Six lies about the Marlins stadium
Like a festering, silver-plated pustule, a grotesquely huge can opener, or just an obscene ode to wasted cash, the new Florida Marlins stadium is rising above Miami's skyline. Whether you're driving down a tree-shaded block in Little Havana or cruising the Dolphin Expressway to South Beach, there it is: a $515 million money sucker that is probably the worst deal for taxpayers of any stadium in America.
As the Marlins have marched to their best start in their last season at Sun Life Stadium, fans are tempted to ignore the damn thing and just enjoy Hanley and Stanton pounding the leather. After all, voters had their revenge in March by ousting Miami-Dade Mayor Carlos Alvarez, who did the deal.
But in just three weeks, residents will head back to the polls to elect a new mayor — a leader charged with righting the wrongs that bought the worst public works project in Miami history.
Before the vote, it's more important than ever to revisit the worst lies Dade County leadership and Marlins execs fed the public — from ludicrous claims that the team would go broke without the park, to pledges that the project will revitalize Little Havana, to the apathetic idea there's nothing left to fight about.
Look away from the monstrosity if you must, but don't forget the six biggest Fish tales about the new stadium.
BIG FAT LIE NUMBER 1
Miami politicians were working for taxpayers.
"We are not building a stadium for the Marlins. We are building a stadium for the enjoyment of Miami-Dade County residents." — ex-Mayor Carlos Alvarez, Miami New Times, October 28, 2010
The Ugly Truth: In March 2009, Miami-Dade Commissioner Katy Sorenson looked around the dais, counted the votes, and concluded she had no chance to kill the Marlins stadium. The chamber was packed with team execs and construction lobbyists. So she made a suggestion: "I'd like to offer a friendly amendment," she said, "to name the stadium Bruno Barreiro Stadium."
How right she was. A New Times review has found that the former county commission chairman, whose district includes Little Havana and the site for the new park, took almost $40,000 in donations in 2008 — one in every six dollars of his total take — from firms with an interest in bidding on the project.
What's more, over the next two years, the same interests continued to feed other key stadium deal backers.
Among these opportunists is a hodgepodge of companies including Trigam LLC, Parsons, Skanska, Thunder Electrical, and others. The Munilla family, a finalist to build the $94 million garage project, donated $6,500. A number of the companies that gave Barreiro cash later earned lucrative contracts to build the park; they include H&J Foundation, Contex Construction, and John J. Kirlin Enterprises.
Barreiro — who didn't return messages left with a spokeswoman — hadn't always been a best friend to the construction industry. In 2004, when he raised $63,000 for re-election, less than $1,000 came from the builders and contractors.
"Of course there's a connection between these donations and Barreiro's role in shepherding through this deal," says Norman Braman, the auto magnate who bankrolled Alvarez's recall. "You think it's just a coincidence? That's how this county commission operates. Special interests buy candidates votes and then get a piece of the pie."
Almost as curious was the cash flow of Barreiro's colleague Joe Martinez. He was the key vote to hire — without normal bidding — a group called Hunt/Moss to oversee construction. During the year before the vote, Martinez took $500 checks — the maximum amount individuals can give — from a litany of Moss & Associates' top execs, including three vice presidents and the legal counsel.
Martinez voted against the stadium, but for Hunt/Moss. Why the flip-flop? "I was against the stadium funding," he told New Times. "But Hunt/Moss... seemed very qualified to me."
Still have doubts about for whom the stadium's political backers were really working? Look at the financial reports of the political action committee Mayor Alvarez formed last year to fight his recall. Marlins owner Jeffrey Loria and president David Samson personally kicked in $50,000 to keep him in office, Hunt/Moss added $5,000, and a laundry list of other stadium builders gave more than $73,000.
"I think he's an outstanding mayor," Samson told the Miami Herald.
Voters disagreed. Eighty-eight percent gave the big guy the boot.
BIG FAT LIE NUMBER 2
The Marlins are a struggling team that can't survive without a new park at taxpayer expense.
"[Jeffrey Loria] has been losing money like crazy." — Marlins president David Samson, Miami Herald, December 11, 2004
The Ugly Truth: Jorge Costales is a downtown accountant and passionate Marlins fan. The soft-spoken 51-year-old, a Miami resident since his parents came from Cuba when he was 2 years old, has rooted for the Fish since the team's first pitch in 1993. But when his favorite club traded slugger Miguel Cabrera and ace Dontrelle Willis in late 2007, supposedly because it was broke, he couldn't resist crunching the numbers to see if the team owners were honest.
Costales quickly decided they were lying. And for the past three years on his blog, 2thinkgood.com, he has told anyone who would listen that the Fish are much more profitable than they've ever admitted. "Their financials are so shady and they acted with such dishonesty," he says, "I couldn't keep silent."
In 2008, Forbes reported the Marlins had made $35.6 million in profit during the prior year, the second-most in the Bigs. Marlins president Samson responded to the Sun-Sentinel: "Every year I continue to be surprised at the absolute inaccuracy that a so-called reputable magazine is willing to print. It's just a shame their readership is forced to read numbers that aren't true. I know the number they have for the Marlins is simply wrong."
Earth to Dave: In a WikiLeaks-like document dump, muckraking sports website Deadspin leaked dozens of pages of secret financial paperwork last August. It confirmed what Costales and Forbes had been saying for years. In 2008 and 2009, even as the team was begging for a public handout at county hall to build the stadium, it turned nearly $49 million in profit.
By Costales's calculation, the Fish have made $300 million in revenue sharing since 2002 and banked at least $154 million in profit.
So why didn't we know all of this before commissioners approved what is one of the worst deals for taxpayers of any baseball stadium in America? For a decade, the Marlins' owners refused to open their books, citing Major League Baseball policy that team finances are a "trade secret."
In 2008, team pain-in-the-ass Braman even asked Miami-Dade Circuit Court Judge Pedro Echarte Jr. to force the team to disclose its finances. Echarte declined, calling it irrelevant to a lawsuit Braman had filed.
All the team's cloak-and-dagger tactics went out the window, though, when Deadspin tossed the Marlins' innermost accounting on the web for the world to see. The leak showed not only that the team was turning huge profits — mostly by keeping millions in revenue sharing from better teams without spending much on its own players — but also that Loria and his cronies were personally milking millions from the franchise.
Through a shady bit of accounting, the team paid a "managing general partner" named Double Play Company $8.6 million between 2008 and 2010, the documents showed. Double Play's owner, according to the Florida Division of Corporations, is Loria; its president is Samson.
What's more, Loria pays himself another $10 million a year in costs classified as "administration," Costales says. That is some crazy bank. And the famed art collector is enjoying it in style. In January 2010, he spent $22 million to buy six acres of beachfront land in Southampton, New York, right next door to his gigantic mansion, according to the New York Post.
So don't worry about Jeffy boy. Last month, thanks entirely to their new, free stadium, the value of the Marlins franchise jumped 13 percent to $360 million — a $202 million profit on Loria's initial investment, by Costales's estimate.
BIG FAT LIE NUMBER 3
Stadium construction will bring good jobs to good local companies.
"The construction of a new $515 million Marlins ballpark will create enormous economic opportunity through the creation of thousands of construction jobs." — Claude DeLorme, Marlins vice president of ballpark construction
The Ugly Truth: Sure, there are jobs, but whether the companies are good or local is questionable. Check out the firms that received multimillion-dollar contracts:
1. Moss & Associates (lead contractor with Hunt Corp.)
In 2003, two years before founding Moss & Associates in Fort Lauderdale, Bob Moss, a North Carolinian with a heavy drawl, left his senior job with national construction giant Centex Rooney.
He was accused of strong-arming employees into violating federal election law. Allegedly at Moss's direction, workers pumped tens of thousands of dollars into local and national campaigns in exchange for end-of-the-year bonuses. Moss also reimbursed himself for $42,000 worth of donations, investigators found.
Moss was never criminally charged, but Centex paid a $212,000 FEC fine. Moss and other execs repaid $56,000 to the company. (In earlier interviews, the North Carolinian denied wrongdoing and chalked up the scandal to "poorly kept" records.)
2. MasTec ($1.1 million contract for electrical ductwork)
MasTec, a Miami firm that was founded by Cuban exile hero Jorge Mas Canosa, was blackballed from county work for almost a decade after its contractors were accused of stealing $17 million. The fraud dates back to 1996, when Church & Tower — the company name at the time — won a $58 million road-paving bid. Subcontractors inflated invoices and charged millions for work they never finished, investigators discovered.
Company honchos said they didn't know about the theft, and in 2003 they finally paid a $4.7 million fine. No one from the firm was ever criminally charged, but a grand jury concluded MasTec's execs should have been punished. "We are outraged at [MasTec's] wanton disregard and cavalier attitude," the jury wrote in its final report.
3. MCO Construction ($5.9 million contract to pour concrete)
In 2001, county investigators determined that MCO — which had a demolition bid earmarked for minority firms at the future site of the Adrienne Arsht Center — wasn't actually doing the job. Instead, owner Elizabeth McNeill allegedly let non-minority-owned businesses do the work.
McNeill maintained her innocence and was never charged, but she paid a $15,000 fine and was banned from county bids for six months.
4. Applegate USA (subcontractor on a $29 million bid to install ductwork)
Applegate, a sheet metal firm owned by Pompano Beach resident Richard Applegate, fired an employee for getting pregnant, according to a 2006 federal suit. When administrative assistant Jessica Hernandez asked for maternity leave in April 2005, the company allegedly sent her packing. The next year, the Equal Employment Opportunity Commission sued.
Applegate never admitted it had fired Hernandez for getting knocked up, but the company agreed to undergo training and pay her a $100,000 settlement.
5. Able Body Labor (subcontractor on a $7 million stucco bid and an $11 million plumbing contract)
Last summer, then-Florida Attorney General Bill McCollum launched an investigation into Clearwater-based Able Body Labor. The AG's office was flooded with complaints after Able Body offered "free emergency response training" to unemployed Gulf Coast workers trying to find clean-up jobs after the Deepwater Horizon oil rig exploded.
Able Body allegedly withheld certificates until students paid fees up to $1,000. "When disaster strikes, fraud follows close behind," McCollum said. Able Body did not admit wrongdoing but is cooperating, McCollum said. (The investigation is still open, says Shannon Knowles, a spokeswoman for the Florida Attorney General's Office.)
6. Cove Construction (subcontractor on a $3.9 million bid to pour foundation)
In March 2010, county inspectors caught Miami Lakes-based Cove Construction carpetbagging for out-of-state workers at the new stadium. Cove owner Brandon Allen won a locals-only, $730,000 bid to build the foundation. But instead he let Michigan's Whaley Steel do the job, investigators learned.
Allen denied wrongdoing, but Cove was fired. Investigators also said the prime contractor that hired Cove, a group called Colasanti, "misrepresented" its work and filed fake work orders. Michigan-based Colasanti is still on the job.
BIG FAT LIE NUMBER 4
Fans will love the new stadium!
"When you can promise fans a retractable-roof facility with air conditioning and games starting on time and ending on time, we firmly believe our attendance will grow." — Samson, MLB.com, March 31, 2009
The Ugly Truth: Teams across Major League Baseball have found that building a new park alone doesn't equal long-term attendance gains. Pittsburgh, Cincinnati, and Washington, D.C., for instance, all sank hundreds of millions in taxes into gleaming new stadiums — and then watched attendance quickly flatten after initial excitement.
Consider the Nationals: Exactly 12 months after opening a $611 million palace, the team drew only 16,000 fans to a weekend game against the Marlins. "We get the attendance we deserve," team president Stan Kasten told the Biz of Baseball website afterward. "If we give the fans a reason to support us, they'll be here in droves."
In 2009, just six years after opening a state-of-the-art park, the Cincinnati Reds drew their lowest attendance since the mid-'80s. The Pirates — whose PNC Park is one of the best in baseball — barely outdrew the Marlins last year for the league's fourth-worst ticket sales.
New stadiums indeed boost attendance by about 10,000 fans a game for the first year, according to a study by Ron Kamara, an economics scholar at Washington University in St. Louis. But that gain decreases about 3,000 fans each year afterward. So by the fourth year, new stadiums draw only a couple thousand fans more than the team would have at its old park.
Much more important than the venue, he found, was the team's commitment to winning baseball. (After all, even the Marlins drew 60,000 fans to Joe Robbie/Pro Player/Dolphin/Land Shark/Sun Life Stadium during their two World Series runs.)
As for Samson's idea that fans are delirious with excitement about the new park, consider the Alvarez recall. In a random poll of 800 Miamians that Braman commissioned before the vote, 57 percent said they hated the new park.
Those feelings were echoed among the teal faithful at the Marlins last-ever opening weekend in Miami Gardens. Red, white, and blue bunting hung from the grandstands, an "Opening Day" graphic was stenciled next to home plate, and as usual, oceans of empty orange seats surrounded the field. Tara Spears, a 30-something mom, watched her kids sprint around a mostly deserted gangway outside the "Fish Tank" cheap seats.
"I don't understand why we need a new stadium, honestly. It's South Florida. We have the worst fans in sports," she laughed. "Everyone here came from somewhere else and has their own loyalties. They don't care about the Marlins."
She gestured at the acres of unfilled seats shining in the afternoon sun. "The idea that a new park is somehow going to create this rabid fan base to fill all those seats," she said, shaking her head, "it's just not true."
BIG FAT LIE NUMBER 5
The stadium will rejuvenate Little Havana.
"We're going to have economic vitality in an area I represent that has been neglected for many, many years." — former city Commissioner Joe Sanchez, March 19, 2009, before voting for the stadium
The Ugly Truth: There's little evidence that new stadiums do anything other than enrich their owners. Some scholars even argue the new parks hurt communities by drawing clients away from local bars, restaurants, and theaters.
"If there's any spillover, it doesn't go more than a block or two," says Neil deMause, author of the 2008 book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit. "The whole point of a new stadium is to have all this shopping and food inside so you spend all your money there."
It's common sense. For one, fans who spend cash at the new park will be mostly Dade residents; tourists don't come to the Magic City to see baseball games. And when locals buy tickets, they're just rerouting money they would have plunked on a movie or dinner.
But for the local economy, spending on baseball is much worse than spending at a neighborhood joint. Why? Because it ultimately goes to either Jeffrey Loria or the players, none of whom really lives in Miami or spends much money here. So instead of circulating cash in Little Havana, most of the dollars spent at the stadium will be sent off to Loria's Southampton bank vault.
In fact, when cities build new stadiums, residents' wages drop and retail and service sectors lose jobs, a 1999 University of Maryland, Baltimore County study showed. That includes data from every city with an NFL, MLB, or NBA team from the late '60s until the late '90s.
Unlike other towns that recently built stadiums — notably St. Louis and San Diego — Miami extracted no promises from the Marlins that they'd invest in housing or commercial space around their new ballpark. The deal rests, instead, on the strong "hope" that businesses will spring up. "Everyone's hoping the neighborhood will change, but there're no concrete plans," Robert Fenton, the city's stadium manager, admitted to the Herald last year.
That's not good enough for Yvonne Bayona, a longtime Little Havana activist who lives a few miles south of the new ballpark.
"This is still a neighborhood full of very low-income residents," she says. "They're not going to be able to afford to go to these games, and as far as I can tell, having that stadium in their back yard isn't going to improve their lives one bit."
BIG FAT LIE NUMBER 6
It's too late to change the deal.
"No... A contract is a contract." — Samson, asked by the Herald if the Marlins would renegotiate after Deadspin's leak.
The Ugly Truth: True, Braman's well-financed court battle against the Marlins stadium died in 2008 when Miami-Dade Circuit Judge Jeri Beth Cohen tossed his argument that the county should have held a public vote on the deal.
But there's another legal challenge facing the ballpark that's still very much alive. It's being waged by grassroots organizers who are passionate, well informed, and committed to fighting to the bitter end.
The 40-page complaint filed last November by Grace Solares, a longtime Miami activist, contends the City of Miami broke Sunshine Laws, illegally gave the team tax-free land, and improperly tied public money to the project. "If the judge looks at the facts in this case, there's no question the team and the city broke the law," Solares says.
A stern, grandmotherly figure sporting a permed pouf of hair, she filed the challenge with the help of Linda Carroll, a former federal prosecutor with a thick Boston accent. Their first argument — a claim that leaves Solares so angry she gesticulates wildly while talking about it in Carroll's downtown office — is that the agreement should have been hashed out in public meetings, not by Alvarez, County Manager George Burgess, Samson, and then-Miami Mayor Manny Diaz in closed conference rooms.
Solares believes a public negotiation wouldn't have left voters holding a turkey that will eventually cost $2.4 billion including financing and other costs. "You can't have a major, publicly financed deal like this done behind lock and key with no citizen input," Solares says.
What's more, the pair argues, commissioners broke Miami's charter by crafting a "convoluted Rube Goldberg-style legal transaction solely for the purpose of sparing the [Marlins] from the payment of... taxes" on 17 acres used for parking garages.
Finally, the county had no right to use its credit to guarantee the bonds paying for the stadium project, they say.
They're all sound arguments, Carroll says, and they haven't yet been hashed out in court.
"Braman's suit was about whether there should have been a public vote," she says. "We disagreed with the result, but he didn't argue any of these problems with the deal."
The Marlins, though, say Solares lacks standing to challenge the deal. In January, they filed a motion to dismiss the case. Judge Lawrence A. Schwartz hasn't yet set a date to consider both sides' arguments.
Solares says voters shouldn't let the team off the hook just because the politicians behind the deal have been fired.
"There's no reason to stop fighting," she says. "My granddaughter will be paying for this until she's middle-aged, and the team is making an incredible profit. How can we just ignore that?"
The Absolute Worst
Ask an economist whether the Marlins stadium deal is the worst in baseball history for taxpayers, and he or she will pussyfoot around and then tell you it's hard to say. Comparing complex stadium deals is like trying to stack Mark McGwire's juiced home run stats against the skills of the Babe.
Baloney. We'll go right ahead. It's the worst flipping deal ever.
First off, most cities have extracted far more funds from their teams to build a new park than Miami, where owner Jeffrey Loria will front just short of 30 percent of the $515 million cost. Take baseball-mad St. Louis, where the Cardinals and private investors eventually covered 88 percent of financing for the new Busch Stadium. Or San Diego (43 percent privately financed). Or Detroit (37 percent private).
Yes, there are ballparks that have cost their teams less. Just last year, Washington, D.C., footed the entire bill for the $611 million Nationals Park. But in return, the district gets millions in rent from the team and will share revenue generated by the stadium. In its first year, that added up to almost $17 million for D.C.
That's where Miami loses. The city and county will get almost none of the revenue from the new ballpark. Even worse, Loria and his cronies will keep virtually all the cash from the naming rights. If the deal is similar to those closed recently for the New Jersey Devils and the New York Mets, Loria will cover his entire share of the stadium with that single deal.
Then there's this: Miami-Dade County leaders were so incompetent in negotiating the project that they stuck taxpayers with interest rates that would have made a mid-housing-bubble speculator gasp. By the time the bonds are paid off in 40 years, we will have sunk $2.4 billion into the boondoggle. And did we mention the team pays no taxes on the land?
Worst. Deal. Ever.