Miamidade County Commissioner Targets A 50 Million Marlins Repayment
Written by Ashley Hopkins on September 16, 2010
By Ashley Hopkins
Amid concerns that Miami-Dade County may have entered into a contract for construction of a Marlins Stadium under false pretenses, Commissioner Sally Heyman announced Friday she plans to look into what could be done to get the team to reimburse the county for $50 million it has spent in general obligation bond proceeds to finance the project.
When Miami-Dade entered into a three-way contract with the City of Miami and the Florida Marlins, it was under the belief that the team was cash-strapped and struggling to stay afloat, Ms. Heyman said. A 2003 pro-forma attributed to the team ownership had estimated the Marlins be to $141 million in debt, with equity declining.
While the administration did not have access to the team’s financial information during negotiations, County Manager George Burgess said, the county spoke with Marlins executives, met with potential lenders, reviewed public documents, discussed team costs and financial structure with experts, and studied other recent ballpark construction agreements before approving the project.
Based on copies of Marlins financials posted in recent weeks on the internet, in 2008 and 2009 combined the team had a net income of roughly $33.3 million. It had the lowest payroll in Major League Baseball in 2008, fifth lowest in 2009. Now that the commission has more information at hand, Ms. Heyman said she would like the Marlins to consider paying back $5 million a year for 10 years.
"We put all our energy into the unknown, to protect a baseball team’s partnership with us by giving them money, letting them work against the rent for 30 years, letting them have the naming rights and everything else, because we had no information to dispute their ability to finance the project," Ms. Heyman said.
According to County Attorney Robert Cuevas, as the Marlins have not violated any Major League Baseball rules that would prevent the team from playing at the stadium, the commission would have to take action to determine if all three partners involved in the contract would agree to look into negotiations.
While Ms. Heyman said at the meeting she plans to look into the matter further, Commissioner Katy Sorenson, who has questioned the deal since negotiations began, said she does not think the commission will see a return on the county funds.
"It was a giveaway to the rich," she said. "I don’t think the rich are going to come back and be charitable."
Commissioner Joe Martinez, who also voted against the contract last year, expressed similar sentiments.
"There’s nothing we can do," he said. "If there’s nothing we can do, then the vote of 9-4 stands, and we have to live with it."
According to the construction agreement, Miami-Dade is set to contribute $347.5 million to the $515 million project, while the city is to provide $13.5 million and also fund parking construction. Of county funds, $237.5 would be financed through tourist tax dollars, $60 million though the Convention Development Tax and $50 million through general obligation bonds. The county is to repay two other bond issues over decades at a total of $2.4 billion as part of the stadium financing.
The Marlins are to put $154 million into the deal, $35 million of which will be financed through county bonds and repaid over time. The team is expected to contribute $2.3 million each year in stadium rent, which is included in that $154 million.
So far the team has contributed about $30 million to the project, Mr. Burgess said at Friday’s meeting. As the team has been shopping around for potential lenders, he said he expects the remaining $90 to come in within nine to 12 months.
Mr. Burgess told commissioners the deal the county made is on par with deals being made across the country. A 70% public and 30% private split in financing is a standard agreement, he said.
Commissioner Carlos Gimenez, who voted against the deal last year, disagreed, saying the county got "one of the worst or the worst baseball deals in the country."
"We did back flips to accommodate the Marlins," he said. "We got nothing in return. We’re going to get a baseball stadium — to benefit the Marlins."
Despite the bitter taste in his mouth, Mr. Gimenez said, the county needs to stay positive and look forward.
"That’s water under the bridge," he said. "The construction process is going well — I would hope so."
Commissioner Audrey Edmonson agreed, saying that while most of her concerns were met, she remains unsure about the project. Looking ahead, she said the commission should focus on the future rather than insulting the Marlins.
"They have a business," she said. "They did a good job in their negotiations."
Closing out the discussion, which led to no action, Commission Chair Dennis Moss said that while he had suspicions that the team was making more money than it had let on, he will consider the deal a learning experience.
"The stadium will be built. At the end of the day I want to make sure a team is here and there is a stadium for that team to play in," Mr. Moss said, adding that next time he makes a deal he will make sure to see financials. "If I’m going to get burned, I’m going to get burned with all the information on hand."