Follow the Bouncing Ball
The image everybody saw -- the one everybody was supposed to see - was this:
Lewis Schaffel standing before a pack of reporters on the last Tuesday in February, assuring the good citizens of Dade County that he was going to do everything possible to ensure that the Miami Heat remain in downtown Miami. "Whatever problems there are, we're going to fix them," the basketball team's managing general partner said affably. Mayor Steve Clark, who had just met with Schaffel for 90 minutes, quickly chimed in with an equally glib sound bite.
There was no talk of Schaffel's year-old threat to move the Heat out of the Miami Arena when their lease expires in 1998. Nor any mention of the city's determination to renovate the seven-year-old structure to accommodate the Heat's growth. At this, the first official meeting between the two men who will play the lead roles in determining where the franchise plays, everyone went to great pains to accentuate the positive.
The image nobody saw -- the one nobody was supposed to see -- was the actual first meeting of these men, which took place more than a month before Clark was elected this past November. Schaffel had arranged the conference, held in Clark's campaign headquarters, after poll results made it apparent that the former Dade County mayor might actually upset then-favorite Miriam Alonso.
Clark began the conversation cordially, telling Schaffel he was open to negotiations and realized there were two sides to every situation.
Schaffel's response, according to a source who was present at the meeting, was delivered in the caustic tone familiar to those who have dealt with him behind closed doors. "What do you mean, two sides?" Schaffel is said to have snapped. "There is only one side here. There's no way the Heat can stay downtown without a new arena." Period.
This brand of hard-nosed avarice, coupled with good old political cowardice, has spun a web of tangled dynamics that renders somewhat comical the recent efforts at civilized negotiations. To wit:
While Heat officials covet a new building purely for financial gain, they must appear sensitive to the community and project an image that they are ready to compromise, lest they offend the taxpayers who will ultimately have to fund a new arena. At the same time, while Steve Clark cannot afford, politically, to let the Heat leave Miami -- just imagine the public uproar -- he must avoid appearing as if he is capitulating to the Heat's exorbitant demands.
Of course, no one involved in the negotiations will speak openly to the press (not to New Times, anyway), because no one wants to shatter the fragile public perception of cooperation. Thus, any insights about the process must be garnered from past coverage, the flurry of correspondence that preceded last Tuesday's meeting, and off-the-record discussions.
This much is known. Back in the mid-Eighties Miami taxpayers laid out $46 million to construct a home for the Heat. Though a funding shortfall caused the Miami Arena to be reduced in size, Schaffel and other team officials praised the venue. Along with Carnival Cruise founder Ted Arison, former NBA coach Billy Cunningham, and theater impresario Zev Buffman, Schaffel had just paid out an unprecedented $32.5 million for a new franchise. But as they explained to reporters at the time, the deal they cut with the city helped justify the price tag. The team's ten-year lease requires payment of $600,000 per season. Nearly all personnel and upkeep expenses are paid by the company that subleases the arena. The team is guaranteed all ticket and television revenues, most advertising fees in the arena itself, plus all profits from merchandise sold at games, and about twenty percent of food concessions.
This past spring, however, Schaffel announced that the team could not compete financially with other NBA franchises if forced to play in the 15,600-seat arena, one of the smallest in the league. Not only does the building contain a paucity of seats, he argued, but it has only sixteen money-making luxury skyboxes, compared to a league average of 47. A more modern facility would have to be constructed by 1998, Schaffel warned, or he would move the franchise, possibly out of Dade. Insiders say Schaffel's demands are not limited to design, that the team also wants a greater share of other revenue sources, especially parking, now under the auspices of the Department of Off-Street Parking. "We're trying to put ourselves in an environment where [we] have a chance," Schaffel told reporters after last week's meeting.
While player and administrative salaries are on the rise, it is impossible to assess how much of Schaffel's doomsaying is valid, because he refuses to open the Heat's financial books to outside inspection. Last year Financial World magazine estimated that the team turned a profit of about three million dollars, approximately half the league average. But sources both within city government and without say they believe the Heat might be pulling in three times that much. Why else, they ask, would team owners have turned down a buyout offer of $130 million, as they reportedly did just a few months ago?
When local officials suggested enlarging the arena to hold more seats and suites, the Heat commissioned an architect who concluded that such an upgrade would be impractical and expensive. City and county officials responded by commissioning two more studies aimed at showing the team that the existing structure could be suitably remodeled.
The rift between team and town widened last summer, after city officials discovered that Ellerbe Becket, one of the firms recruited to study an expansion of the Arena, had already been hired by the Heat to design their hoped-for new building. The company estimated that expanding the arena would cost a whopping $90 million. "Basically, Ellerbe Becket was in bed with the Heat already," is how one disgruntled observer puts it.
The results of the two studies did nothing to quell the Heat's threats to leave Miami. In fact, they went so far as to present a wish list to Palm Beach County administrators, including an 18,500-seat arena with sports bar and catering, parking for 8000 cars, and plenty of deluxe suites.
Heat officials were hopeful that Miriam Alonso, who had pledged to support the construction of a new arena downtown, would defeat Clark in last year's mayoral race. But when Clark posted his come-from-behind win and announced his intention to keep the team in the existing arena, relations between the city and team turned from tense to rancorous.
This past December 23 Clark sent a letter to Schaffel requesting a formal meeting. He sent another on January 3, after receiving no reply. Three weeks later Schaffel finally responded. "While we are happy to meet with you," he wrote, "we are frustrated because these matters have been fully addressed. In fact, our city and county government have already spent approximately $200,000 of public funds on independent experts [whose] resounding conclusion was that the best solution is to work together toward the construction of a new, state-of-the-art arena in downtown Miami." The missive goes on to assert that this new arena could be built for $90 million, "with substantial capital contribution" from the Heat.
City officials put the actual figure at $150 million, minimum. Miami taxpayers, they warn, would also have to pay as much as $30 million over the next several years to pay off the debt on the Miami Arena and to buy out Decoma, the building's developer. (The city signed a contract with Decoma when the arena was built, promising not to construct a competing facility.)
Schaffel concluded his letter by agreeing to meet with Clark and recommending that he add four prominent Miamians -- who already had been selected by the Heat -- to the city's designated negotiating team. Clark politely declined this offer in his next letter. Three letters and three weeks later, the principals finally convened in a conference room on the second floor of the Hotel Inter-Continental.
Those present at the meeting refuse to discuss details of what took place. But insiders say the gathering consisted of Clark asking Schaffel to enumerate precisely what he wants in the way of additional revenue sources, whereupon Schaffel soliloquized about all the amenities he would like, including something that sounded like court-level luxury suites with underground access. The two sides will meet again on March 17.
In the hopes of determining whether the Heat's demands can be met, the Miami Sports and Exhibition Authority (the city agency that actually owns the Arena) and Decoma have commissioned yet another study. City officials won't discuss this most recent examination, except to say that it will cost about $100,000, with the bulk of the bill to be paid by the authority, i.e., taxpayers, who would do best to try to get used to it.