Stadium Proposals Raise Property Tax Ownership Questions
Written by Paola Iuspa on June 14, 2001
By Paola Iuspa
As Miami Mayor Joe Carollo negotiates the latest proposal to build a stadium for the Florida Marlins, questions are arising about who should own the ballpark and pay its property taxes.
Mayor Carollo has said "the city should own the stadium," which is proposed for 20 acres on the north side of the Miami River, land the city still needs to acquire. The Marlins organization would lease the ballpark from its owners for 40 years and, according to Mr. Carollo, pay about $120 million in rent.
But an April ruling by the Florida Supreme Court reaffirms that publicly owned lands leased to private, moneymaking interests should be taxed.
That means if the Marlins lease a $400 million stadium, the team would have to pay "about $10 million in property taxes," said Robert Nachlinger, assistant city manager in charge of finance.
"I see that as a potential problem. We have to sit down with the county and the Marlins and discuss the ad valorem taxation issue."
Payment of taxes was not part of the previous letter of intent between the Marlins owner John Henry and County Mayor Alex Penelas. Mr. Carollo’s plan was modeled from that deal.
City Manager Carlos Gimenez said Tuesday one solution might be to ask Miami-Dade County to take temporary title to the stadium to remove the land from Miami’s tax rolls. For-profit companies leasing land from a county or a school district are exempt from paying property taxes.
"The city wants to own the stadium ultimately," Mr. Gimenez said. "We may be able to own it after 40 years. We don’t know yet how it is going to happen."
Mayor Carollo’s stadium plan calls for the city to refinance its bond debt and issue $320 million in bonds through 40 years. The city would use up to $150 million of that for a proposed $375 million stadium; the remaining money has been proposed to upgrade neglected neighborhoods.
In addition, the plan requires a 40-year extension of the city’s 20% parking surcharge and request for a sales tax rebate on that fee. With an estimated 3% growth factor, the surcharge would generate $1.5 billion over 40 years and about $96 million in sales taxes that could go toward acquiring the 20 acres.
"We could issue around $23 million in bonds" on the $96 million sales tax "that would be used to buy the land," Mr. Gimenez said.
The plan also assumes $118 million revenue from the county’s convention development tax to help finance construction, as did the previous proposal.
Announced by Mayor Carollo last month, the plan departs from the earlier one between Mr. Penelas and Mr. Henry that called for the county to own the stadium and Miami to provide the land and some revenue from the parking fee.
Any extension of Miami’s parking surcharge and a tax rebate on the fee needs approval from the state Legislature, which does not meet until January. Refinancing of Miami’s bond debt and issuing new bonds for construction of a stadium require an election in the City of Miami, which Mr. Carollo has said could be held in late August or September.
In the meantime, Julio Rebull Jr., Marlins executive vice president, said the team is evaluating the Carollo proposal and its feasibility.
"We are in a preliminary phase," he said. He said a date to sign a letter of intent has not been set yet but "if negotiations continues this way, it will be very soon."