Miami Dolphins owner Stephen Ross issued his plans for a $400 million renovation of Sun Life Stadium yesterday, to include wider seats, a bigger lower level, new video boards and sound system, and a canopy to cover the seating sections. And all this will be done, Ross promised, with private funding paying for more than half of the cost, and no tax increases for Miami-Dade residents.
Of course, that means that public funding could be required to pay for the other 49%, and “no new taxes for residents” leaves a lot of wiggle room for, say, existing taxes. So what does Ross have in mind for public subsidies?
Dolphins CEO Mike Dee said a bill will be filed in the State Legislature seeking $3 million a year sales tax rebate from the state on goods and services generated at the stadium. A companion bill will seek to empower the Miami-Dade County Commission to raise the tourist bed tax in Miami from 6 to 7 cents.
That would enable the project to tap into the professional sports franchise tax that has already been authorized and used on other sports facilities, including the AmericanAirlines Arena and Homestead-Miami Speedway. That could provide up to $10 million a year.
“It’s not a new tax,” Dee said, adding, “We are not restricting our discussions to those two ideas. We are open-minded and eager to work with local elected leaders and legislators to find other means to uncork this private investment that we’re willing to bring to the table.”
Let’s break these down one at a time. The sales tax rebate is the same subsidy that pretty much every team in Florida gets, and indeed the same one that the Dolphins have already been getting at Sun Life — this would apparently be an extra $3 million a year on top of the $2 million a year they already get. (Attempts to double-dip on sales tax rebates aren’t exactly unheard of in Florida.) Raising the hotel tax (technically the “professional sports franchise tax,” but it’s a tax on hotels, so let’s call it a hotel tax) is apparently not considered a tax on “residents” since most hotel stays will be by people from outside Miami (though not necessarily outside Florida). But there’s still an opportunity cost: If the Miami hotel market is strong enough to be able to tolerate a 1% hike in costs, then the city could be raising that tax and spending it on other things.
Anyway, that’d come to $13 million a year, which might just barely be enough to pay for $200 million in renovation costs. And why exactly should Florida taxpayers be paying for the cost of redoing a facility because the Dolphins have decided they built it wrong in the first place? What say you, billionaire developer Stephen Ross?
Asked why he won’t pay for the entire project, Ross said: “I think I’ve made a bigger commitment than any other person in professional sports in the United States.”
Fortunately, we have Judith Grant Long’s new book — full review coming soon, by the way — with which to check Ross’s claim. There are two ways to look at Ross’s contribution: by raw dollar value ($200 million) and by share of the cost (50%). Spending $200 million in private money would, according to Long’s data, actually rank tied for 14th (with Washington’s Verizon Center) out of all stadiums and arenas in use in 2010, and even further down the list if we included things like the new San Francisco 49ers stadium and the proposed Seattle NBA arena. In terms of share, going halfsies would be a worse deal for the public than no fewer than 28 U.S. sports venues, including NFL stadiums for the New England Patriots, Carolina Panthers, and New York Jets and Giants — not to mention Sun Life Stadium itself, which was mostly paid for by the Dolphins’ then-owners, though it did get some public infrastructure and other subsidies.
So, Ross’s proposal — assuming we’ve heard the last of it, and there are no additional hidden costs, which by Long’s calculations add an average of 40% to public stadium expenses — would be a good bit better than average, but still far from the best deal in sports, or even in the NFL. And it would undeniably cost close to $200 million in public money, for a stadium that’s owned by a billionaire, that was just renovated in 2007 at a cost of $250 million, and that is home to a team that currently turns an annual profit of about $20 million. Whether that’s going to be good enough to placate Miami residents and elected officials is something that — Ross’s stated plan to start on renovations this summer notwithstanding — we’re likely going to be debating for a good, long while.