Dolphins owner’s new renovation plan: How about we stop paying property taxes?

Miami Dolphins owner Stephen Ross has finally revealed his “new approach” to paying for renovations to Sun Life Stadium, and it’s new, all right: He says he’ll pay for a $350 million overhaul if Miami-Dade County exempts him from all county property taxes on the building.

[Miami-Dade Mayor Carlos] Gimenez said Ross, a billionaire real-estate developer, agreed to complete the renovations, then turn over the stadium to county ownership and start reaping the tax savings once the project was completed. Team officials said the plan would bring Sun Life in line with stadiums across Florida, which are publicly owned and exempt from taxes.

Yes, it would, and yes, they are, but that doesn’t make it any less of a public subsidy. As for how much of one, that’s a bit tough to say: The Dolphins’ current annual tax bill is $3.8 million, but that would likely rise with property values; if you assume that rising real estate prices roughly cancel out the devaluation of money that won’t arrive until several years down the pike, then 30 years of property-tax breaks (I’m guessing a 30-year lease, though neither Gimenez nor Ross gave any details about how a lease would be structured — more on that in a moment) would be worth a little over $100 million.

Gimenez calls this “a much better deal than what we were talking about last year,” but given that last year’s plan was for $127 million in county subsidies, it’s actually pretty close to a wash. (Ross would have gotten more up front via hotel taxes under that plan, but also would have had to repay some of it down the road, reducing its value.) And there’s one more wrinkle here that the Miami Herald doesn’t mention: Whereas right now the Dolphins are essentially stuck in Miami because they’d have a white elephant of a stadium to unload if they ever tried to move, with the county taking over ownership of the stadium, they’d be able to leave (or threaten to) the minute their lease was up. And there’s also the small matter of the $232 million in debt the Dolphins still owe on their stadium — I’m assuming Ross would remain on the hook for that, but neither he nor the county has said.

There are still a lot of questions to be answered, in other words. At best, though, this looks like about the same deal that Miami-Dade was looking at last year, and at worst it could be a fair bit worse. But hey, at least Miami could reap the rewards of hosting a Super Bowl! Oh, wait.

9 comments on “Dolphins owner’s new renovation plan: How about we stop paying property taxes?

  1. Team and Mayor said no County risk, no County debt, including no assumption of debt. So the existing debt stays with Ross. As for the lease, I’m not quite sure I follow your argument. They’re free to leave now…they’d simply have to part with their stadium, which already sits on County owned land. But parting with their stadium is exactly what they’re proposing. They are going privatley renovate the stadium, then give it to the County at no cost. So I think you’re wrong on that point. They can leave now, but if they sign a lease, they can’t.

    Not a fan of stadium deals, but let’s be honest, 100% privately funded, no subsidies, no public funding, and just a property tax reduction after it’s done that’s a tiny sliver of the County budget? Plus a long-term non-relocation agreement?

    Seems about as good as it will ever get. Other owners can’t be happy about this.

    Seems fair.

  2. “… but let’s be honest, 100% privately funded, no subsidies, no public funding, and just a property tax reduction after it’s done that’s a tiny sliver of the County budget?”

    A “tiny sliver” is an odd way of looking at it. $100 million is serious money, regardless of the pie it’s sliced from. And it’s most definitely a subsidy.

  3. If they sign a long-term lease, then yes, they’re tied to the stadium. Has Ross committed to that as part of this deal, though?

  4. It might be better to donate the stadium to the county now:
    1. Insane tax deduction
    2. County gets total bill
    3. Free to go asap

  5. Keith, it is not a subsidy, by definition. It is a reduction in taxes. A subsidy is something that is handed out. A check cut by a county to a facility, for example. A tax reduction (or abatement or incentive) is, well, a reduction in the taxes that the facility or team pays to the county or city.

    Neal, yes, they are committing to sign a long-term non-relocation commitment. I’m not sure if they have announced the term of the non-relo yet, but they typically are concurrent with the length of the lease. He tossed around 20-30 years last time when they had the bed tax proposal.

    All in all, this is a stadium deal, which makes it smell funny, but it seems to be fair on it’s face. I’ll hold on endorsing it until I read the fine print, though.

  6. I would strongly disagree that a tax expenditure is not a subsidy — does it matter whether the county cuts Ross a check or rebates him on a check he’d otherwise have to cut?

    Good to hear about the non-relo agreement, though. I’d still like to see the fine print as well.

  7. Perhaps the easiest way to deal with the stadium subsidy debacle would be for the Federal gov’t to make it illegal for any city or county to own a sports facility that is “home” to a professional sports business/franchise.

    They might still ask for subsidies, of course… and even get them (no accounting for the stupidity of elected officials). But any improvements would form part of their tax assessment for the building… so the host would get some financial benefit. And, even at an FMV assessment of 10-15% of construction cost, the city and county coffers would see significant annual revenue from the properties.

    And yes, a reduction (temporary or otherwise) in taxation is a subsidy. Never forget that these entertainment businesses are competing for the discretionary income of the masses. Any subsidy offered disadvantages other businesses significantly.

  8. I am all for John’s idea that it should be illegal for any city, county, (state or federal) entity to own a sports facility for a professional or any other kind of team – including schools and colleges. It should also be illegal for the tax code to give tax exemptions, tax exempt bonds, tax deductions, etc for building and operating these facilities. Community golf courses are also usually money losers and should not be allowed at taxpayer expense – especially without a vote. Health facilities for teaching students basic physical activities should be okay. Our basic infrastructure is in decay while government entities and public and private tax exempt institutions binge on sports facilities.

  9. Here’s a plan that works with your plan, Neil deMause, why don’t you stop paying property taxes, if and when this proposal succeeds, by not owning or residing on ANY property’s in S.W. Florida!! Win – Win!!