Miami Dolphins owner wants to swap $4 million tax bill for stadium renovations
03/11/2014 12:01 AM
03/11/2014 2:35 PM
The Miami Dolphins want to stop paying property taxes for Sun Life Stadium in exchange for privately funding a $350 million renovation, a deal that would put South Florida in the running again for Super Bowls but also endanger about $3.8 million that funds schools, libraries and other government services, according to people familiar with the talks.
Miami-Dade Mayor Carlos Gimenez met with Dolphins owner Stephen Ross about two weeks ago, and Gimenez said he wants the team to find a way for the arrangement to not dent the budgets of the school board or Miami Gardens, where Sun Life Stadium is the city’s top taxpayer. Under the proposal, Sun Life would revert to county ownership and be free of property taxes, in the same way that the county-owned homes of the Miami Marlins and the Miami Heat are government facilities and exempt from taxation.
Ross “just wants to be treated fairly,” said Dolphins CEO Tom Garfinkel. “He wants to be treated like all the other franchise owners from that standpoint.”
The talks mark the first concrete sign that the Dolphins have not let up in their push for a renovated Sun Life after a bitter defeat last year in Tallahassee. In 2013, Gimenez backed raising hotel taxes to partially fund the renovation, provided the new revenue was approved in an emergency referendum. The special May vote was called in hopes of winning approval while Miami Gardens was still in the running for Super Bowl 50 in 2016, but the Dolphins failed to win the change in state law needed for the hotel-tax vote.
“I frankly don’t believe we’re going to get another Super Bowl if we don’t do something with the stadium,” Gimenez said in an interview Monday. “Quite frankly, it is a much better deal than what we were talking about last year.”
Gimenez said Ross, a billionaire real-estate developer, agreed to complete the renovations, then turn over the stadium to county ownership and start reaping the tax savings once the project was completed. Team officials said the plan would bring Sun Life in line with stadiums across Florida, which are publicly owned and exempt from taxes.
The stadium’s tax bill posted online shows it paid $3.8 million in property taxes last year, including $1.3 million to the school system and about $1 million to Miami Gardens. Most of the rest went to Miami-Dade for general government expenses. An internal team accounting shows the Dolphins’ total Miami-Dade property-tax bill hit about $4.8 million in 2013, since the organization owns land surrounding the stadium that would not be part of the ownership transfer.
Garfinkel suggested Monday the team would find a way to protect Miami Gardens from taking a financial hit in the ownership swap of Sun Life. Ross could arrange to make a payment each year to Miami Gardens in lieu of taxes, or negotiate another arrangement. Miami Gardens’ latest financial statement lists South Florida Stadium Corp., the Ross entity that owns Sun Life, as accounting for 3.5 percent of the city’s total tax base. With about 1,200 employees, the Dolphins also are the city’s largest private employer.
“We’re going to try and make Miami Gardens whole,” Garfinkel said.
Garfinkel did not suggest a similar accommodation for the school system, which spends about $4 billion a year. Gimenez cited both the city and the school board as his two main concerns in the potential deal.
Gimenez’s talks with Ross come as the mayor is facing budget challenges that stem in part from a shortfall in property-tax revenues. The library system might be forced to impose more staffing cuts after Gimenez rejected calls for a raise in the county property tax that funds libraries. A recent decision by county commissioners to spare Miami-Dade employees from a health-care contribution leaves Gimenez having to slice about $40 million from the general budget.
In a statement issued late Monday, Gimenez positioned a potential Sun Life deal as good for the economy — as well as a work in progress.
“The economic impact of these events cannot be overstated, and therefore we always want to remain competitive as a host for Super Bowl and other such events,” Gimenez said. “However, there are still hurdles that the Dolphins organization must overcome before I feel comfortable with the proposal.”
With Ross agreeing to privately finance the renovation, Dolphins executives described the arrangement as a win for Miami-Dade, since it would gain a modern football stadium in exchange for giving the same tax arrangement to the Dolphins that it already provides the Heat and the Marlins. While the Heat receives a $6 million yearly subsidy from hotel taxes and Miami-Dade pays millions in debt service each year on Marlins Park, the Dolphins would get no local subsidy in the deal.
“This is good for our fans, it’s good for Miami-Dade, and it’s good for our team,” Garfinkel said. “If [Ross] makes this investment now, we can be confident we’ll have this world-class facility for years to come.”
The agreement would give Ross far less than what he was seeking a year ago, when a new hotel tax would have generated about $8 million a year in county dollars for Sun Life. He also sought $3 million a year in state funding. A new bill in Tallahassee could provide a similar funding source from Florida, depending on how the final language evolves.
Team executives said the renovation plans have not changed since the team’s big push last year. The plans call for a canopy over the stadium to shield spectators from the rain and sun, an additional 3,000 seats near the field and a full redo of the stadium’s interior, including kitchens, concessions and removal of baseball relics from Sun Life’s time as the home of the Marlins.
Ross’ fortune was estimated at $5.4 billion by Forbes this month, up from $4.4 billion in 2013. The New York-based developer and Miami Beach High graduate has been pushing for goverment assistance in a stadium renovation since fully buying the team in 2009. As he pursued public dollars for the project, the National Football League in 2012 pitted Miami Gardens against a new stadium in San Francisco for the 2016 Super Bowl, the milestone game’s 50th anniversary. South Florida lost the bid after last year’s funding failure in Tallahassee.
Jeff Bartel, head of the sports committee for the Greater Miami Chamber of Commerce, said Monday the deal sounds like something the business group would support.
“The fact that the owner of the Miami Dolphins is willing to pay the total cost of a stadium renovation is unprecedented and is something that as a business community we highly commend,” he said. “It means we’re in the running for future Super Bowls.”
Miami Herald staff writer Patricia Mazzei contributed to this report.