A Miami Stadium Deal That's Not a Rip-Off?

Miami and the Dolphins may have found a better way to share the burden of stadium costs. 
 So, how much economic benefit does a half-empty stadium bring?

"Miami-Dade would pay Miami Dolphins $4 million for Super Bowl in stadium deal."

If you read that headline, you're probably thinking, "Great, more tax breaks for sports teams -- and in Miami, no less! Will they ever learn?"

Indeed, the latest deal between Miami-Dade County and the Miami Dolphins to renovate Sun Life Stadium does sound like just another in an endless line of sweetheart deals in which the city government succumbs to the power of its local team and meets the demands of a billionaire owner for millions of dollars in tax breaks and subsidies that could have been put toward things such as education and better roads. According to the Miami Herald, the proposed deal puts the county on the hook for payments to the Dolphins for hosting major sports events in exchange for paying for the $350 million renovation of Sun Life Stadium.

Miami residents have particular reason to collectively groan, having been put through their city's disastrous financing of the Miami Marlins' new stadium. The $639 million deal was signed in 2009, with the taxpayers footing most of the bill, and will end up costing the county billions in interest on construction loans and stadium bonds. Meanwhile, Marlins owner Jeffrey Loria continues to pocket the millions of dollars he makes from his team while feigning poverty for the benefit of easily swayed politicians.

Following that blatant instance of sports cronyism, Miami voters sent a clear message. In November 2009, stadium opponent Tomas Regalado was elected mayor with a commanding 72 percent of the vote, defeating Joe Sanchez, who had advocated for Marlins Park as a member of the city council. In 2011, with Miami-Dade facing a $444 million budget gap, voters recalled county mayor Carlos Alvarez, who had been instrumental in pushing the stadium deal through.

Carlos Gimenez won the recall election, and then re-election the following year. So why is he trying to push through another stadium deal after the last one sunk his predecessor? Because this Dolphins' deal isn't as much business-as-usual as you'd think -- it's actually a fairly innovative way to deal with the seemingly necessary evil of the public-private partnership cities have with their sports teams. Sure, in a perfect world, billionaire owners would just pay for their own toys, but we live a dystopian world in which the NFL operates as a nonprofit, so we'll take what we can get.

According to the proposal, the county would pay the team for drawing major events to the renovated stadium, giving the Dolphins incentive to campaign for events that would ostensibly bring Miami tourism dollars. The bonuses range from $750,000 for an "international soccer match" selling at least 55,000 tickets to $4 million for a Super Bowl or World Cup final.

A number of stipulations limit the potential for the municipal costs to spin out of control the way they did for Marlins Park. The deal caps the payments at $5 million a year, so the county would never be on the hook for more than it bargained for. It also excludes the Orange Bowl from being eligible for a bonus: The annual college football game is already a permanent fixture in Miami. And while the payments would come from existing hotel taxes, the deal allows the county to defer payments until 2024 and suspend payments if a decline in tourism significantly cuts hotel tax revenue.

Certainly, the payment plan is better than the tax-based solutions Dolphins owner Stephen Ross had previously sought in exchange for upgrading the stadium. Last year, Ross tried to pass a bill that would have raised the hotel tax and diverted around $7 million of annual revenue back to the Dolphins for 26 years. When that failed, Ross sought exemptions from property taxes on Sun Life to the tune of $4 million annually. Local officials were understandably not thrilled about the prospect of losing tax dollars - about $1 million of which are directed to the school system -- as they struggle to offset Miami's continued budget shortfall.

Given the deficit, spending any amount of public money on sports isn't ideal - but at least this way the city gets something in return. Or does it? The entire premise of the deal rests on the much-debated assumption that major sporting events spark the local economy. I'm the first to throw water on the NFL's robustly inflated projections for the economic impact a Super Bowl has on its host city; we in New York are still waiting for that promised $600 million boon, and don't even ask about New Jersey. Then again, when Miami last hosted the Super Bowl in 2010, the South Florida economy reportedly gained an estimated $333 million dollars thanks to the Big Game.

The NFL has made it clear that it will not hold another Super Bowl in Miami until Sun Life gets a significant refresh, keeping with its recent penchant for host cities with shiny, new stadiums, even if that city is Minneapolis. If Miami politicians think they have settled the issue of whether major sporting events really do benefit the local economy, this seems to be a more reciprocal way to go about it.

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