Palm Beach Post article

 

Funding sports arenas yet to pay for public

 

By Charles Elmore, Palm Beach Post Staff Writer

Sunday, January 25, 2004

 

It probably did not hurt the Florida Marlins' hopes of getting government money for a stadium to have the president say, at a White House reception Friday, "Maybe this will cause one of your biggest fans to stop bragging -- the governor of Florida, my brother."

 

Florida Gov. Jeb Bush and Miami Mayor Manny Diaz, crucial hands on purse strings for money the Marlins want in the next 50 days, posed for photos with the World Series champions.

 

Back home, though, another snapshot makes a less glamorous picture -- the performance of sports facilities already built with taxpayer help in South Florida.

 

In the latest available annual results, sports arenas built with government assistance are moving away from -- not toward -- goals of wins and shared profits, a review of public records shows.

 

? Net losses at AmericanAirlines Arena, where the NBA's Miami Heat play, hit a new high, $11.9 million, up 50 percent. (Heat-related-only statistics were not available.)

 

? Revenue from hockey events fell 18 percent last year at Office Depot Center, where the NHL's Florida Panthers play. Net income dipped 30 percent to $5.1 million.

 

? The Miami Arena, which lost the Panthers and Heat as tenants, still costs millions annually to operate and pay off debt.

 

Is any of this affecting talks with the Marlins? Yes, said Otto Boudet-Murias, senior adviser to Diaz.

 

"That's why we haven't been as forthcoming with money and land as the Marlins would like," he said. "It's something we're analyzing closely."

 

Marlins President David Samson -- reached, interestingly enough, at a Heat game in New York on Saturday evening -- said looking at other sports facilities misses the most important point.

 

"It's not about comparing us to other teams," Samson said. "It's about the value of baseball in South Florida."

 

As for the value of the White House visit, "at least it proves we won a World Series," Samson said. "I'm hopeful the state will be a party to any agreement we reach."

 

Counties not getting profits

 

Office Depot Center is meeting its loan commitments, but annual results are moving away from the most optimistic hopes reflected in its contract -- sharing profits with Broward County.

 

The Panthers keep the first $14 million in annual arena profits after debt payments and a $500,000 check to the Tourist Development Council. After $14 million, 80 percent would go to the team and 20 percent to the county. Broward County approved $215 million in bonds to build the arena in 1996. Since collecting $364,000 in the arena's first year, Broward hasn't received anything under that agreement.

 

For its latest year, the Panthers' arena company has yet to file results approved by an outside auditor. They are overdue by about six weeks, said Phil Allen, Broward County's director of finance. In an unaudited report, Arena Operating Co. Ltd. said arena overall revenue dipped to $27.1 million from $28.3 million for the previous year, and net income was down 30 percent to $5.1 million. The partnership that owns the team, Florida Panthers Hockey Club Ltd., reported it lost $64.7 million a year ago, including $17.5 million in operating losses; in December, Arena Operating Co. reported team owners suffered an unspecified "net loss, had a working capital deficiency and had negative cash flows from operating activities."

 

In an interview Saturday, Panthers Chief Operating Officer Michael Yormark said the audited numbers should be coming in 10 days and he is optimistic about the future. Arena executives are taking a more aggressive approaching to booking 25 to 30 more concerts and other off-day events as they work on improving the team and its marketing, he said. "We think 2004 is going to be a better year," he said.

 

As for sharing profits, Yormark said, "You're going to see us reach the point where we're able to share with the county. That's very important to me and very important to Alan Cohen, our owner."

 

A refinancing of bond debt approved in December allowed the team and the county to split a $12 million windfall, part of which will go toward arena improvements.

 

A similar profit-sharing agreement is in place for AmericanAirlines Arena, but it has yet to come into play. Heat officials have said they did not expect to share profits until halfway through the 30-year contract anyway, but the bottom line seems to be backpedaling at the club's arena company, Basketball Properties Ltd. Revenues did grow slightly, to $30.8 million from just under $29 million for the year ended June 30, 2003. Still, net losses increased to $11.9 million, up 50 percent from last year's previous high.

 

Team owner Micky Arison said Friday he hopes the team can get into the playoff race, but if not, "it's going to be difficult to draw numbers." Team spokesman Tim Donovan said he could not address specific arena results but "we're optimistic that business will continue to improve."

 

Counting interest, local and state governments committed an estimated $355 million in land, operating subsidies and other help to build AmericanAirlines Arena in 1999. Miami-Dade County provides an annual $6.4 million operating subsidy and also pays interest and principal on a $42 million bond that was issued to purchase the land.

 

At the Miami Arena, which lost its pro sports tenants years ago, loan payments still cost about $3.9 million a year, plus an operating subsidy of $1 million and an ''asset replacement'' subsidy that ranges from $1 million to $5 million per year, according to published reports.

 

For critics like Miami attorney Dan Paul, who opposed the new Heat arena from its inception, the results have long point to one conclusion: "The public was snookered."

 

That skepticism seemed to be reflected in a statewide poll by two Florida newspapers that found 80 percent of state residents questioned opposed to public money for a Marlins stadium.

 

But in the end, the Marlins hope people and politicians focus on them, not on what has happened with other teams or other stadiums.

 

"South Florida recognizes there are major-league cities and those that aren't," Samson said. "We fully expect success in reaching an agreement beneficial to everyone."

I don't think anyone in Miami but the politicians can confuse the Miami Arena/Heat Arena fiasco with the Marlins Ballpark.

 

Miami's clock is ticking...the State doesn't care where they build it, the tax credit for $2 mil/30 years will be there. The team has set a Miami-Dade County deadline for March 15th, the team's Lowell deadline is in November 2004.

I smell the Marlins are going to wait till the deadline of March 15th and not take Dade's crap. Then they will play the PR game and tell the public the truth which is that Dade's politicos didn't try to keep the team.

 

I feel Mr. Loria is talking to some prospective partners about a private ballpark in South Broward/North Dade using some of the State Tax breaks to pay his part. My crystal ball tells me Hollywood or Hallandale, near Gulfstream maybe! Near I-95 and the Turnpike. Tri-Rail is also near.

 

Private Partner I suspect: Codina, Builder of the Dolphin Mall, and big season ticket account holder for the Florida Marlins.

the miami metro area is stupid when it comes to efficency.

 

 

 

 

i know of no other area in the nation with 3 stadiums all built within 25 years of each other.

 

 

 

look at LA for one example....

 

 

every city with both NHL and NBA teams share arenas.....

 

 

Miami is stupid.

the office depot center is in broward

Das let me explain to you why that happened:

 

Miami Arena was built to get the Heat and the Panthers.

Panthers owner Wayne H had fight with Heat owner Mickey A

Panthers owner goes to Broward and says, "We can build a beautiful arena together"

Broward says yes,

Dade politicos (Penelas) decides to try and one up Broward and build AmericanAirlines Arena.

Taxpayers in Dade screwed with two arenas which are both useful, but cut into each other's profits.

Broward has sales tax mainly for tourists paying for their new arena.

 

Understand? Miami has two arenas, Sunrise/Fort Lauderdale have one. Similar to Detroit with the Olympia/Joe Louis Arena and Auburn Hills with the Palace.

And Das, next time you think having all those arena is stupid..take a ride to the AlamoDome and the SBC Center.

its still idiotic.

 

 

and people wonder why these places are not making money.....

 

 

there was never a need to even build ONE of those new arenas let alone 2.

 

 

 

you reap what you sow.

 

 

 

Dont be shocked when the Marlins move out of Miami.

and while I rant, the LA market has three arenas.

 

Staples Center/Great Western Forum in LA, Arrowhead Pond in Ornage County

 

The Bay Area also had three: Cow Palace in San Fran, San Jose has the Pavilion and Oakland has the Coliseum Arena.

Das, the Marlins aren't in Miami City Limits. So we won't be shocked

the alamodome is a football stadium man, you seriously cant expect the spurs to stay in a football stadium forever.

 

wasnt the alamodome for a CFL team?

were the arenas in LA and the bay area built within 25 years of each other for all 3?

 

 

 

question

Broward was going to build an arena, and the Panthers were using the Miami Arena as temp. home. Their lease ran out and they were forced to leave by the Heat. The American Airlines Arena was the only arena I cannot justify.

 

The Miami Arena is Dade's arena and home of the Heat.

The Office Depot Center is Broward's arena and home of the Panthers.

 

The AAA was a waste of money, it isn't pretty and practical.

hell what am i saying....didnt miami arena open in the late 80s?

 

 

make that 20 years.

SF's cow palace is pretty old, but has been renovated. The Oakland Arena was basically rebuilt in 1997 and the San Jose Arena was built in 1992 I believe.

 

GW Arena opened in the late 70's or 60's, Staples in the 90's along with the Pond.

i could understand two...even though it is fishy....

 

 

 

the three is stupid.

 

 

and yet people whine constantly.

 

 

 

dont be shocked to see the Marlins move out of the Miami/Dade county because the politicans are too stupid to figure things out.

 

 

 

*edit* and/or out of the entire metro area of Miami.

hell what am i saying....didnt miami arena open in the late 80s?

 

 

make that 20 years.

das, the miami arena was a basketball court, the hockey config. was not supposed to be permanent, but when the heat moved out, no one cared.

i could somewhate understand the hockey arena...although the configarations for both hockey/basketball are pretty much teh same....

i could understand two...even though it is fishy....

 

 

 

the three is stupid.

 

 

and yet people whine constantly.

 

 

 

dont be shocked to see the Marlins move out of the Miami/Dade county because the politicans are too stupid to figure things out.

 

 

 

*edit* and/or out of the entire metro area of Miami.

Das, we jusitfied two arenas down here, but the AAA was snuck in a backroom deal by the Heat and Penelas.

 

The County pays the Heat for the Arena, the heat payed all the construction costs and the county has repaid them. the count owns the arena and the team runs it. I say keep the heat in the miami arena. But the Panthers needed the new arena. Panthers used to sell out with 14,500. Now they sell out at 19,250

Das has a point.....

 

Even here in a major market like Chicago, we only have 2 arenas, and only 1 of which is used for pro teams....

 

The United Center (built in 1994) where the Bulls and Blackhawks play.

 

The Allstate Arena (not sure, built about 20 or 25 years ago) where there are a lot of concerts, and where the a college basketball and minor league hockey team play.

 

 

I believe those points support Das, im not sure though. Just thought i'd bring that up.

Das has a point.....

 

Even here in a major market like Chicago, we only have 2 arenas, and only 1 of which is used for pro teams....

 

The United Center (built in 1994) where the Bulls and Blackhawks play.

 

The Allstate Arena (not sure, built about 20 or 25 years ago) where there are a lot of concerts, and where the a college basketball and minor league hockey team play.

 

 

I believe those points support Das, im not sure though. Just thought i'd bring that up.

no one justifies the American Airlines arena. Blame Penelas, the NBA and the Heat for that. But the Panther Arena makes money, and the Miami Arena with the Heat would have made money.

I smell the Marlins are going to wait till the deadline of March 15th and not take Dade's crap. Then they will play the PR game and tell the public the truth which is that Dade's politicos didn't try to keep the team.

Given how Loria/Samson have rarely complained about the completly unfair lease they have at PPS I don't believe your scenario.

I smell the Marlins are going to wait till the deadline of March 15th and not take Dade's crap. Then they will play the PR game and tell the public the truth which is that Dade's politicos didn't try to keep the team.

 

I feel Mr. Loria is talking to some prospective partners about a private ballpark in South Broward/North Dade using some of the State Tax breaks to pay his part. My crystal ball tells me Hollywood or Hallandale, near Gulfstream maybe! Near I-95 and the Turnpike. Tri-Rail is also near.

 

Private Partner I suspect: Codina, Builder of the Dolphin Mall, and big season ticket account holder for the Florida Marlins.

wishful thinking.

 

You sound like a BIG HOMER!

 

There really nothing else on the table other than moving the team.I have feeling the deal will get done at OB if not the team won't be in South Florida.If you're asking yourself:

 

What about Palm Beach site?

 

The Marlins really don't seem all that interested so I'm not even considering.

Ok, a couple of things.

 

First off, I got more reasons to dislike you Das. Thanks.

 

Second, the AAA is justified for the same reasons the Marlins justify their need for a new stadium. The Miami Arena was not built with the idea of being a major-league facility and lacked the skyboxes that a franchise needed in order to generate revenue. The facility was ill-suited for pro-basketball, let alone pro-hockey. We kind of got the Panthers franchise as almost an accident.

 

That said, the Heat needed a better facility and the need for the AAA was there. The Panthers too needed a better facility and thought it needed more seats. So ONE new arena would have been fine. In fact, AAA would be a very lucrative place if the Panthers played there as well. But H-bomb had to go and screw that up too, and use his criminal means to get the ODC in Broward. And that has not been as profitable a venture either.

 

But neither one of these would really serve as good examples for a baseball stadium. First of all, baseball has 81 home games - 1 less than basketball and hockey combined. That is a big opportunity for a consistent revenue stream. A few concerts and events could only add to it - but then again, those events would take away from AAA profits or even ODC profits. But screw em, both those franchises should be in the same facility - AAA.

The heat might sell as many seats a game as the marlins.

 

 

It should not be up to government to build sporting arenas when there are more useful things to do with the money, because quite simply it does not pay.

 

I have had it with corporate welfare.