Dade Manager Says New Marlins Stadium Deal Sweetens County Pot
Written by Risa Polansky on January 29, 2009
By Risa Polansky
Miami-Dade County, the City of Miami and the Florida Marlins have agreed upon five contracts that, with commissioners’ approval, would seal the deal for a new retractable-roof ballpark.
The documents come nearly a year after approving a preliminary baseball stadium agreement and six months later than expected.
Lengthy negotiations resulted in a better deal for the county than that laid out in the initial baseball document, County Manager George Burgess said Tuesday when he released the proposed contracts to commissioners and the public.
He called last year’s framework deal a "starting point… I always expected to come back with something stronger."
The newly unveiled construction administration, assurance, non-relocation, operating and parking agreements come amid financial turmoil and after months defending the proposed project in court.
"I believe this is the best product we could negotiate with the team given the circumstances," Mr. Burgess said.
He said that in the new proposed contracts, "the project budget stays the same for the stadium itself."
The documents do put construction costs at $515 million — the same as named last year — but they reflect some tweaks.
The Marlins’ $155 million construction contribution is down to $154 million, but the team is now to contribute $1 million to hire project architect HOK to design public infrastructure work.
The $347 million county construction contribution named in last year’s agreement is now $347.5 million, and the city’s $13 million now $13.5 million — adjustments meant to even out the $1 million in infrastructure costs passed to the team.
The governments are to pay for site infrastructure work itself — about $10 million in hard costs each for the city and the county — and for a portion of what it costs to certify the stadium project environmentally friendly.
And the team is now set to dole out higher annual rent payments than planned.
The initial agreement had the team paying $35 million of its share in $2.3 million annual rent payments through the 35-year life of the deal. The new contract ups those payments by 2% yearly, yielding the county "millions of dollars more of rent," Mr. Burgess said.
Added to the governments’ construction contributions is up to $1.75 million additional from both the city and the county to seek environmentally friendly certification for the project.
The team is to contribute $1 million toward the certification and cover costs above the governments’ $3.5 million cap.
Project overruns rest on the team as stadium developer and operator, Mr. Burgess said.
The assurance agreement arm of the deal requires a $20 million line of credit from the team.
The Marlins are also expected to assume responsibility for all payment and performance bonds needed for construction.
If the team breaches the agreement, the county and city have the right to use any legal remedies available to secure payment and performance obligations, according to the deal.
But the county and city are also authorized — subject to approval by commissioners — to extend or renew the time for payment and to accept partial payments or performance.
Now that the plan is to hire the same contracting team that’s to build the stadium, Hunt/Moss, to do the infrastructure work at the site, the team is "responsible for overruns on infrastructure and the stadium overall," Mr. Burgess said.
A new out clause would allow any party to walk away between now and June 30 because of funding concerns.
And should the Marlins’ owner choose to walk away from the team within the next seven years, selling more than 50% of controlling interest, "there’s some sharing if there’s a windfall the owner might gain," Mr. Burgess said.
The payout period is two years longer than in last year’s framework agreement.
If the owner sells in year one, the county and city would get an 18% equity payment, up from the 10% named in the earlier preliminary agreement.
The payouts decline each year to 5% in year seven.
Another perk for the county, Mr. Burgess said: the original agreement gave the county and city eight days each for events. The new deal calls for unlimited use during the off season — "which happens to be our on-season in South Florida," he said — and four events to each government during the regular baseball season.
For the first 10 for-profit events at the ballpark each year, the team as the stadium operator is to retain all revenues. But after that, the team and the county split the profits equally.
The deal requires the county to put all that money back into the stadium through its capital reserve fund, but Mr. Burgess said he supports the arrangement "because once you build it, you still have to maintain it."
The team and county are each also to put $750,000 a year into the fund, and the city $250,000 annually. After splitting its event proceeds with the county, half of the team’s income also will go into the pot.
On the community benefits side, the team has agreed to provide 10,000 free tickets a year — twice as many as agreed to in the preliminary deal — as well as 81,000 "affordable tickets" a year, starting at $15 the first year the ballpark opens, Mr. Burgess said.
The stadium is to hold 37,000 fans, 1,000 of them for standing-room space.
The plan is to begin ballpark construction this summer and complete the stadium in time for 2012’s opening pitch.
Chicago-based county consultant International Facilities Group, which also worked with Miami-Dade on the AmericanAirlines Arena project, has reviewed and approved of the Marlins stadium budget and schedule, Mr. Burgess said, so "it’s outside validated."
City and county commissioners must still vote on each of the five contracts, which they received Tuesday. Some require three-fourths votes for approval.
Special meetings to discuss the contracts are expected Feb. 13, the city in the morning, county in the afternoon.
The proposed contracts are posted online at http://www.miamidade.gov/mayor/stadium.asp.