The Miami Heat’s arena deal is one of the weirdest in pro sports, thanks to a last-second switcheroo that the team pulled in order to win a public vote back in 1996. With time running down and the vote looking close, the Heat owners decided to scrap their original plan in which the city would pay for a large chunk of the arena costs, and instead pay for the entire construction cost themselves — but in exchange for $6.5 million a year in “operating subsidies” from the county. It came to the exact same thing in terms of who was paying for what, but it sounded better to voters, and the arena measure passed.
Now, with the operating subsidy deal set to expire in 2029 (only 15 years away!), the Heat are looking to do some renovations to AmericanAirlines Arena, and want to get the public to help pay for them the same way they did the original construction:
The current deal expires in 2029, and the Heat said it wants to work out an extension through 2039 now in order to invest in more upgrades at the county-owned arena. A county commissioner is pushing the mayor to get the deal done by March…
In November, team lobbyist Jorge Luis Lopez said a new deal may require as much as $17 million a year in public subsidies to produce the kind of renovations that will keep the arena competitive. Marquez declined to say what the Heat was asking for, or whether the team wants to increase the current $6.5 million subsidy as part of a new deal.
“There have been numbers thrown around,’’ Marquez said.
Those are some numbers, all right, so let’s crunch ’em. If the Heat are really looking for $17 million a year over ten years, starting in 2029, then in current value, assuming a 5% annual discount rate, that would be … I get $66 million. Which is less than the county kicked in the first time, but then it was getting a promise by the team to stay put for 30 years, whereas here it would only be extending the Heat’s lease by 10 years. That seems like a good candidate for a dictionary illustration to me, but let’s wait and see where the numbers land after they’re done being thrown around.