August 30, 2010
MLBleakgate Watch: More outrage over Marlins' profits
The Florida Marlins financial document firestorm just won't die. In the latest flareup, the Miami Herald reported on Saturday that, shockingly, the Marlins have been turning a profit solely on revenue-sharing payments from the rest of baseball:
The Florida Marlins reaped more from Major League Baseball's revenue sharing than the team paid for player salaries the last two years -- a disparity fueling the $52 million in operating income the franchise pocketed in that time, previously secret financial records show.
The team secured its profit -- which exceeded that of five other franchises whose books have also been leaked -- as it won hundreds of millions of dollars in public money for its new stadium, the records show.
Now, there are two potential reasons to be upset about this. One would be if you're opposed to low-revenue teams profiting by getting a share of high-revenue teams' cash - but then, this is all that the revenue-sharing plan was ever reasonably expected to accomplish, as it was never going to do much to reduce disparities in how much teams were willing to pay for players. As I wrote for Baseball Prospectus at the time:
Baseball is left with what might be called the "Don't make Bud come in there rule": Teams are supposed to make every reasonable effort to compete, and not just sit back and collect revenue-sharing checks. (Not too obviously, anyway.) It's a typically old-school approach for the old-boys cabal: Don't sweat what the rules and regulations say; we'll handle our own.
We'll know more about the full effects of the new CBA once the lawyers actually finish putting the general agreements made at the negotiating table into hard-and-fast rules. (There have already been some reports of things that were agreed on by the negotiators, but scrapped once they couldn't be translated into legalese.) But if you're a Royals fan hoping that "overhaul of the revenue-sharing system" means your team will finally have an incentive to spend with the big boys, don't hold your breath.
The more legitimate gripe is that Marlins owner Jeffrey Loria covered up his profits in order to cry poor in stadium negotiations with the city of Miami. Unfortunately, it seems unlikely that there's much to be done about that now after the fact, though some local electeds are trying.
South Florida Sun-Sentinel columnist Michael Mayo, meanwhile, goes so far as to say that the fault lies not with Loria's shrewd bargaining on the stadium deal but with the government "enablers" who let him get away with it:
The Marlins simply did what every sports team — and any shrewd business — could do. They milked the public to the max. They'll pay a fraction of the overall cost yet keep nearly every dollar in revenue from the stadium, which will ultimately cost taxpayers billions in bond repayments. ...
"The Marlins aren't to blame for this," said Norman Braman, the Miami auto magnate who sued unsuccessfully to stop the project. "The fault lies with the politicians."
Politicians like Miami-Dade Mayor Carlos Alvarez and former Miami Mayor Manny Diaz, who could have at least demanded to see the Marlins' books before agreeing to such a lopsided deal.
"If you read the depositions in the suit, you'll see they never even asked," Braman said. "Alvarez said, 'I didn't think it was necessary.'"
That's just bad business, and bad leadership.
While I get Mayo's point, there's plenty of blame to go around here; one doesn't have to let Loria off the hook just because all the other kids were doing it. There's plenty of blame to go around here, both for those who hid their finances, and for those who didn't think to look at the books.
Meanwhile, Marlins president David Samson's insistence that the team's profit wasn't really profit — it was for improved minor-league facilities, see, and saving up for the team's share of stadium costs — rings increasingly hollow as more news outlets uncover line items in the team's finances that make it look like Loria was simply pocketing money. The Herald reports that in addition to $16 million in cash that Loria took out of the team in 2008 and 2009 (Samson insists this was repayment of a loan), the Marlins paid $5.4 million over those two years to the Double Play Company, a separate company owned by Loria and Samson.
All this is likely to raise eyebrows not only at Miami city hall, but in Major League Baseball, whose other teams can't be happy that they're sending money to Florida just so that Loria can fatten his wallet. Normally I'd say that you'd expect the other teams would have had access to this information already — if the insurer who's thought to be the source of the document leak had it, then surely it was available to baseball insiders — but as we've seen this week, sometimes people have to be slapped across the nose with numbers before they notice what they mean.
August 27, 2010
MLBleakgate Watch: Miami mayor threatens Marlins garage money
Okay, now it's the mayor of Miami (not to be confused with the mayor of Miami-Dade County — that wacky Florida!) who wants to see about getting money back from the Florida Marlins on their stadium deal, now that it's official that the team has been earning big profits. And Mayor Tomas Regalado knows just what money he wants to recoup: the $100 million Miami is set to spend on parking garages for the new stadium.
Regalado asked city attorney Julie Bru whether the city -- which recently declared a state of "fiscal urgency" amid dwindling revenues and a gaping budget hole -- has authority to reopen the parking contract. ...
As a commissioner, Regalado voted against the stadium deal.
Now, citing leaked financial reports showing the team turned a $49 million profit the past two years, the mayor wants the city to receive 100 percent of the advertising revenues from signs that would adorn the garages. The deal now calls for a split.
"If the answer is in the positive, I would like to bring this issue to the city commission in September or October," Regalado wrote to Bru. "If the answer is in the negative, what recourse do we have to expose those who misinformed the commission and public during a public hearing?"
It seems pretty unlikely that Miami will be able to wriggle out of its garage commitment, but it'll sure be interesting to see Regalado try. If nothing else, Jeffrey Loria and David Samson can expect to be beat up plenty more in the local media so long as they insist on sticking to the original terms of the deal — but somehow I think they'd rather pay that price than one with dollar signs attached.
August 26, 2010
MLBleakgate Watch: Miami official demands more stadium cash from profitable Marlins
The fish are really hitting the fan in Miami now over those revelations that the Florida Marlins owners weren't really losing money when they sweet-talked local governments into giving them $478 million for a new stadium:
- Miami-Dade County Commissioner Rebecca Sosa called for the Marlins to cough up more dough for the stadium, now that the team's profits are revealed. (It was actually a letter to Mayor Carlos Alvarez asking that he "explore alternatives to the possibility of securing a greater financial contribution from the Marlins towards the stadium construction," but I like my wording better.)
- Marlins president David Samson shot back that "a contract is a contract" and insisted no more money would be forthcoming from the team. He also told a local sports radio interview that he "absolutely never" lied about the team's finances (as when he said in 2007 that owner Jeff Loria was "committed to stop losing money"), and that all that annual profit actually went to "pay down debt," save up for the team's own stadium costs, and build up the team's minor-league operations.
Meanwhile, more on yesterday's argument from St. Petersburg Times sports columnist John Romano that the documents show the Tampa Bay Rays are likely losing money, as they were shown making a slim profit in 2008 and their payroll is up since then while revenues are down. Noah Pransky of WTSP-TV writes on his Shadow of the Stadium blog:
In making his argument about the Rays' limited television revenue, Romano ignores the fact that the problem is likely to remedy itself in a few years.
From 2009 to 2010, Rays' television ratings have soared more than 70 percent. And while it doesn't mean a ton of extra money right now, it will in 2017 when they begin a new yet-to-be-negotiated television contract.
As entertaining as all this is, all of this debate about "how much do teams have" is still a bit beside the point: Regardless of whether they're turning a $10 million profit or showing a $10 million loss (and likewise regardless of whether those numbers mean anything real — one Miami accountant notes that the Marlins' financials appear to show $10 million a year in "costs" that are really salary payments to team owner Jeff Loria), anyone rich enough to own a sports franchise can "afford" to buy a stadium the same way you or I afford to buy a house: You go to the bank and borrow the money, then pay it off from your income over the years. That's true whatever the profit-and-loss baseline is that you're starting from.
Or to put it even more simply: If the added revenues the Rays (or the Marlins, or whoever) expect to get from a stadium are enough to pay off the stadium debt, then shouldn't they be paying for it? And if they're not enough, then what's the point in building a new stadium in the first place, other than as an excuse to bail out the team's finances with public dollars?
August 25, 2010
MLBleakgate Watch: Wait, Marlins weren't really going broke without a new stadium?
Okay, the Great Baseball Financial Document Foofaraw is taking a weird turn. Today's meme is that the fact that the Florida Marlins have been turning a profit shows that they didn't really need that $478 million in public stadium subsidies after all. As Yahoo! sportswriter Jeff Passan put in a column last night:
Most harrowing is the takeaway that baseball's biggest welfare case could have funded a much greater portion of the ballpark. In 2009, when the Marlins started spending some of their profits on their portion of the stadium, they still had an operating income of $11.1 million. The team fought to conceal the $48.9 million in profits over the last two years because the revelation would have prompted county commissioners to insist the team provide more funding. Loria, an art dealer with a net worth of hundreds of millions, wouldn't stand for that. He wanted as much public funding as possible - money that could've gone toward education or to save some of the 1,200 jobs the county is cutting this year.
Equally outraged are Miami-Dade county commissioners — or at least, the ones who voted against the stadium deal in the first place. Commissioner Carlos Gimenez told the Miami Herald: "[The idea] is horrible and the financing is even worse. And now you see they took us for a ride ... I tried to make it a condition on the contract that we see the books. This shows me they could have put more into the stadium than they did. We could have sold less bonds." Added Commissioner Joe Martinez: "None of us were aware of this. ... I do believe that if some people had known they were taking a profit, they would have voted differently."
Not to say "I told you so" or anything, but... seriously, didn't anybody bother to read Forbes before this? You know, the magazine that estimated that the Marlins were turning a $43.7 million profit in 2008, as against the leaked documents' $39.2 million? If, as Martinez insists, "none of us" on the county commission were aware of this, then that betrays a pretty serious failure of background research by Miami's elected officials.
The real news, as the South Florida Sun-Sentinel's excellent Sarah Talalay makes clear in her blog post today, isn't that the Marlins were making a profit, but that team execs were lying when they claimed they weren't. Writes Talalay:
Each time Forbes released its annual team valuations, Samson disputed the figures saying he didn't know Forbes sources, but he also insisted the team wasn't making a profit, and if there was one, team owner Jeffrey Loria would put it back into the team.
There are several examples of this, but here's one from 2007, when Samson was asked about Forbes' reporting the Marlins had the highest operating income of the leagues' 30 teams at $43.3 million and with a league low payroll of $24.8 million:
"Very often the mistake that's made is they look at revenue sharing numbers and the team's payroll and take the difference and see profit without looking at our expenses," Samson said.
Marlins owner Jeffrey Loria "would want any dollar extra going into payroll," Samson said.
"What's happened is he committed to stop losing money, but he has never said he makes his living from the operation of the Florida Marlins. He simply doesn't want to lose all his money."
Finally, on the journalistic flip side, you have St. Petersburg Times sports columnist John Romano, who argues that the documents really show that the Tampa Bay Rays do need a new stadium, because while the team is turning a profit, it's only doing so because it's getting revenue-sharing money, and winning while spending less than the Yankees and Red Sox.
So let me see if I can follow the logic: Tampa Bay taxpayers should give money to the Rays for a new stadium because, even though the team right now is both winning and turning a profit, there are other teams that are able to win the same and turn a profit while spending more? Does Florida have some sort of citizen right to throw $16 million a year at A.J. Burnett that I don't know about?
UPDATE: Romano points out that his main argument was that if the Rays turned a $14 million profit in 2008, when they went to the World Series, they likely lost money last year, when they missed the playoffs and had a higher payroll.
That's a fair assessment, but it still makes for a weak case for a new stadium, which is still not going to put the Rays into the same spending echelon as the Yanks or Red Sox. At best, it might afford the Rays an extra $20 million or so a year — call it one Carl Crawford, or 1.2 A.J. Burnetts. Or, if they ran their team like Jeff Loria, a couple of Picassos.
August 24, 2010
MLBleakgate Watch: Did Marlins' stadium costs price them out of keeping Cabrera?
I've been trying to avoid the foofaraw over the leaked MLB financial documents, in part because I don't believe even internal sports financial docs are worth the paper they're printed on (cf. then-Toronto Blue Jays VP Paul Beeston's famous statement, "Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss, and I can get every national accounting firm to agree with me."), but because they're not really anything new. Forbes' annual estimates of franchise profits had teams like the Pirates and Marlins raking in roughly the same amount as the leaked documents reveal — so if commentators are going to be up in arms that teams are turning a profit on revenue sharing money instead of spending in on player payroll, aren't they a couple of years late?
That said, this latest from the ever-quotable Marlins president David Samson in today's New York Times just cries out for comment:
Samson said the Marlins' decision to maintain a modest payroll and trade a star like Miguel Cabrera after the 2007 season was to save money to help finance its $645 million, retractable-roof ballpark, which is to open in 2012. The team must pay about one-quarter of the cost, with Miami and Miami-Dade County providing the rest. "We could have had Cabrera, but no ballpark," he said. "That's what I tell fans."
Samson didn't say whether he tells fans this with a straight face, but you have to wonder. The Marlins are putting up about $160 million towards the new stadium, which comes to somewhere around $12 million a year in debt payments over 30 years. A large chunk of that is expected to come from naming rights, which the Marlins kept for themselves — even in today's depressed market, something like $5 million a year in naming rights isn't unreasonable — and another large chunk can come out of stadium revenues, which the Marlins also kept for themselves. The Fish are getting full control over a $645 million stadium for the bargain price of $160 million, and you don't turn down a deal like that whether you're saddled with a first baseman with a large contract or not.
On top of that, though, let's take a look at Miggy's contract itself: Under the extension he signed when he was traded to Detroit, the likely AL MVP candidate is set to earn $20 million and some change each year for the next six. That's real money, certainly, but just like the Marlins' stadium cash, it's an investment, not just an expense: A prodigious slugger like Cabrera puts fannies in the seats, which puts dollars in the cash registers, and helps defray the cost of paying his salary.
Now, admittedly nobody's coming to see the Marlins now, with or without Cabrera — but that's all expected to change once the new stadium opens in 2012. (Or fervently hoped to change by Samson and Co., anyway.) So really, Cabrera is more worth the investment when you have a new stadium than without one, since suddenly having an attendance draw means you can actually draw attendance.
In other words, it would have been more honest for Samson to say: "Sorry, but we weren't sure about this whole stadium thing back in 2007, so we figured we could make more money by dumping salary and collecting revenue-sharing checks than by trying to sell tickets to our invisible fan base. We'll try to do better once the new stadium opens, if it looks like fans will actually show up to see star players." That's the kind of thing that makes you sound like a selfish plutocrat, though — so better to just blame your minimal stadium costs for forcing you to sell off your best players, even if it doesn't make any economic sense.
June 29, 2010
Miami Herald: Impact of incomplete Marlins stadium is incomplete
I've been plenty critical of lazy journalists who fall back on the "stadium to spark development!" meme without a shred of evidence that development is actually en route. That said, it's a bit much for the Miami Herald to complain that the Florida Marlins stadium hasn't helped its surrounding neighborhood when the thing isn't even going to be open for another two years:
East Little Havana has felt little impact yet from the $642 million project, funded mostly by public dollars and pitched to residents with a promise that if you build it, they will come.
As the columns of the enormous structure climb skyward by the day, there are no discernible signs of the stadium spurring retailers, restaurants or businesses to commit to the area.
Of course, it's possible that the Herald is surprised that no restaurants have popped up to serve a construction site because it thinks this is how it's worked in other cities: Reporter Patricia Mazzei writes that in San Diego and St. Louis, "baseball stadiums sparked neighborhood renaissances," and then later that "new baseball stadiums elsewhere -- notably San Francisco and, more recently, San Diego and Washington D.C. -- have triggered neighborhood revivals with stores, apartments, offices and hotels."
Really? St. Louis? Washington, D.C.? If those are your models, a better headline might be: "Lack of Miami stadium renaissance is years ahead of schedule."
June 11, 2010
Marlins stadium to feature live fish in backstop
Marlins' new stadium to have aquariums behind home plate
Really, there isn't much I can add to that. (Even Marlins president David Samson could only say, "It changes all sorts of things about in game entertainment, that's for sure.") Except that when you add in the Red Grooms scoreboard display, the new Miami stadium seems likely to be either the best ever, or the worst. Or possibly both at once.
April 23, 2010
Miami audit no longer threatens Marlins stadium opening
So much for that SEC audit that was holding up the sale of bonds for the Florida Marlins parking garages: It was wrapped up late Wednesday. That means that Miami can move ahead with selling garage bonds now, and then get on with construction.
Whether the Marlins' stadium will be ready on time is still an open question: The Miami Herald notes that garage construction time estimates range from 18 to 24 months, which means "Miami will have to scramble to meet the deadline."
Since the city is on the hook for cost overruns, and there have already been a bunch of those, it's definitely worth worrying about rush charges right about now.
April 22, 2010
Miami audit threatens Marlins stadium opening
Whuh-oh. The Florida Marlins' new stadium — or at least its parking garages — might not be ready for opening day 2012 as planned, as an SEC audit of the city's books could delay a planned May bond sale for the garages:
On the hook for $75 million worth of parking sites around the new Little Havana landmark -- a mixture of garages and surface lots totaling just under 6,000 spaces -- the city hoped to sell bonds by May 10.
Now the city is looking at May 24, at the earliest.
If the new stadium isn't ready, presumably the Marlins could play some games at their old home stadium (I honestly couldn't remember what it's officially called this week), or run shuttle buses, or something. Or MLB could just schedule the team for a long road trip the start of April, just in case.
Meanwhile, the Miami Herald notes that the Marlins will ultimately pay off the garage bonds by buying almost all of the parking spaces for $10 a pop, though it notes that this "could be a boon to the ballclub," which could "resell the spaces for any price the team wishes for its 81 home games, playoffs or events outside the season." Of course, that also means the Marlins take on the risk that nobody comes to the games — but that could never happen.
February 10, 2010
Marlins prez: Buy tickets now, before they're partly gone!
The new Florida Marlins stadium is 22% complete, team president David Samson announced yesterday, which is apparently the magic number for trying to scare people into grabbing up season tickets before they're all gone. This is admittedly tricky when your season ticket base is only 5,000 fans, but Samson still gave it the old college try:
"The response has been, 'well, listen, I know I'm going to get in the area I want, so there's no rush'," Samson said. "What I'm telling them is 'listen, some of these areas are going to be sold out before you have a chance.' So for example, I've had people who want to buy the front row in our new batter's box we haven't announced what the name is but it's coming. The front row is sold out, it's done. Front row behind the dugout, those areas are sold out.
"If you don't have your place in line, the seats you think you're going to get aren't going to be available. I think the urgency will come. There was a far greater, like with the Twins, a far greater increase the year before [the new ballpark opened] than two years before. So I think we're still a year away from the big bump," Samson said. "I still expect more fans this year, we have a good team that's worth supporting, we have a ballpark that's coming up, there is no more excuse, other than no roof and no air conditioning."
I can see it now: "Come see your 2010 Marlins! Or else you might have to sit in the second row in 2012! Also, the players union made us actually re-sign some of our players this year!"
Joking aside, this will actually be an interesting test of whether the Marlins' legendary attendance woes are the result of a bad stadium, as team execs insisted, or of a fan base that has better things to do on summer evenings. (Not to mention a slight shortage of spending money.) If I'm the Tampa Bay Rays, I'd want to time my big stadium push for 2012, when the Marlins' stadium honeymoon is in full effect, because if other small-market teams' experience holds true, it might not be long before attendance falls back to pre-new-stadium levels.
January 14, 2010
Marlins garage back within budget
So it turns out the Miami City Commission really did manage to keep the Florida Marlins parking garage price tag within their budget, as today they approved $92 million in bonds to fund the project, after initial estimates had been as high as $135 million. The trick? They "renegotiated the cost" with the construction firm, according to the Miami Herald. Makes you wonder what else cities could get cheaper if they stopped just paying whatever bill they were handed.
October 23, 2009
Marlins garage cost lowered, sorta
Stop the presses: The Miami City Commission actually did something yesterday, lowering the cost of the Florida Marlins parking garage the city has to build from $41 million over budget to only $26 million over budget. Though when you read the fine print, maybe "doing something" is a bit of an overstatement:
[Commissioner Marc] Sarnoff suggested lowering the financing cost to $120 million. [City Manager Pete] Hernandez said he'd negotiate terms with project managers and others to lower the cost. If it's not possible, he and Sarnoff agreed, the administration would return to the commission asking for more money.
{Commissioners [Joe] Sanchez, [Angel] Gonzalez and Sarnoff accepted the motion.
Also yesterday, the commission rejected using $6 million in tax-free federal stimulus bonds to pay a share of the garage cost, which is more or less trivial in terms of the overall cost (the city would have saved maybe $2 million in the long run), but which allowed Commissioner Michelle Spence-Jones to assert that she wanted stimulus funding to be used strictly for neighborhood recovery: "I don't want one penny, one quarter, one dollar, or one piece of lint to go toward the Marlins stadium, period." I guess no one offered her a quid pro quo this time.
October 22, 2009
Marlins garage already $41m over budget
Whuh-oh. The Florida Marlins' new stadium has only been under construction for three months, and already there are cost overruns: The accompanying parking garage, it turns out, will cost $135 million, not $94 million as originally budgeted. The Miami city commission is set to vote on the pricier garage bonds today, which should make for fine web streaming entertainment as always.
The garage financing is actually a confusing tangle: The Marlins are paying the city $10 per space for the rights to 5,850 parking garage spaces, which the Miami Herald says will "cover construction costs over the life of the bond issue," though it's not clear whether they mean the original $94 million cost or the new $135 million figure — by my calculations, it'd only come to about $5 million a year, which wouldn't be enough to cover either. And in any case, the Marlins' rent isn't going up as the cost goes up, which means the extra $41 million in bond cost will be all on taxpayers. Marc Sarnoff's proposal to make the team guarantee garage cost overruns must be sounding real good about now.
July 20, 2009
Marlins stadium construction clock begins ticking
And they're off! The Florida Marlins broke ground on their $634 million stadium this weekend, with a projected completion date of March 31, 2012 — which the Miami Herald notes doesn't leave much wiggle room before that season's opening day. Most experts the Herald contacted, though, were of the opinion that that left plenty of time for completion of construction, especially in a good-weather climate like Florida where construction can continue year-round: "It sounds like 33 months is doable, unless they run into some bizarre technical difficulty," said some guy named Bob Trumpbour.
The bigger question isn't whether the Marlins will have to open the 2012 season in the Everglades, but rather whether the tight timetable could lead to rush charges and cost overruns. Team president David Samson promised that the Fish would pick up any emergency costs, or take out an insurance policy that would cover overruns caused by, say, a hurricane: "It would be exactly what people do when they get into a car accident. Whether you go through insurance or not, it depends if the car gets totaled or it's a scratch." Of course, we don't know what would be the case if a hurricane caused unanticipated capital costs instead.
July 09, 2009
Calculating the true cost of the Marlins stadium
From yesterday's Miami Herald:
As Miami-Dade County commissioners worked late into the night to finalize financing for the Florida Marlins stadium last week, Commissioner Katy Sorenson posed a simple question: What's the total cost of financing going to be?
If you're a regular reader of this site (or the book Field of Schemes), you already know: That is not a simple question. When you're talking about future payments, there are about a million ways to dice the numbers: You can just add them all up (the nominal cost), which is misleading because much of the cost won't be paid for decades — it's like saying you own a $2 million house because that's the total of all your mortgage payments. Or you can discount the future payments by some percentage — but what discount rate to use is more art than science.
The Herald, though, punts all this and goes with the nominal cost:
With bonds issued last week in New York, the total cost is finally in black and white: $2.4 billion, spread over 40 years, to repay $409 million in bonds that will primarily, though not exclusively, cover stadium construction.
Even if the cost isn't really $2.4 billion, though, it's likely a good bit higher than $409 million, because as the Herald reports, the county had to resort to some pretty dubious bond terms to finance a stadium in this economic climate. The bulk of the stadium debt carries a hefty 6.4% interest rate; the remaining $91 million carries an even heftier 8.17% rate, and will be paid off entirely with balloon payments between 2038 and 2046. "This is the sort of financing you do when you cannot afford it," financier Leo Guzman told the Herald. Sounds like somebody should have listened to the stick figures.
July 01, 2009
Marlins agree to kick in $6.2 million shortfall in bonds
The shovels are in the ground as site preparation is underway for the long-lobbied-for 37,000-seat ballpark to be constructed for the Florida Marlins.
The project almost got hung up after a bit of confusion and muddling through the project finances, but Marlins president David Samson said the team would make up an approximately $6 million shortfall. Miami-Dade county manager George Burgess reported that the bond sale fell $6.2 million short of the needed $306 million, causing questions and concerns, and leading county commissioner Dorrin Rolle to say as things were being hammered out yesterday: "I love baseball, but I don't love it so much that I'll be here all night." Samson said the team would pick up the $6.2 million difference, but some skeptics suggested the team would pull back from full construction plans, trimming back the total cost of the project. Samson denies that will happen.
The project is scheduled for completion at the start of the 2012 season. Since the Marlins lease expires in 2010, some Marlins fans may be concerned that the entire 2011 season may have to be played in a nearby parking lot. My guess is that something will be worked out.
June 10, 2009
Marlins set groundbreaking, delay bond sale
The Florida Marlins have announced July 18 as the date of the ceremonial groundbreaking for their new stadium, but as for paying for the actual building once the ground is broken, the team hasn't quite finalized that yet. Miami-Dade County was supposed to start selling stadium bonds yesterday, but instead shifted the bond sale to next Wednesday.
"The ratings were positive," Marlins president David Samson reassured the South Florida Sun-Sentinel's Sarah Talalay. "We're confident there will be individual and institutional buyers for these bonds." Eventually.
March 24, 2009
Marlins win final stadium approval (kinda)
After a long, long day of hearings that included two stadium opponents being hauled off in handcuffs for shouting "Good jobs, no stadium!" the Miami-Dade Commission voted 9-4 to approve the Florida Marlins' $634 million stadium deal, with no amendments. Following Thursday's Miami City Commission vote, this gives final approval to the team's stadium plan, 12 years, three owners, and several hundred million dollars in cost increases after it was first proposed. Construction is expected to begin this summer, and be completed in time for the 2012 season.
...unless. There is still one final hurdle remaining for the plan: If the city or county isn't able to sell stadium bonds by July 1, either party can back away from the deal. It's a bit unclear what constitutes "unable" in this scenario — even in this economic turmoil, it should be possible to sell bonds if you jack up the interest rate enough — but it's conceivable a government entity could back away from the deal if it proves too rich for their blood: Previous projections have shown that hotel-tax revenues would likely fall well short of paying off the county's stadium bonds, and county manager George Burgess was forced to resort yesterday to assuming hotel spending will leap 15% in 2011 to make the numbers work out.
In all likelihood, though, yesterday's vote means the bagel slicer will become a reality, and the team will in three years' time become the Miami Marlins. If so, how does this deal stack up against previous stadium deals? Let's recap the numbers:
- The county will now put in a whopping $359 million for stadium construction and roads and utilities, mostly from tourist taxes. While the Marlins argued that tourist-tax money legally can't be used for anything other than tourism projects, the way the county got these funds for the stadium in the first place was by funneling off new tax money to pay for what the tourist taxes had been previously pledged to — meaning the cost will ultimately come out of the county's general fund.
- The city puts up $119 million, mostly to build parking garages for the team.
- The Marlins kick in $155 in private funds, a good chunk of which will likely come from the sale of naming rights, assuming there are still any corporations left to buy naming rights in the future.
- The team pays cost overruns on the stadium itself, taxpayers cover overruns on everything else, including the garages.
- The team gets all revenues from the stadium itself, paying only $35 million in rent (part of its $155 million contribution). The city will receive revenue from parking at the new garages, and the Marlins have agreed to purchase some of the spots up-front for resale.
So the public puts up almost exactly three-quarters of the cost, and the team gets virtually all of the revenues. That's not quite as bad as the Washington Nationals deal, but it's in the same, er, ballpark, especially when you consider that virtually all of the spending at the Marlins' new home will be cannibalized from existing spending elsewhere in Miami-Dade County — unless you really believe that more people will schedule summer vacations to Florida so that they can see the Marlins play.
Miami residents, in the end, will be paying a high, high price to free themselves from the team's constant move threats and get to watch ballgames without fear of getting rained on. Now that the deed is done, you have to hope that at least more fans will actually use the place than turned out to be the case in D.C., or this could be another boondoggle for the ages.
March 23, 2009
Marlins stadium vote #2: The webcast
The Miami-Dade County Commission meeting on the Florida Marlins ballpark proposal is underway; you can watch live here, though the feed is pretty jerky on my computer. They're still in public comments at the moment (1:48 pm), so this could go on awhile.
I'll be out for a chunk of the afternoon, so will post results when I return, if it's been decided. In the meantime, please play nice in the comments field...
UPDATE: The commission finally voted 9-4 late in the evening to approve the Florida Miami Marlins stadium deal. More on this when it's not 1 a.m.
March 22, 2009
Marlins stadium deal: All over but the haggling?
Miami-Dade County Commission members are now indicating that the Florida Marlins stadium deal is likely to pass tomorrow, albeit after one last-ditch attempt to extract a few more concessions from the team. "I think they have the votes now, but you can still make the deal better by changing some aspects of it," commissioner Carlos Gimenez, a stadium opponent, told the Miami Herald. Specific items Gimenez mentioned: Getting the Marlins to provide more of their share of funding up-front, and getting an even larger cut of team sale proceed for the county than what was agreed to on Thursday.
Besides, you know the Marlins stadium is unstoppable when it has its own Facebook 25 Random Things About Me page. My personal favorite: "12. More than 80,000 tickets a year will be locked in at affordable prices, starting at just $15." Why, that's almost 1,000 tickets a game, in a stadium that seats 37,000! I'm friending that!
March 20, 2009
More on yesterday's Miami city commission vote in favor of a new $634 million Florida Marlins stadium:
- As expected, commissioner Michelle Spence-Jones cast the tiebreaking vote in favor of the stadium deal, though not before much harsh questioning of city and team officials, most of it geared toward ensuring that her constituents will get a cut of stadium construction jobs. Commissioner Marc Sarnoff, who'd been one of the opponents of the stadium deal, then cast the deciding vote in a 4-1 decision to waive competitive bidding for the project — a vote that required a four-fifths "supermajority" — saying while it was difficult, "I just don't want to be a cause of a potential cost overrun because I didn't believe in something but three of my commissioners did believe in something."
- The Marlins made one concession to Sarnoff's earlier objections to the deal, agreeing to share a larger percentage of profits with the city if the team is sold in the next nine years: Under the old deal the city's cut began at 18% then dropped each year, under the new one it begins at 70%. The Marlins also chipped in $500,000 a year for local charities — which, of course, gets them a tax break, meaning part of the tab will be paid by the federal government.
- The stadium deal now moves on Monday to the county commission, where, at least according to the Miami Herald, "if Thursday is any indication, Monday at County Hall may not be as easy." The county commissioners have so far remained fairly quiet about which way they're leaning, though some have expressed misgivings about possible shortfalls in taxes slated to pay the county's $297 million share.
Following the votes, ever-quotable team president David Samson declared, "It's just like beating the Cubs in Game 6. We still have to come back and play Game 7." He'll have to hope the county commission starts Kerry Wood.
March 19, 2009
Miami city commission debates approves Marlins stadium (again)
And with a "Good morning heavenly father, good morning lord Jesus," the Miami city commission hearing on the Florida Marlins stadium deal is underway. You can follow the webcast here — I'll be posting in the Comments field as we go, with major updates noted here.
UPDATE: Marc Sarnoff just joined three other commissioners in voting to approve the waiver of competitive bidding, which required a four-fifths majority: "I just don't want to be a cause of a potential cost overrun because I didn't believe in something but three of my commissioners did believe in something." That seals it for the city approvals; it's now on to the county commission, Monday at 1 pm.
March 18, 2009
Miami vote looms, confusion still reigns
The Miami city commission meets at 9 am tomorrow morning to vote on the Florida Marlins stadium package, and still no one is sure how the five-member board will vote.
Commissioner Michelle Spence-Jones, who was thought to be leaning "yes" after getting a promise of $100 million or more in redevelopment money for her district, confused matters again on Tuesday night by issuing more demands, including a trust fund to build amateur baseball fields and "encouraging the team to employ local residents for the stadium's construction and operation," according to the Associated Press:
"I'm feeling confident that we're going to be able to work through them," Spence-Jones said Wednesday. "I just can't tell you whether I'm going to vote yes or no until all the decisions have been made."
Further muddying the waters: The Marlins' pledge to hire black-owned businesses to help build the stadium turns out to have been illegal. The team will instead just encourage black-owned firms to apply for contracts; it's unclear how this might affect the city vote tomorrow, or a county vote that would follow Monday afternoon if the city approves the deal.
Either way, I'll post webcast information here, and be liveblogging as much as possible. If it's half as fun as the last one, I'm going to have to type fast...
March 13, 2009
Spence-Jones gets her stadium payoff
In a tuneup for next Thursday morning's Florida Marlins stadium vote, the Miami city commission yesterday unanimously approved extending and expanding the Community Redevelopment Agency district that funnels property tax money to development projects in Overtown rather than having them go to the city's general fund. That would meet the condition set down by commission swing vote Michelle Spence-Jones in return for her support of the stadium deal. Of course, the tanking economy means the CRA district isn't expected to generate nearly as much money for Spence-Jones' district as she'd hoped — between $106 million and $140 million, according to Miami CFO Larry Spring, instead of the $500 million that was originally expected — but Spence-Jones has already said she'll take what she can get.
If all goes as expected, then, the city commission will approve the $600-million-plus stadium deal on Thursday, which will leave the plan in the hands of the county commission, which votes the following Monday. Some county commissioners have started expressing concerns about the looming shortfall in tax revenues that are supposed to pay for the stadium, but if anyone's actually done a headcount of whether these are enough to potentially vote down the deal, I haven't been able to find it.
March 10, 2009
Marlins stadium funds to run dry?
That swing vote on the city commission may finally be within reach for the Florida Marlins, but the economy is delivering less rosy news for the team's now-$639 million stadium proposal. (And no, I haven't figured out yet when the price tag went up another $30 million.) The Miami Herald, which last month reported that projections of hotel taxes slated to pay off stadium bonds seemed overly optimistic, has downgraded that assessment to totally nuts, given that county hotel tax receipts were down an astonishing 22% in January, prime tourist season:
With January's decline, combined hotel-tax revenue is down 9 percent for the 2009 budget year.
Should that trend continue, the county's stadium plan would face shortfalls on ballpark bonds from 2014 to 2029, according to a Miami Herald analysis of the county's stadium financing plan.
The mounting deficits would burn through a planned $26 million reserve fund and leave a deficit of $22 million, the analysis found.
The Herald wasn't clear what it meant by "should that trend continue" — if tax receipts keep going down 9% a year for how long? Forever? Still, the prospect of a $48 million shortfall can't be making county commissioners less antsy about approving the deal — nor can this from the South Florida Business Journal:
The property tax projections that helped Miami-Dade County's $3 billion so-called megaplan gain approval have to be updated to account for condo projects that were not built or finished.
Miami CFO Larry Spring told the Business Journal that the last time the projections were updated was in December 2007 — as the nation's economic meltdown was gaining momentum.
If the updated numbers come in lower than the earlier projections, the general fund might have to be tapped to make up for shortfalls — a key criticism of megaplan opponents.
That'd be the CRA money, for those following along at home, which is being counted on to free up those hotel tax revenues so they can be used on a Marlins stadium.
The city commission is now scheduled to meet to vote on the Marlins project on Thursday, March 19 at 9 am; assuming they approve the deal, the county commission will meet Monday, March 23 at 1 pm. I'll have links to webcasts here once I get them.
March 06, 2009
Spence-Jones on Marlins stadium payoff: I'll take whatever you got
So it turns out the Miami Community Revitalization Agency board didn't actually vote last night, instead holding a "workshop meeting" on city commissioner Michelle Spence-Jones' plan to expand a special property-tax district to provide $500 million funding for projects in her Overtown district. And only two of the five board members bothered to show up, Spence-Jones and stadium critic Marc Sarnoff.
Instead, it became a night for tea-leaf reading of which way Spence-Jones will vote on the Florida Marlins stadium deal, and she gave the team's owners plenty of reason for optimism. First she said she'd already met with Miami-Dade County Mayor Carlos Alvarez and gotten his backing for her plan, which would expand the Southeast Overtown/Park West Community Redevelopment Agency and funnel any new property tax revenues to Overtown. Then, when Sarnoff questioned whether property-tax revenues are really going to go up by much — he estimated, "You probably only have, at a maximum, $100 million in bonding capacity, not $500 million" — Spence-Jones first cut him off, then replied, "If we can't bond $500 million and we know the market won't support it, we're not going to do it. But if we can bond $100 million — guess what — we'll take it."
An actual CRA vote is now set for next Thursday, March 12. If Spence-Jones' price has been met, then the city commission — made up of the same people as the CRA board — would presumably vote to approve the stadium deal the following Thursday, with Spence-Jones as the swing vote. The project would then move on to an as-yet-unscheduled county commission vote, which would get to consider such issues as that the stadium bonds would depend on the same future revenues already committed to other projects.
And if this weren't already complicated enough, the owner of the former site of the Miami Arena in downtown Miami says he'll build a stadium with his own money, so long as he's paid back in the form of rent. Sarnoff made optimistic noises at this, but it really wouldn't be any easier for the team, city, and county to come up with $40 million or so a year in rent payments than in stadium bond payments. But at least nobody's missing an opportunity to make this whole mess even more confusing.
March 05, 2009
Miami postpones one stadium vote, schedules another vote for tonight
Apparently Miami-Dade County Mayor Carlos Alvarez knew something after all: The Miami city commission yesterday postponed its scheduled vote tomorrow on the Florida Marlins stadium proposal, rescheduling it for Thursday, March 19.
In the meantime, Miami's Community Redevelopment Agency board will vote tonight on city commissioner Michelle Spence-Jones' demand for $500 million in property taxes to be redirected to her Overtown district as a condition of the stadium deal. (The CRA board, conveniently enough, is made up of the five city commissioners.) It looks like Spence-Jones is just looking for an expanded tax-increment financing district, not the use of existing TIF funds, so the Marlins' confusing deal to shuffle tax money among various pockets wouldn't be unraveled; instead, the city would just agree to peel $500 million off the top of future property-tax revenues and put it in a fund marked "Open only for use in Overtown."
If tonight's vote approves the Spence-Jones plan, then, expect that the stadium should have smooth sailing once the city commission finally meets on March 19. Except, of course, that the county commission still needs to approve it afterwards. And then there's this guy:
Newly elected Miami Beach Rep. Richard Steinberg has announced he filed an amendment to a sports-franchise bill (HB 253) that would require voter approval of a Marlins stadium in Miami.
From a Steinberg press statement:
"The voters in Miami-Dade County should be given the right to decide whether to commit over a billion dollars of public money for a baseball stadium. If the local elected officials will not allow the people to vote, the Florida Legislature should require them to hold a referendum."
It almost certainly couldn't be done retroactively — that didn't work in St. Louis — even if it were to pass the state legislature. But it's got to be one more thing keeping David Samson up at night.
March 02, 2009
As Miami squabbles, the C-word rears its head
Miami-Dade County Mayor Carlos Alvarez declared today that the Florida Marlins stadium plan has been "hijacked" by dissident city commissioners, with their "unreasonable demands that have nothing to do with baseball," as well as "political grandstanding, the dissemination of half-truths and intellectually dishonest assumptions." He also instructed county manager George Burgess not to "expend or exhaust further resources or time into the Florida Marlins Baseball Stadium agreements" until the city votes on a plan — which seems pretty pointless given that they're voting on Friday, unless he knows something we don't know about a delay to deal with Commissioner Spence-Jones' bombshell.
In related news, New York Daily News baseball columnist Bill Madden has raised the specter of contraction, a subject that's been a major topic of discussion on the comment threads here:
Baseball has run out of places to move struggling franchises and, especially in this economy, who in their right mind would buy either the A's or Marlins with their bleak stadium situations? And just as Wolff, his partner John Fisher and the Marlins' Loria are going to be looking for a way out from under their mounting losses, baseball can't afford to keep dumping revenue-sharing money into hopeless franchises. Like just about every other industry in this country right now, baseball is going to have to take stock of its situation and downsize. There are too many teams in baseball anyway and it makes no sense to continue operating them in places that can't or won't support them.
ESPN's Rob Neyer is having none of it:
Look, the A's and the Marlins both have serious ballpark/revenue woes. No question about it, and Madden does a good job enumerating those woes. But it's a massive leap from "needing" a new ballpark to the c-word. For one thing, both the A's and the Marlins have, in recent years, been competitive. We're not talking about the St. Louis Browns here. We're talking about one franchise that won 93 games three seasons ago and another that won 84 games just last year. I mean, seriously: these are the two teams that might disappear?
What's more, even if both franchises were utter wrecks they still wouldn't be serious candidates for contraction. No franchise would be. It was, what, eight years ago when this spectre was first raised, regarding the Twins and the Expos? I said then that it would never happen; that Congress (among others) wouldn't allow it, and that the owners were simply floating the notion as leverage in their negotiations with the union.
I said much the same thing during the last round of contraction talk, for that matter. At the time, sports economist Rod Fort summed it up to me this way: "I think what'll happen is [players union chief Don] Fehr will look them in the eye and say, 'Fine. You can't.'" Eight years later, that still seems like a pretty likely scenario, as do the other possibilities (lawsuits, antitrust charges) I outlined back then.
February 28, 2009
Miami commissioner demands half-billion in unmarked bills for stadium vote
Miami city commissioner Michelle Spence-Jones has emerged from her maternity leave, and she has done so with a bang: The swing vote on the five-member city commission that will help decide the fate of the Florida Marlins stadium deal says she'll only approve the project if she gets half a billion dollars in development money for her district in exchange. "Overtown must get its fair share," Spence-Jones said in a statement released yesterday, one week before the city commission vote. If not, "the Marlins will strike out on March 6."
Needless to say, Miami doesn't have half a billion dollars sitting around, but Spence-Jones has identified a funding source: part of the expanded Community Redevelopment Agency money that was created as part of the Marlins stadium deal. Unfortunately, that money is already earmarked for paying off $484 million in existing debt on Miami's arts center, freeing up tourist tax money that was paying off the arts center to be redirected to the Marlins stadium. It's not entirely clear whether Spence-Jones is talking about instead using this money in Overtown or further expanding the city's CRAs to generate new funds — if the former, either the arts center or the stadium would need to find a new way to pay for its construction debt; if the latter, the city would end up with a $500 million hole in its property-tax receipts, as a large chunk was funnels off to the CRAs.
Meanwhile, as if the Marlins needed even more bad news, the Miami Herald has revealed that an obscure clause in their stadium deal means the team could get out of paying the county a share of profits on sale of the team if owner Jeffrey Loria dies first, then his heir sells the team instead. Remarked county commissioner Joe Martinez: "That sucks." (No, really, that was his quote.) With the county commission's approval required after the city commission, Spence-Jones' baksheesh demands could be only the beginning of the Marlins' headaches.
February 27, 2009
The Miami city commission's re-vote on the Florida Marlins stadium plan has been pushed back two days, from Wednesday, March 4 to Friday, March 6. No explanation was given, but I'd guess it has something to do with giving commissioner Michelle Spence-Jones more time to return from maternity leave so she can break the commission's deadlock. If the city approves the deal, it goes to the county commission on March 9.
February 26, 2009
Another "sunshine" lawsuit for Marlins
What was the Florida Marlins stadium mess missing? That's right: another lawsuit! Elvis Cruz and Grace Solares, described by the Miami Herald merely as "activists" but apparently leaders of local homeowners associations, have filed suit charging that the team's deal with the city and county should be voided because elected officials held secret meetings to negotiate it, in violation of the state's Sunshine Laws. This was an argument Norman Braman tried in his stadium lawsuit as well, but apparently Cruz and Solares think they have new evidence.
In other news, the Herald says the city and county should "tweak the deal" but then go ahead with it, a longtime local sports reporter says it's a waste of public funds, and the local NAACP isn't too happy about it either. City commissioner Michelle Spence-Jones is certainly going to have an interesting decision to make when she gets back from maternity leave to cast the deciding vote on this deal.
February 17, 2009
I'm going to try to post links here more often to articles I write elsewhere, since the "recent articles" listing went away in the Great Redesign. Today, it's an essay for Baseball Prospectus on recent developments in the Florida Marlins, Oakland A's, and New York Mets stadium situations. It's for subscribers only, but if you don't have a BP account, you can also check out the spirited discussion of the Marlins stadium deal I kicked off on BP's Unfiltered blog.
Also on the Marlins front, South Florida Sun-Sentinel sports business writer Sarah Talalay says the city and county commissions will hold their stadium votes next month on different days, to avoid the craziness that took place on Friday, while her colleague Dave Hyde thinks it's fair to demand that taxpayers get paid back before the team's owners take a profit on the deal.
February 13, 2009
Marlins stadium hearings in "chaos"
A vote on the Florida Marlins stadium plan descended into chaos Friday afternoon after City Commissioner Marc Sarnoff demanded significant modifications to the deal in exchange for his support.
That's from the front page of the Miami Herald's website, as of about ten minutes ago. The actual chaos descended around 2 pm, and went something like this:
- After several hours of discussion, the Miami City Commission voted on approving the Marlins' final stadium contracts. Two members, Joe Sanchez and Angel Gonzalez, voted yes, and two, Marc Sarnoff and Tomas Regalado, voted no, creating a stalemate. Regalado said in explaining his vote that he wanted a new stadium, but the agreement as presented was a "very bad deal" for the city of Miami.
- Sarnoff then proposed a series of three amendments: 1) The Marlins would pay for cost overruns on the stadium's $94 million parking garages, in exchange for getting rental income from a retail tenant of the garage building, if one could be found; 2) the city would get a cut of naming-rights revenue, since it's putting up a share of the construction cost; 3) if the Marlins were sold, the city and county would get their stadium costs paid back before the team would be allowed to reap any profits from the sale.
- There was a proposal to recess for ten minutes, so that commissioners could check with the Marlins to see if these amendments would be acceptable to them. Right before that happened, though, Sanchez shouted that he was withdrawing his support for the motion, saying, "This will kill the deal!"
They recessed anyway, and after almost an hour, Sanchez just returned to his chair and called the meeting back to order. (You can watch the webcast for yourself here.) Marlins president David Samson is now answering Sarnoff's proposal - I'll post followups here in Comments.
UPDATE: Samson said he wouldn't budge on naming rights or a share of the sale price unless the whole deal were renegotiated. Regalado and Sarnoff said fine, let's renegotiate. Sanchez then declared, "The deal is dead," followed by - another recess!
It's not clear whether the county commission will wait around to see if a new deal can be struck this afternoon, or will just postpone its hearing. Stay tuned.
UPDATE #2: They just suspended the stadium discussion until an unspecified date in March March 12, by which time the fifth commission member, Michelle Spence-Jones, is expected to be back from maternity leave. Good luck to her juggling a newborn and all the lobbying calls she's about to receive. (She's also up for re-election, which should make things even more interesting.)
Watch the Marlins stadium vote
Miami-Dade County's Florida Marlins stadium vote is being webcast - follow along at home starting at 1 pm Eastern. I'll try to liveblog it here, or at least post frequent updates.
February 11, 2009
Miami Herald: Marlins deal bad even as stadiums go
Big ups to the Miami Herald, which, despite massive layoffs and earning a spot on lists of newspapers most likely to fold, has been actually taking the time to do original research on the Florida Marlins stadium deal. Today's analysis finds that the deal "would be among the more generous to a team owner this decade," ranking 9th out of 14 baseball stadium deals sealed since 2000.
As with the Herald's earlier story on the cost of Marlins stadium bonds, you can argue with the specifics - in this case, the Herald just used up-front public/private stadium splits to determine its "9th out of 14" ranking, meaning deals like those for the Mets and Yankees show as all-private. (To its credit, the Herald does note that its chart "does not address the wide range of other variables involved in stadium projects," such as land and infrastructure or low-cost loans.) But the paper's analysis also noted hidden subsidies to the Marlins deal, such as that the team will pay neither rent nor property tax, and will get virtually all revenues from the stadium - and what little money the county gets must be spent on improving the stadium for the team's benefit. ''Wow," San Diego ballpark administrator Tim Moore told the Herald, "the Marlins negotiated a good deal."
The best part of the piece, though, may be Miami-Dade Mayor Carlos Alvarez's quote defending the stadium plan: "It's probably not the best deal that has ever been worked out between a community and a team. [But] at some point, negotiations have to stop." With friends like these...
Anyway, go read the article yourself: It's long, it's detailed, and the Herald needs the ad revenue.
As vote looms, Marlins debt cost still an unknown
Big headlines in the Miami Herald today: The public cost of paying off $347 million in Miami-Dade County debt for a Florida Marlins stadium, the paper estimates, "could swing borrowing costs from as low as $528 million to more than $1.1 billion."
It's not quite a fair assessment - the Herald counts money deferred for 20 years the same as money due tomorrow, for starters, which skews its figures. But they do have a point in that two days before a final vote on the stadium project, nobody knows what the interest rate would be on the county's stadium bonds, how much hotel tax money would be available to pay them off, or what would happen if there were a shortfall. This should be an interesting county commission debate on Friday.
February 09, 2009
Marlins stadium vote no sure thing
The Miami Herald has polled Miami-Dade County commissioners as to what they'll do in Friday's Florida Marlins stadium vote, and it could be a close one: With five votes on the 13-member board needed to block passage, four commissioners say they're likely to vote no and a fifth, Sally Heyman, said, "I will not be voting yes unless I get answers, and I can't get any answers right now. What the answers are will determine whether I vote for it." (Which, come to think of it, is pretty much what she said last time, before voting no.) And five more commissioners say they're undecided.
"Unless something changes, I would be opposed to it," said commissioner Joe Martinez, who voted for the stadium plan last February. "The financials trouble me tremendously. It's way too much money the county is investing." What, the wiffle ball game didn't convince you?
February 03, 2009
Could hotel woes nix Fish bowl?
The Florida Marlins stadium steamroller has been hitting a bumpy road of late. First, the city and county put off their final approval vote on the matter, saying they wanted to actually think about it before voting this time. Then on Sunday, the Miami Herald revealed the results of its analysis of county hotel tax receipts, which are supposed to pay for nearly half the now-$609 million cost of the project. Their conclusion: The taxes won't even come close unless tourists "spend record amounts of money" in Miami over the next 35 years.
There's lots in the Herald article projecting various different scenarios, but nothing that I can see about what happens if the county doesn't have enough hotel tax money to pay off the bonds. (Presumably it dips into general revenues.) There is, however, this tidbit buried deep on the jump page:
If commissioners in Miami and Miami-Dade approve the plan, either government would have until June 30 to cancel the deal. ''If we are presented with a worst-case scenario by June 30, we can walk away,'' Mayor [Carlos] Alvarez said in his statement.
So the final vote isn't the final vote after all? And what happens if the Marlins break ground in May as scheduled, and then the city or county backs out of the deal? Maybe thinking things over beforehand isn't such a bad idea.
January 27, 2009
Marlins tweak stadium plan, release sketches
Mark your calendars: The Florida Marlins stadium votes that were postponed last week have been rescheduled for Friday, Feb. 13. Miami-Dade County Manager George Burgess also revealed what he called concessions by the Marlins to make the agreement tastier for the public. To wit:
- If team owner Jeffrey Loria sells the team within seven years, the county "would almost double its share of any profits." Analysis: This seems to actually mean that the county would get an increased cut of profits from a sale of the team. Given how clever corporations are at hiding profits, though, I wouldn't hold my breath waiting for a windfall.
- The team's rent of $2.3 million a year will now go up by 2 percent each year. Analysis: This sounds trivial, but thanks to the magic of compound interest, could actually be worth close to $8 million in present value over time. So, no great shakes, but not chicken feed, either.
- Cost overruns thanks to scheduling problems or conflicts with contractors will now be paid for by the team, not the public. Analysis: Nice, but again, I trust the Marlins can figure out how to push any overruns into other columns on the cost spreadsheet - say, "infrastructure," which the county and city are still on the hook for.
In related news - you know it wasn't a coincidence - the Marlins released new renderings of their proposed $455 million stadium, which make it look a bit like Houston's Minute Maid Park, and a bit like... a Palm Pilot with a sliding cover? Bagel slicer? Futuristic bidet? FoS readers, I leave it to you to finish the joke.
January 22, 2009
Another delay for Marlins stadium vote
The city of Miami and Miami-Dade County have put off their vote on final approval of a $515 million stadium for the Florida Marlins, originally scheduled for today, until next month. While AP blames the holiday season and pols' busy schedules around the Presidential inauguration, the Miami Herald smells something (sorry) fishier:
County Commission Chairman Dennis Moss said he won't place a ballpark item on the agenda unless his colleagues have two weeks for a review -- a contrast to the earlier, quick votes that created the funding mechanism for a host of projects that included the stadium.
Critics complained those votes allowed little time for debate. Moss, the recently appointed chair, said he wants to avoid such complaints in considering a special meeting in mid-February.
As of Monday, county and city commissioners had not seen details of the five contracts still to be finalized, though sources said the paperwork was nearly done.
Better late than never, I suppose. The Herald also reveals that the measure requires a two-thirds "supermajority" vote for approval, as the Marlins hired their contractors without going through a public bid process.
January 13, 2009
Sports bailout: The drumbeat continues
More on difficulties teams are having financing stadiums amid the economic collapse, and their hopes for the government to ride to their rescue. From Sports Business Journal:
The sullen economy and tight credit markets have made it difficult for teams and municipalities to borrow money to fund projects, which in effect has everybody in the facilities industry searching for answers....
"The problem is if you're not credit-worthy or have creative financing, you won't get a project underwritten today," said Chris Dunlavey, a Washington, D.C.-based consultant. "Private packaging sustained by revenues of a project are being completely disregarded these days."
And then, inevitably, we arrive at the calls for the cavalry to come to the rescue, from a familiar source:
Teams and facility developers acknowledge that sports takes a back seat to the dramatic fallout in other business sectors. However, they are encouraged with President-elect Barack Obama's push for public infrastructure improvements across the country, developments they feel could create momentum for their own projects.
"The bond markets drying up is not a baseball issue but a nation issue," said David Samson, president of the Florida Marlins, a team that spent the past 10 years trying to get a deal done before getting the green light to start building a new ballpark this year. "We don't view that as a risk. If that happens, the Marlins will be the last thing on anybody's mind."
That makes about as much sense as most things Samson has said, but it's still worrisome that the meme of a sports bailout seems to be picking up speed.
The Phoenix Coyotes, meanwhile, are apparently still trying to recoup the $2.70-a-ticket surcharge that is the only revenue the city of Glendale gets in exchange for putting up $180 million of the $220 million cost of the team's arena. (Rent? A share of arena revenues? Get real!) With the Coyotes leveraged up to their ears in debt, though, and hockey commentators openly talking about the team folding, they may actually get a hearing for throwing good public money after bad.
The New York Times hockey blog has a good rundown of the Coyotes mess, which unfortunately goes awry at the end in trying to argue that NHL teams have moved to the U.S. in increasing numbers not because of the league's desire to expand into the Sun Belt, but because they "outgrew" their original hometowns, and were beset by rising player salaries:
To cover those escalating salaries, owners needed new revenue. Since hockey was an arena-based gate-receipts business - as it always has been and continues to be - the owners found that they needed more seats, more amenities, more luxury boxes and, yes, even better parking revenue. Many owners got those things. Not all did.
Norman Green, the North Stars owner, issued the ultimatum and was the first to make good on it, in 1993. Unable to coerce a new deal out of the Twin Cities (and with his local mall business failing and facing a sexual harassment suit in the Minnesota courts), he packed up his team and headed to Dallas. Other teams followed, each with their own local twists, turns and absurdities.
In the case of the Jets/Coyotes, there was political wrangling galore and ever-shifting demands from the Jets owners, led by Winnipegger Barry Shenkarow. The public, some politicians and some in the business community exhausted all avenues to save the Jets. But the civic and commercial forces in Winnipeg could not make it work, and perhaps Shenkarow would never have relented anyway.
The problem with this argument is that even with "more seats, more amenities, more luxury boxes," most new arenas wouldn't have made money overall - if not for government subsidies so that the teams could reap the benefits of those new amenities without worrying their little heads about construction debt. The NHL's shift southward, then, has less to do with greedy players or with Sun Belt colonialism than with the fact that unlike Canada, U.S. cities were willing and ready to build lavish new facilities with public money. For no compensation beyond a piddly $2.70 per ticket.