During meetings last week with NFL owners in Phoenix, the Dolphins shared a confidential report on their ongoing negotiations with Miami-Dade Mayor Carlos Gimenez to bring the issue to a countywide vote, according to an NFL source. The source said the Dolphins revealed they have offered to use private dollars to fund $225? million in construction costs for a renovation now estimated at $389? million, less than the $400 ?million figure that was the most commonly used estimate for the deal…
And the Dolphins have offered to go one step further and repay Miami-Dade for the $120?million the county would be expected to put into the renovation, the NFL source said.
Wow, really? If the Dolphins would reimburse the county for its contribution, that’s potentially a huge deal. Depending on what the repayment terms are like, of course—
Under those terms, the Dolphins would repay the county $120?million in 2043, after the end of a 30-year deal covered by the agreement. The terms do not include an adjustment for inflation, and would not return to Miami-Dade any of the interest expense the county would incur to repay $120 million in bonds borrowed using the revenue created by the higher hotel tax.
Okay, not such a huge deal, then. What the Dolphins are proposing is to turn the $120 million public subsidy into a $120 million 30-year interest-free loan — and given the value of $120 million in 2043, that’s almost as much of a subsidy as if the team didn’t repay it at all. Look at it this way: If Ross could expect to earn 5% annually on an investment, how much would he have to put away buy lorazepam india today in order to end up with $120 million in 2043? Get out the calculator, remember how to do exponentials, and … looks like around $28 million.
(This is, incidentally, exactly what economists do when they talk about future money having a present value of $28 million at a 5% discount rate. Learned you something there!)
So, Ross is offering to give back something that’s worth around $28 million, in exchange for getting $120 million up front from the county. They’ve also (if you believe this NFL source) trimmed their total subsidy demand from $200 million to $164 million, so take away the $28 million from the future value of that 2034 repayment, and … let’s see, where’s that calculator again … you’re left with $136 million that the Dolphins want the public to pay for no damn good reason.
(Oh, and they’ve promised not to accept any county money at all if the stadium renovation plan moves ahead and the NFL doesn’t grant Miami one of the next two Super Bowls to be decided, which is a risk of exactly zero since it’s absolutely certain that the NFL will give Miami a Super Bowl if it agrees to stadium renovation subsidies. And in all likelihood even if it doesn’t agree to stadium renovation subsidies.)
Still, it’s a concession, and that’s something. Though, come to think of it, the hotel tax hike and sales tax rebate that the Dolphins are asking for would apparently remain the same size, even though the stated public share of renovation costs would go down. So you don’t think that Ross would be looking at collecting the same amount of money (less the 2043 repayment), but calling part of it something other than renovation costs … nah, that could never happen.