A disastrous pro baseball deal in Miami provides lessons for political leadership
Ten years ago, the professional sports industry could have its way with local politicians anywhere in America. Many politicians seemed to think more like fans rather than as trustees of the public treasury, and they would lose their minds when it came to giving away hard-earned local and state tax revenue to help their teams.
Since then, evidence-based studies have emerged that debunk the myth of the widespread, trickle-down economic impact that pro sports has on local communities. And since the housing and economic crash of 2007 and 2008, the economic conditions of states, cities and counties nationwide have seriously deteriorated.
That’s the general environment in which Daytona International Speedway (DIS) is asking that it “keep’’ $166,000 of our tax money every month for up to 30 years – sales taxes that DIS would normally pay into the state’s general revenue account – to help defray the $450 million cost of Speedway improvements.
Those improvements include increased and improved seating, concession areas, new entrances, and fan attractions. It also could include shops, restaurants, nightclubs, hotel rooms, movie theaters, apartment buildings, and even a gambling casino.
To our knowledge, this would be by far the largest single construction project in the history of Daytona Beach.
The Miami experience
Cities have been burned by greedy sports franchise owners who have built ultramodern sports facilities subsidized by tax dollars, only to profitably operate or sell the franchises for a premium and laugh at the cities on the way to the bank.
Exhibit No. 1: Marlins Stadium in Miami.
In 2009, after threatening to move his Major League Baseball team, multimillionaire Marlins team owner Jeffrey Luria suckered local politicians into covering 80 percent of a new stadium’s $600 million-plus construction costs.
As the public became more aware of the circumstances surrounding the deal – including a no-bid construction contract without diversity and a local jobs requirements – the backlash was fierce. The mayor and supportive commissioners were thrown out of office by a voter recall. The city manager that guided the deal through local government was fired.
But a bad deal negotiated under pressure, and signed in blood, was done. Over a 30-year period, Miami taxpayers will eventually pay $2.4 billion to pay off the $500 million they chipped in for construction costs. (The Florida Legislature wisely refused to contribute one dime at the time.)
Jeffrey Loria, an itinerant pro baseball franchise owner who stiffed both Montreal and Miami in search of the best deal, is not Bill France, Sr., who came to Daytona Beach and set up a local family business that has become a worldwide racing center during three generations of growth and development. The Marlins team, which used to be the Montreal Expos, is not Daytona International Speedway.
Still, there are lessons to be learned from Miami-Dade’s experience with Loria and the Marlins’ new stadium. Here are a few:
• Negotiate. “Daytona” is the name of our fair city, but it’s also DIS’s legendary brand. Could DIS move, after more than 50 years in Daytona Beach, if it doesn’t get what it wants? (Anything’s possible, and we assume there’s acreage available in DeLand.)
But in exchange for supporting DIS’s request for $2 million in sales tax rebates a year – money that could go to education or infrastructure development, especially in a local Black community that’s been left behind – the city or the county shouldn’t be afraid to negotiate material terms and conditions that benefit “locals.”
There should be a preference to select project bidders who agree to use local subcontractors and small and minority-owned businesses. If DIS tells its builders that joint ventures with smaller firms, waiver or consolidation of construction bonds, quick payment to subcontractors, apprenticeships, and internships with Bethune-Cookman University, Daytona State University, Embry-Riddle and the University of Central Florida are necessary to get work on the project, the builders will do it. Such local job experience and business capacity-building would multiply the long-term positive effect the project could have.
• Trust, but verify. On the redevelopdaytona.com website, DIS and ISC make bold statements about their economic impact in Florida (18,000 permanent jobs and $1.6 billion to the economy) and the impact the project will have in Daytona (4,250 construction jobs and 1,300 permanent jobs). Have these numbers been verified by a noninterested third party? What if the economic impact is smaller? Is the deal still worth doing?
• Be transparent. We don’t expect politicians to negotiate this deal in the media. But we do expect that proposals and counter-proposals would be released to the general public. Agreements should be done completely “in the sunshine” and not with the use of secret documents or backroom deals.
Florida’s pro sports owners know that this is a bad time to ask even a Florida Legislature dominated by business-friendly Republicans for taxpayer contributions to their private businesses. (Such payments to an individual would be called “welfare.”) And after a quick start through the Florida Legislature, the DIS proposal and similar proposal from the NFL’s Jacksonville Jaguars and the pro soccer’s Orlando Lions seem to have lost some momentum.
Considering what DIS, the Jaguars, and the Lions are asking for – and the millions of our tax dollars that the Marlins, the Florida Panthers and the Tampa Bay Lightning (hockey), the Tampa Bay Buccaneers (NFL), the Miami Heat and the Orlando Magic (NBA) are already getting – slowing the process down may not be a bad thing.
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