Miamidades Strong Mayor Error Put Marlins Ballpark In Loss Column
Written by Michael Lewis on May 19, 2011
By Michael Lewis
On Tuesday we’ll vote on a mayor to replace Carlos Alvarez, recalled in part for pushing through a $3 billion Marlins stadium.
We’ll also vote on eradicating a strong mayor format that makes the county manager — our last one negotiated the ballpark fiasco — the mayor’s henchman rather than neutral professional.
But before all that, commissioners voted this week to issue the final $42 million in bonds to fund construction. They had no choice, because the bonds fulfill contracts George Burgess crafted as manager.
The stadium is a done deal — the county’s worst ever — with the public on the hook to repay $2.4 billion from its first two bond issues.
But now it’s time for the first money from the Marlins’ $160 million share. No, the most profitable team in baseball hasn’t paid the county a penny so far as the massive project nears completion in a Little Havana residential neighborhood.
And — surprise — to pay much of the Marlins’ share the county is going to borrow the money. The Marlins are to repay the county for the loan at exactly zero interest for 40 years.
We are not making this up. It’s all in the contract Mr. Alvarez called vital and Mr. Burgess ramrodded through a pliant commission.
Under that contract, team owners might never need hand the county a penny more than $6.2 million from their pockets. It’s mostly double-counting of future rent and prior expenses.
After the Marlins pay $6.2 million, taxpayers borrow $35 million for them and begin paying the interest for the team’s share.
Miami Today told you this two years ago when nine commissioners — seven still in office — rubberstamped this travesty. But now it’s game time, when the county actually strikes out to borrow to pay the team’s share.
And beyond $6.2 million, what does that share consist of?
The team is to pay rent for 35 years minimum, 40 maximum, after which it can use the stadium year around rent free for whatever uses it wants. The county owns it, but team owners control it and get the receipts.
Rent is $2.3 million a year, rising 2% a year — about inflation’s level.
That $2.3 million is less than half of one per cent of the official $515 million construction cost. Add actual interest taxpayers must pay and annual rent is below a tenth of 1% of the $3 billion total.
Over 40 years, Marlins owners will pay rent totaling about 4% of cost, maybe less, because if after 35 years the county repays stadium bonds, team owners stop paying that rising rent and use the site all year free.
Strong mayor, huh?
So the Marlins’ so-called contribution is primarily a minuscule rent in relation to true cost. And 40 years’ rent would cover $138.6 million of the team’s $160 million share.
Moreover, the team can count every penny it spent to float stadium designs. It also can count millions owners spent lobbying officials and the public to OK the deal. We pay for them to convince us to buy into a swindle. Through March, the county tells us, that spending totals $31.9 million.
It took a real strong mayor to approve that contract. At least, you need a strong stomach.
So, starting next year, the team’s rent dives from what it now pays at Sun Life Stadium, plus the county gives owners every penny from naming rights, luxury suites, advertising and concessions, plus lots of parking money.
Plus, owners have taxpayers lending them interest-free the value of future rent payments.
Plus, thanks to our strong mayor, team owners get to offer events in our stadium year around and keep the proceeds. Selling about 200 tickets to an event covers a day’s rent. The rest is theirs — far more than 99% of total seats.
No wonder Mr. Alvarez and Mr. Burgess are gone. No wonder the government form that let them run wild in this deal is on Tuesday’s ballot for a vital upgrade.
You might also question why seven current commissioners rubberstamped this giveaway without analyzing the numbers. Mr. Burgess wouldn’t talk, but these seven didn’t ask.
This week, we’ll be seeing how many of the seven who caved in on the deal moan they didn’t understand what they were voting for or they never would have done it.
Then next Tuesday, you’ll get to dump a faulty system that allowed this to happen because no impartial manager served anyone but the mayor.