Like many municipalities, Miami-Dade County has gone through some tough budget times in recent years. Last year the county laid off 1,000 workers, cut salaries and consolidated departments to balance its budget. On top of the steep impact from the country's fiscal downturn, the citizens of South Florida were also feeling the effects of the rich stadium deal that the county's previous commissioners and mayor gave to the Miami Marlins to keep them in the area. Now, local citizens, who opposed the stadium subsidies in the first place, polls showed, are feeling betrayed as the team deals its best--and most expensive--players in a wholesale reshuffling that suggests the Marlins are pulling back on the commitment to invest heavily in the franchise in return for the new facility.
Subsidized stadium deals are generally a loser for taxpayers. Rarely do the new facilities generate the kind of economic impact that studies promise. Research on stadiums that look at their performance in the aftermath of their openings often find that they help to create at best a few hundred low-wage service jobs. As economists Roger Noll and Andrew Zimbalist point out in their book Sports, Jobs and Taxes, team revenues are "trivial compared with the economic activity in even the smallest major league city."
Miami taxpayers didn't buy the argument that the Marlins, a team that never generated much interest in the area even when it was winning, were worth a big stadium subsidy. A 2008 poll showed that most opposed a deal for the Marlins.
But former Miami-Dade Mayor Carlos Alvarez went ahead anyway with a sweetheart stadium package. It included some $500 million in financing, with virtually all of the revenue from the luxury suites, parking and concessions going to the team. Local government even agreed to be responsible for $1.2 million in property taxes on the parking garages built along with the stadium. Officials bankrolled the deal with construction bonds back by hotel room taxes. To guarantee the bonds, the county even had to pledge that if the new taxes don't hit projected targets, the county would step in and help pay off the bonds out of other revenues.
Voters ultimately gave Alvarez his comeuppance. In March of 2011 they recalled him in a special election spurred by growing anger at the stadium deal as well as tax increases that helped to pay for it. Nearly 9 in 10 voters cast their ballots in favor of the recall.
By then, however, it was too late to rescind the stadium deal, so voters were left hoping that the Marlins would invest in the team and try to generate some excitement. Yet the team drew just 2.1 million fans, ranking 18th in the league and well below expectations.
Now they seem to be returning to the business model they used before acquiring the new stadium, which is to keep payrolls low and squeeze a profit out of their cost-savings. That was a profitable strategy before they moved into the new stadium. Over a two-year period, 2008 through 2009, budget documents leaked to the press showed the team earned $33 million even though its payroll was under $30 million a year back then. That was back when the team occupied Dolphins Stadium, where they didn't get to keep any money from stadium concessions but still turned a profit.
This one's a loser for local taxpayers. The problem is, they knew it years ago but had a bad deal rammed down their throats.
Miami taxpayers didn't buy the argument that the Marlins, a team that never generated much interest in the area even when it was winning, were worth a big stadium subsidy. A 2008 poll showed that most opposed a deal for the Marlins.
But former Miami-Dade Mayor Carlos Alvarez went ahead anyway with a sweetheart stadium package. It included some $500 million in financing, with virtually all of the revenue from the luxury suites, parking and concessions going to the team. Local government even agreed to be responsible for $1.2 million in property taxes on the parking garages built along with the stadium. Officials bankrolled the deal with construction bonds back by hotel room taxes. To guarantee the bonds, the county even had to pledge that if the new taxes don't hit projected targets, the county would step in and help pay off the bonds out of other revenues.
Voters ultimately gave Alvarez his comeuppance. In March of 2011 they recalled him in a special election spurred by growing anger at the stadium deal as well as tax increases that helped to pay for it. Nearly 9 in 10 voters cast their ballots in favor of the recall.
By then, however, it was too late to rescind the stadium deal, so voters were left hoping that the Marlins would invest in the team and try to generate some excitement. Yet the team drew just 2.1 million fans, ranking 18th in the league and well below expectations.
Now they seem to be returning to the business model they used before acquiring the new stadium, which is to keep payrolls low and squeeze a profit out of their cost-savings. That was a profitable strategy before they moved into the new stadium. Over a two-year period, 2008 through 2009, budget documents leaked to the press showed the team earned $33 million even though its payroll was under $30 million a year back then. That was back when the team occupied Dolphins Stadium, where they didn't get to keep any money from stadium concessions but still turned a profit.
This one's a loser for local taxpayers. The problem is, they knew it years ago but had a bad deal rammed down their throats.
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