Jungle Island jobs eerily reminiscent of Marlins' ballpark
By Michael Lewis
What do you do when you owe government $26 million you can't pay because you're losing money?
Why, you offer government 10% of your nonexistent profits to forgive almost half your debt — but only if government extends your sweetheart lease 50 more years and gives you more land to develop on at no added rent.
Plus, if you ever actually profit by flipping your lease to someone else, you get to keep all the profit and just pay off the part of the debt that you owe today.
That's the take-it-or-leave-it offer Jungle Island has made to Miami — and the city is considering it seriously.
Moreover, the commission doesn't know what outside investor already plans to pay off part of the debt or what Jungle Island then plans to develop on Watson Island, the city's publicly owned front lawn.
Plus, the commission would be taking its tenant's word that it's losing a bundle running a massive banquet hall surrounded by remnants of the former Parrot Jungle despite luring 450,000 visitors a year, and that it could make a bundle on unknown additions despite badly misjudged past revenues and successive debt restructurings because it couldn't pay loans.
Don't laugh: all this is on the table today.
Given the city's record of terrible deals that Mayor Tómas Regalado cited when the Jungle Island proposal became public, the commission could say OK, claiming it's the best it can do under the circumstances and it needs money.
Can you say Marlins Park?
We didn't see the Marlins' books before that deal, either, though it later turned out that the "poor" Marlins were actually Major League Baseball's most profitable team.
We didn't — and don't yet — know who all Marlins owners and investors were, either. We knew only the public face, just as we do at Jungle Island.
The big difference seems to be that we're dealing with decent members of our own community at Jungle Island.
That's a pleasant difference, though we don't have any idea who is the big outside investor who's going to pay off $15 million in debt, or who else might get into the expanded deal, or what is actually planned for the site.
We just know that beyond the foregoing, Jungle Island would take over and develop the city's Japanese Garden and not pay for it. It would also take over some highway land and not pay for it. And it could get a yacht club too, plus some more, all at no added rent.
The proposal does offer the public 10% of profits. But think of AmericanAirlines Arena, where profits have never hit the level to pay the public's contractual share. If the Miami Heat championship doesn't do it — and it won't — profits will exist forever for owners but never in the public purse.
Isn't that enough warning that what the city is really being asked to do is give away $10 million owed to taxpayers, add 50 years to a bad lease, hand over more land free and add development rights for unknown projects in return for unlikely payback?
Moreover, government shouldn't become a profit partner in a hotel, the one amenity that's known — though we have no idea of the hotel's price point or under what flag it will operate or who will own it.
Even if we knew, Miami has plenty of hotels now. Why are we subsidizing another with taxpayers as partners when it becomes a competitor for taxpaying hotels all around it?
Government — especially Miami — has a terrible record in public-private deals. The taxpaying public almost always gets the short end.
The threat is to force the city to take back the site in default. While we like Jungle Island, if it came to default the city would get a valuable resource it never should have dealt in the first place.
That island is our front lawn. Look at Chicago's front lawn, with green park space run by the public for the public. That should be the first choice for Watson Island, not developers carving it up.
If, moreover, the city is intent on getting revenue from this prized site, why not find the best possible operator at the highest rent rather than limit a new lease to a tenant unable to pay today?
A letter writer suggests Disney: why not?
Someone ought to tell commissioners that Miami is a hot ticket the globe targets for investment. Should worst come to worst, at least seek competitors for the site.
Not that we wish Jungle Island ill. It is now the public's tenant. We fervently hope it can live out its present lease in peace and prosperity.
But if it insists it can't pay, or won't, we don't have to accept the plan that its attorney says "reflects the terms acceptable to Jungle Island."
We need terms far better than merely acceptable to taxpayers, not debtors.
A defaulting debtor should not dictate a sweetheart deal to the city. And the commission should not accept it. Unlike the Marlins, this is not the only team that wants to play here.
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