Sun Life referendum

A breakdown of the Miami Dolphins’ stadium renovation deal

 

Who’s paying what? How much? And for how long? Here are the answers.

pmazzei@MiamiHerald.com

Let’s face it: Very few voters who will cast ballots in the May 14 referendum asking the public to help subsidize a $350 million Sun Life Stadium renovation will have read the 80-plus-page accord between the Miami Dolphins and Miami-Dade County. And all its details hardly fit into a brief ballot question.

So we did the legwork, and broke down the elements of the deal into handy questions and answers to guide voters in what will be a sprint of a political campaign.

The countywide referendum is still iffy: It will be canceled if Florida lawmakers don’t approve Dolphins-backed legislation before the session ends May 3. But absentee voting begins April 23 and early voting later in the month, so it helps to start learning the numbers — and understanding the fine print — sooner rather than later.

The money

What have the Dolphins and Miami-Dade County agreed to?

In the broadest terms, they’ve agreed to three things: The county would help pay for an at least $350 million Sun Life Stadium renovation. The stadium would host a number of major sporting events. And the team would not leave Miami-Dade for 30 years.

How much would the county pay?

Miami-Dade would pay the Dolphins a maximum of about $289 million over 26 years, in monthly payments. The Dolphins have also asked state lawmakers for an additional $90 million over 30 years, as an annual $3 million sales-tax rebate. Since the 1990s, Sun Life has received an annual $2 million state sales-tax subsidy to retrofit the facilities for baseball. The Marlins left the stadium in 2011, and the subsidy ends in 2023.

Where would the $289 million come from?

The county would raise the tax rate charged at all hotels outside of Miami Beach, Surfside and Bal Harbour to 7 percent from 6 percent. Each year, 75 percent of the money raised by that increase would go to the Dolphins. In Year One, that amount is expected to be about $7.5 million. Factor in a yearly 3 percent growth rate over 26 years, and the sum is about $289 million.

Where would the remaining 25 percent go?

Some would go to a reserve fund. The rest would go to the county, for a still-undetermined use. The uses are limited under state law; the Greater Miami Convention & Visitors Bureau could vie for some funds to promote tourism, for example.

How much would go to the reserve fund?

Up to $4 million collected in excess of the amount due to the Dolphins would accumulate in the fund. The Dolphins would be able to tap the fund if there is a shortfall in collected hotel taxes and the team cannot make its private debt payment. At the end of 26 years, the reserve funds would be released to the county.

What if the hotel-tax growth rate is higher than 3 percent?

That money would go to the county. The Dolphins would receive 75 percent of the increased hotel tax or $7.5 million per year growing at 3 percent per year, whichever is lower.

Would the Dolphins pay the $289 million back?

Some of it. The Dolphins would refund the county $112 million to $120 million as a lump-sum payment in 30 years.

Where do those numbers come from?

That’s how much money the Dolphins expect to be able to borrow from private lenders now, using the county’s 26-year payments as collateral.

What happens if the Dolphins borrow more or less money?

They would be required to refund the county at least $112 million. If they are able to borrow more than that from private lenders, then they will have to refund the county that higher amount, up to $120 million.

Would Miami-Dade take on any debt of its own?

No.

What would Miami-Dade get in return?

The stadium would host a specified number of events over 30 years, or pay up to $120 million in penalties. Supporters say the events, such as Super Bowls, provide temporary employment to local workers, bring in tourists and promote the county. One of the Super Bowls would have to be awarded when National Football League owners meet May 21-22. They are scheduled to award the 50th and 51st Super Bowls.

What if NFL owners don’t award Sun Life a Super Bowl when they meet in May?

The whole deal is off.

How many events would the stadium have to host?

Sun Life would have to host at least four Super Bowls, four college football championships and 20 international soccer matches, or their respective equivalents, over 30 years.

How would the penalty system work?

The agreement sets up a point bank, assigning a certain number of points to each type of event, depending on how many visitors and public attention it is expected to attract. For each event the stadium hosts, its corresponding number of points — each worth $1 million — would be credited toward the $120 million total. For example, each Super Bowl or World Cup soccer final would be worth 15 points, or $15 million.

The Dolphins would track the events every year, and pay any penalties as a lump sum at the end of 30 years.

What happens if the Dolphins can’t pay some or all of the refund or penalties?

Dolphins owner Stephen Ross would be on the hook. Ross, a billionaire real-estate developer, is personally guaranteeing the payments.

What if Ross sells the team?

If he sells it in the next five years, Ross would have to pay the county a $20 million penalty. Before closing any sale, the new owner would be subject to county approval and to taking on the same personal guarantee as Ross. The county’s approval would be “presumed” if he or she has a net worth of at least $1 billion and has been approved by the NFL.

OK, so the Dolphins would get $289 million from the county. But they could also get $90 million from the state. Would they pay the $90 million back?

The Dolphins have said they would pay $47 million back after 30 years — again, based on how much they expect to be able to borrow now from private lenders, using the state’s 30-year payments as collateral. But state lawmakers have yet to approve any legislation.

What happens if the Legislature doesn’t give the Dolphins the $3 million annual sales-tax rebate?

The Dolphins would be able to take the entire deal off the table if they decide that they wouldn’t have enough money for the renovation.

But $289 million plus $90 million is $379 million. Isn’t that more than what the Dolphins would need for a $350 million renovation?

This is where things get tricky. The $379 million is what the Dolphins will have received at the end of 30 years. But the immediate revenue stream from county and state tax dollars would only enable them to borrow about $167 million in today’s dollars.

If the renovation costs at least $350 million up front, does that mean the Dolphins would be paying the remaining $183 million themselves?

Probably not. The NFL could contribute $150 million, according to a county-hired financial consultant. That would lower the direct costs to the team to about $33 million. The Dolphins have disagreed with that calculation, saying it’s too early to determine how much money the league might contribute.

How does that break down, percentage-wise?

The agreement requires private funding to cover more than 50 percent of the costs. For a $350 million renovation, the up front split comes to about 48 percent from public dollars and 52 percent from private dollars. Or, further broken down and rounded, assuming a $150 million NFL contribution: 43 percent from the NFL, 34 percent from the county, 13 percent from the state, and 9 percent from the Dolphins.

The public contribution percentage goes down once the Dolphins’ refunds in 30 years are factored in.

So why shouldn’t the Dolphins — and Ross — pay for the entire renovation?

Ross has noted that the team paid for $210 million in stadium upgrades in 2007, that he paid $1 billion for the team in 2009 and that the region receives an economic boost from sporting events. Other team officials and supporters have pointed to the Dolphins’ long-term commitment to the region and community involvement.

Critics, including Norman Braman, a billionaire Miami auto salesman who opposed public financing for the Marlins’ Little Havana ballpark, has decried the Dolphins’ plan as “corporate welfare for a billionaire.”

Early on in the team’s push for a deal, Dolphins CEO Mike Dee said in a television interview that “Just because somebody is wealthy enough doesn’t mean he should invest money in a way that is unwise. Mr. Ross has made a tremendous commitment to this franchise, and to this community.”

He later added, in a statement: “No franchise owner in the history of South Florida sports has ever invested more. Our ability to continue to invest unilaterally is not limitless.”

The fine print

Who would put in money first — the public or the Dolphins?

The Dolphins would have to secure the private funds before the county puts in its share.

Which upgrades would be included in the renovation?

The Dolphins provided a list of upgrades in the agreement, but they can all be revised — except for a canopy to shade spectators. Among the other improvements the team has mentioned are new scoreboards and shifting seats closer to the sidelines.

What happens if the renovation costs more or less than $350 million?

The Dolphins would bear the costs if the renovation is more expensive. If the renovation costs less than $350,000, then the county would share in the savings.

What are the terms of the Dolphins’ 30-year non-relocation agreement?

The team would be required to play all but one of its regular season home games at Sun Life. And the Dolphins would have to keep the word “Miami” in their name.

What else have the Dolphins agreed to?

• For any Super Bowl hosted at Sun Life, key NFL activities would have to take place in Miami-Dade and not Broward County. That includes having the two participating teams stay at Miami-Dade hotels.

• The Dolphins would pay the county $390,000 to monitor the team’s compliance with Miami-Dade small-business standards, and $100,000 to pay for deal consultants and financial advisors.

• The team would set “aspirational” goals to hire at least 70 percent of its construction workers from Miami-Dade County, with 10 percent from the city of Miami Gardens, home to the stadium, and at least 20 percent from low-income areas. The Dolphins would also provide a quarterly report on diversity hiring, contracting and purchasing, breaking down employees by race and gender.

The election

What is the ballot question?

“Modernization of Sun Life Stadium used by Dolphins and Hurricanes. Resolution 279-13 proposes using 7,500,000 dollars a year, adjusted annually for growth, from additional tourist room taxes to be levied to modernize stadium conditioned on:

• Dolphins’ remaining long-term in county;

• Private funding for majority of costs;

• Stadium owners paying county at least 112,000,000 dollars in 30 years;

• Stadium owners paying penalties up to 120,000,000 dollars for not bringing premier football and soccer events to stadium; and

Award, in May 2013, of Super Bowl.

For the proposed use ___

Against the proposed use ___”

Come again?

In short, if you want to raise the hotel-tax rate to give most of that money to the Dolphins, vote “for” — the first option. If you oppose the proposal, vote “against” — the second option.

Are there any concerns about the ballot language?

Two county commissioners, suggesting the language favors the Dolphins, have said it would be better for the question to specify the increase in the hotel-tax rate to 7 percent from 6 percent, instead of saying “additional tourist room taxes.” They tried to amend the language, but failed. The mayor said county attorneys wrote the language to “accurately” reflect the deal.

Is the referendum binding?

Yes. If Miami-Dade voters reject the proposal, the deal is off.

So the referendum is definitely happening?

No. It will only happen if Florida lawmakers, who meet through May 3, approve state legislation allowing Miami-Dade to raise the hotel-tax rate, and if Gov. Rick Scott lets that legislation stand. Both need to happen, or the referendum would be canceled. The results of any ballots cast up to that point would not be published.

How much is the election going to cost?

The Dolphins paid the county $4,784,337 by check Friday to pay for the election. The payment is nonrefundable, so the county keeps the money even if it ends up canceling the election. At the request of the mayor, the Florida division of elections opined this month that the Dolphins could cover the elections cost, even though they are a private entity.

When will the referendum take place?

Election Day is Tuesday, May 14. Miami-Dade voters will be able to cast ballots from 7 a.m. to 7 p.m. at their usual precincts.

Will early voting be available?

Yes. Two weeks of early voting will begin April 29 following this schedule: 7 a.m. to 3 p.m. April 29 through May 3, 9 a.m. to 1 p.m. May 4, 1 to 5 p.m. May 5, 11 a.m. to 7 p.m. May 6 through 10, 9 a.m. to 1 p.m. May 11, and 1 to 5 p.m. May 12. Twenty early-voting sites will be open.

What about absentee voting?

Yes. Overseas ballots will be mailed beginning Tuesday, and domestic ballots beginning April 23.

What if I’m not registered to vote in Miami-Dade County?

You have until Monday to register. You are eligible if you are at least 18, a U.S. citizen and a permanent Miami-Dade County resident. If you register online at www.miamidade.gov/elections, your signed form must be mailed to the elections department and postmarked by Monday.

Prospective voters can also register in person at the department’s Doral headquarters, 2700 NW 87th Ave. The office will remain open until midnight Monday. Several other locations that accept registration forms will be open until 5 p.m. Monday: the elections department’s County Hall branch office at 111 NW First St., public libraries, most city halls, state public assistance agencies and Florida driver license bureaus. For more information, call 305-499-VOTE (8683).

Miami Herald staff writer Douglas Hanks contributed to this report.

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