Following multiple stories from Riptide about the Miami Heat refusing to share profits from the American Airlines Arena with the taxpayers who subsidize the place, Miami-Dade Inspector General Christopher Mazzella has apparently decided that someone should try to verify how much the team is actually making. We've confirmed the top Dade watchdog is auditing the Heat.
According to public documents obtained by Riptide, meanwhile, Heat owner Micky Arison is doing everything he can to stonewall the IG.
Since the Heat's controversial deal was signed in 1997, the county has never shared the wealth as owner Arison had promised. In order to keep the team in Miami, then-county mayor Alex Penelas agreed to give away $38 million worth of prime waterfront public land. The team paid $240 million for the arena's construction, but the Heat was awarded an annual $6.4 million subsidy to operate the arena for the next 30 years — that's $192 million in taxpayer funds for the life of the deal. In return, a Heat subsidiary — Basketball Properties Ltd. — agreed to share 40 percent of all its profits over $14 million.
The arena has never hit that magic number, not even during last season's NBA Finals run as prized free agents LeBron James and Chris Bosh helped the Heat bank $60 million in revenue.
The IG's office began its inquiry June 22 with an email to the Miami-Dade Internal Services Department, which administers the arena contract. An IG investigator requested copies of the '97 agreement, annual financial reports, and any other documents submitted by Basketball Properties. A similar request followed on July 26.
On August 31, Mazzella met with the subsidiary's chief financial officer, Sam Schulman; two other arena executives; and Heat lobbyists Jorge Luis Lopez and Pablo Acosta. The team complained the information he requested was a "trade secret."
Mazzella stood firm. On October 4, he officially notified Basketball Properties that his office was conducting an audit. Two days later, Schulman sent a new letter to the county complaining that the Heat does not have a sweetheart deal and that the team has helped revitalize downtown. "We are very proud of the leadership role we have played in being the catalyst for the unprecedented growth of the downtown urban core," Schulman wrote.
Sources tell Riptide a full report from Mazzella is forthcoming. Mazzella himself declined to comment, as did Heat officials.
