Public Strikes Out In Ballpark Giveaway But Game Isnt Over
By Michael Lewis
While citizens were questioning a $600 million giveaway for a Florida Marlins stadium, county commissioners who were doing the giving had a query closer to home: What’s in it for me?
Ignoring where stadium funds would come from, what government liabilities would be or how the county would be protected as the Marlins controlled construction and land use around the ballpark, most commissioners were only looking for what they could grab for their supporters.
It was the old political cry: Where’s mine?
Government was serving up a gigantic free banquet to a hungry team, and all the commissioners could do was try to snatch crumbs that fell off the table. Pitiful.
In agreeing to the giveaway two weeks ago, Natacha Seijas cried for union construction jobs, Dennis Moss called for contracts for small minority firms, other commissioners argued that county police should get the plum off-duty pay for patrolling during games. Take care of my folks, and I’ll vote yes.
Only three commissioners — Carlos Gimenez, Sally Heyman and Javier Souto — looked at the big picture and voted no, stating their reasons in writing. Katy Sorenson was absent for medical reasons and likewise is absolved of blame for a blunder that will haunt us for decades if it isn’t undone — which it still can be, either via Norman Braman’s ongoing lawsuits or if the City of Miami or the county wisely rejects four subsidiary agreements by Aug. 31.
And there is some slim hope: the team, not government, is drafting all four agreements. Marlins management is so obtuse that it may well overplay a winning hand and seek so many added advantages in this already unfair deal that even our city and county commissions may balk. It will only take five county votes, for example, to deny the waiver of competitive bids for a stadium developer or stadium manager, jobs the Marlins are to control.
As it is, the governments that are giving everything away are due to get precious little back. So, instead of looking at what’s in it for me, let’s look at what’s in it for the public.
The Marlins are to pay a bargain $2.3 million a year rent, but even that is part of the team’s construction payment. The team isn’t required to put up a penny of that, via county bonding, until one year before construction is to be finished.
Further, until all county and city construction money is spent, not a penny of the Marlins’ share can be touched for construction — it sits gathering perhaps $7 million interest that reduces the team’s $155 million cost.
Now, what happens when construction, which the Marlins are to control, soars over budget the way terminals at Miami International Airport and the performing arts center and other major county jobs exceeded low-balled budgets that were designed to win government approval by understating true costs?
Well, the Marlins must cover $20 million in overruns. Swell, but other projects have doubled or tripled budgets, so who could believe a team that can’t even build attendance can build a stadium on time and on budget? Who pays for the next hundreds of millions in overruns?
The team isn’t liable for a penny more. That leaves just the taxpayers to pay, as Commissioner Heyman points out, from the general revenues "used for housing, health care, crime prevention, school, social services."
While the county is nominally to own the stadium, the team, not the public, gets all benefits. The Marlins control all 60 luxury suites except one that the city, county and team share for charity events, all advertising revenues, all concession revenues, all naming rights payments. The city and county get to use the stadium eight days a year each under terms tightly controlled by the Marlins, and the city and county pay operating costs when they use it. The Marlins can bar any of those events they don’t like.
The team also gets all stadium revenues from all non-baseball events all year long except for those 16 government dates.
Meanwhile, because the county nominally owns a stadium it doesn’t control, the Marlins pay no property taxes.
The Marlins even control use of the city-owned land around the stadium — and that will directly impact the public. Because while Miami plans to develop the nearby land, the Marlins get to limit what the city can do with its own site.
Looking for a nice cold drink in a beer garden before or after the game, a rite of baseball fans for generations? How about a quick burger or a bucket of fried chicken to carry into the stadium or eat beforehand? Forgetaboutit. The city isn’t allowed to lease its land for a beer garden or fast food — not even to someone who gives away food or soft drinks within three hours of a game. You can, however, go inside the stadium and pay nice high prices that the Marlins get to set, another taxpayer benefit of this deal.
And while the Marlins will pay the City of Miami $10 or so apiece for 5,750 parking spaces in a garage the city will build (the Marlins get the other 250 free), you can expect to pay sky-high prices when you use those spaces. Plus, the Marlins get half of all ad revenues in the city’s garage and get the garage free for World Series games, All-Star games, exhibition games and all non-baseball events at the stadium, keeping every penny you’ll pay to park.
What else does the team give us? 5,000 tickets for charity a year (fewer than 62 per game in a 37,000-seat stadium), and less than 3% of its seats must be priced at $15 or less — not onerous for a team that has failed to sell out seats for less than half that.
Ah, but when owners sell this team, the public gets a cut of a price above the current value, a big stadium spending spree rebate.
But, in fact, how big is that rebate?
The stadium agreement sets the team’s value at $250 million — close to the $244 million Forbes estimated last spring, though far below the prize team, the New York Yankees, valued at $1.2 billion, or the New York Mets, $736 million. In fact, the Marlins are the lowest-valued team in baseball.
A new stadium would change that. Let’s assume that $600 million or so in public spending would double the team’s value to $500 million, a huge free gift to team owners.
But under the agreement government just approved, by the time the stadium opens the team’s base value — the public gets not a penny below that from a team sale — rises to $315 million. If the team were sold then for $500 million, the city and county would share $18 million for their $600 million spending.
But if the Marlins were sold for $500 million a year later, government would split only $14 million. In the third year the split would be $9 million. That would fall to $6 million the fourth year, less than $4 million the fifth.
And after five years, government’s share would be a nice fat zero, even if owners sold for $1 billion or more. It’s all in the stadium deal; you could look it up.
There is so much not to like in this lopsided agreement, in fact, that you should look it up. The baseball agreement belongs in the government Hall of Shame.
But no matter how bad it looks today, the Marlins by the end of this month are to unveil four subsidiary agreements that are sure to make it worse.
When commissioners examine those documents, we can only pray that they for once will look beyond "What’s in it for me?" and ask "What’s it doing to the taxpayers and the community?"
Like the baseball fan on opening day, hope springs eternal. Maybe this is the year that the public finally wins. Advertisement