For county incentives deals, schedule a whole new ballgame
Written by Michael Lewis on February 4, 2015
Miami-Dade commissioners this week were to set deadlines to negotiate $75 million in tax-funded incentives grants to multiple enterprises for supposedly game-changing economic catalysts.
As they plan for future grants that must be funded by raising taxes, it’s highly instructive to examine giveaways of taxpayer monies for past supposedly vital projects that were also intended as economic engines.
One glaring example, which remains on the front page as recently as last week in this newspaper, was the 2009 gift of almost $3 billion to the Marlins to build a baseball stadium that the county owns in name only.
It’s hard to believe now, but government labeled the stadium an engine of economic change for a still-unchanged Little Havana area. It was going to spur so much demand that the City of Miami built 53,000 square feet of stores into its ballpark garages – and most of it has never seen an occupant.
The latest lesson is not this incredibly bad deal that brought the public nothing for its $3 billion. Rather, it is the loopholes that allowed team owners to continue claiming stadium capital expenses through the end of December 2014 although the stadium was in use in March 2012.
In fact, as the team prepares to use the stadium for a fourth year starting in April, the county is still contesting $4.2 million that the Marlins listed as their capital spending to get the stadium built. The dispute is due for arbitration someday.
So it’s entirely possible that after playing in the stadium four full seasons we still won’t know how much the Marlins can legally count as having spent on it.
That doesn’t mean they actually spent a penny to build it. They were never legally responsible for a penny’s worth of construction. But they were to fund engineering, architecture and other capital soft costs to total $126.2 million. If they can’t show that they spent that much, they must for the first time start putting their own cash into the stadium to make up the difference – though the money goes not to taxpayers but to upgrade a stadium that the Marlins totally control and solely benefit from.
But regardless of who benefits from the money (only the team), the Marlins would still have to open their wallets and hand the county actual cash for the first time. So they’ve for years been throwing at the wall everything they could think of and calling it ballpark capital cost.
What kinds of things? $26,870 for cleaning the team’s sales office – and it wasn’t even at the ballpark. Or cable TV for that office. Nearly $10,000 in office supplies. Printing sales brochures. A pack of chewing gum for travel (not for holding the building together). Flight upgrade fees. Telephone expenses. $5,000 monthly auto and accommodations allowances. Almost $11,000 for alcohol – the drinking kind.
The list went on and on and on. By May 2012 county auditors had questioned 439 Marlins claims of what they called ballpark capital spending. The auditors said it wasn’t.
And more claims kept coming through the end of last year. The Marlins have already agreed that $812,000 of what they listed wasn’t proper. But county auditors found lots more they’re disputing.
Now the apparently endless ballpark spending saga awaits arbitration.
For the future deals, Commissioner Daniella Levine Cava proposed that the county negotiate with all the recipient list for the county’s $75 million in current incentives by July 21. Then the commission would follow up by voting to approve those deals.
Setting deadlines is valid. But within each deal, deadlines for the performance that would earn incentives must be tightly pinned down as well as firm definitions of what achievements will trigger payments of incentives.
When incentives are based on jobs, definitions should be firm, specific and easily auditable. If they’re based on capital spending, make sure chewing gum and alcohol – or equivalent foolishness – can’t be considered. No flight upgrades or cable, either.
The Marlins contract left so many loopholes in every area that anything at all was possible. We fell all over ourselves to give away $3 billion and then thanked the Marlins profusely for taking our money.
Today, however, top county administrators are far stronger and under less pressure to give away the store. They are more likely to pin down goals in detail and not leave it to auditors to challenge foolhardy claims after the fact.
When they cut the deals that will fund projects that the commission has chosen, county negotiators must be precise and demanding.
The negotiations due to take place in the next six months should end with tight definitions of performance that qualifies for the grants of taxpayer money. Otherwise, just like the baseball stadium, it becomes a county gift of our tax money with almost no strings attached.