City looks at settling suit on Miami Marlins sale $1 billion profit
Miami commissioners will consider settling a lawsuit with the Miami Marlins over a dispute concerning, among other things, the increase in the baseball team’s value when it was sold.
The proposed $562,800 settlement purports to represent the city’s share of building the team’s stadium in Little Havana.
The April 2009 agreement, according to legislation the commission faces today (1/28), provides that upon a sale the new owner would pay the city and the county a percentage of the proceeds “attributable to any increase in value of the franchise.”
The former owner alleged the team’s value had not increased at the time of the sale due to expenses and capital gains taxes, so the city and county are owed nothing under the profit-sharing scheme from the 2009 agreement.
The city and county have questioned whether the value determination was fair and accurate.
After the sale, former owner Jeffrey Loria sent a letter and accountants’ report claiming he suffered a loss so the county/city equity payment was zero. County attorneys have described those calculations as “fuzzy math.”
Mr. Loria bought the Marlins in 2002 for $158 million. In October 2017, he sold to Marlins TeamCo. LLC, a Delaware limited company, for $1.2 billion.
As an inducement to provide what “proved to be highly-controversial funding” for the Marlins stadium’s construction, 5% of profits from a future sale were to go to the county and city as compensation for their contributions, according to a 2018 city and county lawsuit against Mr. Loria and Marlins TeamCo. LLC.
Some in Miami have long criticized the stadium deal, funded through the sale of county and city bonds, as a public giveaway to private interests that ultimately left taxpayers on the hook for $3 billion.
The City Attorney’s office recommends settling the suit for the suggested terms.