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Union-owned investor offers loan to Marlins

State Rep. Gus Barreiro brings a union-owned investment company to the Florida Marlins with a $110 million deal to help finance a new stadium in Miami.

BY MARC CAPUTO, OSCAR CORRAL AND BARRY JACKSON

mcaputo@herald.com

 

An unexpected new player emerged Thursday in the effort to build a stadium for the Florida Marlins when the nation's largest union-owned life insurance company, ULLICO, announced it's willing to loan more than $110 million toward the plan.

 

ULLICO Chairman Terry O'Sullivan hopes to discuss the offer with the club next week. He says the company will offer rates that could undercut conventional loans if the project creates a negotiated number of high-paying jobs.

 

The catch? The construction site would be union-only.

 

''This is money from union members and it should benefit union members,'' O'Sullivan said. ``The giveback with this project is more than that. It's a chance to raise our stature in the community and to put labor up there with the World Series champs.''

 

Whether the company will get the chance is unclear.

 

Marlins President David Samson said late Thursday that he couldn't comment on the proposal because he has not been contacted. Miami City Manager Joe Arriola, working on a financing plan with Miami-Dade County Manager George Burgess, said ULLICO's offer to loan the Marlins money does little to bring the team closer to a new stadium. ''We'd still have to pay for it,'' Arriola said.

 

Asked whether the estimated $325 million stadium price tag includes union labor, Samson would say only, ``That's the cost of building a retractable-roof stadium following all of the codes and ordinances.''

 

So far, Miami-Dade has pledged $73 million and the club has promised $137 million -- leaving a $115 million shortage. The team is talking with Miami about a contribution, and may approach the state Legislature.

 

BARREIRO'S EFFORTS

 

State Rep. Gus Barreiro, R-Miami, who is bringing ULLICO and the club together, hopes the Marlins are open to new financing options -- perhaps through a naming-rights deal, though O'Sullivan said he's leery of that idea. Another possibility: finding civic-minded investors to pick up the loan tab.

 

''We can't expect taxpayers to pay all the cost,'' Barreiro said. ``People are taxed enough, and they're sick of paying money to the government.'

 

Barreiro learned of ULLICO through the Laborers' International Union of North America. O'Sullivan is president of the 840,000-member union, which opened a chapter in Barreiro's Miami-Dade district last month -- just before the Marlins won the World Series and talk of a new stadium resurfaced.

 

The union is one of dozens whose members pay into ULLICO, which stands for the Union Labor Life Insurance Company. Its $2.2 billion mortgage investment arm, called J for Jobs, invests in large projects to expand the union's base.

 

ULLICO became mired in scandal early this year when it was learned that some former directors engaged in special stock trades that earned them almost $6 million in questionable profits. The federal government is investigating.

 

O'Sullivan was brought in to clean house at ULLICO. He sold the $3 million corporate jet and decided to get back to basics: promoting labor, especially in places like South Florida, where construction is heavy and a union presence is scarce.

 

''It wasn't a good year for ULLICO,'' O'Sullivan said. ``We want to put that behind us.''

 

O'Sullivan said the company can't discuss what it's prepared to offer until it finds out what the Marlins want.

 

The new ULLICO proposal is only the latest of a number of funding options being considered. For example, Miami officials are talking about demolishing the underused Miami Arena to free up revenues that could be used toward a new stadium. The city is considering the arena and Orange Bowl areas as a possible site.

 

County convention development tax money that the city receives for Miami Arena each year could be available for other uses if the arena is torn down, Miami Commission Chairman Johnny Winton said.

 

Winton said the arena receives about $1.5 million to $7 million each year that goes into a capital improvement fund, and uses another $1 million a year for operating costs. Besides that, another $2 million to $3 million a year goes to honor the arena's debt, which is about $36 million.

 

If it tears down the arena, the city could free the capital improvement and operating money, and bond it out to leverage about $25 million to $50 million for a stadium, Winton said.

 

''From my viewpoint, I consider this option very serious,'' he said.

 

But Arriola played down the option, saying it would be unpopular to demolish a structure that is still usable.

 

''That's foolish,'' Arriola said. ``I wouldn't do it.''

 

Arriola did say the Orange Bowl area is his favorite site. ''At the end of the day, I don't know if we could do it anywhere but the Orange Bowl,'' he said. ``Everything else is speculation.''

 

STATE FINANCING

 

Prospects of state financing also remain uncertain. With state needs outpacing state revenues, lawmakers predict that next year's legislative budget cuts will be particularly brutal.

 

Two previous attempts to win money from state taxpayers died in the Legislature when the economy was far better. Samson has declined to say if the club will head to Tallahassee.

 

If he does go, he says, he will do it without lobbyists -- a move seen as unwise by some insiders who say that getting North and Central Florida legislators to support a tax break for South Florida would be an uphill battle.

 

Further estranging lawmakers from outside Miami-Dade: The deal struck with the county to change the team's name from the Florida Marlins to the Miami Marlins.

 

State Rep. Stacy Ritter, D-Coral Springs, said she's troubled by the proposed name change, though she still wants to get state support. She plans to file a bill giving the Marlins a $2 million annual sales tax rebate to pay for about $60 million of the construction costs.

 

The Marlins already have the rebate at Pro Player Stadium, but the club wants to move because its lease is too costly, Samson says.

 

Senate President Jim King said he hopes the club stays in Florida, but he's not prepared to spend tax dollars to keep it here. However, he said, if the Florida House and Gov. Jeb Bush reverse years of opposition and agree to eliminate sales-tax exemptions or legalize gambling to expand the tax base, he said he would agree to more spending.

 

''If we had more money to spend, we would spend it,'' King said.

Well, this is certainly interesting.

Ross, don't forget to add the link for copyright issues BTW, you won by a hair :thumbup

Problem is its a loan :confused

If Loria doesn't have a problem taking the loan on his own credit (Marlins LLP Credit) then my only concern is that the labor agreement not allow a work stoppage or slow down of any form until the project is done and completely ready for handover. If their is a stoppage/slow down then there should be an abiity to fine the unions.

ULLICO HAS HAD UPS AND DOWNS

 

ULLICO Inc., originally known as the Union Labor Life Insurance Co., was founded in 1925 to provide death benefits for union members. Still union-owned, it is now the corporate parent of a group of financial services companies.

 

The J for Jobs program that is offering a loan to the Florida Marlins for a new baseball stadium is a mortgage account sponsored by ULLICO's life-insurance subsidiary. According to the company, it allows tax-exempt pension plans to invest in mortgages for union-built construction.

 

ULLICO's former directors, many of them union presidents, are under scrutiny by the federal government for insider stock transactions between 1998 and 2000. The new board of directors, led by Laborers International Union President Terence O'Sullivan, is suing four of those past directors.

 

The new board learned in May that ULLICO had lost $74 million in 2002, rather than the earlier estimate of $57 million. But J for Jobs is profitable, reporting a gross return of more than 10 percent for 2002.

 

ULLICO is the former owner of what is now the Westin Diplomat Resort and Spa in Hollywood.

 

SOURCES: ULLICO corporate website, Herald wire services

 

I say if it makes business sense, go with it and win some brownie points with taxpayers. They want the jobs and the "J for Jobs" program is success.

My concern here is the word Union... I may tick somebody off with this one, but Unions are usually the reason why some companies go bankrupt or lose money... If the labor agreement only benefits the Union employees that to me is a minus. I really do not know enough details of the deal but IMO getting involved with a Union is not a good business deal for any company... Will see how things come out. Don't be surprised if the Marlins organization rejects the proposal of Ullico.

I don't like unions either, but you have to deal with them one time or another, so why not take advantage of the offer if the numbers work out? It isn't like they owe you money that if the fold won't be collected. The company has been around since the 1920's and has been pretty stable with this line of financing.

:deal I think I am a little extra suspicious, but with a good reason... We'll see what happens.