Painting A Happy Face On A Ballpark Or Lipstick On A Pig
Written by Michael Lewis on March 5, 2009
By Michael Lewis
Hard evidence against spending public billions for a stadium to benefit a baseball team’s owners during a painful recession is compelling enough to smash the deal right now.
The Miami City Commission comes to the plate Friday. It should wallop this hanging curveball out of the park.
Still, after we detailed a lopsided deal we can ill afford, I was startled when a letter alleged prejudice. What the out-of-state writer terms anti-stadium bias I call demonstrable facts.
To test the issue, let’s look at this deal as optimistically as possible. We’ll hunt for reasons to support the plan, starting by drawing optimism from history.
—The last time we optimistically sought a baseball stadium, we built it. We tapped some of the same funding we’re now targeting: taxes geared to lure visitors here.
You don’t remember our baseball stadium? With the enthusiasm some now profess for the Florida Marlins, in 1991 we built a complex in Homestead for Cleveland Indians spring training, which, unlike summer games that don’t add tourism, actually draws out-of-town visitors.
The stadium was a success when the Indians finally did play the 1993 Marlins there in two games. But it was the Indians’ only visit.
After we built the vast complex at taxpayer expense, the Indians decided they didn’t want to train here after all. Deal or no deal, they walked away — just like, deal or no deal, the stadium contract now on the table says Major League Baseball can at any time unilaterally change it. If we’re optimists, we’ll say it can’t happen again — but the contract says it can.
—We’re always optimistic about sports facilities. Two decades ago we built at taxpayer expense a modern arena requested by the new Miami Heat basketball team. It too was a success — until the Heat decided within 10 years to ask for a new arena.
We were optimistic that the Miami Arena would revitalize Overtown, just as we’re now optimistic a baseball stadium would revitalize Little Havana. You could go to the Overtown vacant lot that was once the arena and view any possible revitalization.
What happened to the arena? After the Heat moved out, the city finally sold it for about half the remaining debt — leaving taxpayers to pay for bonds on something they no longer owned. The new owner razed it.
Optimistically, something better will someday revitalize the neighborhood.
—With renewed optimism, the public next gave the Heat scarce bayfront land for yet another arena. Taxpayers would share in profits above a set level, and the Heat sketched parkland and soccer fields it would build on land we gave the team behind its new arena. We were optimistic about revitalization all this would bring us.
Was our optimism rewarded?
The public has received not one cent of arena profits. There is no parkland. The soccer fields were just drawings not guaranteed in the contract drafted by the same law firm that is now working for the Marlins. So there are no soccer fields. Downtown revitalization came not with an arena but with a condo bubble.
Optimistically, the fallow public land behind the arena will someday find use, but the Heat’s owners control the site and will get all income it yields.
—While the Heat was deserting the Miami Arena, the Florida Panthers hockey team that shared the building for a few years exited both the arena and the county, moving to Sunrise in Broward County to — you guessed it — another new arena, thankfully bankrolled by another community.
The effort to get that Panthers arena built, incidentally, was captained by Alex Muxo, who as city manager had spearheaded the Homestead stadium that Major League Baseball never occupied. But now he was working for H. Wayne Huizenga, who owned the Florida Marlins too.
We need to be really optimistic to believe that the Marlins wouldn’t suddenly "need" a new stadium long before taxpayers were through paying for a Little Havana stadium. It takes a heap of optimism, however, to blot out history.
—Speaking of Broward, it and Palm Beach County are home to the Marlins’ fan base — far more than half the ticket buyers. We’ve got to be very optimistic that people who moved from Miami or have never visited will drive all the way here and wander a crowded lower-income area looking for parking in a back yard at $15 to $25 every game.
But at least the neighbors are optimistic about a new income stream.
—Maybe the neighbors are overly optimistic. Fewer fans pay to see a Marlins game than any other big league baseball team. Last year’s 16,000 average wouldn’t even fill half the planned stadium. But, optimistically, a new 37,000-capacity stadium will bring more, right?
Maybe for a while. Attendance at most new big league ballparks spikes for several years, followed by a big slump. Optimistically, we’ll do better than almost every other city, even if we’re worst now.
—Marlins attendance peaked in 1993, their first year, and 1997 and 2003, when they won the World Series. You can only have a first year once, and on average a team wins a World Series only every 30 years, so you have to be optimistic the Marlins will win very often to make a stadium succeed — unless Miami suddenly becomes a baseball town.
The Chicago Cubs, for example, pack their park most games and haven’t won a World Series in 101 years — and their ballpark is 95 years old. You’ve got to be very, very optimistic to think the Marlins will suddenly build that kind of loyalty in a city that only supports winners.
—One reason Marlins attendance is low is that both times they’ve won they’ve broken up the team. Optimistically, new fans drawn by a new stadium may forget about the past.
—The Marlins say if we build a stadium, they’ll put some of the profits they’d reap into higher-paid players who could then multiply their ticket income at public expense. That isn’t in the contract, but an optimist will trust them to keep their pledge, just as optimists are awaiting those promised soccer fields behind the Heat’s arena.
—Speaking of soccer, the most popular game among many Miamians, when Miami Mayor Manny Diaz proposed a baseball stadium at the old Orange Bowl site he optimistically tied in a soccer stadium next door.
Soccer is, in fact, in the baseball stadium contract — but only in rules that would leave soccer subordinate to and controlled by the Marlins, limiting soccer’s revenues, scheduling and even when a soccer stadium could be begun.
Optimistically, though, we won’t worry about those draconian controls. Because the parking lots for the baseball stadium would eat up every inch of the land once ticketed for soccer, promises of baseball as a prelude to soccer mean nothing. Soccer was just window dressing, as was other development to revitalize the area touted for the site.
—Speaking of Mayor Diaz, he and Miami-Dade Mayor Carlos Alvarez have been our two top baseball optimists. (We’d include County Manager George Burgess, government’s stadium deal architect, but he’s been hiding since he dumped massive contracts on commissioners and left the state on vacation. He’s back, but unavailable and invisible. Does his optimism remain in the face of the facts?)
The mayors, however, have no reason to hide.
They’ll be term-limited out of office before a stadium rises even if it hits its most optimistic timetable, so they’ll never have to explain budget problems, construction flaws, cost overruns, use of scarce public funds or general revenues, inability of the Marlins to meet obligations, low attendance, parking snafus, sale of the team that vastly profits its owners or the deal’s other looming problems. Count on them to remain our leading baseball optimists. Problems won’t surface on their watch.
—We forgot the absolutely biggest optimist: Marlins President David Samson, who is pitching this deal for the team. He talks fastballs but throws only curves.
The deal optimistically would grant the public a sliver of profits a stadium would yield to owners if they flip the team, as widely expected, once a deal is final. The window for payback would last about six years at declining taxpayer benefit. Even optimistically, it’s all the stadium would yield its owners.
The wrinkle, as we revealed a month ago, is that if the Marlins principal owner should die in those six years, a team sale would net the public nothing. But Mr. Samson, ever the optimist, assured the public last week that the contract clause is of no concern because owner Jeffrey Loria is in good health, so the public is giving up nothing.
Guess if we’re in our late 60s, that’s all we’d have to tell an agent to get tens of millions of free life insurance for six years. Or is that being too optimistic?
—Even greater optimism: believing that cost overruns on a massive public works project (the county would own the stadium it will put $2 billion into although the Marlins would get every benefit) won’t top $20 million.
The Marlins, who to our knowledge have never built anything taller than a pitching mound, are unilaterally hiring and bossing the folks who would design, build and run a stadium towering over Little Havana. Optimistically, we’re taking the Marlins’ word that they can get a $20 million letter of credit to cover overruns and that they’ll pay out of pocket anything over $20 million.
Well, how optimistic can we get? Airport expansion is now billions over what was promised and years late. The performing arts center downtown doubled budget, hundreds of million over promises and years late. Both were controlled by supposed experts.
So we’re taking the team’s word that it can come in on time and fund overruns. But the team refuses to show its books. The public doesn’t even know the names of all the owners. And the contract specifically exempts owners and operators from personal liability, no matter how rich they are.
All we do know is that the owners have yet to pay off a loan from Major League Baseball to buy the Marlins. We know of debt and no unencumbered assets. Even a subordinate public lien on the team that the contract offers would expire before overruns could be known.
Boy, oh boy, are we optimists!
—But wait, there’s more optimism. The county’s whole financing plan is based on using tourist taxes to repay bonds over 40 years. The big payments are loaded later, just like home loans that now are in default, meaning our kids and grandkids have to worry if tourist taxes fall short.
But even that may be too optimistic: it’s predicated on a 2% tourist tax dip in 2009 and receipts at that level for the next two years. Seems safe — except that experts see tourist taxes falling 10% to 12% this year. If receipts in 2010 and 2011 equal this year’s, the plan would begin deep in the hole and commissioners would have to dig more funds out of budgets they’re already slashing. You have to be very optimistic indeed to think this is a wise course.
—Far more optimism is needed to commit billions that even Mr. Burgess acknowledges will create no jobs once a stadium is built. As the recession bites deeper, most governments target spending to add jobs and multiply economic impact. Is there enough optimism to do the opposite?
—The biggest optimism, therefore, is required of Miami and Miami-Dade commissioners. They’ll need optimism on steroids to think voters will forgive and forget if they toss scarce funds vital to the recession battle to instead enrich team owners at public expense.
We should know by Friday night just how optimistic city commissioners can be with other people’s money.
Of course, in the face of so many facts, it’s a short step from unbridled optimism to irresponsibility.