Miami-Dade County on Tuesday secured an eight-year delay in paying the Miami Dolphins a bonus of up to $5 million a year for hosting the Super Bowl and other big events so that the county can save more money to pay off the debt for the ballpark that’s home to the Miami Marlins.
In 2014, commissioners endorsed a proposal by Mayor Carlos Gimenez to pay the Dolphins a maximum of $5 million a year through 2024 as rewards for attracting the Super Bowl and other large events to the team’s newly renovated stadium. Owner Stephen Ross secured the agreement in exchange for privately funding an upgrade of the Dolphins’ home, now called Hard Rock Stadium.
The Dolphins say the renovations cost about $500 million, and the county deal included an agreement not to move the franchise from the Miami area for 30 years.
With the renovations finished, the Dolphins are ready to start collecting their bonuses from the county. And that prompted the county to trigger its option to delay payments until 2025.
County commissioners approved the delay Tuesday, without discussion. Postponing the payments was considered all but a given in 2014 because the Miami-Dade hotel taxes that would be used to pay the team were already tight then. That crunch was thanks in part to mounting payments on the county’s Marlins Park debt of roughly $350 million. The recent drop in hotel taxes, largely blamed on last year’s Zika outbreak, only amplified the county’s need for more time to pay.
So far, the Dolphins have landed two events eligible for the bonus payments, which are capped at $5 million a year. The 2014 deal assigns $4 million for a Super Bowl, meaning the 2020 big game will bring the maximum windfall available to the Dolphins under the deal. International soccer matches — including the El Clásico game played in July at Hard Rock — are eligible for payments of $750,000.
Under the terms of the deal, securing the Super Bowl triggered the Dolphins’ eligibility for the payments, which are owed once an event is held. By exercising the deferral option, Miami-Dade postponed the 2017 payments until 2026, with any payments earned in 2018 paid out in 2027, and so on.
Michael Hernández, an Gimenez spokesman, cited the events as proof of the deal helping Miami-Dade tourism.
The agreement “incentivized a $500 million private investment in Hard Rock Stadium and has already resulted in Super Bowl LIV being awarded to our community, and the first El Clásico being played outside of Europe in 35 years,” Hernández said.
Tuesday’s vote highlighted the complications of stadium finances in Miami-Dade: While the county owns Marlins Park, Ross and partners own Hard Rock. The 2009 Marlins deal is still a source of fan ire as Jeffrey Loria ended his tenure as owner this week after a $1.2 billion sale to Derek Jeter and partners, but the county still has decades left of debt payments on the ballpark.
The Marlins debt played a role in the logistics of the 2014 Dolphins deal, with the Gimenez administration negotiating the provision that allowed the county to delay payments. Even after the first payment is due at the end of 2025, Miami-Dade can cancel any year’s payout if it can prove hotel revenues dropped to the point that they won’t cover debt on Marlins Park, the Adrienne Arsht center and other big consumers of hotel taxes in the county budget.
The agreement could mean a reliable stream of large payments if Ross succeeds in moving the Miami Open tennis tournament from Key Biscayne to courts he would construct at Hard Rock. A county source said the Dolphins see the event as large enough to qualify for a “Tier One” event, the category that includes the Super Bowl.
The lowest payment in Tier One in the county deal is $2 million for a college football semi-championship. Commissioners could amend the deal to include the yearly tennis tournament, which is one of the biggest tourism draws on the Miami sports calendar.