any benefit to the Bucs …" "…even if benefits are more to the Bucs, still a paramount public benefit…"
The Answer is No…
He never did answer the question, of course. There is, however, a very simple rejoinder to Anstead’s query: No.
A decision siding with the local governments and the Bucs, allowing them to spend $318 million in public funds on a new stadium (as much as $424 million total public cost, by Poe’s calculations), could dramatically change the balance of previous decisions by the Supreme Court.
No deal would be too sweet. Virtually any expenditure of public funds to aid a favored business could be justified as long as some city council, county commission or appointed board declared the deal to have a "paramount public purpose."
There are those who say tremors from a pro-Bucs decision won’t spread past the county line. "Poe’s suit will only settle this issue. It won’t solve the larger problem," says Fred Karl, a former Supreme Court justice and Hillsborough administrator.
UF’s Little disagrees: "The Tampa case would give the court a nice place to draw the line."
Already, other deals may hang in the balance. In Miami, there are plans to spend $650 million – perhaps as much as $1 billion – to build the Miami Heat basketball team a new arena. The funding issues have parallels to the Bucs’ stadium. "We are definitely hopeful that (Poe) wins his case," says Dan Paul, a Miami lawyer who has led the opposition to a new Heat arena.
The practical outcome? Officials say the political universe as we know it will collapse into a black hole of uncertainty if the government loses the stadium case. "Absolutely we need to win," declares County Commissioner Ed Turanchik, who joined the well-heeled pro-Bucs throng in Tallahassee for the hearing. "If we lose, we won’t be able to conduct business. Any expenditure will be suspect."
And, County Attorney Acton says a win for Poe will have a "chilling effect" on government.
Baloney, say critics who see politicians usurping power the constitution intended to deny them. "When you’re curbing the power of legislative bodies, such as city councils and the like, to spend money, you’re curbing the power of individual politicians. Power, that’s what this is all about," says Dale Rubin, a former Willamette College law professor who last year authored an analysis of the Florida constitutional issue for the James Madison Institute.
From the iron horse to the gridiron
Once upon a time, say a little more than a hundred years ago, things were very much like today in many respects. Cities and counties in Florida and around the nation had become stockholders and bondholders in commercial enterprises. The governments had lent money to companies and entrepreneurs. Vast public landholdings were turned over to railroads. If asked, politicians of the day would have probably justified their actions as serving a "public purpose."
Remember that phrase: Public purpose.
Bill Poe’s brief to the Supreme Court recalls that period in the 19th Century. "Many of these entities were poorly managed and failed, leaving the governmental entities, and ultimately the taxpayers, responsible for their debts and obligations."
Sound familiar? Perhaps some recent events will illustrate the problems faced by Florida’s citizens of yesteryear. Just a few months ago, for example, the city of Miami took a nosedive into insolvency. A major contributing factor was a series of ill-advised leaseholds – turning over public assets to private businesses. Need an example closer to home of a misguided "public-private partnership?" Look no further than the failed Florida Aquarium on Tampa’s Channelside Drive.
Florida found a solution 122 years ago. A provision was added to the state’s constitution that made it illegal for governments "to obtain or appropriate money" for private ventures. Ultimately, the wording was modified and, with a new state constitution in 1968, became Article VII, Section 10. "The essence of the 1875 constitutional amendment was to restrict the activities and functions of the state, counties and municipalities to that of government, and to forbid their engaging directly or indirectly in commercial enterprises," states Poe’s brief to the high court.
Bentley, one of Poe’s attorneys, says: "The constitution is very straightforward. It’s very hard to misunderstand." Perhaps.
Prior to the 1968 constitution, the decisions were pretty clear. "Public money cannot be appropriated for a private purpose…." the court ruled in 1952. "It does not matter (what) such undertakings may be called or how worthwhile they may appear to be."
One case even nixed bonds for a stadium, when in 1966 Deerfield Beach sought to build a spring training facility for the Pittsburgh Pirates.
In 1967, Jacksonville had sought to use bond money for port construction that would have benefited maritime companies. The firms would have been responsible for the debt, and the public financing was sought because of the low tax-free interest rates available to governments. The Supreme Court said no.
The next year, however, with the new constitution, a provision was added that allowed bond issues for ports, airports and industrial development. Typically, these are called "industrial revenue bonds," and although they are issued by local governments in order to be exempt from federal taxation, the companies receiving the loans are obligated to pay the debt. Taxpayers aren’t on the hook.
Dollars for speedways and stadiums
In the last three decades, "there has been no hard and fast bright line on this issue," says Alan Sundberg, a former Supreme Court justice who is now Florida State University’s general counsel.
That ambiguity has made things pretty messy, which is why so many lawyers are collecting so many thousands of dollars in fees arguing cases such as the Bucs’ stadium.
However, Poe’s attorney, Bentley, contends that the cases fall into two broad categories:
The court has allowed publicly financed projects to have "incidental private benefit" when the bonds are repaid from proceeds of the project itself. Both sides, for example, cite the Daytona International Speedway. While government lawyers claim the case as proof that sports facilities can be financed via public bond issues, Bentley quickly counters that the Speedway’s debt was repaid entirely by revenues from the race track, a fact the court noted when it approved the financing in 1956. Other cases are as diverse as drainage bonds on Disney property, and bonds for a nursing home – all paid for by the projects themselves.
When no private enterprise is involved, the court has allowed projects to be funded by general tax revenues. Projects such as St. Petersburg’s Dome (built long before the city landed the Devil Rays), the Tangerine Bowl in Orlando and improvements to Miami’s Orange Bow all received the court’s blessing.
"In each case," says Diane Tremor, another of Poe’s attorneys, "there was no tenant who would receive a benefit, or there was no one challenging the lease, so it wasn’t an issue before the court."
(Tampa Stadium, funded with little controversy in 1967, was built nine years before the Bucs were born. Improvements, including skyboxes, for the Bucs were approved in 1975 and 1977 – but the team helped pay.)
Bentley concedes there is "one chink in the armor, but not a big one." A $7 million bond issue in Panama City was used to fill in land, and build a civic center, city hall and municipal marina. There were also some shops – private businesses enjoying public financing.
The government’s brief says of Bentley’s theory, "No case so holds and there are cases to the contrary." The first contrary case mentioned by the government is Panama City.
However, in that case, the shops occupied a mere 1.2 percent of the land, were considered necessary for the success of the entire development, and contributed a hefty 20 percent of the revenues collected by the city to help pay the bonds. "That’s not really an exception," Bentley says. "The private benefit is, truly, incidental."
The clincher
Poe’s brief concludes: "The 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."
By that standard, the lease with the Bucs would be overwhelming unconstitutional – virtually all of the money to pay for the stadium comes from general taxes and the all of the money generated by the facility itself goes to the team.
County Attorney Emeline Acton and Gewirtz, in their brief, say the Supreme Court "must reject Poe’s novel theory."
The government lawyers were offered opportunities to provide exceptions to Poe’s claims. Although they cited cases – including the ones mentioned above – none appeared to be a successful rebuttal. Some of the cases did not deal with bond issues, but only spoke to the public purpose of sports facilities. Other cases – notably the Daytona Speedway -- support the descriptions by Poe’s attorneys of facilities generating the money to pay for their own debt.
Acton, for example, mentioned a 1980 case involving a convention center and hotel in Miami as proof that general taxes were used for private gain, and her brief to the Supreme Court states: "private interests benefited greatly from the publicly financed project." Yet, the court’s decision in the case is clear – the construction and operation of the hotel and other facilities would be at the developer’s "own expense."
License to spend tax dollars
Here’s the catch with Poe’s arguments – and it’s a giant one.
While all of the cases may fall into the two categories Bentley described, the Supreme Court has never established those criteria as any sort of rule. "Despite many decisions, there is no defining line," observes Arthur England, a former Supreme Court justice who is now a Miami appellate attorney.
Acton comments: "The court is struggling" to find a guiding principle. Poe’s attorney, Tremor, says the Bucs case would be a "good opportunity for the court to set a standard."
That opportunity opens the door for the government lawyers’ alternative theory.
"Ultimately, what this case gets down to is ‘paramount public purpose,’" Gewirtz says. According to Gewirtz and Acton, the public purpose is clear because:
There are "intangible benefits" to having a NFL team and a stadium.
A team inspires civic spirit, and a city’s importance is enhanced by the presence of sports franchises.
There is free television exposure.
Civic boosters claim it is easier to attract new businesses to a community that has a football team.
The government attorneys love to turn that argument on Poe. In the county and city brief to the Supreme Court, it is noted "Poe executed documents that found that the Bucs benefited the economy both by providing tourism and generally promoting the image of the area."
Government claims there are immense economic benefits to having the new stadium and the 40 or so events it will attract each year. Also, there is the icing of the NFL-promised 2001 Super Bowl. The public’s purported benefit is a rather elastic figure. When first touted to the justices by government lawyers, it was $3 billion. Later in that same hearing, it was $3 billion to $6 billion. Five days after the hearing, County Attorney Acton said the number was "$7 billion, and that’s before inflation" is computed.
Whatever, no one has ever described many of the specifics of where those billions will be found, other than with Bucs owner Malcolm Glazer, who will reap about $1.2 billion from the stadium over 30 years.
Nor, for that matter, has anyone offered a concrete example of a significant financial benefit resulting from the Bucs’ 21-year tenure in Tampa, other than to make the late Hugh Culverhouse fabulously wealthy.(At the Circuit Court trial of Poe’s case, considerable evidence was presented that stadiums and teams don’t contribute significantly to an area’s economy and may actually have a negative impact. Moreover, the experts contended, sports events merely shift entertainment dollars from other activities. Circuit Judge Sam Pendino rejected those claims and sided with government witnesses who said there was a financial benefit to the Bucs. Poe’s lawyers, in their appeal, have contested the credibility of the government experts, but under the appellate process, the "findings of fact" by Pendino likely will stand.)
Finally – and this is the big one – the government contends public benefit is a matter for legislative bodies, not courts, to decide. The government’s brief argues that while the trial court must decide whether the stadium serves a "paramount public purpose," the judge must "defer to the decisions of state and local public officials…. The trial court had no authority to second-guess elected public officials on the particulars of their negotiations with the Bucs."
The Florida Legislature has declared sports facilities to be a public purpose, notably in a law that allows a $2 million a year sales tax rebate on a stadium in order to attract or retain a pro franchise. The Hillsborough County Commission has deemed the Bucs stadium to be a public purpose, as have the Tampa City Council and the Tampa Sports Authority. The voters last September approved the multi-purpose bond issue that included $318 for the stadium.
In other words, say the government lawyers, the guys in black robes should butt out. Proof of public purpose, according to government lawyers, is in the declaration itself. Objective reality has little to do with it.
Accepting that argument, it’s interesting to then consider the twisting of common sense when it comes to the stadium. The government says a new stadium is for a public purpose and that the benefit to the Bucs is "incidental." Yet, the public whose purpose is allegedly being served never demanded a new stadium. The Bucs did – with a threat to leave town if the team wasn’t appeased.
The "incidental" gain to the Bucs is a windfall of $40 million a year from the stadium while the public will not even glean enough to pay the upkeep. The public’s "benefits" are promises and speculation based on highly questionable economic models; the Bucs’ have theirs guaranteed in writing.
Still, the government’s argument has merit, says former Justice England. "Judges shouldn’t second guess legislative bodies unless absolutely necessary," he says. "There should be great deference to the wishes of a community."
Poe’s lawyers disagree, of course. For the government to say that the courts shouldn’t have a say "is astounding," Bentley argues. "The courts do place great weight on the decisions of elected officials. But the courts will overturn a decision when it is arbitrary or egregious."
Put another way: Declaring a stadium or any other project to have a public purpose does not entitle politicians to do something that would be unconstitutional. "Stadiums generically serve a public purpose," Bentley said in his presentation to the court. "But the mechanism by which you fund the stadium can’t violate the constitution."
What governments have tried to do "is equate private purpose with private benefit," says law professor Rubin. "Almost any action can be said to have a public benefit. If a company creates one job, that’s a public benefit. But is it a public purpose? No. A public purpose refers to the big jobs that only government can do. Private enterprise can build stadiums and has done so.
"The real purpose of these stadiums is not public, but very private, to make the team’s owners wealthy. The public benefit is purely incidental."
When Poe won his case on March 21 in Hillsborough Circuit Court, Judge Pendino found one item – revenue from non-Bucs events – too generous to the team. Poe’s brief calls that "only one small portion of the stadium deal which renders the project unconstitutional."
"It is clear," the brief argues, "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."
Who will win?
Chris Bentley was in Hilton Head, S.C., on April 12, holding his just-born grandson. "That’s when I got a telephone message that the court had expedited the case." Bentley had to drop whatever he was doing – well, not literally – and rush back to Tallahassee.
Generally, the Supreme Court takes its own good time. However, bond cases move along faster – they’re "expedited" – because presumably the public needs whatever the bonds are going to build. The news that day for Bentley was that the speed of the already expedited stadium bond case was being ratcheted up another notch.
"I still don’t know why the court did that or who requested it," Bentley says.
That small little event is about the only signal of the court’s mood toward Bill Poe’s lawsuit. The fact that the court would hurry the case along – a benefit to the government’s side, assuming it wins – could hint at a tilt. But, said court spokesman Craig Waters, it only takes one justice to request that a case be expedited.
The rush job could also reflect many other things not at all related to the court’s mood. There are a number of serious cases before the court, for example, and the justices need to wrap things up before their annual vacation begins July 1.
What will determine the court’s decision?
The justices could focus on details, picking at points in the deal with the Bucs. Essentially, that’s what Judge Pendino did in the Circuit Court trial. The government has asked the justices that if the court takes such a micro-management approach, then the whole deal should not be thrown out. The Bucs and the governments should be allowed to eliminate or renegotiate offending provisions.
Or, the court could decide that now is the time to draw a line in the sand, to state a hard rule, to establish a principle, to end the confusion. Article VII, Section 10 could be bolstered, made to mean what it says. Or the court could enervate the idea that business and government should be separate.
The division between the two sides is very clear.
"The intent of the Article VII, Section 10 was to be a limiting doctrine," law professor Rubin says. "What politicians are trying to do is take that doctrine that says you can’t do something and turn it into something that allows you to do it."
Interestingly, County Attorney Acton agrees, after a fashion, that that is exactly what the government lawyers are arguing. She acknowledges that Article VII, Section 10 was devised to "keep government and private industry at arm’s length." However, she adds: "Now we’ve come full circle. The public wants government to be proactive in developing projects that are good for the community. The courts have responded, allowing" projects such as the stadium for the Bucs.
That’s not exactly correct. No deal in Florida history has been as sweet for a private interest as the Bucs stadium lease. The court’s decision may hinge on a question Bentley raised during his arguments to the justices: "Does the benefits received by the Buccaneers go beyond the threshold of mere incidental?"
The government counters that by adding the word "paramount" to "public purpose" – in essence maintaining that the benefits to the public overshadow the largesse to the Bucs – the deal is justified.
The justices’ questions were equally sharp to each side. Both sides made a good showing. The briefs from both sides were scholarly, if occasionally abrasive in remarks about opponents.
Each Thursday the justices release their opinions. By mid-morning on Thursday, May 15 – the first day a decision could have been handed down – a half dozen phone calls had been placed to the court from lawyers in Tampa and Tallahassee. "I held my breath, but there was no decision," Tremor says. The phone calls will continue to be made until word comes.
Or, perhaps, the decision will be made at a more basic level. On the day of the Poe case hearing, Bryan Brewer was taking a break from the broadcast media herd. A veteran WFLA 970-AM newsman, Brewer as smoking a cigarette and trying to get a cell phone connection back to his station.
"Here’s what I think about the decision," he said with a wink. "I think the justices like to go to a football game just like everyone else."
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