County Hasnt Gotten A Cent From Its Americanairlines Arena
By Risa Polansky
It’s been more than a decade since the American Airlines Arena opened, and owner Miami-Dade County has yet to share in the receipts.
The Heat Group paid to build the now nearly 11-year-old arena on government land downtown.
Miami-Dade pays a $6.4 million annual operating subsidy to Heat entity Basketball Properties Ltd., established to build, manage and operate the arena.
Under the 1997 contract, the county stands to gain a 40% share of arena net cash flow above $14 million after other obligations are covered.
It’s unclear when, if ever, that might happen.
Before the county sees a share, money must first go toward arena operations and a capital replacement reserve, amortizing arena construction costs and paying management fees.
Any shortfall in covering those areas and the arena manager must advance the money — which has happened.
There’s still nearly $28.2 million in arena manager loans to go after paying down about $4.55 million in principal last year, fiscal 2009 financial statements show, as well as about $2.5 million in unpaid management fees and accrued interest.
The county can’t see a penny until that’s all paid back.
The Heat Group declined to comment on revenue projections.
The county doesn’t make them.
"To date, the County has not received a distribution of arena cash flow," said county Finance Director Carter Hammer, who was not involved in the arena deal, via e-mail. "I was informed that due to the complexity of forecasting the team’s and arena activity over a 5 year period, these forecasts were not being provided. We generally don’t do the forecast for external third party organizations such as the Miami Heat operations."
Financials show that arena operating expenses totaled about $30.6 million in fiscal 2009.
Revenue, including the county subsidy, reached about $52 million, netting about $21.5 million.
Subtracting $14.5 million for arena cost amortization left less than $7 million in excess net cash flow, which went toward deductions for accrued interest and paying down some manager loan principal — leaving nothing in the pot of "arena distributable net cash flow."
Longtime county Commissioner Katy Sorenson said she doesn’t recall the project being pitched as a revenue-generator at the time but says she opposed it because "it was going to give a lot of benefit to the team and not so much to the county. We own the land and we own the arena — but so what? As long as there’s a contract we don’t really get anything out of that."
Armando Vidal, county manager when the deal was made, did not return a call.
The bayfront project has "absolutely" made money for the county, said Bruce Jay Colan, who led a team of Holland & Knight attorneys representing the Heat Group in the arena deal.
"Part of the goal was to spur development," he said, pointing to Biscayne Boulevard and its condos, restaurants and the performing arts center that’s also been credited with helping revitalize downtown.
"Each piece adds to the next," Mr. Colan said, "and that [the arena] was the first major construction in that whole corridor." Advertisement