Miami Heat

January 16, 2014

Miami Heat wants 10 more years on its arena deal

Upgrades to the AmericanAirlines Arena are the current focus of the talks, with County Hall under pressure to wrap up the negotiations this season.

The Miami Heat and Miami-Dade County are negotiating a 10-year extension of the deal that lets the team play at AmericanAirlines Arena and receive about $6.5 million a year in hotel taxes to subsidize operations.

On Wednesday, Heat executives met at County Hall with Mayor Carlos Gimenez and his top aides about extending the team’s original deal in exchange for the Heat launching a major upgrade of the 14-year-old arena.

The current deal expires in 2029, and the Heat said it wants to work out an extension through 2039 now in order to invest in more upgrades at the county-owned arena. A county commissioner is pushing the mayor to get the deal done by March.

Ed Marquez, the deputy mayor for finance, said the talks currently involve what kind of improvements the Heat are willing to make at the facility, which opened on the downtown waterfront in 2000.

“We want to see what kind of an arena we want to have. Then we can start talking about the terms of the contract,’’ Marquez said.

Heat executives declined interview requests Wednesday but have said in the past they want a new deal now in order to get ahead of renovations the arena will need in the coming years. Without significant investments, the team maintains, AmericanAirlines Arena will become dated and, eventually, unsuitable, for an NBA team.

In November, team lobbyist Jorge Luis Lopez said a new deal may require as much as $17 million a year in public subsidies to produce the kind of renovations that will keep the arena competitive. Marquez declined to say what the Heat was asking for, or whether the team wants to increase the current $6.5 million subsidy as part of a new deal.

“There have been numbers thrown around,’’ Marquez said.

The Heat exercised its option to begin renewal discussions in 2012, 17 years before the current 1997 agreement expires.

The timing coincided with the team’s hottest era. LeBron James led the squad to its second straight championship last year, playing to record crowds and propelling the Heat to be the odds-makers’ favorite to take the 2014 title, too.

This also is the last season before James can entertain offers from other teams as a free agent.

Owner Micky Arison, the billionaire chairman of Carnival Corp., and the Heat bankrolled construction of the $360 million arena in the late 1990s in exchange for the current deal. While the Heat organization pays no rent to the county, its original agreement includes profit-sharing agreements designed to give the county 40 percent of all arena profits above $14 million. Team profits, including television revenue, are not part of the agreement.

The arrangement drew criticism, and an investigation by the county’s inspector general, after years passed without the Heat’s parent company paying anything to Miami-Dade. The team cited operating losses in the years between the championship runs by Shaquille O’Neal and James.

In November, the team cut its first profit-sharing check to the county for $257,134.

While talks are underway, Commissioner Bruno Barreiro is sponsoring a resolution urging Gimenez and his staff to “finalize” negotiations with the team by Feb. 22 — 30 days after next week’s commission meeting.

His motion cites the Heat’s boost to downtown Miami’s economy, as well as the belief that “the Miami Heat and the AmericanAirlines Arena have instilled a sense of civic pride in our community.”

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