Don’t let Dolphins’ bonanza reopen business bidding war
Written by Michael Lewis on July 31, 2018
Miami opens purses for sports so freely and so often that it was no surprise when the county last week granted the Miami Dolphins up to $71 million to build a practice site that could cost $70 million beside the team-owned stadium in Miami Gardens on what is now a parking lot.
That move 10 miles south from Broward County was smart: it would have made business sense for the team without the county paying any incentives at all, and we are pleased that they will convert raw land to a higher use.
But by using incentive money to lure a business from Broward, the county ignored a decades-old multi-county accord that bans pirating business from neighbors, thus potentially opening a new era of free-for-all bidding wars.
The county cited as a reason for the payout the 100 jobs of players, coaches and staff who practice in Broward – except that they work in Miami-Dade for games. So we’re paying incentives of up to $710,000 per head for jobs that we already had on Sundays.
Yet the incentive has to be for jobs, because total construction could cost less than the incentive of $71 million that we are dangling.
Then there’s the third possibility:
“This incentive should be called what it is … a bribe,” said Frank Nero, managing director of the Economic Solutions Group, who for almost two decades ran our economic development organization, the Beacon Council, which normally recommends to the county when to offer business incentives.
Whether it’s jobs or capital investment or simply a gift we’re funding, the incentive to move from Broward could trigger repercussions that have nothing to do with sports and everything to do with economic development.
The danger beyond the cash giveaway is that spending to lure a business across the county line could unleash a backlash from Broward County that would result in bidding wars for businesses and erode a spirit that has been building in South Florida in which counties cooperate in luring major industries for the region’s benefit. It might even taint the multi-county cooperation to fund and host the economic bonanza Super Bowl in Miami.
Look back 25 years. Miami-Dade, Broward and Palm Beach counties were offering economic jackpots to not only outside companies but also to nearby businesses to move operations across county lines. Those packages contained local and state incentives, with businesses vying for larger payoffs to jump from county to county.
The state quit the game first when then-Gov. Lawton Chiles prohibited state payoffs in economic musical chairs within Florida. But the counties continued to offer their own funds to lure businesses from their neighbors. Shifts from North Dade to South Broward became common for all the wrong reasons.
Then the heads of the three counties’ economic development organizations united to end the foolishness with formal agreements to not swipe businesses from each other with locally funded incentives.
The three agreed that before reaching across a county line, a development group leader had to formally give the home county first chance to retain the business. Only if the home county couldn’t accommodate the company and it was looking to exit the region could an incentive be offered, and then only if the home county signed off in writing.
That ended job piracy, until now.
We doubt that spending to lure Dolphins training, which has been billed as economic development, had much to do with the Beacon Council. No development organization could call that $71 million well spent while far bigger prizes like a 50,000-job Amazon headquarters are up for grabs with Miami still in the running.
Still, all that development money just flew away. And we can’t see how that would please Broward.
So what happens the next time Broward spies a Miami-Dade firm to lure north? Would Broward stick to the no-piracy agreement that Miami-Dade just ignored, even though there was no net economic return on investment for us?
Though we strongly disagreed that having the Florida Marlins renamed Miami Marlins was worth a $3 billion stadium, at least we got a Miami name for our money. But what do we publicize from a practice area? There are no bragging rights.
We got no economic development, no publicity bonanza and nothing much else from a practice facility except possible problems if our neighbors to the north resent our poaching.
So although the Beacon Council didn’t engineer this $71 million incentive, it can’t just punt. Beacon leaders need to carry the ball back to their Broward counterparts and make sure the no-poaching pact is kept alive, at least as far as the development organizations are concerned.
Despite what county commissions do, development organizations themselves must not revert to bidding wars by dangling incentives across county lines. Those lures to neighboring businesses too often become giveaways that make no economic sense.