Miami-Dade County

Miami-Dade, Dolphins negotiating $2.5 million county subsidy tied to Formula One race

A draft agreement between Miami-Dade County and the Miami Dolphins would pay the team at least $2.5 million a year for bringing a Formula One race to Miami Gardens, a subsidy tied to an existing agreement that pays Hard Rock Stadium up to $5.75 million annually for large events.

The draft Formula One agreement obtained by the Miami Herald would boost that cap to $7 million, a 20% increase. But the deputy mayor overseeing the talks, Jennifer Moon, said Friday that the Dolphins have dropped the request for the higher cap. “They came back to us and told us they didn’t need the cap increased,” she said.

Even without the higher cap, the proposed Formula One agreement would make the 2014 agreement a more reliable source of county revenue for Dolphins owner Stephen Ross.

With F1 coming each year, it would let him lock in another $2.5 million more for the yearly allocation allowed under a 2014 agreement that pays the Dolphins for large tourism-generating events at the stadium. The bonus payments were swapped for Ross agreeing to a privately financed stadium renovation the team said cost $500 million.

The Dolphins see F1 as a significant tourism boost in Miami-Dade, with about 35,000 overnight stays generated for local hotels. The Dolphins already are allowed a $1 million payment for the Miami Open tennis tournament, which moved from Key Biscayne to Hard Rock this year.

The 2014 agreement was passed after Ross failed to win direct county subsidies for a stadium renovation. It ties payments to Hard Rock luring large events, with payouts linked to anticipated spending by attendees. International soccer matches that sell out Hard Rock, for instance, qualify for a $750,000 payment, while a college football championship game brings in $3 million.

The money comes from hotel taxes, with the idea that the events are large enough to boost tourism and lodging spending. Miami-Dade uses hotel taxes to promote tourism, as well as fund parks, pay for cultural activities and fund debt for museums and performing arts centers. Yearly allocations are capped at $5.75 million.

While payments are established each year, Miami-Dade exercised a provision allowing it to delay payouts until 2025. Another provision allows Miami-Dade to cancel payments if hotel revenues fall below certain benchmarks, an unlikely scenario given the lodging industry’s growth.

Internal emails released as part of a public-records request showed the Dolphins lobbyists hoped to win the F1 subsidy agreement in July from the county commission. But that effort stalled, quickly followed by a commission push to block the yearly race from coming to Miami Gardens altogether. On Friday, Mayor Carlos Gimenez announced his veto of a commission resolution opposed by the Dolphins that would ban the road closures needed to run the race at Hard Rock.

The emails extend the timeline of Gimenez’s office helping advance F1 at a time when Gimenez had publicly recused himself from the matter due to a son, C.J. Gimenez, being hired as a race lobbyist when the event was trying to use city and county land to hold the event in downtown Miami. Ross, a billionaire real estate developer based in New York, has the rights to extend the F1 circuit to Miami if he can win governmental approval for the event.

The county mayor issued a formal recusal memo on May 14, 2018, citing his son’s lobbying work. Late last month, Gimenez issued a new memo lifting that recusal, saying his son no longer worked for Formula One. The subject of the memo was Gimenez’s opposition to the commission effort to block Formula One from coming to Miami Gardens, an event opposed by a group of neighbors complaining of noise, traffic and air pollution. Gimenez’s office said the younger Gimenez stopped his lobbying work in March 2019.

A source close to the Dolphins said Friday that the younger Gimenez, who helped with the 2017 campaign of Miami Commissioner Joe Carollo, was hired to win Miami approvals and was dropped after the race shifted to Miami Gardens.

In a July 12 email, the Dolphins executive in charge of lobbying, Marcus Bach-Armas, described “the F1 grant amendment being spearheaded by the Mayor’s Office.” Moon, who also serves as budget director and was promoted to deputy mayor in July, said she was brought into the talks on a potential Formula One incentive payment in May.

The $2.5 million yearly payout appeared to be settled by the Gimenez administration. “We have agreed to $2.5 million for Formula One, no increase to the cap for now,” Moon wrote county lawyer Monica Rizo on Oct. 1.

While the agreement sets a $2.5 million payout as a starting point for Formula One, the payment could go higher under the terms in the most recent draft Moon sent Rizo on Oct. 9. The contract calls for both sides to agree on a firm to conduct an economic-impact analysis of Formula One after it came to Hard Rock for its second year in 2022.

If the results of that study found the race had economic impact closer to the Super Bowl, the payment would automatically reset to reflect that calculation. That would mean a sizable jump in the financial stakes for F1, since the 2014 stadium agreement with the Dolphins requires a $4 million payment when a Super Bowl is held at Hard Rock.

Though it was included in the most recent draft, Moon said the automatic trigger is still something the Gimenez administration wants to negotiate. “We weren’t comfortable with it,” Moon said. “Those are draft documents.”

Doug Hanks covers Miami-Dade government for the Herald. He’s worked at the paper for nearly 20 years, covering real estate, tourism and the economy before joining the Metro desk in 2014.
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