Fields: Not A Stadium Ripoff Again?
BY SAM FIELDS
Fool me once…shame on you.
Fool me twice…shame on me.
Fool me three times…someone needs to be Baker Acted.
That thought occurred to me as I read Dolphin owner Steve Ross was going to the Dade County “well” to once again ask them to chip in a couple of hundred million to gussie up Joe Robbie Stadium.
Billionaire Steve Ross prepares to throw the ball to taxpayers again!
First it was the Heat and the Arena. Next it was the Marlin Stadium ripoff. That led to overwhelming votes to recall the Mayor and a County Commissioner and the current Securities Exchange Commission investigation.
Now billionaire Ross–who must be suffering from Alzheimer’s or is hoping everyone else is– wants Dade to bend over and spread ‘em for the third time.
[An early and wise vote of the Broward County Commission made it clear that he’s getting’ zipski from us. He’s asking for money from the state, so who knows what our esteemed legislators will do?]
But with those idiots down in Dade hope springs eternal.
His carrot is that this will get us the 2016 Super Bowl. His stick is that he might just move the team.
For the price of a ticket we can all watch the game at home on a new 60” TV.
As for moving the team. No problem. I’ll even loan him my SunPass.
January 15th, 2013 at 11:51 am
Ross bought his Palm Beach mansion for $31.8 million. It is a sin that he wants us to pay for his team.
January 15th, 2013 at 11:53 am
What he is doing in that picture is getting ready to shove that ball up our asses. No Money For Rich Football Teams While Our Schools Are Being Shortchanged!!!!!!!
January 15th, 2013 at 11:54 am
Sam, you didn’t mention the hero in this is Norman Braman. I think everybody should buy their next car from Braman to show their support.
January 15th, 2013 at 12:36 pm
Instead of giving him $$$ to make improvements to his privately owned stadium that he makes money on, how about instead he sells the county an ownership interest for the money? Let’s say 30% of the team and stadium? Green Bay, Wisconsin owns their team and stadium.
Maybe throw in an option to resell the stock with a nice profit for the county.
January 15th, 2013 at 1:06 pm
the stadium was recently remodled in the last few years, i belive to the estimate of 200 million and most of it was tax money. all we got out of it was a great but expensive area on the club level, 18 dollar hamburgs and fries, why doesnt anyone bring this up, ross owns the stadium wil he give a percentqge of it to the taxpayer.
January 15th, 2013 at 3:20 pm
Oh come on now. If they have the super-bowl @ his stadium, do you know how much money this will bring in to both Broward/Dade. Millions and millions. Oh I here he has bookoo money etc. I am all for helping him out w/ extra bed tax etc. Whatever it takes to get the 50th Super-Bowl here in S.Florida. So say we invest 200 mill-to recoup almost ten times that much. This is a no-brainer.
January 15th, 2013 at 4:43 pm
This is what your typical cafeteria conservative would call good socialism.
FROM BUDDY:
That’s funny since Ross was a major Mitt Romney supporter. I guess he believes that government shouldn’t do anything for anybody except billionaires.
January 15th, 2013 at 5:10 pm
No more crony capitalism. Let him pay for the improvements himself or sell an interest in the team and the stadium to the county.
January 15th, 2013 at 7:15 pm
Not a bad point, Buddy, but don’t forget what the government did for (or to) Joe Robbie. He built that stadium with private dollars. When he died, the death tax was so punitive, his children had to sell the stadium, the Dolphins, and much more to get out from under the tax bill from Uncle Sam. How is that for doing things the right way?
January 15th, 2013 at 9:17 pm
@9 get the facts…
As the Committee for Tax Justice notes, when Robbie died in 1990, he had singled out three of his nine children to act as his trustees and manage the Dolphins. That did not go over well with his other children, and legal action ensued. The San Jose Mercury News summarized the Robbie case in a February 21, 1998, article [retrieved from Nexis]:
The fight didn’t heat up until after the death in 1990 of owner Joe Robbie, who needed bank loans to finance a new stadium but found his cash flow withered after it was built. Robbie died after agreeing to sell 50 percent of Joe Robbie Stadium and 15 percent of the Dolphins to [Wayne] Huizenga, but his son, Tim Robbie, proceeded with the deal.
Some family members, however, didn’t want Huizenga as a limited partner and believed Tim Robbie had sold them out. What they did not realize was that the team’s future was in jeopardy without Huizenga’s money.
The ensuing rift broke apart the family. On one side were three of Joe Robbie’s children, Tim, Danny and Janet. On the other was everyone else, including their mother, Elizabeth, who had a legal right, under Florida law, to claim 30 percent of her husband’s estate. That claim, plus estate taxes of about $43 million, forced the Robbies to sell the remainder of their interest in the team and the stadium to Huizenga.
In the end, each of Joe Robbie’s children was left with about $ 6 million after taxes.
“As much as Mr. Robbie produced for his children, I’m sure he’s turning in his grave,” Dade County Circuit Court Judge Ronald Friedman told the family. “I’m sure this is the last thing Mr. Robbie wanted to see.”
While estate taxes were a factor, it was far from the only one. Feuding heirs in a highly leveraged operation with cash flow issues, plus inadequate planning that allowed the feuding-heirs situation to occur in the first place, exacerbated the issue.
Blaming the Robbie situation only on estate taxes is a highly selective reading of the facts.
January 16th, 2013 at 12:54 am
Notwithstanding that he was a lawyer, Joe Robbie’s enormous tax bill was a result of extremely poor estate planning.
January 16th, 2013 at 8:18 am
Actually when I was going through UM for my LLM-Tax, we did a quick study on the Robbie Family and their Estate Tax issues.
Bottom line, he really didn’t have a plan, and with all the attorneys he hired, none of them paid much attention to it.
The main problem was that they didn’t do any proper estate planning until it was way too late and many of the options that should have been considered were no longer available.
We found this is also common among professional athletes, particularly in football, baseball and basketball.
If Joe Robbie had established a proper estate plan long before his death the family could have avoided being force to sell the team.
It is studied as a case of what not to do.
January 16th, 2013 at 8:56 am
Sam, join me in saying a little prayer for all of those Cuban Americans in Dade county. They left a Communist/Socialist system where their money was confiscated for the benefit of few insiders and loyalists , only to find that the a Communist/Socialist duo named Luria and Ross have replaced Fidel.
Buddy, this is from a recent NY Times mgazine recap of 2012 deaths.
http://www.nytimes.com/interactive/2012/12/30/magazine/the-lives-they-lived-2012.html?view=Art_Modell
” …But perhaps his biggest windfall came with the television-revenue-sharing agreement, which split revenue equally — something Modell supported. Over time, this created a situation wherein a team from Green Bay or Cleveland could compete with teams from New York and Chicago. Famously, Modell once described N.F.L. owners as “26 Republicans, and we run our business like socialists.”
FROM BUDDY:
A very interesting point. As I wrote in an earlier comment, Ross was a major supporter of Mitt Romney. I guess he is against governments helping anybody but wealthy sports team owners.
January 16th, 2013 at 12:04 pm
Not that it matters, but when Norman Braman owned the Philadelphia Eagles, he was very much in favor of publicly funded venues. After selling the Eagles, he tried hard to get an MLB franchise. When it didn’t happen, he got a bug up his ass over a publicly funded Marlins park. Those of us who have been around a while know all too well about Mr. Braman.
Now as far as Dolphins Stadium getting a renovation at taxpayer expense, it’s a good idea. The amount of money that will be generated into the local economy from Superbowls and other events are well worth it. It’s a hotel bed tax. Local residents won’t feel the pinch. 2 owners who tried to build their own stadiums ended up losing the team. Just because Forbes says a guy is a billionaire doesn’t mean that he has 400 million cash laying around. Mr. Ross was honest enough to tell reporters yesterday that he simply did not have 400 million laying around. I know a couple of “millionaires” who probably could not take $400,000 dollars out of the bank today. To expect a billionaire to pony-up 400 million cash is unreasonable. We are a tourist based economy. We can invest in tourist based initiatives. Especially when tourists are paying for it.
January 16th, 2013 at 1:28 pm
@10
I’ll concede the Robbie Family situation was a complicated one but all reports at the time indicated the reason for the sale was due to their inability to cover the nearly $50 million in estate taxes. Whether or not we agree on the share of the blame it should merit do you not find that amount of death taxes punitive?
January 17th, 2013 at 5:07 pm
The St. Louis Rams were recently sold after the 2 siblings who inherited the team figured out they could not pay the inheritance taxes. Mom did poor estate planning and dad is rolling in his grave. 50 years of owning an NFL franchise and it has to be sold due to poor estate planning. Should have taken a cue from the Steinbrennars. Who knew until he died that Steinbrenner transferred ownership of the Yankees to the kids years earlier?
January 19th, 2013 at 4:40 am
Steinbrennar’s case was completely different. Because Congress could not agree on the Federal Estate Tax Code they created a compromise (because they wanted to eliminate the tax altogether).
Therefore for several years the Federal Tax Estate Credit increased up to $5 M until 2010, which for one year they totally eliminated it. Also for that year they changed the basis law from step-up to carry-over (I won’t go into that but it is significant). In 2011 the tax came back but at $1 M (though Congress finally resolved and it is now $5 M again).
Steinbrennar died in 2010 and his kids had no Estate Tax that year, so it was pure coincidence.
January 19th, 2013 at 9:12 am
As a card carrying member of the Socialist Party USA, I can say this with total confidence.
Tax the living fuck out of the rich.
And then tax then some mo’.
January 19th, 2013 at 9:20 am
FROM BUDDY:
Jim DeFede grills Dolphin President Mike Dee about the stadium plan on Facing South Florida, CBSMiami Channel 4, at 8:30 a.m. Sunday, Jan. 20th. It promises to be interesting.
January 19th, 2013 at 9:26 am
Last 6 comments good points here on estate/death taxes and poor planning especially Duke’s, but the ‘investments’ made via bed taxes in these properties never has a caveat for any type of “repayment” to the taxpayers and local governments when teams and venues are sold. Further, how much of a line item bed tax is reasonable on a hotel room bill before those ‘tourists’ start to question the value of that hotel stay? Ditto the rental cars when you rent from an ‘airport facility vs. off site rental car location’.
If Marlins sells team, or worse, team moves out of FL, whats the use of the venue to pay back bonds etc? And upkeep the property. Same with Dolphins who may ‘threaten’ to move out if they don’t get the upgrades at Robbie Stadium. Sure Ross like many others probably can’t get their hands on millions let alone tens or hundreds of millions CASH real quick, but that’s what loans and lines of credit are for, where they or an entity they legally represent, can commit to borrowing terms to have funds fronted with COLLATERAL pledged, use them for improvements, then pay the loan funds back over a specific agreed to amount of time from season tickets, bar revenue, parking fees, or whatever way they want to bring in that revenue. The backs of the taxpayers, where occassional or frequesnt tourists, or locals who take a ‘staycation’, should not be the source of their improvement fund.
If my query and reasoning is wrong please correct me. This is how the ‘little guys’ have to do it.
January 19th, 2013 at 9:59 am
@15 WWRD – Awww, my heart bleeds for those poor, poor children who only got SIX MILLION DOLLARS dropped into each of their bulging bank accounts… NOT!!!!!!!!
@18 – Sing on, brother Chaz! 🙂 🙂 🙂
January 19th, 2013 at 11:13 am
@18
Not enough rich to tax to run this government. Even at 100%, it’ll only last about a week and a half. But hey, call Tom Waits. He’ll party with you, “Till The Money Runs Out”.
January 19th, 2013 at 6:23 pm
@22 – you are referring only to income. Please note that WEALTH can be taxed as well.
January 19th, 2013 at 9:00 pm
http://www.huffingtonpost.com/2012/07/19/households-wealth-american-1-percent_n_1687015.html
Half Of American Households Hold 1 Percent Of Wealth
Updated: 07/19/2012 3:53 pm
[…] By contrast, the share of total net worth held by the weathiest 1 percent of American households continued rising, hitting 34.5 percent in 2010. The top 10 percent’s share was 74.5 percent. […]
January 20th, 2013 at 4:51 pm
@24
So you agree that Obama’s tax and spend policies are causing the wealthiest Americans not to spend, thereby stunting the economy and hurting the working man by reducing demand for the products they are paid to produce.
January 20th, 2013 at 6:01 pm
@25 – No, I don’t agree. The reverse is true. By taxing the wealthy and easing the tax burden on the non-wealthy, Obama is stimulating the economy by taking excess money from wealthy people whose needs are already met and will therefore have no need to spend the money, and giving it to non-wealthy people who still have many needs and therefore WILL spend the money.
Look at Table 3 “Bang for the Buck” in this Moody’s analytics report (link below). It shows that every dollar spent on unemployment benefits generates $1.52 in economic stimulus. This is because the unemployed will immediately spend the money, thus kicking off the “multiplier effect” as that money moves through the economy and creates jobs along the way. However, a dollar spent on benefits for the rich, such as making dividend and capital gains tax cuts permanent, generates only 39 cents worth of economic stimulus because wealthy people already have more money than they need and thus tend not to spend any additional funds they receive.
http://www.economy.com/dismal/article_free.asp?cid=224641
The wealthiest 1% have a whopping 34.5% of the assets in this country, and the wealthiest 10% have 74.5%. That means the other 90% have only 25.5%. And the lower 50% has only 1%.
Chaz is right – the way to stimulate the economy is to prevent the excessive accumulation of wealth. That $6 million per person windfall we were discussing amounts to $50,000 a year for 120 years. That ought to be enough money for anyone, but let’s say $10 million just to be sure. Tax laws should ensure that anyone wealthier than $10 million either pays enough taxes or gives enough away to friends, family and charity to ensure that their personal net worth is no higher than $10 million.
“The top 1%… saw their average wealth grow to $16.4 million in 2010” – http://money.cnn.com/2012/09/11/news/economy/wealth-net-worth/index.html
If the 1% had no more than $10 million per person, that’s $16.4 million – $10 million = $6.4 million that the average 1%-er could contribute to public investments or charitable contributions. The US population is 312 million, so there are 3.12 million 1%-ers. Multiplying, $6.4 million * 3.12 million = $20 trillion.
The total national public debt of the United States is 16.432 trillion as of January 10, 2013. Therefore, taxing away the excess wealth of the 1%, leaving them with a mere $10 million each (that’s $100,000 a year for 100 years), would COMPLETELY PAY OFF THE NATIONAL DEBT, with $3.5 trillion more still left over for public investments!
http://en.wikipedia.org/wiki/United_States_public_debt
http://en.wikipedia.org/wiki/National_wealth
So as brother Chaz so eloquently stated, let’s
Tax the living fuck out of the rich.
And then tax them some mo’.
January 21st, 2013 at 8:35 am
As a card carrying member of the Revolutionary Marxists/Leninist Workers Communist Socialist Trotsky Party USA, I can say this with total confidence.
I fully support the actions of my two beloved comrades in South Florida . Comrade Loria and Comrade Ross , we salute you in your abandoning your Capitalist running dog principals of using your own capital to steal the workers money and now adopting socialism to steal the worker’s money to further our secret plot to impose socialism on the unsuspecting Americanos.
I just got off my rotary dial phone with Comrade Fidel who is so jealous of your smoothness in creating the People’e Sport’s Palaces using the People’e money that if not for his health, he too would be on a raft to Miami to kiss your ring.
BTW, there will be a secret reception for both Comrade Loria and Comrade Ross in a sky box for putting the appropriate heads into the nooses of the ropes they sold to the anti socialist enemies of the state in Dade County.
Team Owners of the world unite for the socialist utopia of the masses is at hand.
January 21st, 2013 at 6:33 pm
@26
You are brilliant. You just solved the economic crisis. Why didn’t I think of it? If $1.00 of unemployment results in $1.53 in economic stimulus all we have to do is fire every working American. Ha Ha Ha indeed! You are amusing. And by the way, the multiplier effect you describe as allowing people to keep more of their own income so they spend it thus moving it through the economy to create more jobs is called Reaganomics. I’m so pleased you you’re an advocate.
January 21st, 2013 at 8:50 pm
@28, you are delusional. The multiplier effect is correctly defined here:
http://www.economicsonline.co.uk/Managing_the_economy/The_multiplier_effect.html
January 23rd, 2013 at 12:39 pm
I’m certainly no tax attorney, but with respect to the Robbie v. Steinbrenner scenarios.. didn’t Steinbrenner periodically transfer portions of ownership of the Yankees to his sons while he was alive? I heard that when he died, he did not actually own the team. The kids already owned it. Because of that, his kids avoided inheritance taxes. As opposed to the Robbies in Miami and the Rosenblooms in St. Louis where those teams were left to the kids in a will.
January 25th, 2013 at 4:05 pm
How dare anyone question the wisdom of the 1% . Just take a look at how much the good citizens of Miami will be paying for Loria’s socialist dream.
http://www.miamiherald.com/2013/01/24/3199018/how-a-91million-loan-on-the-marlins.html
How a $91 million loan on the Marlins ballpark will cost Miami-Dade $1.2 billion
By Douglas Hanks The Miami Herald
One small part of the Marlins stadium bonds comes with a large payback.
Carl Seibert / Sun Sentinel
Photo
Related Content
Miami-Dade County Commission helps Miami Dolphins more than voters By Douglas Hanks
dhanks@MiamiHerald.com
How can you turn $91 million into almost $1.2 billion? Buy some bonds from Miami-Dade County.
This week, the Economic Time Machine helped cover the debate over the Miami Dolphins requesting Miami-Dade hotel taxes for part of a $400 million stadium renovation. County commissioners endorsed the plan with a non-binding resolution. But they emphasized they wouldn’t approve anything close to the 2009 deal given to the Marlins, which had the county footing most of the construction bill for the new $639 million ballpark and parking complex.
Miami-Dade borrowed about $400 million in that deal by selling bonds on Wall Street. During the commission discussion on the Dolphins plan, Mayor Carlos Gimenez mentioned one set of stadium bonds worth about $90 million would cost more than $1 billion to pay back. We at the ETM thought: Can that be true? The answer: yes. See below.
The chart (if you can’t see it, try refreshing or opening this article in a different browser) lays out the debt-repayment schedule on that initial $91 million.
The first column is the money borrowed, and the small lines show the amount of principal and interest owed each month. The soaring line is a running total of how much money Miami-Dade is scheduled to pay back for the loan. It crosses the $500 million mark in 2042, and hits $1.18 billion by the time the last payment is due 2048.
Miami-Dade will use hotel-tax revenue to pay off the bonds. But payments don’t kick in until 2026. Once they do, they get very costly very quickly. The first payment, for example, totals $260,000. The fifth jumps to almost $8 million and the 10th tops $20 million. Payment No. 18 brings the big hit: $118 million comes due in 2042 alone.
The high interest comes from the penalty Miami-Dade must pay in exchange for a repayment plan that lets the county delay by 15 years making it first debt-service payment to the Wall Street lenders who bought the bonds.
“It’s an expensive way to borrow money,’’ said Frank Hinton, head of the county’s bond program. “You’ve got $1.2 billion to pay back. It is a lot of money.”
Because Miami-Dade couldn’t afford a straight-line paydown of the loan — like a home mortgage — the finance team had to be more creative in borrowing the money on Wall Street. Unlike most bonds, these can’t be repaid back early either.
Should Miami-Dade agree to help the Dolphins with the stadium project, Mayor Gimenez said he would not allow the same kind of aggressive financing. As a commissioner, Gimenez voted against the Marlins deal and won the mayor’s office in part thanks to anti-Marlins sentiment against then-mayor Carlos Alvarez.
Hinton noted the bonds in question were sold in 2009, a time when the global credit markets were all but frozen. And with construction on the stadium all but underway, Miami-Dade had to take the best terms it could. “Money needed to be borrowed,’’ he said.
Of course, the dollar totals probably won’t look quite as scary in 40 years as they do today. Inflation works in a borrower’s favor, as hotel revenues rise while the county’s debt payments remain fixed. (For instance, $250 million in 1973 would have the same buying power as $1.2 billion today, according to an inflation calculator on the Bureau of Labor Statistic’s website, bls.gov.)
Hinton also noted there’s a downside to holding back on construction until Miami-Dade has enough money to do a straight-line payback regimen. Construction costs tend to go up, which can eat into savings on the borrowing side. For instance, in 2005 one mile of track for the county’s Metro Rail line was estimated at $77 million for one mile. Now it’s $140 million a mile, he said.
Still, the $91 million bond package illustrates just how expensive it can be when a borrower holds off paying down debt. For every dollar Miami-Dade borrowed in this transaction, it will pay back $13.
Read more here: http://www.miamiherald.com/2013/01/24/3199018/how-a-91million-loan-on-the-marlins.html#storylink=cpy