Saturday, December 03, 2011

Interesting times (Marlins edition)

The Dolphins *used to* share the stadium with the Florida (and now Miami) Marlins.  Lets take a quick trip in history shall we?

  • Joe Robbie wanted football, baseball, and soccer to play in his venue so he built it accordingly.  He had hoped to own teams in each sport
  • H Wayne bought the stadium when he bought the Fins, and was granted an expansion baseball team
  • They coexisted for several years,  but H thought baseball needed its own stadium, so he lobbied long and hard to get one for his team
  • Remember that he essentially wanted it to be publicly funded - or heavily subsidized through tax breaks
  • Failing that, he sold the team, and wrote an awful lease for the new owner to use JRS (and by awful, we mean totally benefitting him)
  • A few owners came and went, with each trying to secure a stadium for themselves
  • Finally enter the current owner, who made it happen.  For better or worse, he got the city of Miami to build him a stadium.  And to top it off, its on the site of the old Orange Bowl (this is particularly amusing, because Joe Robbie moved the Fins from the Orange Bowl, and had made comments that the city was impossible to work with as he built his own stadium)

That takes us to today.  There was a lot of consternation about this stadium deal.  Accusations of back-room deals, lack of accountability, sketchy financials, and the like dogged them along the way.

But the deal went ahead.  I have to admit I don't understand the finances.  The city borrowed close to $500 million at an interest rate that would seem fairly high (I think it was on the order of 8%, which is bad for municipalities), but is trying to tell everyone that they only took out loans for under $200 million.  In any event, they built 4 parking garages as well, and are leasing the spaces in it to the Marlins.

Everything is "on schedule" but there is a cost to doing that, and its cut corners.  We saw one example when the garages showed cracks in the concrete.  More will come, I am sure. 

And then we hear that the garages - since they are leased exclusively to the Marlins - don't qualify as "public" which means that the city has to pay taxes on them.  Oops.  That's money they don't have, and can't get easily.  In addition, the deal has not been signed with parking authority to run the garages - and their retail space. And with opening day about 4 months away, that means there will be no tenants and no revenue in the retail space - and no method for ingress and egress (which means that the city will have to pay off-duty police to manage traffic).

Meanwhile, the SEC (the commission that oversees financials, not the football conference) opened an investigation into the city of Miami finances - unrelated to the Marlins. Basically they were trying to figure how the city stayed solvent, and improved its bond rating...no final word yet, but we hear that they have uncovered an elaborate shell game where money has been moved around to make the books look good.  And that investigation has been going on for 2 years, which probably means its big.

And then yesterday, the SEC widened its investigation to look into the stadium agreement.  It seems clear to me this is not about the Marlins, at least overtly. The larger issue is how much money the city borrowed, how they got it, the interest the paid, and how they plan to repay it.  Now the fact that the SEC also subpoenaed the Marlins finances and campaign contributions tells me that there is a larger tale - and the underpinnings of the deal are at issue.  It might affect the Marlins, but this is about how we came to this state...needless to say relentless critic of the Marlins Norman Braman is enjoying this turn of events.

Now one side note: the Marlins assured us that there would be parks on all 4 corners, and there would be a fun walkway between downtown and the stadium.  Turns out that the stadium is so large it actually abuts residential areas on all 4 corners - there is no room for a park!  And walkways?  Haha.  Nope.



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