Marlins County Head Toward Arbitration

By Scott Blake
After being criticized for giving away too much in the deal to build a new stadium for the Miami Marlins, the county is continuing to scrutinize down to the dollars and cents the expenses the team has been submitting as its share of the stadium construction costs.

During a teleconference last week between Marlins Executive Vice President Claude Delorme and Jose Galan, acting director of the Miami-Dade County Internal Services Department’s Real Estate Division, the team agreed to remove $144,624.52 of items it had submitted to be charged to the project, according to county spokeswoman Suzy Trutie.

The Marlins had already agreed to remove $476,336.69 in expenses to be counted toward the team’s share of the stadium costs, bringing the Marlins’ total expenses so far to be removed to $620,961.21, county records show.

The invoice dates for the charges range from February 2010 through October 2012.

Overall, the county has been questioning several hundred line-item expenses totaling more than $4 million that the Marlins had submitted related to the construction of Marlins Park in Little Havana.

At this point, no other meetings or teleconferences are scheduled between the county and the Marlins to resolve the remaining costs in question, and the matter is expected to go into arbitration for a resolution, Ms. Trutie said.

The arbitration process is outlined in the construction administration agreement for the stadium, she said.

"The arbitration has not begun because the panel has not been established," she added. "Once the panel is established, a date will be forthcoming."

The county is disputing many of the expense items to be removed on grounds they are not capital costs. The county’s position on other items calls for the Marlins to pay for Major League Baseball’s portion of certain costs, records show.

Those include items in which Miami-Dade County is listed as the vendor, including individual line items of $19,423, $19,327 and $18,647.

Other expenses to be removed include multiple line items in which a firm named SME Inc. is listed as the vendor with individual charges up to $4,184. There are other charges to be removed from professional services firms such as law firms Holland & Knight and Stearns Weaver Miller.

Many of the charges already removed from the list are identified as Direct Office Supplies — mainly relatively small charges totaling several thousand dollars, records show.

Three of the single-largest charges already removed were one for $113,267; another for $112,867; and another for $67,721 listed with Johnson Controls as the vendor. The company provides products and services that optimize energy and operational efficiencies for buildings and vehicles.

Other large line-item expenses already removed include separate charges of $47,012, $45,948, and $20,451 with Holland & Knight as the vendor; $20,985 with AAA Flag & Banner as the vendor; and another for $10,980 listed to a firm named Match Up Promotions, records show.

The retractable-roof stadium, which opened for the Marlins’ 2012 season, has a capacity of 37,000. Together with its parking garages, the complex cost in excess of $640 million to build, including $515 million for the stadium itself.

The stadium-financing deal worked out between Marlins owner Jeffrey Loria and county and city officials has been one of the mostly criticized deals of its kind. The project was mostly financed through sales of county and city bonds.

When fully paid off over the next three-plus decades, the total cost in tax revenue will come to more than $2 billion, with some calculations running as high as $3 billion — which would make Marlins Park the most expensive stadium ever built.

Regarding the upfront construction costs, the county’s share of the bill reportedly came to $384 million, with the Marlins providing $131 million and the city $127 million, mostly for the four garages. Mr. Loria has maintained that the team’s share of the project actually comes to more than $161 million, plus costs related to the parking garages.

Under the agreement, the county owns the stadium and leases it to the Marlins, who get to keep all stadium-related revenues.

More than a year ago, the US Securities & Exchange Commission’s Miami office issued subpoenas to the county and the city, requesting extensive records and other information on meetings and discussions between the county, the city, the team and private financial professionals involved in the stadium deal and the related bond sales.

The SEC has neither confirmed nor denied that it is investigating the stadium financing deal.To read the entire issue of Miami Today online, subscribe to e-MIAMI TODAY, an exact digital replica of the printed edition.