November 22, 2014

Sports Business:

Playing Hardball

City and county officials approve funding for a Marlins stadium -- with strings attached.

David Villano | 7/1/2004
After months of negotiations and a string of setbacks, the city of Miami and Miami-Dade County have given preliminary approval to fund a $367-million stadium for the Florida Marlins next to the Orange Bowl near downtown Miami. Construction could begin in December, with completion set for opening day 2007.

The Marlins now play in massive Pro Player Stadium in the remote reaches of the county. Despite winning last year's World Series, the team ranked 28 among 30 teams in attendance. The answer, the team insists, is a retractable-roof stadium in the heart of a population center. Marlins owner Jeffrey Loria hinted the team might flee Miami-Dade without a new stadium.

Under the deal reached in May, the county will contribute $120 million, and the city will provide the land and $28 million and will issue a bond to cover a $32-million garage. The Marlins will provide $157 million.

But the financing plan has holes. The team is counting on a $30-million state sales tax rebate -- a proposal already rejected once by the Legislature. "The county and city have done about all they can," says County Manager George Burgess. "Now it's up to the Marlins."

Marlins spokesman P.J. Loyello says the team is working on a contingency plan should it again be rebuffed in Tallahassee.

Miami City Manager Joe Arriola is confident the Legislature will come through. He's more worried about potential cost overruns, which the Marlins have pledged to cover. Arriola says experts tell him that the team's construction budget for the 38,000-seat ballpark is laughably low. Before signing a final agreement, the city will demand the Marlins produce a $100-million performance bond, a line of credit or other form of guarantee covering overruns.

The city is also wondering where the team will get money for repairs and maintenance. "If they can't maintain it, they can't have it," says Arriola. "Otherwise in five years the place will be a dump."

The Marlins had no comment on Arriola's concerns.

Such hardball tactics come from experience. The city is losing about $1 million a year on the Miami Arena, a $53-million facility built in 1988 for basketball's Miami Heat but deemed obsolete shortly after completion. The Heat -- which wasn't required to sign a long-term lease at the Miami Arena -- now play a few blocks away in the $215-million AmericanAirlines Arena.

That mistake won't happen again, insists Arriola. If the stadium is built, the Marlins' lease will be for a minimum of 32 years -- the life of the bonds issued to pay for it.

Tags: North Central

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