County Should Choke Off Ballparks Lateinning Squeeze Play
Written by Miami Today on June 19, 2008
In less than two weeks commissioners are required to vote on a slew of legal agreements that would firmly bind taxpayers to build a stadium for the Florida Marlins in one of the worst deals this county has yet devised.
So far, neither the public nor commissioners have seen one word of those documents. They weren’t even on this week’s county agenda, yet they face a July 1 contractual deadline for action.
True to form, whenever they appear they’ll appear at the last minute, leaving commissioners staring a $1 billion decision in the face with no time to weigh the facts.
That’s how big county deals get put through, with commissioners later vowing they had no idea of the ramifications. They’re not getting time to question this deal even if they want to.
Last winter, City of Miami and county commissioners approved a basic agreement with the Marlins, but that deal required many more contracts to begin construction.
Knowing that the county and city must pay several million dollars to the Marlins to back out now, commissioners will be under heavy pressure to vote yes — although that yes vote would cost taxpayers not just millions but more than $1 billion, including land and interest on stadium bonds. They’ll feel forced to throw lots of good money after bad.
Yet even the most pro-stadium elected official should feel obligated to at least read and understand the deal — and its many ramifications — before a blind yes vote. They all know voters oppose it. After mass transit and airport and performing arts center spending fiascos, how much more can they expect to get away with without being held accountable at the polls?
They can’t get away with claiming the public money can only go to a ballpark. While much of it is earmarked, it’s broadly earmarked for infrastructure that will increase tourist spending, and studies prove baseball doesn’t do that.
Further, the contract leaves the public on the hook for overruns caused by government. Construction costs have skyrocketed, and the Marlins, who will have sole charge of construction, are likely to run over by hundreds of millions. Like American Airlines overruns at the airport, one way or another the costs that were to be borne by business will end being borne by you and me.
Moreover, as municipal bond markets fight chaos and interest rates poise for a sharp future rise, even if the Marlins pay all overruns stadium bonds are likely to cost hundreds of millions more than budgeted. General revenues must pay that add-on, because the budgeted stadium costs will deplete special funding sources.
Miami isn’t the only Florida community caught up in the stadium frenzy. Look at what’s going on in St. Petersburg.
There, the city council just voted to hold a hearing next month on a stadium for the Tampa Bay Rays, its baseball team. They want to build a stadium with a roof, as we do, but plan to do it for $450 million, far below our $515 million budget, with the team owner on the hook for every penny over that.
While Miami-Dade plans to issue stadium bonds for 35 years to fund construction, Tampa Bay plans to raze a 21-year-old baseball stadium to build a new one. The average life of new stadiums is far less than 35 years, so who’s kidding whom? Remember the City of Miami paying off bonds for years after shutting down the 12-year-old Miami Arena?
Tampa Bay plans 34,000 seats, less than the 37,000 Miami seeks. But they plan 14,000 garage spaces plus 7,000 for on-street parking. We plan 5,750 garage spaces plus parking in neighbors’ yards.
The St. Petersburg City Council is hiring professional developers. We count on the Marlins to oversee constructing, using firms they hire.
St. Petersburg has tied in a redevelopment deal on neighboring land to help fund the ballpark. Miami plans to redevelop its surrounding Orange Bowl site as well, but not a penny of income from that would help pay for a stadium.
Most importantly, the Tampa Bay deal only gets done if taxpayers vote yes Nov. 4, and the city council hasn’t yet decided whether to even put the measure on the ballot.
In Miami-Dade, knowing that voters would never approve, the city and county found ways to hand public land to a baseball team and cut a deal without the public ever getting a vote. Much as officials claim to be doing what their constituents want, they know perfectly well that taxpayers don’t want any part of this bad deal.
Now, why do we need a stadium? Because the Marlins want more profits. In their current home, the stadium owner gets most of the revenue from parking, signage, concessions, naming rights and luxury boxes. Under this deal, the Marlins would get parking profits and all receipts on everything else.
Also, if we do hand the Marlins a stadium, the team’s value more than doubles. The owners then could sell for $600 million or more — roughly five times their investment. And under this deal, the public would not get a penny of those profits if current owners stay in the new stadium just five years before they sell.
If this deal sounds like it was crafted to hand the Marlins everything they could possibly want, you’ve got it. When government officials are told to cut a deal no matter what and the other side knows it, this is what you get — nothing. They get everything.
For example, the stadium would nominally belong to the county, so the Marlins would pay no taxes on it. Yet the Marlins would get to use the stadium all but 16 days a year and for non-baseball events would pay no rent and get every penny of the revenues — including from the city-owned parking garage next door. The Marlins could even control what government could use the stadium for the other 16 days and government would have to pay all costs.
What else is wrong with this deal?
Well, the site, the lack of nearby public transportation, the fact that the city is giving away valuable land at the Orange Bowl and then has to move streets and utilities for the stadium, plus local governments’ dire fund shortage for things that are truly vital.
Then, if local government wants the stadium to be environmentally friendly — and Miami Mayor Manny Diaz bills himself as the green mayor — government must pay extra for that out of taxes. The Marlins aren’t responsible for a penny.
The Baseball Stadium Agreement that government has already adopted got the ball rolling. But the stadium strikes out unless government also approves a construction administration agreement, a management agreement, a non-relocation agreement, an assurance agreement and a city parking agreement. Those must be approved by July 1 to meet the current requirements and they haven’t yet surfaced. The commission chairman wants to delay a vote until well into July.
The current agreement gives government 30 days’ grace after July 1 to OK these contracts, after which any of the parties can cancel the whole deal — but the Marlins will never cancel a deal that gives them everything. That means the city and county have no real need to rush votes on these five agreements without proper study even if they want a ballpark.
It also means that either the city or the county has a way to dump this lemon.
It would take only five county commissioners to do just that, because some agreements require a two-thirds county vote. Or, if the county doesn’t act before Aug. 1, the city could dump it.
There’s no good reason to rush through this deal, and every good reason not to. Commissioners, let sanity prevail.