Miami Dolphins deal set for vote by Miami-Dade County Commission

Miami-Dade would pay the Dolphins $4 million to host the Super Bowl, in return for having the team’s owner arrange $350 million in renovations to the stadium without county help.

06/16/2014 7:23 PM

06/16/2014 9:02 PM

Miami-Dade commissioners face their second sports-subsidy vote in two weeks on Tuesday, as they consider Mayor Carlos Gimenez’s plan to pay the Miami Dolphins millions of dollars for hosting the Super Bowl and other major sports events.

In exchange for the custom-made bonus system, Dolphins owner Stephen Ross would arrange for a $350 million renovation of his Sun Life Stadium without further county assistance. Ross plans to use a mix of team dollars, NFL money and a possible Florida subsidy for construction, which would include a partial canopy over the 1987 facility and redone seating.

The vote scheduled for Tuesday’s commission meeting comes on the heels of the Miami Heat easily winning approval June 3 of a new subsidy arrangement negotiated with Gimenez. While that deal essentially lowered the Heat’s yearly $6.4 million subsidy from hotel taxes by $1 million in exchange for higher subsidies that start in 2031, the Dolphins’ plan would only generate cash if Sun Life lands big games like a World Cup, national college football championship or international soccer matches.

“I think it’s a very good return on investment,’’ Gimenez said Monday. “If they perform, they get the payments.”

Supporters see the proposed Dolphins deal as a novel compromise with Ross, a New York developer who has been pushing for county help in a stadium renovation since becoming majority owner in 2009. With the NFL signaling South Florida won’t get another Super Bowl without a new stadium for its Dolphins franchise, the deal would likely return Miami Gardens to the regular rotation as host of the country’s largest sports event.

Critics see the bonus plan as rewarding one of the wealthiest men in America with tax dollars and opening up Miami-Dade to more subsidy requests for other major events. Miami-Dade estimated it spent nearly $5 million in cash support and free services, including police staffing, when the Super Bowl last came to Miami Gardens in 2010.

“Do we also give incentives to the Boat Show? And Art Basel? Where’s the logic in this?” asked Norman Braman, a Miami auto magnate who sued to try to block the unpopular 2009 Marlins Park funding deal, which Gimenez opposed as a county commissioner. “What makes it so ludicrous is the Dolphins benefit tremendously already from these events.”

The proposed contract commits Miami-Dade to pay the Dolphins $4 million for each Super Bowl hosted at Sun Life, and $3 million if the national championship for college football returns to Sun Life. A college play-off game, which Sun Life is slated to host every three years under the new Bowl Championship Series system, would bring $2 million, while smaller sporting events generating 55,000 ticket sales — such as an international soccer match — would bring the Dolphins $750,000.

Should Miami ever land a World Cup soccer match, a championship would be worth $4 million for the Dolphins, and a semi-final $3 million. Brian May, a Dolphins lobbyist, said the yearly Orange Bowl game would not be eligible for bonus payments.

The county’s 3-percent Convention Development Tax is the specific funding source for the Dolphins deal. It’s on track to generate about $75 million for the budget year that begins Oct. 1, while Miami-Dade’s finance department lists $87 million in current obligations for the CDT.

County officials plan to close the current gap using reserves and derivative financial instruments called interest-rate swaps, which allow Miami-Dade to temporarily boost revenue tied to hotel taxes. The current gap comes largely thanks to debt on the Adrienne Arsht Center for the Performing Arts, the Miami Beach Convention Center and Marlins Park.

With hotel-funds tight, Gimenez aides negotiated an option allowing Miami-Dade to delay payment to the Dolphins until 2025. The team would begin accumulating credit for events as early 2016 — when the renovation is expected to end — but wouldn’t collect for 10 years. The agreement also caps at $5 million the amount of money Miami-Dade would pay for a year’s worth of events.

The deal also allows Miami-Dade to suspend the bonus system if it doesn’t have enough hotel tax income to pay the Dolphins and its current obligations, including subsidies to Miami museums.

Gimenez has said he wants no pending sports deals once the debate over the county’s new budget for the coming year begins in earnest this summer. He’s warning of significant layoffs at the county’s police force without concessions from unions. During the last two budget cycles, Miami-Dade drained about $50 million in CDT reserves to fund the county’s parks department — an accounting shift that helped ease the strain on the county’s general fund.

Since Miami-Dade can delay Dolphins payments until 2025, Gimenez said it would be unfair to link the stadium plan to the county’s current budget challenges.

“There is absolutely zero nexus between the two,’’ he said. “This doesn’t take effect for 10 years. “

If commissioners approve the agreement, Ross, a Miami Beach High graduate whose net worth is estimated at $5.6 billion, would be eligible for NFL stadium funds that are reserved for franchises that secure government help in stadium deals. He’s also pursuing a new state program that could bring as much as $3 million a year to Sun Life, on top of the $2 million Florida already pays under an earlier award from when the Marlins played in Miami Gardens.

Unlike the Heat and the Marlins, who play in government-owned facilities, the Dolphins own their stadium, which pays about $4 million a year in property taxes. That wouldn’t change under the deal.

As part of the bonus arrangement, Ross would sign the Dolphins to remain in Miami-Dade for the next 30 years.

Last year, the Dolphins won county approval to ask voters to raise hotel taxes in order to fund about half of the proposed $350 million renovation. That plan died in the state Legislature, which declined to approve the change in state law needed for the higher tax. Corporate entities tied to the Dolphins donated about $40,000 to commissioners seeking reelection this year, giving it the No. 5 spot on the list of top donors, according to a Miami Herald analysis.

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