Commissioners OK finance plan for Florida Marlins stadium
BY JACK DOLANjdolan@MiamiHerald.com
Miami-Dade commissioners on Tuesday gave the county manager approval to start borrowing $563 million to help build the Florida Marlins' new stadium in Little Havana.
But the 8-4 vote -- the last required before the county goes to the bond market -- came with tough questions about the financing's blueprint.
At the core of the debate was whether hotel bed taxes, paid mostly by tourists, can be counted on to cover all of the debt.
Some hotel tax revenues were down as much as 22 percent in February from the previous year, noted Commissioner Carlos Gimenez, a stadium financing critic.
If the ''bed taxes'' can't cover the payments, the bond agreements commit the county to pay for shortfalls with money from the general fund -- which also pays for county services like police.
''It's rolling the dice,'' Gimenez said.
County Manager George Burgess, who negotiated the stadium deal with the Marlins on behalf of Miami-Dade Mayor Carlos Alvarez, said the general fund money is being offered only to reassure a potentially skittish bond market, and to get a lower interest rate.
Only the non-ad valorem portion of the general fund, like the sales tax revenue, could be tapped. Property tax revenues, which make up about three-quarters of the general fund, can't be used to fund the stadium without a public referendum.
The county has pledged sales tax money to back-up other bond issues -- but never had to dip into it to cover payments, Burgess said.
Supporters of the financing plan, like Commissioner Javier Souto, said they were relying on Burgess' judgment.
Commissioner Katy Sorenson was not persuaded. ''If someone asked me to co-sign a loan, even if they promised they had always paid their other loans back, I would still think twice,'' she said.
Voting for the measures were Commission Chair Dennis Moss, Jose ''Pepe'' Diaz, Natacha Seijas, Barbara Jordan, Dorrin Rolle, Audrey Edmonson, Rebecca Sosa and Souto.
Voting against were Gimenez, Sorenson, Joe Martinez and Sally Heyman.
The county has capped the interest rate it is willing to pay for the majority of the bonds at 7.5 percent.
Not all of the $563 million approved Tuesday would go directly to stadium costs. About $105 million would refinance existing loans for the tennis center on Key Biscayne, the Homestead race track and the old Miami Arena. Refinancing those loans helps free up collateral to borrow the baseball stadium money.
Burgess said if investors demand terms that require the county to tap the general fund, the county will not go through with the deal.
The county has until July 1 to back out of the deal if the terms don't look good.
BY JACK DOLANjdolan@MiamiHerald.com
Miami-Dade commissioners on Tuesday gave the county manager approval to start borrowing $563 million to help build the Florida Marlins' new stadium in Little Havana.
But the 8-4 vote -- the last required before the county goes to the bond market -- came with tough questions about the financing's blueprint.
At the core of the debate was whether hotel bed taxes, paid mostly by tourists, can be counted on to cover all of the debt.
Some hotel tax revenues were down as much as 22 percent in February from the previous year, noted Commissioner Carlos Gimenez, a stadium financing critic.
If the ''bed taxes'' can't cover the payments, the bond agreements commit the county to pay for shortfalls with money from the general fund -- which also pays for county services like police.
''It's rolling the dice,'' Gimenez said.
County Manager George Burgess, who negotiated the stadium deal with the Marlins on behalf of Miami-Dade Mayor Carlos Alvarez, said the general fund money is being offered only to reassure a potentially skittish bond market, and to get a lower interest rate.
Only the non-ad valorem portion of the general fund, like the sales tax revenue, could be tapped. Property tax revenues, which make up about three-quarters of the general fund, can't be used to fund the stadium without a public referendum.
The county has pledged sales tax money to back-up other bond issues -- but never had to dip into it to cover payments, Burgess said.
Supporters of the financing plan, like Commissioner Javier Souto, said they were relying on Burgess' judgment.
Commissioner Katy Sorenson was not persuaded. ''If someone asked me to co-sign a loan, even if they promised they had always paid their other loans back, I would still think twice,'' she said.
Voting for the measures were Commission Chair Dennis Moss, Jose ''Pepe'' Diaz, Natacha Seijas, Barbara Jordan, Dorrin Rolle, Audrey Edmonson, Rebecca Sosa and Souto.
Voting against were Gimenez, Sorenson, Joe Martinez and Sally Heyman.
The county has capped the interest rate it is willing to pay for the majority of the bonds at 7.5 percent.
Not all of the $563 million approved Tuesday would go directly to stadium costs. About $105 million would refinance existing loans for the tennis center on Key Biscayne, the Homestead race track and the old Miami Arena. Refinancing those loans helps free up collateral to borrow the baseball stadium money.
Burgess said if investors demand terms that require the county to tap the general fund, the county will not go through with the deal.
The county has until July 1 to back out of the deal if the terms don't look good.
After that, the county is committed to the proposed $634 million stadium, parking and public works project. The county and Miami are funding slightly more than 80 percent of the costs; the Marlins will contribute $120 million and repay a $35 million county loan.
Other large county construction projects, like the Performing Arts Center and the ongoing airport additions, have a history of overruns.
On Tuesday, Commissioner Martinez thought he saw a harbinger of things to come. A resolution that was supposed to offer $50 million from the county's Building Better Community bonds, actually read $55 million.
Martinez demanded an explanation. One million might be financing costs, offered Assisted County Attorney Gerald Heffernan. But the rest? ''I really don't have an answer for that,'' Heffernan conceded.
Martinez replied: ``Without the bonds even being issued, we already have a $4 million cost overrun.''
The good news for the county: the Marlins are on the hook for stadium overruns.
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