SBD/April 24, 2014/Facilities

Heat Owner Arison, Miami Mayor Gimenez At Odds Over AmericanAirlines Arena Lease

Arison originally financed construction of the $240M AmericanAirlines Arena
Heat Owner Micky Arison yesterday announced an agreement with Miami-Dade Mayor Carlos Gimenez for "extended county payments to the AmericanAirlines Arena -- only to have Gimenez say an hour later that the proposed subsidies are too high for him to endorse the deal," according to a front-page piece by Hanks & Mazzei of the MIAMI HERALD. Shortly after Arison wrote season-ticket holders with news of an agreement, Gimenez said, "We don’t have a deal that I’m recommending. It’s unfortunate the Heat put this out now.” Hanks & Mazzei report taking into account the increased subsidies, minus the rent the Heat would pay between now and '40, the agreement would "cost Miami-Dade an additional" $121M through '40. That is on top of the $6.4M the county "must pay yearly for the next 15 years" under the terms of the '96 agreement in which Arison financed construction of the $240M arena. The yearly subsidy would increase to $12M in '31 -- the first year of the extended lease -- and hit $17M in '40. The deal also means the county would "start collecting a fixed rent as soon as the new deal is signed." In all, the term sheet outlines $147M in "new subsidy payments" and $26M in "new rent." Gimenez said that the rent money would be "earmarked for the county’s park system." Hanks & Mazzei note "the Heat talks come as Gimenez is warning" of a $208M budget gap. Poor public reaction to a Heat agreement also could "complicate matters as the mayor negotiates a potential soccer stadium on PortMiami with David Beckham and a tax-relief deal" with the Dolphins for a privately financed $350M renovation of Sun Life Stadium (MIAMI HERALD, 4/24).
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