Dolphins’ stadium handoff must tackle money issues
Written by Scott Blake on March 12, 2014
Before the Miami Dolphins would turn over ownership of Sun Life Stadium to Miami-Dade County, the two sides will have to settle a number of money issues – and apparently Dolphins owner Stephen Ross isn’t all that concerned if he gets the short end of the deal.
The crux of the proposal, as put forth by Mr. Ross, calls for the Dolphins to pay $350 million or more to renovate the stadium as a way to attract future Super Bowls, Dolphins CEO Tom Garfinkel told Miami Today on Tuesday.
Mr. Ross’s latest proposal is an alternative to last year’s failed attempt by the Dolphins to get financial concessions from the county and the state to help pay for the renovation.
Mr. Garfinkel said Mr. Ross isn’t thinking about selling or moving the team and he isn’t proposing to pay for the entire renovation to later make money, as the Dolphins probably would never recoup the project’s cost through savings on taxes and other expenses.
Rather, he added, Mr. Ross wants to secure the team’s future in Miami and help the area draw Super Bowls.
One goal is for Miami to make a competitive bid for the 2018 Super Bowl, Mr. Garfinkel said.
“Mr. Ross thinks Miami is a world-class city that deserves a world-class facility,” he added. “And to secure the team’s future in Miami is really why he is doing this.”
While he wouldn’t discuss details of conveying the stadium to the county, Mr. Garfinkel said the Dolphins will look for similar terms to what the pro baseball’s Miami Marlins and pro basketball’s Miami Heat received in their deals to play in county-owned facilities.
“We’d like to be treated similar to the other sports franchises in the area,” he added.
In a statement this week about Mr. Ross’s proposal and the prospect of bringing more Super Bowls to Miami, county Mayor Carlos Gimenez said: “The economic impact of these events cannot be overstated, and therefore we always want to remain competitive as a host for the Super Bowl and other such events.
“I have met with Dolphins owner Stephen Ross and we agree that unless renovations are made to Sun Life Stadium, Miami-Dade County will lose the opportunity to host another Super Bowl,” the mayor continued.
“Mr. Ross’ proposal is better than last year’s,” he added. “However, there are still hurdles that the Dolphins organization must overcome before I feel comfortable with the proposal.”
Gimenez spokesman Fernando Figueredo told Miami Today the mayor wants to ensure the county and the City of Miami Gardens, home of the Sun Life Stadium, are “made whole” to limit the amount of tax revenue they would lose, as the Dolphins would no longer be responsible for paying taxes on the stadium.
Mr. Figueredo acknowledged the tax money at stake – estimated at about $3.8 million a year – is relatively minor compared with some other monetary issues that need to be worked out.
Those issues include negotiating a lease with the Dolphins to rent the stadium, settling on who would pay the stadium’s maintenance and operation costs, and determining who would get revenues for non-Dolphins events at the site.
“These are things that have to be negotiated,” Mr. Figueredo said. “It’s hard to give you a definitive answer now. At this point, it would be largely speculation.”
However, Mr. Figueredo said the county already has some expectations about what it should get out of the deal:
νA “long-term” lease with the Dolphins that would ensure the team would remain at the stadium for many years to come. In addition to the rent the Dolphins would pay, a long lease presumably would be a safeguard against having the team move outside the area, but apparently no one from the team has raised that issue.
When asked if the Dolphins could be thinking about eventually relocating, Mr. Figueredo said, “I don’t think so.”
Mr. Garfinkel pooh-poohed the idea of the Dolphins leaving Miami.
“Why spend $350 million to $400 million on the stadium and then move out?” he said. “It doesn’t make any sense…. We could [leave Miami] now without conveying the stadium to the county.”
A Dolphins source familiar with the matter who asked to remain anonymous said in negotiating a lease with the county the team would expect to only pay a low “nominal” rent. Mr. Garfinkel wouldn’t comment on that issue.
νThe county would expect the Dolphins to pay the costs to maintain and operate the stadium year-round, but stadium employees for those kinds of functions might become county employees. Mr. Garfinkel indicated the Dolphins would be agreeable to paying to maintain and operate the stadium.
νThe county might seek some revenues from non-Dolphins events held at the stadium. Mr. Garfinkel wouldn’t comment, but the Dolphins source said the team probably would look to keep most, if not all, of those revenues.
Such events could be college football games and other NCAA events, professional soccer matches and concerts. The source said the Dolphins have already invested time and effort in recruiting other events to the stadium.
Mr. Figueredo indicated the county might seek rights to host its own events at Sun Life, similar to agreements the county has at Marlins Park in Little Havana and American Airlines Arena downtown.
“We want to make sure” the county gets a certain number of days during the year to use the stadium, he added.
According to the Dolphins source, the team has offered to pay for the Sun Life renovation itself as a simple alternative to last year’s failed plan largely because Mr. Ross wants his “legacy” regarding the Dolphins to be an improved stadium capable of attracting Super Bowls and other events that have a positive impact on the area’s economy.
Mr. Figueredo said Super Bowls bring visitors and media attention to Southeast Florida that’s valuable to area businesses and other aspects of the economy, in addition to generating additional tax revenues.
With the proposed renovations, Mr. Figueredo said, “I’m sure they would be able to compete for Super Bowls again” in Miami, which has hosted 10 of the NFL’s annual championship games.
The inability by the Dolphins and Florida government officials to agree on a financing plan last year for the Sun Life renovation is believed to have played a part in the NFL’s decision to hold the 2016 Super Bowl in the San Francisco 49ers’ new stadium, still in construction south of San Francisco, instead of in Miami.
The planned Sun Life renovation appears to be largely the same as proposed last year, as it would include erecting a giant canopy from the top of the stadium’s walls to cover seating areas, as well as adding some 3,000 seats, among other improvements.
Mr. Garfinkel said the plan also calls for moving seating closer to the field, renovating the concourses and parking lots, and more.
“It will look and feel like a brand new stadium,” he added.
In negotiating a deal with the Dolphins, Mr. Figueredo said, Mayor Gimenez “wants to ensure the school system is kept whole” in terms of limiting or avoiding a loss of tax revenue by the county taking ownership of the stadium. He said the Dolphins pay about $1.4 million a year in taxes on the stadium that go to Miami-Dade public schools.
“The mayor is very interested in making sure the school system is properly funded,” Mr. Figueredo added.
In addition, he said, the mayor wants “to make sure we’re not negotiating away” any revenue from the City of Miami Gardens, noting the team is that city’s largest taxpayer and employer.
Named after the Dolphins original owner, Joe Robbie Stadium opened in 1987. The late Mr. Robbie led a financing campaign to build the stadium entirely with private funds, according to the stadium’s website. The facility was designed to cover more than 1.5 million square feet, with more than 24,000 parking spaces and with a capacity of 75,000 seats.
In 1990, Wayne Huizenga agreed to purchase 50% of the stadium and, in 1994, he acquired the other half.
In 2008, Mr. Huizenga sold 50% of the Dolphins, the stadium and the surrounding developable land to Mr. Ross. Then, in 2009, Mr. Ross closed on the purchase of an additional 45% of the Dolphins and the stadium. Mr. Huizenga retains a 5% share of the team and the stadium and is a 50% partner in the land, the website states.