Category Archives: Orlando Magic

Florida house speaker: No new sales tax “checks” for stadiums this year

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Florida House Speaker Will Weatherford, who said earlier this week that he’d be introducing a bill to require sports teams to show they actually have a reason to ask for sales-tax kickbacks, upped the ante slightly yesterday by declaring that he doesn’t intend on approving any sports subsidies this year at all:

“Our focus right now is on a process that treats everyone equitably and not writing any checks,” Weatherford said during an interview with The News Service of Florida in his Capitol office.

Currently, the state of Florida pays $2 million a year to the Miami Dolphins, Jacksonville Jaguars, Tampa Bay Rays, Tampa Bay Lightning, Florida Panthers, Tampa Bay Buccaneers, Miami Heat, and Orlando Magic in exchange for the teams doing the state the favor of existing. (The Miami Marlins got left off this list after getting the $2 million a year break for their previous stadium, but did get everything else they wanted, so no complaining.) Right now the Orlando City Soccer Club, David Beckham’s as-yet-unnamed Miami MLS expansion team, and the Daytona International Speedway are all lining up to ask for sales-tax rebates as well, but it sounds like they’re going to have to wait — until next year, anyway, when Weatherford will, at the ripe old age of 35, be term-limited out of office. If Weatherford has his way, by then there will be new laws requiring team owners to “go through the process with the Department of Economic Opportunity just like everybody else does that wants to create jobs in Florida” to prove that their projects will provide a return on the state’s investment, though it remains to be seen whether he has a chance in hell of getting it through the state senate, which has historically been much more lenient about this kind of thing.

Orlando paying restaurants to open near Magic arena

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The Amway Center, home of the Orlando Magic and property of the city of Orlando (thanks to $480 million in public spending), is having some troubles with the slew of restaurants that were supposed in and around it. There’s the restaurant that defaulted on its lease and left the city to spend $738,000 to finish building out the space, the beer lounge (beer lounge?) across the street that has racked up more than $350,000 in grants and rent forgiveness, and in general a whole lot of good-money-after-bad activity that maybe should make Miami grateful that it can’t even find any restaurants to rent space near its new stadium.

But really, there’s one sentence that stands out in the Orlando Sentinel investigation of this mess, and that is:

Oopsy Scoopsy Yogurt Shop closed last year after being awarded a city grant, its owners charged with trying to defraud the city.

If all that survives of our current civilization is that single sentence, future historians will have a great head start on defining what the early 21st century was all about.

Old Orlando arena dies at age 23 of being insufficiently subsidized

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The Orlando Magic‘s old Amway Arena was demolished yesterday, if “old” is the right word for it: The arena was just 23 years old, and had been targeted for replacement by its NBA tenants pretty much since it opened.

The Magic’s owner (Amway kingpin Rich DeVos) complained from the start that the building was economically obsolete, because it lacked the kind of luxury and club seats that other, newer arenas built in the 1990s had. To put that in context, consider these quotes from the old arena’s Wikipedia page:

Major renovation was beginning to seem unfeasible in 1997 when the task-force determined that the cost of implementing everything that the team wanted would reach up to $75 million. The revenues brought in by the changes likely would not be enough to cover mortgage payments on money that would have to be borrowed to pay for the renovation…

On September 29, 2006, the City of Orlando and Orange County finally came to an agreement on a $1.1-billion improvement package that included $480 million for a new arena. The Magic would provide $114 million in cash and up-front lease payments and guarantee $100 million in bonds toward the arena. The venue plan received final approval on July 26, 2007, and the arena was completed in time for the 2010–11 NBA season.

In other words, the old arena wasn’t making enough money for DeVos’ tastes, and spending $75 million on renovations would only make profits go down. But an entirely new arena that cost six times that amount was just what the doctor ordered, so long as taxpayers paid most of the tab and the Magic kept all the revenues.

If you want the template for stadium and arena development over the last 20 years, there it is in a nutshell.

Florida homeless-shelter bill wouldn’t actually recoup stadium subsidies

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Apparently there’s a small problem with that bill to require Florida stadiums that received public funds to double as homeless shelters. As Stephen Nohlgren of the Tampa Bay Times reports, the original requirement was introduced in 1988 to win support for allowing sales-tax money to be kicked back to help pay for construction of the stadium that went on to become Tropicana Field, current home of the Rays — a subsidy scheme that’s since been used by numerous other sports teams. The bill, proposed by state senator Michael Bennett, would require that stadiums immediately set up shelters on off days, or else refund all the cash they’ve received.

And the problem? Take it away, Nohlgren:

But in fact, only one stadium listed by legislative analysts — the Miami Dolphins’ Sun Life Stadium — is owned by a team that received the sales tax exemption. The other 17 are owned by cities, counties or public sports authorities. Refunds would be borne by taxpayers.

The bill doesn’t seem to have much chance of passage in its current form, regardless, though it’s always possible it will lead to some debate on legislation that would actually affect the sports teams that Bennett is upset about subsidizing. I wouldn’t hold your breath, though.

Florida bill would enforce law to use public stadiums as shelters

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A pair of Florida state legislators have unearthed an old law requiring that state-funded sports facilities be used as homeless shelters on days when there’s no event on, and is out to enforce it. “These organizations have failed to follow the law for over 20 years,” declared state rep Frank Artiles, co-sponsor of legislation that would require teams that have received public cash to return it if they don’t obey the law. “This is the simply the State of Florida holding them accountable.”

While it’s hard to picture the Miami Marlins, say, setting up cots around the Red Grooms home run sculpture, the bill is certainly getting media attention, and now has attracted an amendment to require publicly funded stadiums to ban TV blackouts of games. Which sounds like it has even less chance of being enforceable, but it’s certainly interesting, to say the least, to see what options people come up with for demanding conditions in exchange for public funding. Of course, it would be easier if somebody had thought to demand them before actually opening the public’s checkbook…

Orlando Magic gyms bleeding red ink, forcing service cuts

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When team owners are looking for hundreds of millions of dollars in stadium or arena funds, they’ll often offer to throw a few million dollars at some community improvement to help grease the skids. So it was with the Orlando Magic, which build five community gyms as part of its deal to get its new $480 million arena in 2007.

Only one problem, the Orlando Sentinel has discovered:

However, these new gyms are also going to cost taxpayers twice as much to run as the county originally estimated, a review of budget records shows. Instead of breaking even, the five facilities are expected to generate a $1.25 million annual deficit to operate, once user fees are balanced against staffing and other costs.

After-school and summer programs at other facilities would continue to be capped or shrink to offset most of the steeper operating costs at the Magic gyms.

“The community was told these were going to be a bonus and not take away anything,” Commissioner Ted Edwards said. “The residents didn’t get what they were promised.”

Apparently one county commissioner, Tiffany Moore Russell, warned about this possibility back when the deal was first being discussed, but she was outvoted. She was not immediately available to the Sentinel, it seems, for “I told you sos.”

Orlando arena subsidies to buy $2,100 chairs, bumper pool table

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The Orlando Sentinel had some fun yesterday digging through the $480 million budget for the Magic‘s new Amway Center (not to be confused with their old Amway Arena — three guesses what company Magic owner Rich DeVos owns), and finding stuff that Orlando taxpayers will be helping to pay for. On the shopping list:

  • A $10,000 conference table and eight $2,100 conference chairs for Magic executives.
  • 264 barstools costing $892 each for luxury suite holders.
  • A $2,100 poker-and-bumper-pool table, plus PlayStation 3 and Wii systems, for concert performers to play backstage before events. Writes the Sentinel, “According to city officials, that’s needed to stay competitive with other venues vying for touring shows.” What, no brown-free M&M dispenser?
  • A $87,600 Zamboni, though the arena won’t be home to a hockey team.

A spokesperson for Orlando Mayor Buddy Dyer defended the expenses, saying, “We are investing in making this a state-of-the-art facility, and it’s important that we invest now so we don’t have to replace these items in five years.” (Note to Buddy: I’m pretty sure PlayStation 4 will be out by then.) Jim Martin, chair of the watchdog group CountyWatch, retorted: “That stuff needs to be scrutinized. The question is, can you justify it at this time? The next question is, could you ever have justified it?”

Headlines we didn’t read today: “Magic arena forces arts cuts”

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Hotel tax revenues in Orange County, Florida are expected to plummet by a record 18% this year, but don’t worry about the new arena for your NBA Easten Conference Champion Orlando Magic, notes the Orlando Sentinel:

Despite the slump, the new arena for the Orlando Magic — already under construction just west of downtown — is safe, Orlando officials say. Bonds were sold for the $480 million project last year, and it is scheduled to open in the fall of 2010.

Of course, since the county is already locked into paying off the Magic arena bonds, that means the tax shortfall must be made up out of other projects. A planned Orlando performing arts center, as well as renovation of the Orange Citrus Bowl, could now be delayed or scrapped, while local theaters and museums are expected to lose up to half of their county grant money. What was that about a no-lose proposition again?