If Florida Marlins Stadium Comes In Under Budget Team Funds Go To Capital Reserve
Written by Risa Polansky on January 28, 2010
By Risa Polansky
While the competitive construction climate is bringing in many major projects below price estimates, the Florida Marlins predict market conditions will help get their new ballpark built on budget without compromising quality.
In looking at new stadiums built across the country recently, it’s been common to see major "value engineering" near the end, adjusting elements of the project — often downgrading — to bring higher costs back within budget, said Claude Delorme, Marlins executive vice president of ballpark development.
But "in this case it will be minimal because of the favorable market conditions that we’ve seen.… It does allow us to keep the project in budget and on time at this point," he said.
In building the 37,000-capacity, retractable-roof ballpark in Little Havana, "what we’ve seen is certain bid packages have come in under, and others were over," Mr. Delorme said.
In the end, the $515 million construction project — nearly $3 billion with interest — should come in on budget without cutting corners, he predicted.
Officials have updated cost estimates along the way to make sure the project is in line with the budget, he said, and favorable construction costs in today’s down market "really took care of any scope growth along the way."
The team would have done what it needed to do to keep ballpark costs on point, Mr. Delorme said, but it looks like "value engineering" may not be necessary.
"I think our project will allow us to keep all the amenities we had at the design-development stage," he said.
The competitive construction market — a result of the economic crash that’s left builders scrambling for work — allowed the City of Miami to secure a $75 million contract for stadium parking facilities long projected to cost $94 million.
That’s a 20% savings.
But unlike parking garages, the stadium is a complex, custom-designed facility, county spokesman Vicki Mallette said.
Agreed Mr. Delorme, "This [stadium] is very specialized — it’s a very iconic building."
Ms. Mallette also said the project is "tracking on budget" and there should be some savings on standard construction materials such as concrete, but "it’s premature to presume any pricing results."
The stadium is meant to open in time for the 2012 baseball season.
Should the ballpark come in under budget as the city’s parking looks like it will, lower-than-expected building costs wouldn’t shrink the amount the team is due to pay.
Under the stadium deal among the Marlins, Miami-Dade and Miami, the team won’t put in money for hard construction until county and city shares are entirely spent.
The county is putting toward construction $347.5 million and the city $13.5 million.
Should local government funds cover all or most of the construction budget, the team would still pay the full $154 million it’s committed to, but the money would go into a capital reserve fund rather than toward construction itself.
The team is already paying costs related to design and infrastructure, so no matter how cheap building turns out to be, "there would never be a scenario where the team’s entire contribution would go to the capital reserve fund," said Assistant County Attorney Geri Keenan. But "some portions, certainly."
The stadium contracts between the team and local governments say the team won’t put in its hard construction contribution until "following the complete funding and exhaustion of the City Account and the County Account."
If that covers the entire job, the balance of the Marlins’ $154 million portion would go into the capital reserve, which "in no way diminishes their annual contribution" to the fund, Ms. Keenan said.
Once the stadium is built, contracts require the team to put into the reserve each year $750,000, plus some of its proceeds from stadium events other than Marlins games.
Lower-than-anticipated construction costs and the subsequent deposit of team construction funds into the capital reserve, she said, would be "in addition to" the annual deposits.
The county is to put $750,000 a year into the fund and the city $250,000.