County cuts new deal with Marlins – as storekeepers
Written by Scott Blake on July 9, 2014
The county is doing business again with Miami Marlins owner Jeffrey Loria and his son-in-law, Marlins President David Samson – only this time on a much smaller scale.
Mr. Loria and Mr. Samson were at the center of controversy over the deal the Marlins struck with county officials five years ago to publicly finance most of the cost of the Major League Baseball team’s new stadium, Marlins Park in Little Havana.
Now, Miami-Dade commissioners have approved a lease agreement with the duo to open a retail operation at Miami International Airport to sell Marlins and Major League-licensed merchandise. The store is expected to open in November or December.
The lease deal is with Marlins Airport Retail Operator LLC. A county document shows that Mr. Loria is the firm’s chairman and CEO. Mr. Samson is listed as the firm’s president and secretary. The firm’s address is listed as 501 Marlins Way, which is the ballpark.
The firm includes three others from the Marlins front office: Michel Bussier, the team’s executive vice president and chief financial officer; Claude Delorme, the team’s executive vice president of operations and events; and Susan Jaison, the team’s senior vice president of finance.
The airport deal is an eight-year lease with a two-year option. The firm is to pay 8% of gross revenues or $16,783 a year, or about $1,398 a month, whichever is more.
The deal is similar to an earlier deal between the county and basketball’s Miami Heat, which opened a shop at the airport in 2012.
A recent memo from Miami-Dade Mayor Carlos Gimenez’s office to commissioners suggests there was no reason not to approve the Marlins airport venture.
“Marlins Airport Retail Operator LLC has no contractual history with Miami-Dade County and there is no history of violations on record,” it states.
Although the memo states the firm’s record with the county is spotless, the firm’s principals – Mr. Loria and Mr. Samson – have been blasted by critics of the ballpark deal for the astronomical cost it will have on future tax revenues.
The 37,000-seat, retractable roof stadium and neighboring parking garages were primarily funded by the sale of county and city bonds. By the time the bonds are paid off over the next 40 years or so, the $640-plus million construction project will have ballooned to an estimated $2.4 billion or more to be taken from county hotel taxes and other revenues.
The deal prompted a lawsuit by billionaire activist Norman Braman that was dismissed and an investigation by the federal Securities & Exchange Commission. The SEC subpoenaed records related to the deal more than two years ago but has refused to discuss the probe.
In 2012, when the new stadium opened, Yahoo Sports dubbed Mr. Loria and Mr. Samson the “architects of the con.”
“This would be falling-down funny if it weren’t so very sad,” wrote Yahoo columnist Jeff Passan. “Two charlatans, ripping off a major American city and laughing all the way to the bank.”
Mr. Loria has said the ballpark deal was distorted by the news media.
“The ballpark issue has been repeatedly reported incorrectly and there are some very negative accusations being thrown around,” the Sports Business News blog quoted him as saying last year.
“Those who have attacked us are entitled to their own opinions, but not their own facts,” he said. “The majority of public funding came from hotel taxes, the burden of which is incurred by tourists who are visiting our city, not the resident taxpayers.”
The mayor’s memo about the upcoming Marlins airport venture states the firm will pay the “prevailing Class VI terminal rental rate” of $79.92 per square foot on 210 square feet. That’s a lot less than the 1,381 square feet the Heat store occupies.
“The [Marlins] store will be developed, financed, managed and operated by… the Miami Marlins’ retail division,” it adds.
The Marlins retail spot will be in a “marketplace” area of the North Terminal amid several concessions such as Caribbean food, empanadas, and Cuban cigars, said airport spokesman Greg Chin.
“It’s just a small space,” he said about the Marlins retail. “But they’ll still do sales and make money.”
Regardless, the Miami-Dade Aviation Department, which manages Miami International, liked the idea of bringing the Marlins brand to the airport.
The Heat store, the memo states, generated more than $129,000 in revenue for the Aviation Department after having been open only 10 months, with the Heat paying the same 8% of gross revenue as the Marlins will pay.
“The addition of the Miami Marlins brand,” the memo reads, “will add to an already excellent product mix that includes the Miami Heat store.
“Because the Miami Marlins retail store brings a unique professional baseball sports-franchise merchandising concept to [Miami International], and assists Miami-Dade Aviation Department in reaching its goal of increasing passengers’ sense of place, it is in the best interest of the county to waive competitive bid procedures” and approve the deal.
The Aviation Department, it adds, is considering another retail deal at the airport with the NFL’s Miami Dolphins, but Mr. Chin said no “serious discussions” have yet been held with the Dolphins.