Miami-Dade taxpayers have less than a year to share in any windfall from Jeffrey Loria selling the Miami Marlins to Jeb Bush and Derek Jeter.
Loria must share 5 percent of any sale profits with Miami-Dade and the city of Miami if he closes a deal by April 2018, according to a summary of the payout provision prepared by the county. That could mean millions, since Loria’s original deal for the tax-funded stadium values the franchise at about $500 million and the owner is said to be selling the team to Bush, Jeter and partners for about $1.3 billion.
But Loria’s original 2008 agreement with Miami and Miami-Dade allows him to make significant deductions from the proceeds before the team pays out anything to taxpayers. That includes team debt, the cost of closing the sale, and taxes paid on the transaction.
Jose Galan, head of Miami-Dade’s real estate development division, marked the debt, tax and closing costs entries as “Unknown” in his summary of the deal terms. That means Miami-Dade can’t estimate a profit-sharing amount on a Marlins sale, even if the deal closes before next spring. In 2012, a team financial statement listed the team’s debt at $200 million, the Miami Herald reported in 2013.
How Loria and the Bush group structure a purchase could be key in resetting public goodwill for the Marlins amid continued backlash against the stadium deal. Miami-Dade Mayor Carlos Gimenez, who took office in 2011 as a leading critic of the stadium deal, said Tuesday the Marlins’ deadline for sharing profits with the public is very much on his mind.
“Everybody knows if it’s after March, then we don’t get anything,” Gimenez said. “I’m sure Loria knows.”
Privately, county officials have scoffed at the possibility that Loria would actually pay the government a share of the purchase proceeds. Loria can deduct capital-gains tax on a franchise he bought for $158 million in 2002. With the Marlins described as a money-losing team, the debt tab is sure to be higher than in 2012. That could mean an even bigger deduction from the sale proceeds for Loria, leaving taxpayers with nothing.
On the potential for Miami-Dade collecting money from a Marlins sale, Miami-Dade Commission Chairman Esteban “Steve” Bovo posted on Twitter: “Not holding my breath.”
Gimenez, who frequently plays golf alongside Florida’s former governor at the Biltmore, said he’s spoken to Bush about the deal. “I do believe it would be good for the town if we get new ownership,” Gimenez said.
Miami-Dade’s profit-sharing right comes from the non-relocation agreement that Loria signed in 2008 as part of a broad deal that had the city and county borrowing nearly $500 million to build the $640 million county-owned ballpark and city-owned garages. The Marlins contributed about $150 million to the deal.
The agreement requires Loria to pay Miami-Dade and Miami a portion of the proceeds if he sells the team within 10 years of the original 2008 contract, according to the county summary. Miami-Dade estimates it would keep 85 percent of the payout, with Miami getting 15 percent, depending on the value of the land that the city contributed for the stadium site in Little Havana, Galan said. The portion of the proceeds shrinks the farther out the deal goes, with Year 10 being the end of the window when taxpayers are eligible for a piece of the sale.
According to the one-page county analysis, the base value of the Marlins would be about $500 million. That’s based on the value of the franchise in 2008 of $250 million, with an additional 8 percent growth per year, as called for in the agreement. From that value, Miami-Dade would calculate the profit based on the sales price, minus the deduction for debt, taxes and other costs.
Though Miami-Dade has begun running the numbers for a potential Marlins sale, county officials say the team and Bush’s group have not made formal contacts for a transaction.