By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
By Terrence McCoy
By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
"The only thing I'm a little nervous about is that we've got a pink elephant over there, the sports complex," says council member Nick Sincore, referring to the city's empty, salmon-color baseball stadium. "I don't want a second pink elephant. The success of the motorsports complex is crucial."
To date Homestead has borrowed or spent more than $33 million to build the track, including $8.2 million in cash from its own general fund. The city has incurred a dizzying array of debt totaling $25 million and involving three commercial banks and a government-backed lending organization called the Gulf Breeze Pooled Loan Program. The debt was originally acquired by the city to pay back Huizenga's short-term $20 million loan.
The above figures don't include an additional five million dollars Homestead spent on land acquisition related to the track, nor the cost to the city for insurance, police protection, and other services related to the motorsports complex -- about $450,000 each year. Meanwhile, the city is suffering a continued hangover from Hurricane Andrew, which pummeled the area on August 24, 1992. Facing a two-million-dollar budget shortfall in the coming fiscal year, Homestead was forced to lay off seven full-time and two part-time employees last week. Nineteen others accepted early retirement and voluntary separation programs. A hiring freeze remains in effect.
"Our tax base is not where it should be, our population still isn't back to normal; we're hurting," says council member Roscoe Warren, chairman of Homestead's finance committee. "For a while it seemed that everything was okay, but it wasn't. What blurred our vision was the preponderance of grants and loans we received after the storm. If we had looked beneath that we would have seen the real budget was in trouble."
At the moment, Homestead is nervously awaiting a decision on an appeal of its request for forgiveness of a $10.3 million loan granted by the Federal Emergency Management Administration (FEMA) after the hurricane. The initial response from FEMA was a resounding no. If the agency chooses not to reverse its position, the result for Homestead could be disastrous -- a $1.8 million annual debt repayment over the next decade, money it simply doesn't have.
And so, by late last week, a majority of council members said they would support a lease sale in exchange for seven million dollars from Huizenga and Sanchez. The MMJV partners indicated they would be willing to pick up the $170,000 annual cost of liability insurance on the track, which the city now bears, and most of the cost of police protection.
"We're prepared to absorb some of those costs to relieve Homestead of some of those expenses," says Sanchez. "We understand they have money invested, and we think it's fair for us to take on some of it."
As of press time, Asmar and various council members said they would be willing to throw in another important concession. Under the current lease, Homestead is scheduled to share ten percent of any revenues from the track over and above $15 million (last year MMJV's racetrack operation generated approximately $13 million, while losing a reported $2 million net), but Huizenga and Sanchez want the clause dropped, in expectation that a Winston Cup race would increase revenues substantially. In addition, Asmar is recommending that the city reduce annual rent on the motorsports complex from $2.2 million to $1 million once track revenues pay off Homestead's outstanding construction debt.
Homestead Mayor Tad DeMilly echoes the position of many of his council colleagues: "I have nothing against the free market system, I like to see people make a profit, but we approached the construction of the track as at least a philosophical partnership. I never expected it to be a profit generator for the municipality per se, just an economic development engine and a quality-of-life enhancer. I wasn't going to suggest that we go thirds with Wayne and Ralph, but I thought one million dollars was low. My suggestion was it wasn't equitable. I said, 'We're not trying to hold you guys up, but I think we should share more equitably in the fruits of our labor.' And I think where we're at now is more satisfying."
After five terms as mayor, DeMilly says he won't run again this fall. He notes that in two decades he has given out only five keys to the city -- the last one to France in November 1995.
"The challenge that we're facing is that there's an incredible amount of competition for the crown jewel of domestic racing, and that's the Winston Cup," DeMilly says. "When you have total control of something like this, as the France family does, you can afford to be incredibly selective."
Warren, Homestead's lone black council member, says he's a steadfast supporter of the racetrack. Someday, he hopes, the benefits of Homestead's largest-ever public works project will trickle down to the city's poorest citizens. Now the track remains a boon to restaurateurs and hoteliers on the east side of town.
"Are we really seeing economic development?" Warren wonders. "Is the community really benefitting? The jury's still out. It's simply too early to tell.
"As for a new lease arrangement, my position is this: Not one dime more from the city coffers will be spent on that facility. As we renegotiate that contract, my main focus will be how does it benefit Homestead, and are there any new costs associated with a new lease. Whatever happens on the back side of this deal between Sanchez, France, and Huizenga, I don't really care about. That sort of corporate swapping goes on all the time."