Call marine stadium time out until city develops a firm plan
Written by Michael Lewis on February 27, 2018
Why do governments build projects before they know how to fund construction or how to maintain and operate them? And shouldn’t real estate assets help fund other public needs?
The latest example, which we detailed two weeks ago, is Miami’s push to renovate and reopen Miami Marine Stadium on Virginia Key. Despite a $9.2 million construction shortfall and no plan at all for how to actually use the stadium or how to pay to keep it open, it’s full speed ahead.
New commissioner and former mayor Joe Carollo is wisely trying to call time out. He recalls that when the stadium was open it always lost millions that the city had to cover from taxes. He’s asking for a firm plan for stadium use and an operating as well as construction budget.
We’ve been writing the same thing ourselves for years.
The worst approach to take is “Field of Dreams” – the fiction of building a stadium in a cornfield because baseball greats would appear to play there, with ticket sales funding it all. That made a good book and movie plot, but in the real world, dreams of a public project paying off big without a funding plan remain just that – dreams.
You needn’t look far for parallels. By spending tens of millions in county visitor tax funds, Homestead built a stadium in the 1990s as a spring home for the Cleveland Indians. But the Indians didn’t come, and it’s been a stadium looking for a use for 25 years.
Or look at Marlins Park in Little Havana, where Miami built four garages with hopes of partly paying off bonded debt by renting more than 53,000 square feet in them to four-star restaurants and other upper-end uses that would uplift the neighborhood.
That was a “Field of Dreams” hope, but it lacked a game plan. So only now, for the seventh season of baseball, has garage retail risen to even 75% occupancy, with the biggest user medical facilities, not luxury venues. Filling the space has been not a dream but a nightmare.
The main users of Miami Marine Stadium before it closed 25 years ago were boat races and concerts. A consultant has listed more than 50 uses this time around. Some might be self financing.
But the city should seek more than that. It will have to find $9.2 million more just to build. It will also need to pay back the $45 million it would borrow to rebuild the decayed stadium. Then it will need to maintain the stadium and pay any revenue shortfalls – and it’s likely that no matter how good the plan, there would sometimes be shortfalls.
The city hopes to hand the stadium to a private operator in a deal yet to be structured. No operator has been chosen.
Until commissioners decide what they want to use the stadium for, however, why rebuild it? Once the city has a solid funding and operating plan and an operator, it should rebuild to encompass uses that it desires, because each use has different structural needs.
For example, part of the project is to build some sort of welcome center in front of the stadium. Without city direction before handing someone the land, that center might become an expensive private club or meeting facilities or you name it.
And an operator must face controls. Even having the city run it would be no guarantee – remember, land around the marine stadium was to be a park with multiple soccer fields, but the city built it as paved parking for major events. Is that the marine stadium’s fate: to house massive events? If the city chooses an operator before it picks a concept, it’s just asking for a bait-and-switch future for the stadium.
The extremely valuable public land lies along the only road between Key Biscayne and the mainland. Law doesn’t require use to consider the Village of Key Biscayne, but whatever uses the city allows should factor in the vital link not only to the village but to county and state parks that bookend it, used by hundreds of thousands of persons annually.
These concerns and others should have commissioners agreeing with Mr. Carollo, who wants a five-year plan. Frankly, with bond debt outstanding 30 years, we’d seek a 30-year plan. Money might fall from the sky to pay off bonds, but we’d prefer a solid plan that outlasts the bond debt. Plans can fail, but they beat praying for a bonanza.
“My concern is that we’re creating another white elephant,” Mr. Carollo told commissioners. We echo that concern, just as we did in the case of what is now Marlins Park, where all payback from a $1.2 billion team sale is going to operators of the publicly funded stadium that enhanced the team’s value, with none for taxpayers.
We’d love to restore a decaying city asset. But restore the stadium for what use, under what terms, run by whom, with what potential to not only support itself but pay the city a long-term income stream from its asset to fund other pressing city needs?
City real estate assets should be used in ways that benefit residents by filling gaps in the budget, not by creating additional gaps.
Some commissioners want to use other city assets like marinas and mooring fields to fund the marine stadium. Mr. Carollo has thoughtfully asked to reverse that pattern and instead have the marine stadium asset pay for other vital city needs. We concur.