Miami Dolphins

Stymied on hotel taxes, Dolphins owner Ross braves a property-tax battle

 

dhanks@MiamiHerald.com

The new stadium upgrade plan by Miami Dolphins owner Stephen Ross scrambled the political scorecard Tuesday as a bitter foe sounded supportive and past allies questioned the team’s pursuit of relief from property taxes.

The billionaire developer wants to privately fund a $350 million renovation that he had tried to finance with county hotel taxes since buying the team in 2009. In exchange, Miami-Dade would take ownership of Sun Life Stadium and free the team of a property-tax bill that last year hit $3.8 million.

“I think it’s a step in the right direction,” said Norman Braman, the fellow billionaire who helped defeat Ross’ costly hotel-tax bid in a personal battle that included full-page ads against the Miami auto magnate. “It’s a hell of an improvement over last year. It’s a positive development that needs to be fine-tuned. That’s what negotiations are for.”

But after four years of pursuing hotel taxes, Ross’ request to stop paying taxes that fund ambulances, police officers and schools has some key past supporters questioning the new option.

“I'm very glad that they're going to put their money towards the renovation,” said Rebeca Sosa, chairwoman of the Miami-Dade County Commission, who voted for the team’s hotel-tax plan last year. “But if they don't want to pay taxes — in a year when we're balancing the libraries and fire-rescue budget — they won't count on my support.”

Ross spent four years trying to get hotel taxes to fund the renovation, arguing that the county-owned baseball park and basketball arena already receive subsidies from tourist revenues and that improving the stadium would not affect local taxpayers. Now he is pointing to the fact that the teams running those facilities don’t pay property taxes, and Ross wants the same deal, but without subsidies.

Last year’s hotel-tax plan, which included a referendum requirement, would have steered between $7.5 million and $16 million annually to Sun Life Stadium for 26 years. Florida lawmakers failed to pass a bill required to enact the hotel-tax hike that Ross wanted, scuttling the plan before voters could consider it.

“I have decided the best way to get this done is to pay for the project with private funds,” Ross said in a statement Tuesday. “All we ask in return is that we are treated the same as all franchises in the state of Florida.”

A mantra of the Dolphins’ political boosters last year was that hotel revenues would bring a renovation “at no cost to local taxpayers,” as the campaign’s Twitter feed noted on April 29. Now Ross must contend with an itemized tax bill for Sun Life that breaks down some specific government functions the facility funds: $70,000 for child services, $24,000 for libraries, $350,000 for fire and rescue operations, and $1.3 million for schools.

“People should not underestimate what a $1 million impact on the district would be, or diminish it,” Miami-Dade Schools Superintendent Alberto Carvalho said during a break in a meeting with the School Board’s audit committee. “That’s real money.”

Carvalho did not reject the potential tax deal, noting the school system could receive state aid to make up for as much as $1 million from the Dolphins’ revenue. But the popular schools chief said a sound Sun Life deal is one that “fully mitigates” the costs to the school system.

County Commissioner Juan C. Zapata, who joined the 9-2 vote in favor of Ross’ hotel-tax plan in 2013, said this time around he was more concerned about the source of local dollars than the amount.

“I’m not very sold on the deal,” Zapata said. “It sounds good in concept, maybe, but at the end of the day this is going to impact taxpayers directly. The previous attempt was just going to affect tourists.”

After several weeks of closed-door discussions with County Mayor Carlos Gimenez, Dolphins executives scrambled Monday as news of the proposed deal broke.

Team representatives said privately that they had not had time to meet with Carvalho, or to finalize an agreement with the city of Miami Gardens — where Sun Life is located — to protect the $1.1 million in property-tax revenue that city would lose under the transfer plan. Sosa said she learned of the potential tax-revenue loss after reading about it in the Miami Herald.

While Sun Life’s tax bill represents a tiny fraction of the school system’s and county’s tax stream, it plays a large role in Miami Gardens, a city where almost one in three children live in poverty, according to U.S. Census statistics. The Ross entity that owns Sun Life is the city’s top taxpayer, accounting for about 4 percent of the tax base. Dolphins CEO Tom Garfinkel said Monday the team would try to “make Miami Gardens whole,” but Ross did not allude to that offer in his statement.

Team executives pitched Ross’ latest offer as a major concession, after last year’s losing bid to secure public financing for about half of the renovation. With the Miami Marlins, Miami Heat and the state’s other major sports teams playing in government-owned stadiums, Ross pitched his plan as an equitable swap given the economic boost Sun Life brings by hosting Super Bowls and college football championships.

An internal Dolphins poll conducted last week showed voters object to a stadium plan that would have an impact on property taxes and cut into school funding. But the same poll showed the Ross plan was overwhelmingly popular when presented as part of a privately financed effort to boost the economy with major sporting events, said Dario Moreno, the Dolphins’ pollster.

Moreno described the poll results, which he would not release, as “night and day” from the surveys he ran for the team last year, when Gimenez negotiated an emergency referendum for voters to endorse the hotel-tax deal, and pollsters largely considered the campaign an uphill fight.

Ross’ latest stadium push joins a crowded field of sports teams pursuing deals with Miami-Dade. Gimenez is negotiating with David Beckham’s lawyers over a potential soccer stadium at PortMiami, and an extended deal for the Miami Heat at AmericanAirlines Arena. Should the PortMiami talks break down, one alternative would put a soccer stadium next to Marlins Park, with Beckham’s team sharing the Miami-owned garage that the Marlins run.

Gimenez sent a memo to commissioners Tuesday night outlining the soccer, basketball and football talks, noting he sees Sun Life as an economic engine, but also saying he has “concerns regarding the tax impacts to the Miami-Dade County School Board and the City of Miami Gardens,” and that he told Ross to work out a deal with both entities.

Commissioner Dennis Moss, who voted for the Dolphins last year, said he wanted to learn more about the latest offer, but added, “I have a concern about impacting the city and hurting the school system. Something has to be worked out.”

The only two commissioners who voted against the Dolphins last year, Esteban “Steve” Bovo and Xavier Suarez, were not backing the new deal on Tuesday.

“I haven't seen the details,” Bovo said on the Spanish-language morning show on WQBA-AM 1140. “It sounds like something that we would pay for anyway, though maybe indirectly. I'm not sure if that's a good deal, honestly.”

Suarez, a former Miami mayor, issued a statement that read in part: “There is no public support whatsoever for any tax concessions favoring an established professional sports team — not even one as respected and successful as the Dolphins.”

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