Miami-Dade’s feud with Jeffrey Loria has at least one more act in it: the profit-sharing drama.
The county recently signed the Marcum auditing firm to scour the numbers once Loria’s accountants reveal how much the team says it owes taxpayers from the former Marlins owner’s $1.2 billion sale of the team to Derek Jeter and partners last week.
Loria’s 2008 deal with Miami and Miami-Dade included payout provisions if he sold the team within six years of the 2012 opening of a county-owned ballpark built with more than $400 million in public dollars and about $150 million from the team. The deal requires the Marlins to pay the two governments 5 percent of the proceeds of a sale.
Five years and six months later, the bill may be coming due. But with Loria able to deduct both debt and taxes paid on the sale, it’s not known whether he plans on notifying local governments that they’re entitled to any dollars from the transaction.
“Miami-Dade County has identified an independent auditor to review the documents that will be provided to us by the Marlins,” said Michael Hernández, communications director for Mayor Carlos Gimenez. “The County has 30 days to review and advise the Marlins if we disagree with the calculations as outlined in the Relocation Agreement.”
There’s nothing in the agreement that promises a blow-up over the next step. But with Loria’s inner circle downplaying the potential for a notable county payout in the run-up to the sale, and Gimenez rarely missing an opportunity to ding Loria, the elements are there for one final scrape between the longtime foes.
Gimenez came to office in part thanks to his vocal opposition to the 2008 stadium deal, which he voted against as a county commissioner. The mayor at the time, Carlos Alvarez, championed the agreement and was recalled from office in 2011, clearing the way for Gimenez’s win in a special election weeks later.
Though the county-owned ballpark opened in 2012, Gimenez never attended a Marlins game there until last year during an event celebrating Miami’s landing of the 2017 All-Star Game. The national attention that comes with serving as the All-Star host only exacerbated the tension.
Gimenez did not attend the All-Star game, complaining of a snub by the Marlins for not providing free tickets. And Hernández, his top spokesman, made headlines days earlier by publicly accusing David Samson, Loria’s top deputy and team president, of “pettiness” for not allowing the mayor’s office to have a speaking slot at pre-game event that Gimenez did not attend.
And in the run-up to the sale, Gimenez threw some brush-back pitches directly: He said he hoped Samson, whose mother used to be married to Loria, would not keep his job under new owners. He also predicted Loria would find a way to not pay a share of profits to Miami-Dade.
In a July 4 New York Times article pegged to the All-Star game, Gimenez said of the deal-hunting Loria: “I would think he’ll walk away with $500 million in his pocket. It sticks in my craw.”
Loria paid $158 million for the Marlins in 2002, so the reported $1.2 billion sales price to majority partner Bruce Sherman, Jeter and other investors represents a steep climb in the franchise’s value over 15 years. But calculating a profit for the county gets more complicated.
The original agreement with Miami-Dade sets a base value of the Marlins franchise at $250 million in 2008, and allows for an 8 percent growth per year. In May, an early analysis by Miami-Dade’s real estate division, which oversees Marlins Park, pegged the starting value of the franchise at $500 million in 2017.
That analysis listed as “unknown” the key factors at play in calculating profits: debt, taxes and closing costs. That could get complicated, since past Marlins financial statements published by Deadspin listed Loria himself as a creditor of the team, with a loan of $15 million on the balance sheet in 2009.
Under the deal with Miami and Miami-Dade, it’s the Marlins who must provide an accounting of the sales proceeds. Hernández said on Monday the county hasn’t received the paperwork that would trigger the 30-day review period.
The original agreement calls for a 5 percent share to be split between Miami and Miami-Dade, based on each government’s contribution to a stadium that cost more than $500 million to build. Hernández said Miami-Dade contributed about $389 million and Miami about $27 million toward construction and development costs — meaning the county would get about 4.67 percent of the proceeds and the city less than half a percent.
The agreement lays out an arbitration process if the governments disagree with the Marlins on profit-sharing calculations. Miami’s legal department recently began examining the deal to see if it can anticipate what sort of revenue the city might expect from the sale.
For sure, the process is ripe for political score settling: The elected commissions of both governments could demand reports on the Marlins offer, and outgoing Miami Mayor Tomás Regalado rivals Gimenez as a top Loria foe. “The deal was so good for the Marlins,” Regalado said in a recent interview, “I don't expect the city to get any money.”
While Jeter and company own the Marlins today, Loria appears to be handling the potentially explosive close-out process with Miami-Dade. P.J. Loyello, the Marlins vice president who heads up media relations, referred questions to Loria’s camp.
Samson, who left the team after Sherman took over, declined to comment.