Miami Must Score Riverfront Site For Stadium Deal To Win
Written by Paola Iuspa on March 22, 2001
By Paola Iuspa
As county and Miami city officials continued this week to take steps toward a stadium-construction deal, the city still lacks possession of the 20-acre downtown riverfront site it has decided it wants to secure for a ballpark.
According to Mayor Joe Carollo and two commissioners, Miami hopes to pay for it by using future parking fees if the state legislature extends that surcharge together with a sales tax refund needed to help finance the stadium construction.
The site north of the Miami River, which has two parcels owned by two separate, private owners and one owned by Florida Power & Light, is estimated to cost $45 million to $50 million, Mr. Carollo said.
The 20% surcharge is poised to expire in June 2006 unless legislators extend it for a requested 40-year term, the length proposed for the Florida Marlins’ stadium lease.
State Sen. Ronald Silver of Miami Beach is sponsoring a bill to extend it, said Sharon James, his legislative assistant.
Miami collects about $13 million in parking surcharges yearly, excluding $3 million that Miami-Dade County refuses to pay, said Fred Bredemeyer, director of Parking Network Inc., a city-hired company that collects the money.
Robert Nachlinger, assistant city manager, said the almost two-year-old surcharge has a projected growth rate of 3%.
This revenue source was created in 1999 to replenish the coffers of a city declared by the state to be in financial emergency.
Mr. Carollo said the city would need yearly at least $4 million from the surcharge to pay for the land.
Another $2 million of that surcharge would help finance the construction of a $385 million stadium the Marlins would rent, as outlined in a proposed financing package.
The proposal also called for the county to provide $75 million in bond capacity and $118 in community development taxes while the Marlins raise $46 million in an admission surcharge. It also included $266 million from a proposed state sales tax refund that is about to go before the legislature.
Before closing any land deal, the city wants the county to drop a suit it brought against the city saying it’s exempt by law from paying parking surcharges, said Alex Vilarello, city attorney.
Mr. Bredemeyer said the county owes the city almost $3 million in parking surcharges.
Mr. Vilarello said "15 to 20 other long-standing issues" must be resolved before any deal could be sealed.
Mr. Carollo said another alternative for paying for the riverfront site is to exercise an oral agreement he worked out with Miami-Dade Mayor Alex Penelas two months ago.
That deal, he said, called for the city to provide the land for the stadium and the county to allow the city to sell the Miami Arena. The city for 20 years would keep getting the annual $6 million the county gives it to help run the arena and pay off its $37 million in debt service.
"We could use $4 million to pay for the land and keep $2 million," Mr. Carollo said.
Miami Commissioner Joe Sanchez said the city won’t move to obtain the land until the state extends the parking surcharge and oks a sales-tax rebate because without either of those components the stadium project will be impossible.
The city did receive on Tuesday Miami-Dade’s approval to use a part of the county’s convention development taxes levied on hotel rooms to help pay for the stadium.
The tax, created in 1983, allows a 3% levy on hotel rooms for projects that would "acquire, construct, extend, enlarge, remodel, repair, improve, maintain or operate convention centers, sports stadiums, sports arenas, coliseums, auditoriums and museums" in an effort to attract tourism to Miami-Dade, according to a county document.
Commissioners said Tuesday that showing support to use the tax for the stadium did not mean it was making a commitment to building or paying for the project, as was originally called for in a letter of intent between County Mayor Alex Penelas and Marlins owner John Henry.
Miguel De Grandy, the team’s attorney, said the commission only needed to show its support for the stadium so the state legislature would look more favorably on a request for a state sales-tax rebate and the extension of Miami’s parking surcharge to help pay for the ballpark.
He said negotiations involving who would pay what would come later, if the proposal gets approval from the state legislature’s.
But as the county commission committed a portion of convention taxes for a stadium, representatives from other groups stood before the commission to ask for "their share," too.
Members of the Virginia Key Park Trust asked for $5 million of the projected available convention taxes to build a civil rights museum at Virginia Key Beach Park.
The commission approved their request with no opposition.
"I would like to triple that amount if we can get out of the Marlins," said Commissioner Katy Sorenson, the only commissioner who voted against using the tax for the stadium.
Jorge Gonzalez, Miami Beach city manager, also stood before the commission to remind its members the Miami Beach Convention Center was in need of repairs and the county needed to take that into consideration before giving tax money away.
Mr. Gonzalez said Miami Beach collected 40% of the county’s convention development taxes, or $12 million.
He said the county and Miami Beach had signed an agreement in 1996 where the city reduced its share of the tax so the county could pay for its proposed performing arts center, which was approved in December, but not a baseball stadium.
But, Mr. Gonzalez said, Miami Beach was now working out a new agreement where that city could support using the convention taxes with one condition.
"The county would have to secure a yearly stream of revenues that we could use for the Miami Beach Convention Center," he said.
He said the City of Miami Beach needed about $120 million to repair and expand the convention center.
George Burgess, executive assistant county manager, said the county is expected to get $30 million in convention taxes, "but it is pretty much tied to the performing arts center and the American Airlines operating subsidy, among other things."
In 1995 the county collected $18 million in convention taxes; last year it collected $29 million, a county document said.
The tax grew 10% last year but the average growth since 1985 is only 7%, the document said.
"But," Mr. Burgess said, "we feel more comfortable projecting a 5% growth. Now we have new high-end hotels driving up revenues. But how high can the prices go or for how long?"