22 July 2008

Around the league, Dog Days edition

Major intrigue surrounds the Marlins' stadium situation, as opponent and former Philadelphia Eagles owner Norman Braman's lawsuit enters its second week. This followed an unsuccessful mediation period. Braman argues, among other thing, that the use of redevelopment money for the ballpark is illegal without a referendum. The South Florida Sun-Sentinel's Sarah Talalay has a great running tab on the case.

On Friday, case judge Jeri Beth Cohen struck down numerous smaller claims made by Braman, but not the core issue:
Miami-Dade Circuit Judge Jeri Beth Cohen said she believes it does, but is "torn" because a Florida Supreme Court ruling, which states property tax money pledged to finance bonds for more than a year for major projects are subject to a referendum, is being reconsidered and is unclear how it should be applied until it is final. In that case, Gregory Strand sued Escambia County over spending property tax money without a referendum.

"The way I read Strand, it applies to this funding scheme. However, I'm torn because of the way the court issued the opinion on how to apply it," Cohen said.

Braman contends the public has a right to vote on the financing for $3 billion in Miami projects, including a $515 million ballpark. He calls it a "shell game" for relying on property tax dollars meant for impoverished neighborhoods to pay off debt on the performing arts center to free up hotel bed taxes for the ballpark.
Braman has said throughout that he'd drop the case if Miami/Miami-Dade officials would simply put the whole development plan, which is far more extensive than just a ballpark, to a vote. If he wins the matter will undoubtedly go to appeal, where Braman has shown the willingness to keep fighting. Fish Stripes notes that a recent Miami Herald poll shows that 57% of respondents believe the ballpark is a bad investment.

Braman also talked out of school when discussing the Marlins' financial situation:
Braman attorney Bob Martinez said the document shows the team was $150 million in debt and had no equity. Braman later slipped in that he turned down the team’s request to invest because “I could not invest in a company that had $163 million…” but he was again cut off.
The issue with the Marlins has always been Loria/Samson. Ownership groups are expected to meet a certain bar in order to operate properly. $163 million in debt? That's Selig's fault. I guess Loria had Selig over a legal barrel when Expos were "contracted."
In New York the Yankees are in a battle to secure $350 million that they feel is needed to complete the new Stadium. Here's the scoop, courtesy of Newsday:

February 2008: Planned upgrades to the scoreboard, concession stands and luxury suites spark the Yankees to seek an additional $350 million in tax-exempt borrowing via the city's EDC. The problem lies in potential revision of an Internal Revenue Service regulation - a revision proposed shortly after the Yankees and Mets got IRS approval for their tax-exempt financing in 2006.


The proposed regulation under review by the U.S. Treasury Department and IRS would impose stricter interpretation of rules governing PILOTs. The proposed regulation would require PILOTs to be closely tied to "applicable taxes" such as a real estate tax, rather than a fixed payment - in the Yankees' case, a PILOT equal to the debt service on the bonds. The change could disqualify the Yankees from benefiting from further tax-exempt government financing via PILOTs. The Yankees are trying to persuade Treasury and IRS officials to drop the proposed regulation.
Should the feds rule that PILOTs are to be restricted to specific (non-stadium) uses, it's likely that PILOTs could never be used as a financing instrument ever again. That would affect all three New York area venue projects: New Yankee Stadium, CitiField, and Barclays Center. It could also affect plans to renovate Madison Square Garden. Since it's the feds pressing the case, the restrictions would apply throughout the nation, not that many projects were looking to use PILOTs (most publicly-funded venues use sales or hotel/car rental taxes).