City of Miami officials received another rude awakening as a consequence of partially funding construction of the new Marlins Ballpark. After taking out $100 million in loans on the bond market for the construction of four parking garages, the city is on the verge of being handed an unexpected $2 million property tax bill.
In financing construction of the parking garages, the city agreed to lease all 5,700 spaces to the Marlins at the cost of $10 a spot. Although out of line with the city’s regular practices, the contract stipulates that the city, and not the team, is responsible for all taxes on the garages. According to the Sun-Sentinel, however, municipal properties in Miami-Dade County are only exempt from property taxes if used exclusively for public purposes. By building garages for use by a private organization, the city was taking on an extra tax bill that it had not prepared for. Miami Mayor Tomás Regalado (who opposed the stadium deal as city commissioner) has said that parking revenue alone will not cover the increased costs. The cash strapped city will instead have to draw funds from its budget.
County officials, who played no part in the city’s negotiations with the team, seem bewildered by the city’s decision to take on tax liability. Miami-Dade County property appraiser Pedro Garcia told the Sun-Sentinel that he had “rarely if ever” seen a similar clause in a leasing contract. Garcia also noted that “when they [the city] did the contract, there was no conversation with the property appraiser.” So while it seems unbelievable that the city would sign such an agreement, they might have done so without checking whether or not they would have to pay taxes!
The team is, of course, absolving itself of blame for the newest raid on Miami taxpayers. Marlins President David Samson said that the issue entirely “really has nothing to do with the team.” “Property tax,” he said, “never even came up in any discussion when it came to the garages.”
Why on earth the city would add such an unusual clause to the contract is a difficult question. City officials certainly deserve most, if not all, of the blame. Even if the team were aware that it was sticking Miami residents with an extra bill, responsibility for the stewardship of tax dollars lies with the city. City and county officials, along with the team itself, seem to have been singularly focused on getting the stadium built, no matter the costs or long term ramifications.
Given the clause of the city’s contract, an immediate solution seems far fetched. The county played no part in negotiations between the Marlins and the City of Miami, and has no choice but to play by the rules. The Marlins, already distancing themselves from the issue, have little incentive to renegotiate a contract that works so heavily in their favor. Barring an unforeseen push by the team to build good will within the community, it is likely that the garages will be placed on the tax rolls come January.