Computing the Jaguars' impact on Jacksonville is ‘more of an art than a science'
1994-'95: Renovation of the Gator Bowl into an NFL-grade stadium. Total cost: $134 million with $60 million provided by the city of Jacksonville. The agreement included the cost of three practice fields. As part of the plan, the city agreed to obtain an environmental assessment and pay up to $20 million to remove or correct any problems found. Jaguars agreed to pay city supplemental rent in the amount of $10,350,000 per year.
2002: $7 million by city to finance south end zone permanent platform before the 2003 Florida-Georgia game. Jaguars want to make $33 million in improvements, with the city's shares at $4.9 million.
2004: $13 million paid by city to replace scoreboard signage on Jumbotron. $41 million renovation prior to the 2005 Super Bowl, including 294 high-contrast plasma displays, the construction of three-story space in the south end zone to house the 14,000-square-foot Bud Zone and 17,000-square-foot ADT Terrace Suite, a party area with buffet dining, bar and seating. Renovation of all the private suites, press box and renovation of the East and West Touchdown Clubs. City was asked to contribute $11 million. Jaguars were given permission to sell 6,000 Super Bowl seats to raise $15 million, plus contributed $16 million of Jaguar funds.
2010: $16.6 million deal reached with EverBank for five-year naming rights of stadium. City agrees to forgo its 25 percent share of the deal, giving entire amount to Jaguars.
2012: Shad Khan spends $10 million for locker room and weight room improvements.
2014: $63 million renovation at EverBank Field, includes new video boards between north and south end zones, including the world's largest scoreboards, which will be 55 feet by 576 feet. Plans also call for adding a swimming pool and cabanas. The renovation will eliminate 7,000 seats. City agreed to pay $43.1 million.
Love them or hate them, as the Jacksonville Jaguars enter their 19th season in the National Football League, the team and its ownership have become an intrinsic part of this city's character.
It is headline news when the starting quarterback sprains his ankle in training camp, when running back Maurice Jones-Drew is involved in an altercation in a St. Augustine nightspot, when Jaguars owner Shad Khan buys a British soccer team, or when the city endorses plans to build the "world's largest scoreboards."
But the question is still unanswered: Is the money spent for the care and feeding of the Jaguars giving the citizens of Jacksonville the best bang for their buck?
Business and political leaders will tell you the team is an economic engine helping to power the Northeast Florida business sector, bringing jobs and creating interest for companies seeking to relocate to sunny Florida.
Others decry tax breaks, bed tax payments and a money-sucking stadium. They claim the cost of having an NFL team in Jacksonville is nothing more than corporate welfare for a billionaire owner and his second- or third-tier NFL team, which hasn't posted a winning record in five seasons.
Paul Mason, a University of North Florida economics professor, said no formal studies on the economic impact of the Jaguars have been done. The Jaguars approached him about conducting one, but he's still waiting to hear back on his proposal.
"They are a monumental positive force in the community because of the reputation they have," Mason said.
Over the years, there have been estimates of the Jaguars' value, but Mason said he doesn't know how those were derived.
"It's more of an art than a science," he said.
In 2009, Mayor John Peyton tagged the number at more than $130 million a year. He also said the city had another $300 million boost from the 2005 Super Bowl.
"There is no doubt that the perception of Jacksonville nationally and internationally has jumped up several notches because of the Jaguars," Mason said. "That's why it is important to keep them."
The Jax Chamber estimated last year that the Jaguars franchise contributes more than $200 million a year to the local economy.
"Since the team's inception in 1995, Jacksonville has attracted numerous large companies to Northeast Florida, including Fidelity, National Financial, Rayonier, SAFT and Deutsche Bank, among many others," the chamber stated in an October 2012 news release.
Former Mayor John Delaney, now University of North Florida president, said economics is a big reason for Jacksonville hosting the Jaguars. He was chief of staff for Mayor Ed Austin and helped broker the original lease agreement.
"It's a huge win for Jacksonville," Delaney said. "The Jaguars have placed Jacksonville on the national map and now with Shad Khan, on the international map."
As mayor, Delaney said, he was frequently told by economic prospects that the particular company was considering a move to the area because of the Jaguars.
Over the years, Delaney said, published stories using "voodoo math" made some people question if the city had given the team a "sweetheart deal" or "gave away the farm" in its eagerness to win a franchise, but he said those people are wrong.
City Councilman John Crescimbeni, who voted against the original contract in 1993, said he has been surprised about the Jaguars' impact.
"The city has probably achieved a net gain in having a team here," he said. "It has been a good deal, although I wish we would have had a better position as landlord in the lease. We are ahead of the game in terms of economic impact in the community."
Crescimbeni said when he talked to businesses that hire large numbers of employees who have moved to the city since 1993 about their reasons for choosing Jacksonville, he expected them to talk about the low taxes, available work force, weather, the beaches and the river. Most of them mention the NFL and the Jaguars.
"They recognize us as part of an elite club of American cities," he said.
Former Mayor Tommy Hazouri, who confesses he and his wife never miss a home game, said he and former Mayor Jake Godbold were focused on getting an NFL team.
"As mayor, I publicly made attracting an NFL team to Jacksonville our city's No. 1 economic priority," Hazouri said. "And I continue to say it is the single most important dynamic that puts Jacksonville on the search engine for other companies to see."
But Dr. Brian Mills, an assistant professor of tourism, recreation and sports management at the University of Florida, said the benefits might not be as rosy as some expect.
"Many of the direct economic benefits tend to be overstated," Mills said. "As a whole, the current situation in Jacksonville seems favorable to the team."
Both Delaney and Crescimbeni claim the social impact of the Jaguars on the city cannot be underestimated.
"Walking into that stadium the night of the first game, there were people from all over town, all income levels and all races," Delaney said. "It was an incredible unifier."
"It has helped a great deal with our image of ourselves," Crescimbeni said. "It has been a socioeconomic eraser. Fans come from all walks of life, rich and poor."
Marvin Edwards, a Folio Weekly contributor for several decades, said with all the problems facing the city, including fighting crime, maintaining libraries and improving the education system, having and keeping a football team should fall way down on the list of priorities.
Since the birth of the Jaguars, Edwards has written about the stadium, battling the city for several years for public records on stadium renovation and later the Super Bowl, threatening legal action before being given 25 boxes of related material.
The documents he retrieved showed the stadium renovation to bring it up to NFL standards cost some $144 million, most of it from the city of Jacksonville. Hosting the Super Bowl in 2005 cost the city another $11 million.
"A team may be fine, but it should not be the top priority," Edwards said.
Addressing plans for a huge scoreboard with a swimming pool, Edwards said, "You have to have a pigskin for a brain" to support such a project.
"If you want a big screen like that, let the Jaguars foot the entire bill," he said.
John Winkler, president of Concerned Taxpayers of Duval County, said the city's financial support of the Jaguars is a prime example of corporate welfare."Like blackmail, once payments start, they never end. Sports teams tend to be one of the most extreme examples of this taxpayer extortion," Winkler wrote in an email.
Winkler and other members of his organization said if owner Shad Khan believes the new scoreboard is a great idea, let him pay for it himself.
"Selling bonds to finance a scoreboard [which is what it would take] is like taking out a 30-year mortgage to buy a television. It might be possible, but the mere ability to do something stupid does not mean it should be done."
Victor Wilhelm, past president of the group, said, "There are old ladies on the Northwest side who never go to the stadium and will never see those screens and end up paying for it."
Joe Andrews, treasurer of Concerned Taxpayers and a member of the city's Taxation, Revenue & Utilization of Expenditures (TRUE) Commission, said sponsoring a professional sports team is not a core function of government. He believes the decision to seek the Jaguars "was some kind of emotional, euphoric attitude."
"I don't think the city should be spending taxpayer money to bring a team into town," said Andrews, an economist.
Recently, Forbes magazine listed the value of all 32 NFL teams, placing the Jaguars as the 31st team in value at $840 million, a 9 percent increase since last year. The new ranking moves Jacksonville above Oakland, which is worth about $825 million. The latest report shows the Jaguars had $260 million in revenue and $15.5 million in operating income. Last year, the Jaguars were dead last, with a value of $770 million.
With the addition of new Head Coach Gus Bradley and new General Manager David Caldwell, fans are anticipating the upcoming season, hoping at least for something better than last year's dismal 2-14 record.
"We're excited," said Marc Lepecheur, a founding member of the fan group Bold City Brigade. "We're going to improve, that's for sure."
Lepecheur, 27, has been a fan since the Jaguars' arrival and will have season tickets for the first time this year.
"I'm part of generation Jaguars. I grew up with the team," he said, adding that his father took him to the first home game in 1995, when the Jaguars took on the Houston Oilers.
Lepecheur has met the new coach and the general manager and has been impressed.
"Their passion — it is infectious," he said.
EverBank Field, where the Jaguars will play seven home games each year for the next four years, shows little resemblance to the original Gator Bowl. To secure the team, the city agreed to a $121 million rebuild in 1995. Constant building and remodeling projects have continued, with many funded by the franchise and others funded by taxpayers.
The Jaguars and the city recently announced plans for a $63 million project that will begin at the end of this season and will be finished for the start of the 2014 season.
The "world's largest scoreboards" will be built in each end zone. In addition, seven LED board displays will be built around the stadium and 7,000 seats will be removed from the north end zone to create a "fan engagement area," as well as a control room and support equipment for the scoreboards. The fan area is scheduled to have a real swimming pool and palm trees.
The city's share of the project is $43.1 million or 68.4 percent, while the Jaguars are contributing $19.9 million or 31.6 percent.
Glenn Hansen, the city's budget director, said the city and the Jaguars are still negotiating the details of a contract and the city is still trying to determine "revenue streams" to pay for the project. He did not mention what they were considering, saying they were involved in "sensitive negotiations."
"Just to be clear, the scoreboard and deck are not included in the budget," said David DeCamp, a spokesman for Mayor Alvin Brown. "A lease amendment and legislation are necessary before funding is appropriated or authorized."
At a news conference, Khan talked about the importance of the upgrades, which would require the removal of some 7,000 seats, putting an end to the tarps added in 2005 that covered 9,703 seats, to bring down the stadium's seating capacity to 67,246.
Seating can be expanded to about 83,000 seats for college football games. The city has budgeted $269,379 for the Florida-Georgia game, which includes adding seats to the stadium and removing them after the game, but also other stadium costs. The city did not have a figure immediately available breaking down the budgeted item.
Mayor Brown said he supported the new scoreboard plans.
"The stadium is publicly owned, and the city has a responsibility under the lease to keep the stadium up to date," Brown said. "I'm on board and support it and conceptually agree with the concept," he added.
How the city will pay for the upgrades is a problem for some.
"I don't have heartburn over the scoreboard," said Crescimbeni, who was still unclear about the funding for the improvements. "If it is coming out of the general fund or if we are raising taxes and closing libraries, that is going to be a problem."
Another rough spot in the road for the Jaguars and the city occurred last fall during the battle over whether to give a new contract to manage city facilities, including EverBank Field, to SMG or another company, Global Spectrum.
In August 2012, the Professional Services Evaluation Committee recommended that Global Spectrum should be awarded the contract. The Jaguars insisted on SMG.
On Dec. 15 that year, Brown and chief administrative officer Karen Bowling flew in a Jaguars plane to meet with Khan and SMG officials on his yacht in Miami. DeCamp said Bowling described it as a "get acquainted meeting" and no action was taken on the contract. Bowling had another meeting with SMG in New York City on the issue.
At a Dec. 22 new conference on the steps of City Hall, Brown and Khan announced a new three-year contract had been awarded to SMG. DeCamp said it had been signed that day.
The new contract slashed SMG's management fee from about $1 million a year to $100,000, with the option of a $100,000 bonus. SMG also agreed to contribute $1 million to a capital grant fund and set up a $500,000 fund to attract and promote events at the city facilities it runs.
SMG gets exclusive rights to provide concessions at city venues and guaranteed the city $1.6 million a year in net profits.
In 2010, the city and Jaguars sold naming rights to EverBank for $16.6 million in a five-year deal. The city was supposed to get a 25 percent share, or $4.15 million, but agreed to allow the Jaguars to pocket the entire fee.
The city received about half of the $6.2 million agreement with Alltel for the naming rights from 1997 to 2007.
The lack of transparency in the city's dealings with the Jaguars franchise with its overlapping contracts, amendments to contracts, agreements and mega-million-dollar deals — sometimes negotiated aboard private yachts docked at the other end of the state — often leave the average taxpayer suspecting something is amiss.
Crescimbeni said after the original lease was signed in 1993 with a group known as Touchdown Jacksonville (which included local business and political heavyweights such as Tom Petway and Jeb Bush), there have been 10 amendments, some of them substantial.
"The lease today is far different from the original," said Crescimbeni.
Harry Reagan, who was on the City Council when the lease was discussed, said he remembers having some concerns and also voted against it.
"Generally, it was a question of which costs should be paid by the city and which by the team," Reagan said. "I had several amendments to the lease ready to be introduced the day of the decision and couldn't even get them discussed on the floor of the Council. I don't think I expected to prevail, but I wanted to have them at least discussed."
The cost of renovations at the time of the original lease was an issue before the City Council, Delaney said.
At the time, the city had already committed to spending about $50 million to renovate the aging Gator Bowl facility to satisfy the demands of the universities of Georgia and Florida to keep the Southeastern Conference game in Jacksonville.
Except for the two years the stadium was being renovated for NFL football, the popular college game has been played in Jacksonville every year since 1933, with the ticket allotment split evenly between the two schools.
To satisfy the group attempting to convince the NFL to award the franchise to Jacksonville, the city agreed to fund $121 million in improvements, Delaney said.
Things moved into high gear when the city was awarded the team.
At the building site, the Jaguars set up shop in a group of mobile offices. Shoe magnate and owner Wayne Weaver convinced Boston College Head Coach Tom Coughlin to come aboard as the new team's first head coach. Coughlin was fired in 2003 after three losing seasons. He went on to become head coach of the New York Giants, leading them to Super Bowl wins in 2007 and 2011.
Most of the original stadium was torn down, and construction was completed before the Jaguars opened their inaugural 1995 season.
The original lease gave the Jaguars all the profits from parking, concessions, advertising and tax rebates; these were necessary for a team to survive in this small market, Delaney said. Now, most of those dollars go to paying off the bonds to renovate each year.
Delaney said franchise owners in large markets such as Dallas can own their own stadiums and can afford to pay their own renovation costs, while smaller markets like Jacksonville struggle.
Since 1995, a total of 9,212,329 people have attended NFL games at the site now known as EverBank Field, according to figures in the Jaguars media guide. That's an average of 65,000 fans per game.
While attendance can be applicable to market size and the size of the stadium, Jacksonville ranked 20th out of 32 teams in attendance in 2012, with a total of 519,872 local fans, an average of 64,984 per game.
The Jaguars sold an average of 70,184 tickets per game in 1998, the year after it made the playoffs for the second year as a wild card team. Team statistics show they sold a record 561,472 tickets for that season.
The team's low year was 2009, when an average of 49,395 tickets were bought per game — 397,314 for the season.
After attendance problems, the Jaguars avoided blackouts in 2011 and 2012. NFL policy allows the Jaguars to purchase their own tickets for 34 cents on the dollar to avoid a blackout. Both Winn-Dixie and Anheuser-Busch bought thousands of tickets to enable the games to be broadcast in the local TV market.
On Aug. 15, 2001, the grocery store chain pledged to purchase tickets to evade blackouts of seven games with meager ticket sales.
Winn-Dixie also pledged $1 million to become the first major sponsor of the Super Bowl Host Committee. In February 2005, the company filed for reorganization under Chapter 11 bankruptcy laws. Earlier this year, after it merged with the BI-LO supermarket chain, Winn-Dixie dropped its sponsorship agreement with the Jaguars.
The Jaguars are playing only seven games at EverBank Field this year and the next three years because Khan has agreed for his team to play one game a year in London's Wembley Stadium. He recently purchased a British soccer team, Fulham Football Club, for $300 million from Egyptian businessman Mohamed Al Fayed, the father of Dodi Fayed, who with Princess Diana was killed in a Paris car crash in August 1997.
Revenues from the 2 percent tourist development tax, a $2 million yearly tax rebate from the state, the fee the Jaguars and others pay to rent the stadium, parking fees and NFL ticket surcharges are placed in the EverBank Field Enterprise Fund to pay stadium-related debt and stadium operating and maintenance costs.
In fiscal year 2012, those revenues brought in $12.8 million and the city owed $10.63 in stadium-related debt, leaving $2.1 million available for operating and maintenance costs.
An attempt to give the Jaguars and other professional sports teams in Florida another $2 million tax break for stadium improvements failed in the 2013 session of the state Legislature.
Khan seems anxious to convince the nation that the Jaguars are not a fly-by-night franchise.
"We're making a statement to the NFL, to the nation and to the world that Jacksonville is world-class," Khan said at the news conference announcing the latest upgrade projects.