LGBTQ South Florida

Miami Beach lost $200K in World OutGames debacle; now city is rethinking large grants

World OutGames sporting events canceled amid financial turmoil

The 10-day event scheduled for venues in Miami and Miami Beach is unraveling due to financial problems.
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The 10-day event scheduled for venues in Miami and Miami Beach is unraveling due to financial problems.

Of the more than $1 million collected and apparently spent by organizers of the ill-fated World OutGames Miami, one contribution is well-documented: $200,000 from Miami Beach taxpayers.

It was public money spent on an event that floundered for months — some say years — before organizers in the 11th hour canceled most of the events, outraging LGBTQ athletes who came from all over the world to compete.

Now, the fiasco has prompted the Beach to draft criteria for making large grants to prevent tax dollars from being squandered on mismanaged events.

Most of the $200,000 was intended as seed money to kickstart the OutGames’ fundraising efforts. Part of it was a loan that the city forgave after admitting it couldn’t have a kitchen ready in the convention center in time for the scheduled opening ceremonies, after organizers abandoned Marlins Park and before they settled on the nearby Fillmore theater.

On top of the $200,000 grant, the Beach discounted fees, extended deadlines and even did some fundraising on behalf of the event. The city had committed another $200,000 if the OutGames had independently raised more money.

As troubling financial updates from the OutGames led city officials to believe the event might be on a downward spiral, the Beach continued making concessions to help organizers salvage some kind of event. City Manager Jimmy Morales pleaded with OutGames CEO Ivan Cano and Chief Operating Officer Keith Hart to scale back activities to fit a shrinking budget.

All along, organizers reassured the city, athletes and LGBTQ community leaders that donations were coming in and that they would produce an event they could afford. It wasn’t until Opening Day, May 26, that the “scaled-back” OutGames meant eliminating most of the scheduled programs and events.

As troubling financial updates came in, the Beach continued making concessions to help organizers salvage some kind of event.

“If there was any hint that what happened that Friday was around the corner, I would have hoped they would have raised the alarm and let us know,” said Steve Adkins, president and CEO of the Miami-Dade Gay and Lesbian Chamber of Commerce and past board member of the OutGames. “That never happened.”

About $225,000 from Miami-Dade County and the state of Florida never made it to the OutGames because that public money was tied to fundraising goals that were never met. Those grants would have been provided as reimbursements after the event. Now, some officials are questioning why Miami Beach didn’t put similar restrictions on its donations.

“Certainly going forward, any such funding should be tied to clear thresholds, clear delivery dates and, ideally, reimbursable, as opposed to providing seed money for these kinds of things,” Morales told the Miami Herald in an interview.

City commissioners briefly discussed the OutGames at their most recent meeting, lamenting the event’s massive problems while praising city staffers who stepped up to facilitate makeshift tournaments for athletes.

Commissioner John Elizabeth Alemán said the high-profile meltdown left a bad global impression of Miami Beach.

“Even though that was not a city event, we were one of the sponsors of that event,” she said. “It really reflected quite poorly on us all around the world.”

The commission did not discuss vetting organizations who ask for large sponsorships.

OFF THE RAILS

As the OutGames unraveled financially, Cano promoted the event and assured public officials that the investment of taxpayer dollars was worthwhile.

Behind the scenes, trouble boiled over. For nearly a year, athletes had grown skeptical when they stopped receiving timely email responses from organizers. Final schedules weren’t posted on the event website. Weeks before, performers had not been paid. Permits had not been pulled. Athletes’ medals hadn’t been ordered. Venues were owed full rental fees.

Even though that was not a city event, we were one of the sponsors. … It really reflected quite poorly on us all around the world.

Commissioner John Elizabeth Alemán

Throughout, Cano and Hart told Beach administrators and elected officials that there were significant donations in the pipeline. In March, organizers announced a sponsorship from Adidas but would not say how much it was worth.

By March, the situation looked dire enough to prompt a letter from Morales to city commissioners that outlined discrepancies in financial statements provided by the OutGames. Cash and in-kind sponsorships were mixed together. No sponsorship agreements were provided. Fundraising reports did not match other financial reports.

Only a few months out, these records showed that the OutGames had $31,499 in the bank. The anticipated price tag for the whole event was about $2 million — an estimate that had already been severely scaled back from an initial $12 million figure.

“I can tell you they received well over $1 million,” Det. Juan Sanchez, Miami Beach police’s LGBT liaison, told a community board following the collapse of the OutGames.

World OutGames aquatics 016
Jax Cole, 36, a World OutGames Miami competitor from Long Beach, California, dives into the pool during one of the few events that wasn’t canceled. STEVE ROTHAUS srothaus@miamiherald.com

In March, Morales questioned the ability of organizers to pull it off, which led to a public reassurance from Cano before the commission.

Just two nights before OutGames opened, Cano texted a Beach commissioner asking for $250,000. Then, on the eve of the first day of social events for the games, Morales penned another memo foreshadowing what would become clear the following morning: All but a few OutGames events would be canceled due to serious financial shortcomings.

In the wake of the fiasco, city hall demanded that organizers hand over the books for a forensic audit while hundreds of athletes took it upon themselves to organize their own tournaments.

Cano resigned the week of June 5, according to an email to Beach officials from the OutGames. City officials said Hart is cooperating with auditors and that Miami Beach has been granted full access to the OutGames’ financials.

Neither man has responded to the Miami Herald’s requests for comments.

Spending quality time … on a healthier path. Today is a new day to build a better life.

Ivan Cano, former CEO of World OutGames Miami, on June 15 in New Jersey

On June 15, Cano posted on Facebook from Clark, New Jersey: “Spending quality time … on a healthier path. Today is a new day to build a better life.”

According to people at city hall, the OutGames audit is nearly completed. Auditors want to see how much money came in versus how much was spent, and where that money was spent.

“What we’re trying to accomplish is look at all the income and all the expenses,” said James Sutter, the city’s auditor, to commissioners at a recent public meeting.

Joey Flechas: 305-376-3602, @joeflech

Steve Rothaus: 305-376-3770, @SteveRothaus

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