Dismantling of Miami Marlins hurt efforts to get tenants at new ballpark
05/08/2013 7:59 AM
05/08/2013 3:15 PM
When Miami Marlins owner Jeffrey Loria cut payroll costs by dismantling the ballclub at the end of last season, it wiped out any immediate hope the city of Miami had of luring retailers to the ballpark, interviews with those involved in negotiations and internal emails show.
Two national restaurant chains that had signed letters of intent to open in the parking garages surrounding the facility backed out of their deals, expressing reservations to the city about dwindling crowds and foot traffic.
Now, more than a year since the Marlins first opened the gates to the new Little Havana ballpark — and four years after city and county leaders crowed that building the stadium would be an economic shot in the arm for the area — not a single business is operating in the 8,500 square feet of retail space available in three of the four garages fronting the ballpark.
“Obviously, the Marlins didn’t help in regards to their off-season moves,” said Miami Parking Authority Chief Executive Art Noriega, whose semi-autonomous agency manages the garages. “Then everything went ice cold.”
City records show that before Loria determined the Marlins hadn’t met expectations, first in July 2012 when he sold off shortstop Hanley Ramirez and five others, then in November when stars Jose Reyes, Josh Johnson and fan favorite Emilio Bonifacio were sent packing to the Toronto Blue Jays, the city was in negotiations with the two national restaurant chains and a pizza shop.
When those players were traded, the talks tanked.
A week after the November trade, leasing agent Arthur Stevens of Terranova Corp., the firm hired by the city to lure clients to the ballpark, expressed concern about Marco’s Pizza making good on its letter of intent to sign a lease.
“Marco’s is very concerned about what this will do to future attendance,’’ Stevens, who has since left the firm, wrote to the city’s public facilities director, Henry Torre. “Just thought you should know, I’ll keep you posted.”
Marco’s cut and ran.
Two months later, in January, Stevens again expressed concern over a client, this time a national restaurant chain named Firefly.
“While we want to do the deal with the Marlins, their investors are worried about the negative impact that the new Marlins team will have on overall traffic, attendance. One of their investors has contacts within who continues to hear not so good things,” Stevens wrote Henry in an email.
A few weeks later, Firely opted out.
The two defections followed earlier tension between the city and a retail broker working to land a deal with the Tilted Kilt, an Arizona-based national chain the city had pinned its hopes on as the large, sexy anchor needed to attract other tenants.
In August, broker Nathan A. Werner had blasted the city and Terranova’s Stevens for a “poorly drafted” lease and for leaking terms of the negotiations to two media outlets including the Miami Herald, which wrote about pending deal.
“Art, your client is doing the exact opposite of what they should be doing,’’ Werner wrote Stevens in October. “First they send a poorly drafted lease with all the wrong terms and conditions, and now two leaks to papers that shed negative light on the area. Have they never negotiated a lease? Don’t they understand the sensitivity of these type of negotiations?”
Werner, reached Thursday, said his client got “sick of negotiating” with the city over the lease terms, and said that Loria’s dismantling of the team “was the final nail in the coffin.”
The city needs revenue from the retailers to grow its coffers and help cover the debt payments on the $120 million it put into building the four parking garages. Miami sold all 5,800 spaces in the four garages to the Marlins for between $10 and $13 a spot per game for the next 30 years. That money also will help cover debt service.
Meanwhile, the Marlins maintain full control over the parking spaces and are allowed to raise rates at any time for playoff games, concerts or other events.
Marlins President David Samson, in an interview Thursday, said the team has repeatedly offered to help the city — at no charge — find tenants for the parking garage, but the city hasn’t been interested.
“It’s been made clear since Day One that they were handling it,” he said.
It’s in the Marlins’ interests to have more tenants in place, Samson said, because their customers would buy parking spots and likely attend games.
“The city said they’re not interested in help,” he reiterated.
But Noriega, the parking authority boss, said the city would welcome potential tenants recommended by the Marlins. He said the organization was cooperative in landing a Subway restaurant scheduled to open in August, when the team agreed to waive a clause that prohibits the city from leasing space to vendors who sell food over the counter.
“If they have leasing prospects, we’d look,” said Noriega. “They have passed a couple along that for one reason or another just didn’t work out.”
As empty as the stadium is for most Marlins games, the 8,500 square feet of storefront lining the garages is even more lifeless. Though three companies have signed leases with the parking authority, as season two at Marlins Park is well under way, none have opened.
Miami Commissioner Frank Carollo, who represents the district, acknowledged the Marlins “have made some moves that have made things difficult.” It’s frustrating, he said, because the city was close to landing the Tilted Kilt as the much-desired anchor tenant. “We’ve got to just keep marketing the hell out of the property, and hope we find one big tenant,’’ Noriega said. “If they start to do well, it will automatically attract others. It’s like a domino effect.’’
The three businesses with signed leases are Subway, Café Rubio and 100 Fires Cigars. All have 10-year leases whose payments vary depending on profits. 100 Fires Cigars, which is only 625 square feet but faces the main promenade of the ballpark, began paying a monthly rent of $6,432 in April. Café Rubio, a sports bar and restaurant with 3,196 square feet, will begin paying $8,922 a month in July. Subway’s monthly lease comes to $3,767, starting in August.
The July opening for Café Rubio will mark the second establishment for the family-run business. The first has been operating for more than a decade within walking distance of Citi Field, where the New York Mets play.
Anna Diloene, manager of the New York pub, said the lagging Marlins attendance doesn’t concern her.
“They love us here, and they’re going to fall in love with us in Florida,” she said.
Nearby, Frank Martinez, who owns 100 Fires, said he had hoped to be open by now, but he’s still waiting on a sprinkler system so he can get his fire permit.
The cigar shop, on the southwest corner of the main plaza, is still a work in progress, with piping, air-conditioning parts and wood in piles on the dusty floor. Outside are seats and lamps from the Orange Bowl, which was razed to build Marlins Park.
Martinez plans a comfortable setting with couches, tables, three humidors and converted lockers for customers who want to store their cigars and paraphernalia until they visit again.
Though he’s a baseball fan who attended games last year, Martinez said he’s not thrilled with the moves made by Marlins owner Loria.
“Listen, I’m a business man. I understand that side of it,’’ he said. “But I see this area as an entertainment district. Anyone who opens here and expects their revenues just from the ballpark is in for a big shock’’ because the customer base has to expand beyond baseball fans, he said.
One stable component of Marlins Park has been the Clevelander bar inside the stadium. The well-established South Beach hot spot has occupied a spot under the outfield bleachers in left field since Opening Day 2012, but it rents the space from the Marlins, not the city. In addition to a few ground level seats, the bar offers drinks, food and a swimming pool.
Anna Whitlow, marketing manager for the Clevelander, declined to provide details about the lease agreement, but said her company was “very pleased with how we did last year, with space both for branding and as a revenue generator.” She said though the crowds have thinned, the Clevelander is content with its current deal with the ballclub.
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