From the Miami Sun Post and Miami Today Come Serious Questions About the Mega Deal
Thursday, Feb. 13, 08
No Rush, Souto Says
Museum Park funds on hold indefinitely
By Cynthia Archbold
Miami-Dade County Commissioner Javier Souto listened to answers to the legal questions he raised about “anomalies” in the city-county plans to build Museum Park. But Souto did not say whether he was satisfied with them.
Assistant County Manager Alex Muñoz presented a report during a Recreation and Cultural Affairs Committee meeting Monday to “address questions that weren’t clear” in the Memorandum of Understanding between the city, county and the museums to set the legal and fiscal framework for building Museum Park.
In January, Souto, who chairs the committee, was asked to approve the MOU and issue the first installment of the county’s general obligation bond funds — $235,000 to the Miami Art Museum and $3.3 million to the Miami Science Museum. Instead, he lambasted the agreement and put the museum funds “on hold” until the county responded to the many issues he raised.
Specifically, Souto denied the museums’ request to waive a rule under the county general obligation bond program requiring the museums to have control of the land in order to receive county funds.
“This convoluted deal seeks to avoid a referendum by the residents of the city of Miami, which would be required if the city of Miami tries to execute a lease directly with the museums,” Souto wrote in a letter to County Manager George Burgess.
The land — waterfront park land in Bicentennial Park — is protected under the Joe Carollo Amendment from development, unless voters decide otherwise in a public referendum.
In addition, the commissioner questioned the MOU’s leasing arrangement, in which the city would lease the land to the Miami Sports and Exhibition Authority, which would then sublease the land to the museums.
Muñoz did not justify the request for waiver, but insisted it is necessary for the museums to continue planning and fundraising. He added that it would only apply to the initial grant allocations to the museums “in order to sustain momentum on the design phase of these projects.”
“These initial [bond] grant allocations for each museum cover very limited amounts of their total grant funds,” according to the memo Muñoz presented Monday.
He told Souto, “But at this time, it is important to keep these projects moving forward because they are at a critical juncture. It was important to ask permission from the board to do this.”
Souto also wanted proof — studies required by state law that “demonstrate that the area being annexed to the existing Community Redevelopment Areas meet the criteria of slum and blight.” In January, the commissioner wrote that without solid evidence, the CRAs and the global agreement would be “just another scandal … defrauding the African-American community out of dollars meant to tackle poverty and create opportunities for the African-American Community.”
The city-county deal would use CRA funds to landscape Bicentennial Park; build a port tunnel, Marlins baseball stadium with a 6,000-car parking garage and a soccer stadium; and pay off the construction debt of the Adrienne Arsht Center for the Performing Arts.
On Monday, Muñoz provided reams of folio numbers and property tax information to justify expanding the Community Redevelopment Area, showing values for Bicentennial Park, Overtown North, Overtown West and Watson Island — the neighborhoods the city wants to include in the CRA to fund the $3 billion “global agreement.”
But the summary of the property values shows escalating market prices. For example, Overtown West increased from $24 million in 2001 to $87 million in 2007; Watson Island went up from $5 million in 2001 to $28 million in 2007.
Muñoz said increasing values don’t disqualify the properties from being included in the CRA. “While slum or blighted conditions need to exist within a CRA, those conditions do not need to prevail in the area,” he wrote in his memo. “In many occasions, CRAs are designed to include areas where slum or blight are nonexistent and only serve as a financial catalyst towards the revitalization of the greater area.”
Muñoz did not provide Souto with infant mortality rates or information about public health issues and diseases in the proposed expansion areas, as requested.
As for Souto’s objection to giving the museums and their boards ownership of the museum buildings, “there were several key factors that resulted in the recommendation for both museums to own their buildings,” Muñoz wrote. He noted that the $120 million raised by the Miami Art Museum and the $112 million raised by the Miami Science Museum “is reliant on being able to assure to the private contributors that each of the museums are the developers, operators and owners of their facility.”
“From the county’s perspective, the museums’ responsibility for developing their own projects and owning the buildings emphasizes the museum’s sole obligation for all capital costs in excess of the county’s … grant support,” Muñoz wrote.
With a lawsuit that auto magnate Norman Braman filed in January looming over the $3 billion mega-deal, Souto said he needs time to digest the information, adding that there currently is no timetable for reconsidering the MOU and releasing the funds to the museums — until he hears acceptable answers.
“There is no rush,” Souto said.
Comments? E-mail letters@miamisunpost.com.
True costs of a stadium soar, questions multiply faster
By Michael Lewis
County commissioners have given administrators and Florida Marlins officials two more weeks to cement a stadium deal or forget about it. Forgetfulness in this case would be a public asset.
Set aside the poor policy of using more than half a billion public dollars to build a stadium and hand it to a profitable company so that it can earn vastly more. Set it aside only because officials are hell-bent on a giveaway for whatever specious reasons.
But if they refuse to consider far wiser uses of funds that could actually create added jobs and expand our local economy — which a stadium would not do — perhaps they will at least seek the least-costly giveaway.
That they cannot possibly do in the next two weeks.
An agreement among county officials, City of Miami officials and the Florida Marlins doesn't yet exist. When commissioners do receive it, they should take weeks to digest it, question it and question in detail those who drew it.
Every time county government has rushed to a vote on a big project it has cost taxpayers big-time.
Take the vote on the performing arts center. Commissioners guaranteed that not a penny of taxes would go to operate the center — but the promise was oral. The contract in writing ignored that. That omission cost taxpayers tens of millions.
So assuming commissioners are dead set on a giveaway, at least they should ask what the true cost is. And they cannot heed the negotiators' $525 million figure. They'll need experts to sift details.
They'll find that no cost is assigned to the Orange Bowl site that will house the ballpark. But experts value the land at about $28 million.
They'll discover that in the deal the Marlins demand free office space within two miles of the stadium — most likely the Brickell area — that would cost government $6 million-plus over the agreement's life. It's not in the $525 million total.
The Marlins also want more than $6 million in tax breaks. If they don't pay the taxes, either government goes short or, more likely, the rest of us pay for them. That's not in the $525 million, either.
About $1 billion to finance bonds to fund the stadium isn't included either. Nor are costs to issue the bonds, reserve money or fund interest during construction.
Also not tallied is the infrastructure to support the stadium. The last draft agreement in late January noted that "The County and City are also responsible for providing Public Infrastructure at no cost to the team."
Infrastructure needs noted in the agreement include relocating utilities, closing some streets and relocating others. Miami commissioners should demand a list of these streets, where they'd be moved and what that would mean to a neighborhood — as well as how much the city would pay.
A note in the January draft would also require government to implement by April 2011 all recommendations of a city-ordered September 2007 transportation and parking study by HNTB. Any realistic transportation scheme should require rail transportation to a stadium or a lot of highway feeder roads. The full recommendations, and their ultimate costs, are vital components before government signs a stadium deal.
The package also calls for free parking for Marlins players, coaches and top executives in a government-funded garage for the agreement's life. At market rates for top reserved parking, that's about $3 million free to the team.
We can't total the added costs with mammoth unknowns like transportation. But certainly $1 billion bond financing is huge, and we've just put price tags on $43 million more. Just how high above $525 million is government prepared to go in its giveaway?
Also hidden but real is opportunity cost. What else could be done with the Orange Bowl site or with government funds that could uplift the neighborhood, the city and the county? Certainly better uses abound for both land and funds that would multiply their value.
Beyond all this, commissioners must see details of other agreements that will link to the general agreement they'll be handed to approve. Unfortunately, there's no plan for them to see those other agreements before they vote.
The accord on which commissioners are to vote calls for a further construction administration agreement listing the features a stadium is to have. Will there be luxury bars and restaurants? A convention and meeting center? Retail shops? Office space? An amusement park? Commissioners aren't due to learn that until after they agree to build the stadium — but they should know now.
Also due later is an assurance agreement in which the Marlins, who are to manage construction and development of the public's stadium, guarantee their payment and performance. They'll agree to pay construction overruns, which will be the trick of the century for a team that hasn't been able to repay its loan from Major League Baseball to buy the franchise years ago.
Viewing the weasel-wording of that agreement is going to be worth the price of admission — but commissioners won't get that chance until they've already voted to go forward on the stadium. And the city and county governments must pay the Marlins $5 million each if they vote to go forward but pull out once they see full details.
Also due later are stadium plans. The latest draft deal says the city and county will get just 10 days to approve plans once they're drawn — which will be after government has voted to go forward.
Also yet to come is the contract under which the Marlins would manage the county's stadium. The team's representatives are to set all prices for all events, including all non-baseball events except 12 days when the city and county get to use the stadium — but those 12 days cannot come within five days of a baseball game, and the Marlins get first choice on non-baseball uses for every day of the year.
The Marlins also get to make all contracts for other uses of the stadium 272 days of the year and keep the revenues from all those uses even though the county would own the stadium.
Stop a moment and ask this: what businessperson who has not been committed to an asylum would dream of signing this deal? It's far worse than the county's contract at AmericanAirlines Arena that gives the county a slice of income above a point that somehow never has been reached and never will be — leaving the county without a penny of return.
The only real payback the ballpark contract gives the public is two free private suites and 22 box seats at each Marlins game — a seat for each commissioner, mayor and manager, plus private suites for their handlers and financial supporters.
On the other hand, maybe that's the reason to sign. It's rotten policy at far too high a cost with no ceiling in sight, but at least our public officials would be amply cared for.
If the stadium belongs to the public, officials wouldn't even have to list their free seats as gifts. Going to games would just become part of the job. And the public would pay for that, too.
