Micky Arison is a greedy corporate pig . . . and other observations about big boys and their expensive toys
EGO, EGO EVERYWHERE, AND NOT A DROP OF SENSE
Earlier this year, when it looked as though the Miami Heat almost certainly would move to Broward, Dade County Commission Chairman Art Teele sat at the downtown arena watching the team take on the Chicago Bulls. Alongside him during the February 23 contest were several Broward County legislators, including State Rep. Fred Lippman from Hollywood. Throughout the game, Lippman teased Teele: In the future, Lippman laughed, Teele would have to drive up to Broward to watch the Heat play. Soon they would be the Broward Heat.
Teele was not amused. The Heat abandoning Miami -- and leaving his very commission district -- would be a stunning blow to his power and prestige, and he simply was not going to let that happen. In the weeks that followed, Dade's efforts to build a new downtown arena for the NBA franchise kicked into high gear. The frenzied activity culminated in emergency meetings of both the Dade County Commission and the Miami City Commission on March 29. After cursory debate and very little attention given to details, commissioners approved a plan to spend $210 million on the project.
Critics of the proposal say the motivation behind this extraordinary effort can be summed up in one word: ego. "It is practically all driven by ego," asserts former Miami commissioner Victor De Yurre, who spent his last years in office overseeing the city's interest in the existing Miami Arena. "It is the egos of the team owners and the egos of the elected officials."
County Commissioner Katy Sorenson, who voted against the arena project, compares it to boys fighting in the schoolyard to see who is toughest. "The only emergency meeting I've ever attended as a county commissioner was on the arena," she says with disgust. "What does that say about us? Where are we going as a culture when we are so busy focusing on things that do not have lasting value? We are focusing on these glitzy, short-term dazzlers that really won't sustain us in the long run."
Teele says his efforts had nothing to do with personal gratification, but he doesn't deny that ego played a role. "This is about ego, community ego," he argues. "People want to live and work in neighborhoods and communities that are fun and balanced and have wholesome outlets for families. This is going to be a horrible place if all we are going to do is build jails and pour new asphalt on roads."
Sorenson says Teele's logic puzzles her: "When people say that a new sports arena is a quality-of-life issue, it just makes me smile. The real quality-of-life issues are jobs and job training and child care for people seeking job training. It's schools and health care and parks. It's about making sure people feel safe in their homes and that there are enough police to protect them. Those are the things that will really make this a great county. Not an arena.
"This is about a bunch of spoiled, overfed, overpaid corporate giants who are having an arena built by the taxpayers so that a bunch of spoiled, overfed, overpaid athletes can have a place to play. If the owners of these teams want a new arena, then let them finance a new arena. Micky Arison," Sorenson notes pointedly, "obviously has the money." She then picks up from her desk at county hall a newspaper clipping. The article is from the April 16 business section of the Miami Herald and it concerns Carnival Corporation, Arison's company.
The headline: "Cash-rich Carnival looking for acquisitions." The story:
Carnival Corp. is looking for acquisitions. The Miami cruise-line company said Monday that its cash flow is so high that it needs to find profitable investments. Carnival's cash flow, or net income from operations, was $587 million in the fiscal year ended Nov. 30, 1995, and is expected to reach $700 million this year. The figure is so high that during the next three years Carnival will pay for seven new ships, costing about $2 billion, without borrowing.
"We need to look for ways to deploy [remaining cash flow] to get our shareholders value," Vice Chairman Howard Frank said at Carnival's annual meeting. "We will generate free cash flow of $2 billion over the next five years, beyond the cost of new ships. We've clearly been looking for opportunities."
Investment opportunities in fancy new sports arenas, Sorenson wryly adds, is not mentioned anywhere in the article. "That's left for us to build for him," she grumbles.
TONY RIDDER IS CHAIRMAN OF KNIGHT-RIDDER, KNIGHT-RIDDER OWNS THE HERALD
Since February 8, the day Knight-Ridder chairman Tony Ridder agreed to lead the fight to build a new downtown arena for the Heat, the Miami Herald has published more than four dozen stories mentioning the man upstairs. (Ridder's corporate office is one floor above the Herald newsroom.) Of all those articles, one stands out, not because it was stylishly written or because it divulged shocking new information, but because of its surreal qualities.
About halfway through the March 29 front-page story reporting the dramatic announcement that a deal had finally been struck between the county and the Heat to spend $210 million of taxpayer money to build a new arena were these two paragraphs:
"Dade officials and the county's consultant did not provide additional detail showing how the plan would work, despite a request by the Herald under the Florida public records law for more documentation.
"The same request was made to Ridder with similar results. Ridder said he had no additional documentation. Knight-Ridder owns the Herald."
Imagine it -- the Herald serving public records requests on itself. And then being denied information.
Luckily for the Herald and Ridder, the newspaper's reporters never re-examined Ridder's assertion in print. If they had, they would have reached the unhappy conclusion that Ridder had misled them, because he did in fact have additional documentation outlining the Heat's demands, material that, had it been made public earlier, would have given county commissioners an opportunity to ask informed questions and better understand the ramifications of their decision. As it was, Ridder knew far more about the deal than nearly all the commissioners who voted on the project.
When the Herald made its public-records request of Ridder, he had in his possession at least two letters sent to him from Miami Heat officials -- a March 18 letter from Heat attorney Eric Woolworth and a March 21 letter from Marshall Glickman, the arena consultant working with the basketball team. The letter from Glickman outlined, point by point, the conditions under which the Miami Heat would agree to remain in Dade County. Those points included demands that the team be given naming rights for a new arena, a guarantee of revenues from parking, an exemption from any future taxes, and an agreement that the Heat would operate and manage the new arena. The team would also select the architect and contractor, receive 15,000 square feet of rent-free office space in the complex, and assess penalties against the county if the new arena is not open in time for the 1998-99 NBA season.
The March 21 letter, and the March 29 letter of intent signed by Ridder "on behalf of Dade County, the city of Miami, and [the Miami Sports and Exhibition Authority]" finally became public in early April -- nearly a week after commissioners had approved the deal, and only after both the Herald and the Fort Lauderdale Sun-Sentinel filed additional requests for information and threatened legal action. Ridder says he consulted with Knight-Ridder's attorneys -- who are different from the lawyers who advise the Herald -- about what he was required to make public.
The irony of this situation was so blatant it could be appreciated even from afar. Broward County Commissioner Lori Parrish, for example, found Ridder's reticence to be in poor taste. "I thought it was a tad on the tacky side," she says. "After all, the Herald is always so critical of government for making decisions in the dark, and yet it had to sue itself to get access to public documents."
The Heat's March 18 letter to Ridder, which consultant Marshall Glickman refers to in his communication of March 21, has never been released. At the time, however, Glickman believed it to be a very important letter and thought that Ridder's response was "critical" to the Heat's ability to judge the feasibility of locating a new arena on the downtown waterfront. Ridder recently denied a request by New Times to make public that letter, and his response. By way of explanation, he says that his attorneys told him he was exempt from the Florida public records law because it applies only to elected officials and governmental bodies. His lawyers, he adds, told him he had to make available only those documents he shared with county officials. The March 18 letter, he says, was not among such documents: "That was not shared with the county, so if it is just between me and the Heat, it is not a public document."
Ridder's interpretation of the state's public records law may not be correct, according to one expert. Barbara Petersen, executive director of the First Amendment Foundation in Tallahassee, says that because Ridder received $250,000 in public money to hire a consultant and was granted the authority to negotiate an agreement with the Heat, all material in his possession regarding the arena A whether he shares it with county officials or not A is likely to be a public record. "He is representing the commission, he is acting on behalf of the commission, and the public records law most likely applies to him," she says. "But ultimately a judge would have to make that determination."
Ridder grows uncomfortable when pressed on the seeming contradiction of a newspaper owner withholding from reporters documents concerning a government project. "We were moving fast," he ventures. "Believe me, I do not like being in this position. We spend our lives trying to get government open. I do not like being in the middle of this thing."
But for skeptics such as County Commissioner Bruce Kaplan, Ridder's excuses are hypocritical. "It was almost a week before I saw the letter that he signed on behalf of Dade County," Kaplan complains. "If that had been anyone else, the Herald would have criticized them for withholding information."
Ridder's involvement has left the Herald open to other attacks as well, in particular on its editorial pages. The newspaper has published only one editorial dealing directly with the commission's vote to spend taxpayer money on a new arena. "The day was historic not just because a sports team said it would stay or because Dade will get a new state-of-the-art arena," the editorial stated. "It was also historic because it demonstrated so clearly what could be achieved when the county, its largest city, and the private sector all work together toward a common goal." The only hint of misgiving arose from the speed with which the deal came together. "Events moved fast, often behind closed doors, so public understanding lagged," the editorial noted, adding that "a thorough public airing" was now needed to allay the community's "unfounded fears."
Compare those sentiments to the ones expressed only weeks earlier, as the commission prepared to ratify its decision to turn over Homestead Air Force Base to a group of politically connected private developers known as HABDI. "How much of this was publicly discussed before HABDI got the commission's nod?" the Herald wrote this past January 10. "None. If adopted, HABDI's plan may turn out to be a winner. But the Metro commission generated it by a flawed, closed process. That invites not just distrust, but disaster. Commissioners must begin anew, in full public view."
County Commissioner Betty Ferguson, who voted against the new arena, was one of the first to denounce what appeared to be the newspaper's double standard. During the commission's pivotal March 29 meeting, she looked directly at Ridder, and, referring to the Herald, said, "Whenever we vote to support something that they are in favor of, it's okay that we don't take the time to scrutinize and do those things that we should do. But if it is something that they are not in favor of, then we are bashed all over the place."
Bruce Kaplan says it is easy to understand the Herald's sudden reluctance to insist on public scrutiny and measured deliberation. "Tony Ridder drove this train," he states flatly. And if the train wrecks, supporters and critics alike will point the finger of blame at Ridder. Warns attorney and arena critic Dan Paul: "It is unfortunate that he put his prestige behind this project. He will come to regret it."
ARENA HISTORY 101
Why is the current Miami Arena considered an unusable relic just eight years after it opened? And who is to blame? "I've driven cars longer than eight years," says Commissioner Katy Sorenson. "What happened?"
Those questions may seem like minor speed bumps on the fast track toward a new arena, but they are illuminating nonetheless. The Heat's owners, as much as any elected official, are responsible for the perceived inadequacies of the current Miami Arena. Critics believe that once that fact is fully understood, the public will rise up against the team's demand for a new, publicly financed arena.
"The old arena was partly my mistake," admits County Commissioner Maurice Ferre, who was mayor of Miami at the time the original arena plans were created. "Any fool knows and should have known that you don't put an arena in a blighted area without anything else around it. So I'll take the blame for that.
"But when I left office on November 8, 1985, at least we were duplicating the Summit," Ferre adds, referring to the size and design of the arena that is home to the Houston Rockets. "Then four months later the city cut $10.3 million from the plans and the arena suddenly became outdated before it even opened."
By outdated, Ferre means the arena seats only 15,200 and has a measly sixteen skyboxes. (Even though the arena seats "only" 15,000 people, the Miami Heat sold out just 13 of its 41 home games this past season.) The arena construction budget was trimmed shortly after Xavier Suarez replaced Ferre as mayor. It was City Commissioner J.L. Plummer's idea to slash the budget and divert those funds to the James L. Knight Center and a new exhibition hall in Coconut Grove. "This arena was being built with money from the Sports and Exhibition Authority," Plummer says today, "and my contention was that you had to give some of that money for exhibition space." Plummer's motion was supported by both Suarez and Joe Carollo, who has emerged as one of the strongest advocates for building a new arena.
But everyone -- meaning Suarez, Plummer, Carollo, and even Ferre -- says that the Miami Heat's owners approved of the changes. "Lewis Schaffel didn't want a big mammoth place," recalls Ferre, referring to one of the team's principal owners. Suarez points out that at the time, no one was certain basketball would succeed in South Florida, and that Schaffel was worried the arena would seem empty if it were too big. "That arena was built exactly the way Schaffel wanted it," says Suarez. "He always used the word cozy. He wanted to be able to fill the arena."
Because the Heat's owners got exactly what they wanted, critics charge that their demand for a new arena A under threat of leaving town A only proves they have no integrity or community spirit. "If they didn't want to play in that arena," says former city commissioner Victor De Yurre, "then the owners shouldn't have brought a franchise here." What they did, De Yurre claims, is to bring a team to South Florida knowing that if it were successful, they could extort anything they wanted from the community. "It is unbelievable how owners of professional sports teams can manipulate a community," he says. "We are being held hostage by these owners."
The Heat's current argument -- that the team will lose money if a new arena is not built -- does not impress De Yurre. "My job as an elected official was not to cure the financial ills of a professional sports franchise," he argues. "When they give players these multimillion-dollar contracts and then whine to us that they can't make any money, I have a hard time feeling sorry for them. They have to get their own act together and not expect local government to subsidize them."
IT AIN'T OVER TILL IT'S OVER
With public opposition mounting, the county mayor's race heating up, and a final contract between Dade and the Heat to be voted on later this month, County Manager Armando Vidal and commission advocates have been scrambling to improve the county's financial standing in the deal for a new arena.
Sources familiar with the negotiations say that among the issues being considered is a possible revenue-sharing plan similar to the one Wayne Huizenga will have with Broward County, in which the team will keep the first $14 million earned each year and then give the county twenty percent of all additional revenues.
Another area under discussion is the level of minority participation -- from construction contracts to food vendors. Given the pounding the project has taken on Spanish-language radio (WQBA-AM station manager Augustine Acosta says about 80 percent of callers oppose the way the arena deal came together), the Heat could shore up its support from commissioners Javier Souto, Natacha Millan, and Pedro Reboredo by guaranteeing substantial minority participation.
Micky Arison may be hearing a lot of different suggestions as he's been visiting county commissioners during the past couple of weeks, lobbying for their support. One commissioner who recently met with him, Bruce Kaplan, says Arison, rather than talking about increasing his commitment to the community, talked instead about backing away from his pledge to pay $5.5 million per year in rent. "He wanted to pay only five million," says Kaplan, who was absent when the commission initially voted on March 29 but who opposes the plan. "He said Tony Ridder drove a hard bargain, but that in the end he would drive a harder one." (Says Heat spokesman Mark Pray: "The negotiations are a fluid process, but currently the rent payment does stand at $5.5 million.")
Another subject likely to spark controversy is the decision by the city and the county to finance a "capital reserve fund" for the arena using money from their general funds. The city and the county have each pledged between $500,000 and $1,000,000 per year to this account, which will cover any emergencies or unexpected costs. "I have a real problem with using any general-fund dollars for this project," says Commissioner Alex Penelas. "You are talking about money that can go to parks, that can go to police, that can go to social services."
Ironically, the City of Miami's money for this reserve fund will come from a pool of cash supposedly earmarked for improvements in Overtown. Rather than spurring development in the most economically depressed section of the city, the arena financing plan would actually deprive the area of needed finances. "It is certainly diluting the commitment to Overtown," concedes Commission Chairman Art Teele, who adds that it is one of the features of the plan he is still trying to correct. "The deal," he says, "is evolving."
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