As Miami city commissioners prepare to consider negotiations Thursday for a long-term lease of the abandoned Miami Marine Stadium and surrounding waterfront land, newly released documents show the deal proposed by a not-for-profit trying to save the venue is more expensive — and more private — than anyone previously let on.
An operating and financial plan obtained by the Miami Herald shows the arrangement with Friends of Miami Marine Stadium would be a mostly privately financed, $121 million package that projects it would bring the city $150 million in profits over 49 years.
Some $30 million in capital costs for the stadium would be raised by the Friends group. The remaining $90 million would be funded by private partners to pay for the construction of dry docks, a marine expo center with restaurants and retail, and a “flex” park and field.
The surrounding uses were approved in concept two years ago by the Miami Commission as part of a short-term agreement that gave time for Friends to come back with a more solid plan and finances. But the extent of private involvement in a deal that hinges on the arrangement with a not-for-profit has caught even city administrators off-guard.
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“I was a little surprised by the scope of the private investment,” City Manager Daniel Alfonso said Monday.
The city is still reviewing the figures to see if crucial revenue projections are reasonable. Administrators released the proposed agreement in response to a public records request from The Herald. Some details of the arrangement were first reported Monday by the Crespogram.
Included in the numbers starting in 2017: revenues of $1 million annually for stadium naming rights and $3 million from concerts, boat races and events; $3.5 million from events and shows at the park; $350,000 from underground parking; $1.6 million from a grand porch space at the expo center; and $1.3 million from dry-dock rent.
The city, according to the proposal, would pay nothing toward the project. The Friends team would incur $10 million annual capital and debt service payments.
“We’re looking at the revenue projections,” Alfonso said. “We have questions about them. We have concerns about them.”
For Friends, time is limited. The announcement last week that the Miami International Boat Show is coming to the stadium launched the push for a deal, but the National Marine Manufacturers Association (NMMA) has signed only a letter of intent to host the boat show on Virginia Key starting in 2016. Closing the deal — which could be a lucrative years-long arrangement — is contingent upon a concrete agreement with the city to control and redevelop the site.
“This has happened very quickly because the NMMA agreement has a very hard deadline,” said Jorge Hernandez, an architect and co-founder of the Friends of Miami Marine Stadium.
Hernandez and Friends co-founder Hilario Candela say that while the proposed lease has materialized swiftly, the numbers do work and the project remains consistent with the public plan created for the site. They said private business is crucial to the stadium plan because the venue can’t function without subsidies as a standalone site, even though their financial projections show the stadium turning a small profit by 2020.
“We’ve learned that if we didn’t have the for-profit component we wouldn’t be able to save the stadium and keep it for the years to come,” said Candela, who noted that the county deeded land on Virginia Key to the city of Miami specifically to fund the existence of the stadium.
In fact, while the Friends group is working with the National Trust for Historic Preservation to raise funds to rehabilitate the architectural gem closed by the city after Hurricane Andrew in 1992, private money and interests will have to carry the deal.
The stadium would be operated by The Heat Group. The anchor tenant to the whole deal, the Boat Show, was brought to the Friends group by financier Expo-Miami. And without a $15 million upfront injection by TPA Group and Expo-Miami, preservationists, who currently have less than $6 million in hand, would be unable to afford the cost of improving the stadium and park grounds to accommodate the boat show.
The substantial involvement of private business becomes more important when considering the portion of Miami law that allows the city to enter into a lease with the Friends group without bidding out the project or seeking the approval of voters. Under the city’s charter, the commission can work directly with a not-for-profit in giving away control of public land as long as the property is used for public purposes only, among other conditions.
On Monday, the board of advocacy group Urban Environment League considered taking a position of concern with the Marine Stadium project. Vice president Greg Bush said there are potential issues with granting large portions of the site to private business.
“We have serious reservations,” said Bush, who stressed he was speaking only for himself.
Commissioners won’t be voting on the deal Thursday, but merely authorizing negotiations. A lease wouldn’t be considered until December at the earliest.
“It’s a starting point for looking at what a lease might look like,” Alfonso said.