Pay the Dolphins for performance – and everyone else too
Written by Miami Today on May 28, 2014
It’s getting harder to track all the stadium deals floating though the office of county Mayor Carlos Gimenez, who must be vying with recalled predecessor Carlos Alvarez to become stadium giveaway king.
But nestled between his decision as to which valuable public waterfront to give to a startup soccer team and how much to subsidize Miami Heat owner Micky Arison is a football stadium gambit that would set a national giveaway precedent.
Miami Dolphins owner Stephen Ross, who has been privately negotiating his own stadium handout with the mayor to save millions yearly by ending taxes on the stadium, has shifted to seek a new paradigm.
In his latest stratagem, Mr. Ross would not get the tax subsidy but instead would earn a county bounty for every big event he brought to Sun Life Stadium, starting with the Super Bowl but including big soccer matches, college football championships, playoff games, concerts and who knows what else.
The money would come from the same tourist tax pot that’s paying off our $3 billion subsidy for the Miami Marlins’ stadium and already subsidizes the Miami Heat.
Actually, the principle of paying for performance isn’t bad.
Mayor Gimenez points out that we reward corporations for moving, expanding, investing and creating jobs here. So, why shouldn’t the Dolphins get in on the action for bringing big events here?
The concept of paying a bounty for generating spending, business and jobs is good. But getting from principle to practice is harder than buying a 50-yard-line Super Bowl ticket at a discount.
First off, who would evaluate each subsidy-generating event? How would we decide economic impact and what percentage of that impact to hand Mr. Ross as a sort of commission on his sale?
It’s not easy to figure impact. Someone on each major event’s payroll does it, so every total is hyper-inflated. We generally divide every economic impact study by 10, but that might still be high.
Second, which events that Mr. Ross brings us are worth a bounty? The Dolphins bring thousands of fans to games, but should we pay a bounty for what we get anyway? So, what would count?
Third, how would we finance the bounty? If all the money is supposed to come from a tourist taxes pot that’s already pledged, would we have to use general tax revenue if tourist taxes fell short? Would a pledge to the Dolphins freeze out of the goodies whoever came later – say, a soccer team?
One good thing about reward for performance is that events that got rewards would help add more tourist taxes, which would replenish the pot from which the county would pay the Dolphins.
So, fourth, shouldn’t we cap rewards at some percentage of the tourist taxes that an event generates? If not, we might be paying Mr. Ross as a commission for added visitors more than we would earn in taxes from those visitors, which is the height of bad business – as Mr. Ross, who has the University of Michigan’s business school named for him, well knows.
Fifth – and most important – it would be highly unfair to pay the Dolphins for bringing in tax-generating events without also compensating everyone else that generates taxes.
That would mean paying Marlins owner Jeffrey Loria if we got an All Star Game or World Series, giving Micky Arison a bonus for Heat championship and playoff games, funding organizers of the Sony Open for tennis tournaments, plus golf tournaments and car races and…
But real fairness extends beyond sports. We’d also have to pay Art Basel and every other show or convention that brings visitors to town, businesses that have meetings of associates here, maybe even families that host reunions and wedding planners for big ceremonies that bring in outsiders.
After all, fair is fair.
All of that reward money could come from the same pot of tourist taxes, after subtracting what’s already committed, like the billions for Marlins Stadium, and then dividing total taxes by total economic impact to develop a fair reimbursement.
If we did that, we’d have enough cash to pay everyone something, though perhaps a tad less than Mr. Ross is thinking about, say starting at $10,000 for a Super Bowl down to $25 or $50 for a family reunion. That way, we’d have enough to go around – and everyone would be fairly compensated.
It would also create jobs – at least it would at county hall, where we’d have to hire a corps of people to tally all of the bounty requests and double-check for true economic impacts. We’d have to pay those salaries out of the tourist taxes before we spread around the remaining proceeds as bounties for revenue-generating events.
If that’s Mr. Ross’s idea of pay for performance, we’re with him all the way.
We’re certain he wouldn’t be unfair enough to hog all the money and leave out the other sports, cultural events and conventions – not to mention those all-important weddings and family reunions.
Handouts for everyone, that’s the motto of Miami-Dade County.