Hard Rock Stadium bonds win stable outlook
Bonds that funded past development and redevelopment at what is now Hard Rock Stadium in Miami Gardens have been affirmed at a BBB rating with a stable outlook by Fitch Ratings, whose bond ratings are paid for by the bond issuers.
The ratings cover $120.9 million in taxable Miami-Dade County Industrial Development Authority revenue bonds issued in 2006 and 2007 and $76.3 million in tax-exempt Industrial Development Authority revenue bonds issued in 1985.
Fitch notes that the bonds were issued by the Industrial Development Authority on behalf of the Miami Dolphins football stadium’s owner South Florida Stadium LLC, which is obligated for all payments on the bonds. South Florida Stadium also issued $100 million in bonds through the Industrial Development Authority in 2015 as part of the current stadium renewal funding, but Fitch does not rate those bonds.
The current renovation, Fitch says, has spent about $372 million of its $500 million capitalization on the first two phases.
The first phase includes a sales and data center, bowl area renovations on the stadium, full seat replacement, construction of five new clubs in the club area, general admission concourse improvements and service level improvement, Fitch says.
Projects completed in the second phase, Fitch says, include construction of a shade canopy over the football field, four new high-definition video boards and production controls, new LED lighting, a broadcast video production area and equipment, general admission concourse flooring restoration.
The third phase next year is to include additional suite and club area renovations.
Of the $500 million expected to be spent on the whole renovation, Fitch says, $350 million is to come from owners, $100 million from the 2015 bond issue and $50 million from the National Football League. “To the extent that there are costs above $500 million, Fitch expects additional ownership equity to fund projects,” the ratings firm writes.
In looking at the credit of the stadium ownership, Fitch notes that in the fiscal year that ended March 31, stadium-related revenues grew about 11%, “”driven by luxury suite premiums and club seats, while signage and sponsorships declined.” Total revenues also declined for the fiscal year, Fitch said, “reflecting fewer other events including other sporting events and concerts, due to the ongoing construction during the [football league’s] off-season.” To offset the decline, Fitch said, expenses were cut 7%.
In citing factors underlying its bond ratings, Fitch cites “Hard Rock Stadium’s status as a premier venue in South Florida,” the strength of the National Football League, football’s player contract through 2020 that “provides for a lengthy period of labor relations stability” and the stable fan base of the Dolphins.
Also cited as strengths for bondholders are that “a high percentage of collateral is contractually obligated and consists of luxury suite revenues, club seat revenues, stadium advertising and sponsorships, concessions, annual stadium rent, parking and other revenues.”