Some of the hurdles facing soccer at PortMiami should be on display Tuesday when Miami-Dade County commissioners consider borrowing hundreds of millions of dollars for the seaport and clearing out an environmental facility sitting on land that David Beckham wants for a new stadium and entertainment complex.
Port officials see the land as the next big commercial district in Miami, and are counting on the real estate revenue as a cushion against PortMiami’s mounting debt. Internally, port officials have pushed back against the stadium plan for endangering their revenue projections from a hotel and office complex, along the shallows of the port’s southwest corner, that could contain as much as 7 million square feet of space.
The port’s finances are tight enough that last week the county was forced to declare a violation of its borrowing agreements when an accounting issue flagged by auditors pushed the 2013 earnings about $1 million below the minimum levels promised to Wall Street. On Friday, the Moody’s credit-rating agency said it was not worried about the covenant violation because the port’s cruise and cargo fees are still high enough to cover all expenses and debt obligations. Port officials note they have about $30 million in reserves to handle shortfalls.
The port wants to borrow an additional $225 million to fund its new underwater traffic tunnel and other improvements, and the new debt package on the agenda for Tuesday’s commission meeting is likely to push the port’s long-term obligations above $1 billion. In order to keep the county-owned port’s interest rate lower, County Mayor Carlos Gimenez is asking commissioners to guarantee the debt if cargo and cruise fees ever fall short of the required payments.
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Given that the port’s bond payments are set to exceed $35 million next year, lenders are insisting on about $1 million a year in extra interest fees for the new debt without additional backing from taxpayers, said Ed Marquez, deputy mayor for finance.
“The seaport is not as rich as we’d like it to be,” he said.
Beckham’s negotiators see the port’s development plan as too ambitious, and are pitching a soccer stadium as crucial for stimulating development on the southwest corner. Cruise line Royal Caribbean, whose headquarters overlaps the stadium site, opposes Beckham’s plan, citing increased traffic and its own interest in expanding onto the land.
Also Tuesday, commissioners are slated to consider a new lease for a fuel-spill facility that occupies land on the development site, just west of where the stadium would be built. The new lease includes a $6 million relocation cost for the county if PortMiami wants Marine Spill Response Corp. to move, but port officials said the cost would be passed on to developers.
None of the port’s financial forecasts include real estate revenue from the land, so the soccer debate has no direct impact on the $225 million borrowing plan. But Tuesday’s agenda items would give commissioners a chance to delve into the soccer issue, and to question new PortMiami chief Juan Kuryla on the matter. The former deputy director took over this week from Bill Johnson, whom Gimenez moved to the Water and Sewer Department for Johnson’s final year before his mandatory retirement in June 2015.
An earlier version of this story gave an incorrect figure, $385 million, for the amount of money the port wants to borrow.