Private Stadium Offer Gives Commissioners An Out Pitch
Written by Michael Lewis on March 12, 2009
By Michael Lewis
Could it be that after all the fuss, the Marlins stadium saga will turn out as it always should have — a straight business deal rather than a political giveaway?
In deep recession, city and county commissioners were about to fund a stadium based on unjustifiable waste just to avoid being labeled anti-baseball. Suddenly, they have a rescuer — actually, two of them.
A businessman with land and cash has offered to build a ballpark in the best area, downtown Miami. Meanwhile, sale of Dolphin Stadium to a real estate whiz offers the Marlins hope of a bid to stay right where they are.
They now have the leverage of choice.
A private stadium deal that excludes government’s bankroll would benefit everyone.
Glenn Straub wants to build a stadium on the old Miami Arena land and lease it to the Marlins with an option to buy. He could profit on a site he bought from the City of Miami for $28 million.
The new Dolphin Stadium owner, New York realty mogul Steve Ross, knows the value of leasing property for an extra six months a year and might cut a better deal than predecessor H. Wayne Huizenga.
So the City of Miami, which is still trying to help bankroll a stadium within city limits, could put its money back in its pocket. If the Marlins struck a deal with Mr. Straub, the city would get a stadium that pays taxes in the city, which a government-funded stadium would not.
A stadium at the old arena site would also stimulate economies downtown and in backwatered Overtown and add construction jobs there, which could hand City Commissioner Michelle Spence-Jones the victory flag in her overt bid to leverage a tiebreaking stadium vote to benefit her community and herself.
Outgoing Miami Mayor Manny Diaz, prime proponent of a stadium in his city, could also claim victory if the Marlins chose downtown.
County mayor Carlos Alvarez would also win. He’s been waving the flag for baseball and could tout either a stadium downtown or retention of the Marlins at Dolphin Stadium as a boon.
County and city commissioners wouldn’t have to empty tourist tax coffers for 40 years and could use those scarce resources to generate jobs now and enhance our economic engine in the future, becoming heroes instead of goats.
Major League Baseball, the unmentioned elephant in the infield of stadium talks because it can block any deal it doesn’t like, would be an elephantine winner. Any new ballpark would raise the Marlins’ franchise value by several hundred million dollars, enabling owners to sell out and repay the league untold millions they borrowed from baseball.
For that reason, this deal would benefit even the Marlins — though far less than if government were to build and rent them a stadium far below market value.
No, the Marlins for certain wouldn’t get the sweetheart deal from either Mr. Ross or Mr. Straub that city and county administrations are pushing. Businessmen wouldn’t yield all proceeds from tickets, advertising, luxury boxes, concessions, naming rights, media rights and more — at least, not without enough rent to make a fair profit.
That’s the hang-up: fair, which the deal with government is not.
In a normal lease, a tenant chooses a site based on the best deal and location, but the landlord seeks a fair profit in return. The government offer is neither the best location — it’s the worst — nor any kind of deal for the public. Everything would go to the tenant.
Dolphin Stadium is centrally located to the team’s tri-county base. The reason to move has been that the Marlins want the landlord’s profits too.
The old arena site is in Miami’s core, great for people who’d buy high-priced seats. But the Marlins won’t like that anywhere near as much as a bad location for fans where the team pays virtually nothing.
Now two good stadium choices loom without need of government. The team could get a good income — and have a great chance to sell to new owners at a very big profit.
But with a public giveaway in the offing, why would the Marlins look anywhere but a lesser site in Little Havana?
Wouldn’t you be pleased to have government build a workplace to your specifications at rent so far below market rate that your head would spin? Of course. But if government wasn’t in a giveaway mode and you had two good choices for a home, you’d still be happy.
That’s where the issue stands. The city and county have called time out to twist enough commissioners’ arms to force through a deal that no longer has reason for being, because the Marlins now have two other choices.
The Marlins wouldn’t be as happy downtown or in Miami Gardens as in Little Havana, because what is ticketed to be a giveaway would become a normal business deal.
But when did it become government’s job to beat out competent business professionals with a lower-priced offer that would penalize only taxpayers and imperil the community’s economic future?
As of today, government has no role at all in a stadium deal. Just like any office or warehouse or retail lease, it’s now strictly a business arrangement. Leave the business dealings to business and the tax receipts to taxpayers.