HomeMy WebLinkAboutItem #05 - Discussion ItemIIIIIIIIIIIIII.uI II.uIII■
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Mayor and Members of
the City Commissioh
Joseph kb Grassie'
City Manager
NOV 11
Beer in the OratceoV3
On October 24th Mr. Mitchell Wolfson, as Chairman of the Mayor's
Citizen's Advisory Board on Beer in the Orange Bowl, reported to
the City Commission on the terms which his committee negotiated and
recommended to the City Commission in order to settle the dispute
between the City and the Miami Dolphins regarding the serving of
beer in the Orange Bowl, and all its related considerations.
The Citizen's Advisory Committee consisted of the following individuals
named by the Mayor: Mitchell Wolfson, Jeanne Bellamy, Garth Reeves,
Carlos Arboleya, Stuart Thomas and William Ruben.
The recommended agreement, and one which the committee has been able
to get the Miami Dolphins to accept, covers the problems of serving
beer as well as the improvement of the scoreboard, because of the
tie-in between the sale of product and the advertising required on
the scoreboard.
The basic terms of the agreement on beer sales are the following:
1. Term of Agreement: The existing concession agreement
would be expanded to include the sale of beer, and
would run until July 1, 1980, as it now does; a new
concession and beer sale agreement would then be
entered into which would run to July 1, 1987.
. Compensation to City: On food the City would receive
the current 30.5`1. of gross sales through 1980, and
thereafter would receive 31% of gross; on beer the
City would receive 321 of gross sales through 1980,
and thereafter would receive 35% until the end of
the agreement in 1987.
Cost of Implementation: The estimated $330,000 cost
for the required beer pumping system, refrigeration,
and all other fixtures would be advanced by the Dolphins
permanent improvements to the Orange Bowl, calculated
at $210,000 of the total, would be repaid by the City
from City revenues, plus an interest charge identical
to the cost of borrowing incurred by the Dolphins; this
repayment would be made over three years, unless the
City wished to extend the repayment over the remaining
seven years of the concession agreement.
MM
ME
NOV 1i9ie
mayok dhA Meffibers of
the it/ CoMMissioh
44 title to IMprOVeMehtst The Dolphins would retain
title to all equipment and fixtures until either
the costs they had advanced had been amortized,
or the agreement is terminated by them.
Installation Time: It would require six weeks to
install the pumping system; partial beer service
could be accomplished in the short run using tem,,
porary measures.
The besic points of the companion scoreboard agreement are the ffollbwing:
Term of Agreement: The agreement would run for
71/2 years, through the 1986 football season.
. Return to the City: The City would share adver-
tising revenues with the Dolphins on a 50-50
basis, after all sales and operating costs are
deducted from gross advertising revenues.
. Cost: The scoreboard is estimated to cost
approximately $360,000, and would be designed
to accommodate future instant replay capacity
if that were desired.
Investment: The Dolphins would advance the entire
initial investment of $360,000; the City would
repay its one-half share ($180,000) from the
advertising revenues it received over the period
of the first three years; the City would also re-
pay whatever actual interest was incurred by the
Dolphins in providing the front end money; if the
City wished to increase its revenues in the early
years, it could elect to repay its share of the
investment over a seven year period.
. Operation of Scoreboard: The scoreboard would be
operated exclusively by City personnel, and the
City would be reimbursed for all of its operating
costs, including wages and maintenance costs.
Sale of Advertising: The Dolphins would be respon-
sible for selling all advertising required to
support the scoreboard, and would receive the normal
15% commission on sales; the City would have a right
to approve all advertising contracts, advertising
rates, and advertising content.
Title to Improvements: The Dolphins would retain
title to the scoreboard system until the City amor-
tized its share of the costs, or until such time as
the agreement is terminated through action of the
Dolphins.
Page 2 of 3
NOV 1
Mayor and Meimbers of
the City Commissioh
E
The recommendations of the Advisory Committee represent a sighifieant
improVement in terms for the City in the case of the sale of beer,
since the City'' percentage of gross during the last six years of the
agreement would move from the previously discussed 30.5% up to 35% of
M gross beer sales. In the case of food, the recommendation represents
a modest increase up to 31% of gross during the period of the conces-
sion agreement extension. Mr. Wolfson, as Chairman of the Committee,
ii emphasized to the City Commission the belief of his committee that the
II proposed agreement was fair to all parties, and particularly emphasized
that based on their review of other agreements in the National Football
League, a review which was made possible with the assistance of Mr.
Bill Goldrich of Touche Ross & Company, that the overall package being
recommended to the City was fair to all concerned.
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SALIENT POINTS OF BEER SALES AMEND1,ENT AND
EXTENSION OF CONCESSION AGREEMENT
11 *AM: From present until July 1 1980, Ektehsioh o a§fdeffieht
to run to July 1, 1987.
tlFECT: Alters present concession agreement to permit sale of beer
(in paper cups, and not to high sclybols ot rock concerts).
3. CO85 or IMPLEMENTATION: Dolphins pay all costs of implementation -
estimated at $330,000 for pump system,
refrigerators, and all other fixtures and
equipment,
4 ;NSTALLATION TIME: About six to eight weeks.
CITY INVESTMENT AND REPAYMENT: Permanent improvements to Orange Bowl
represent about $210,000 of the
$330,000 investment. City to retaT.
that over 7 years from City's(30.5%
of concession gross revenue. City al::
repays interest cost on its portion of
investment in same fashion.
nVtNUtSt City's revenues in first year estimated at about $200,000.
After the third year, this increases to about $250,000.
7. TITLE: Dolphins retain title to all equipment fixtures until either
cost is amortized or agreement is terminated.
e./
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�.t�t Lt :3� TII;� NTE:,.t IGNS ft86A C►b d
i f�•a�t►�'��a.y� Gr t��i�s,.,�o I.+..�.�ilv..�
bVLLa�-.t,, P �L v:1 OF 1ay`iV lta .u•1al .
AND CO3T1','
c i
♦W �^� �7 R c
ALD8 AT
a,t1l.i Vu TO
'ME 011.1.�CL BOWL
1cla,
2 bCLZ:ii> S -
Annual
$210,000
$120,000
$330,030
-011:1� O`.1 O�-."�tj'.3t1C1 ar'.d CcstS=
• Gross revenue
ounce cups of
beer
of S03,000 fourteen
at $1.00 per cup
• Les--;
- 1/7 of City investment
Less - 1/7 of Dolphins investment
Revenue after
investment recovery
e53 - due to City under concession
agreement (reductf On for interest
recuire.:,e:.t r o t included)
.Less - cost of beer for 300,000 cups
Les3 - cost of sales of 300,000 cups.
at 15% of gross revenue
Less - cost of corporate overhead pp
4
at 6% of gross revenue ;._
,000
Net to concessionaire: -k'2 j...jr .°; .f $154,068
- $800,000
— 30,000
17,143
- $752,857
22'9,621
231,168
120,000
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41 it
$At,I,EtJT
POINTS Of SCOREBOARD r1GREE:• „ JT
14 TWO years, through and including the 1986 Eo 3thdi1 stdsotlx
2. Gu5!T: Scoreboard cost is about $360,000.
3. INSTALLATION TIME: About 6 months from date (50)conttact.
4. INVESTMENT: Dolphins make entire initial $360,000 investments
City
repays its one-half share ($180,000) from adVertisinst
revenues, over seven years. City repays
intere
on its share of Dolphin investment over same seven years.
5. REVENUES: City
and Dolphins share net revenue from advertising 50-50
after deduction of sales and operating costs. (See attached
6. OPERATIONS: City personnel operate board, and City may use message lin•
for public service announcements. City is reimbursed all
operating costs.
7. SALES COMMISSIONS: Dolphins sell advertising -and receive 15% sales
commission.
8. ADVERTISING: City must approve advertising contract forms. Yates and
content.
9. TITLE: Dolphins retain title to system until cost is amortized.
se
ar
10. TER:dINATIO?I: caseainsrentalDolphins
Agreement. scoreboardebecomes1Cityon
cllauuse in
property if Dolphins move.
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Ca tx"µµt.y ya i:a= {�,a_i•��++T^ i 4.“," aa iiusa A�`-0
SOMLLI'tl Y3LiY1ti l.Atl t�aitlf+fJfi:1 OL a.►vas''t fli`t1tlwa
0
t►i
coot to City $$170, 935
�. Dolphins.. i70 935
LJa I,V iJ �: to G171 ►7.11aiS �' t
'yotal cost of system
y •(i'iii 1: vf:'1 •��+ :\I.iY ice,: 1iu 7� 1�'tiw 1. ri'1^T
lia Y i�+itJitu :-r 1 t" .0 O.
A. Anticipated gross annual reVenue from
t".:dvel:tising
15 fee to Dolphins zor acVe:'t . sia
sales commission
aat?ss - estimated :.Merest on investment
L
made by Dolphins on behalf of City
-tin ticipated annual net revenue from
advertising
Less - estimated operating cost
Not revenue for distribution
• Net annual revenue to
▪ Not annual revenue to Dolphins
City repayment to Dolphins for investment
(over 7 years)
Net/net to City - first 7,years.
V
18,.000
$118,000
6,000
$112,000
$ 56,000
$ 56,000
Oct 2r 24, 1978
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blot doe:
Attached please find copy of cltedk oh various bowls and What
they pay, You may not want to show this to p.iblicz Use ycut
best judgment.
doe Robbie wants to make sure that this offer is turned down
by the Commission, that it's withdrawn in its entirety and
any negotiations would go back to his original concession
contract with no obligation for him to build a scoreboard,
install the beer equipment, etc.
I'm convinced that if the City doesn't accept this, we have
no deal for either beer a scoreboard. To me it would
mean a great loss of revenue to the City and very unfortunate.
I feel very strongly that the City should not have personal
opinion or prejudice deprive the public of the beer and the
scoreboard; and also the City and the General Revenue Fund
of the income that they will lose over the next few years.
Respectfully submitted,
Mitchell Wolfson
. S. Phone me if you want me to come back tb';
I don't want to come. ..I'd rather not, but 'Wi;j.
anything can be accomplished.
MW
pity Commission.
bp if you think
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SEATING CMCITY
LENGTH OF LEASEI'--:,
OWNER OF FACILITY,.
RENTAL - BASIC
_ .
PARIING
SCOREBOARD (ADVERTISING)
TO AUTHORITY
OTHER
Stadium
111
Authority
15% of Gross
Receipts* team
limited to 2700
free
Opening costs
paid by
team
Stadium Authority
On a sliding scale
down to 10% at
65,000
If attendance
over 65,000, team
'gets all receipts
over 65,000
No opening costs
to team
25% of gross. See
parking receipts Concessions
after deducting
$1.50/car
$4.50/bus
50% of gross
revenues
N/A
. .
Team pays $25M/
year to Authority
All revenues stay
with the team
Team pays $250M
for lounge boxes
and retains any
revenues
I
TEAM #3
65,000
30 years
Stadium Authority
$1.50/ticket
surcharge until
bonds arc repaid
7% of gross
receipts
Minimum:
$504,000
opening costs
paid by team
See
Concessions
N/A
Team rents
30,000 sq. ft.
and 100 parking
spaces for
$144,000/year
11
TEA #4
76,00G
1111111111
1111
10, years -with
options
Stadium Authority
10% of gross
receipts
Guarantee:
$25,000/game
Opening costs
paid by team
See
Concessions
N/lt
Team rents
2,000 sq..
$6.50/sq—ft,
N/A NOT AVAILABLE
* ALL GROSS RECEIPTS ARE NET OF LOCAL TAXES
**
PFCFTPTS THcinpE TrCrrT!1,
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1111
111111
1111111111111111111111111
TEAM #5
83,000-
20, years
Stadium Authority -
Team is sole lessee
Initial rent of
$510,833 pIus:
Gross
Receipts* Rental
(in Sur -
millions) Charge
$5 - 7.5 64 over $5.
Over $7.5 over $7.5
All operating costs
are paid by the
team
See
Concessions
Owned by the team
who receives al/
revenues
Nix
CoNcr:',STOT:.
111111111111111111111
TEAM #6
69,rooa
10 years, Iiittle'••
options
Stadium Authority
10% of gross,
receipts
No- guarantee'
All monies to 1
stadium auithorit
Stadium Authority
owns the score-
board and,
receives all
revenues
Team put in.
training facility
and dressingt
room at team's
expense
411
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CONCESSIONS:
STATUS OF
CONC1SSIONAIRE
INVESTOR IN
EQUIPMENT
PROVIDER OF
UTILITIES --
AMOUNTS RECEIVED
BY AUTIHORITY
AMOUNTS RECEIVED BY
THE TEAM
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TEAM #3 TEAM #4
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TEAM #5 TEAlt #&
-Independent Party .Independent Party Independent Party Independent Party Independent Party Independent
but subcontracted Party
with the team
Concessionaire, Concessionaire:- -Concessionaires =
however, Authority
has the Option to
buy the equipment -
after five years
and lease back for
TA of gross
receipts
Stadium provides N/A. Stadium provides
space, heat and space, heat &
light. Concession- light.
aire supplies other Concessionaire
utilities supplies other
utilities
S 10% of gum,
cigarettes
25X of all else
gross receipts
R 25% of beer, fast
foods - gross receipts
SC 10-1/2% of food
32-1/2% of alcoholic bev.
gross receipts
Programs/yearbooks - 50%
If revenues to the
Authority are over
a set minimum.
Then concession
revenue over Lhe
minimum is split
50/50. This is
net revenues from
concessionaires;
:after deducting
costs of operations
1
411
5-22% of gross receipts
Also receives $3/car
and $15/bus
Team receives no Team receives not
percentage percentage of
of concession or parking as
parking revenues concession
income
N/A NOT AVAILABLE
* Ar,1, nr.O: iw(•1.rt .
Concessionaire
See 'basic rental
agreement -
NO, furid'si- are=
received bir L$
teams
11111111111 I I I I I II I I I III I I II II I I I I I I I I I I I 1 IIIII I I I II I I I I I I II I II■I■I■IIIIiII ii D i i ii iu m i
SALIENT POINTS OF SCOREBOARD AGREEMENT
i, TOM! 74 dears, through and including the 1986 football tedsbi►r
2, CO8t: Scoreboard cost is about $360,000.
3, INSTALLATION TIt4E: About 6 months from date of,contract.
4. INVESTMENT: Dolphins make entire initial $360,000 investment. City
repays its one-half share ($180,000) from advertising revenues
over three years. City also repays interest on its share of
Dolphin investment over same three years.
5. REVENUES: City and Dolphins share net revenue from advertising 50-50
after deduction of sales and operating costs. (See attached).
6, OPERATIONS: City personnel operate board, and City may use message line
for public service announcements. City is reimbursed all
operating costs.
7. SALES COMMISSION: Dolphins sell advertising and receive 15% sales
commission.
8. ADVERTISING: City must approve advertising contract forms, rates and
content.
9. TITLE: Dolphins retain title to system until cost is amortized.
10. TERMI:NATION: Terminates if Dolphins exercise three-year terminationty
clause in rental Agreement. Scoreboard becomes City p
if Dolphins move.
a
XIII3IT A
OrA L,u r :N:,.ICIAL t1NHl. c
Of' A SC.ALZD DOWN O ' G:: a04'u
ram^`t
SCORn3OA 2D 5 �,•u..:►.I
Lei L`Ii) i•
A. CO.Nit to City "` $179,035
u.
CO:,t to Dolphins- $17', J35
.otal cost of systean
11. ' ANNUAL SYSTEY. REVENUE
TECTION
Anticipated gross annual reVenUe from
advertising -.
Less - 15 fee to Dolphins .!.or advertising
sales commission
Less - estimated interest on investment
by Dolphins M behalf of City made � i:.s o.. .
Anticipated annual net revenue from
advertising `;`
Less - estimated operating cost 6,0000
$112 , 000
F. Net revenue for distribution
G. tip.. t _ annual ..,...eal revenue to City
H. to Dolphins
Net annual revenue ,.�
I. City repayment to Dolphins for investment
(over 7 years)
. Net/net to City - first 7 years
$ 56,CCO
$ 56,000
$ 22,857
33,143
/ft JIM
SALIENT POINTS OF SEER SALES AMENDMENT AND
EXTENSION ,OF CONCESSION AGREEMENT
From present until July 1, 1980. Extehsioh of AlfddMtht
to run to July 1, 1987.
2, 'F CT: Alters present concession agreement to Pettit sale Of
beer (in paper cups, and not to high school or rock concerts).
3, COST OF It•MPLEMENTATION: Dolphins pay all costs of implementation -
estimated at $330,000 for pump system, refrigerators, and all
other fixtures and equipment.
4. INSTALLATION TIME: About six to eight weeks.
5. CITY INVESTMENT AND REPAYMENT: Permanent improvements to Orange
Bowl represent about $210,000 of the $330,000 investment.
City to repay that over three years from City's 32% of beer
sales revenue. City to receive 350 of beer sales revenue
from extension of present concession contract which expires
in 1980. City also repays interest cost on its portion of
investment in same fashion.
6.,_REVENUES: City's revenues in first year estimated at about $85,000.
After the third year, this increases to about $250,000.
7, TITLE: Dolphins retain title to all equipment fixtures until either
cost is amortized or agreement is terminated.
EMI , 1u11.1■uuiiui.■'•'
Iu�ti�ttt
:S
INTtNTIONG RDOA tbI: li
{�r}�tAND COBS
tOLM mow 0 AMORTIZATION
RELATIVE TO avizNuz FROM DEER SALD3 V
THE 0131% ol: 3......,
Oftt of:r.',0rovencnt Alterations, , and tc4Uintent t
1.
2. OCLPHINS -
OT.\L
ide
$210,000
$120--- 0 0
$330,000
Dollar Flow of t:-:.ort: ation and Costs
Goss revenue from sale
of S00,000 fourteen
ounce cups of .~jeer at $1.00 per cup
of City y investment
Less - 1/7 of Dolphins investment
Revenue after investment recovery
Less - 30.5 % due to City under concession
agreement (reduction for interest
requirement not included)
Less - cost of beer for 300,000 cups
- cost of sales of 800,000 cups
at 15% of gross revenue
ss - cost of corporate overhead
at 6% of gross revenue
Net to concessionaire
,00,000
30,000
17,143
$752,857
$154,068
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5AtItNt $OItJ'5N,,OF „CONCESSION AGPEEMEIV
Pfesent contract with Restaurant Associates assufned by
boiphins continue at the rate of 30.5% on gross of ail
concessions fotraCtab�tlteYmsrs. incre,aseconcession
of gross
as present con
sales.
MI?CHELL WOLF SON
PRESIDENT
1
OMETCO ENTERPRISES, INC.
306 NORTH MIAMI AVENUE MIAMI. FLORIDA 3312E + (305) 374.6262
October 20, 1978
Gentlemen:
Attached please find copy of minutes and pertinent material on
the meeting held by 'die Special Citizens Committee with Miami
Mayor Maurice Ferre and City Manager Joe Grassie, on October
19th.
This will give you some background information for our meeting
on Tuesday morning at 10 o'clock, October 24th, in the Wometco
Board Room.
After the meeting... at 12 noon, we will have lunch with Joe Robbie
of the Dolphins. llopefully we can come to some agreement
and submit our recommendation to the Miami City Commission
that afternoon at their regular scheduled meeting.
cc: Mayor Maurice Ferre
City Manager Joe Grassie
Respgctfully submitted,
G
tchell Wolfsd'n
Chairman
ElImII.IuII
:MINUTES OF SPECIAL CITIZEt1S COMMITTEE MEETING WITH
MIAMI MAYOR MAURICE FERRE AND CITY MANAGER JOE CRASSIE
October 19, 1978
Mayor Maurice Ferre addressed the members of the
Citizens Committee and news reporters gathered in the Conferefee
Room of the Executive Offices of Wometco Enterprises, Inc.,
306 North Miami Avenue, Miami, Florida:
"Ladies and gentlemen: We are here because hopefully
this Committee will be able to assist the City of Miami over-
come what seems to be a stumbling block at this point between
the Miami Dolphins and the City of Miami on how to have beer
served at the Orange Bowl. Members of the press, this is going
to be a working committee, and we would appreciate no interruptions."
The Mayor then introduced the members of the Citizens
Committee:
Mitchell Wolfson, Chairman of the Board of Wometco
Enterprises, Inc.
Jean Bellamy, President of the Miami Chamber of Commerce
and member of the Board of Directors of Sun Bank of Miami.
Mr. Garth C. Reeves, Sr., editor and publisher of The
Miami Times.
Mr. Bill Rubin, Chairman of the Board of Jordan Marsh
.and Mr. Stewart Thomas, President of Sears Roebuck, Miami and
Mr. Carlos Arboleya, President of Barnett Bank had previous
commitments that precluded them from being here today.
•aii plea§ed to also introduce Mt: bill doldridh
td'Mr� Michael Brown from Touche Ross & Co., certified publih
accountants, who will be assisting us in this matter.
Hopefully, the Committee will be taking the information
fromm our City Manager and other constituents to see what other
dities are doing in the U.S. - hopefully the outcome will be
after we are finished deliberating, you (Colonel Wolfson and
the rest of the Citizens Committee) can speak with Joe Robbie,
who will be back from Montana on Friday. You (Colonel Wolfson)
and Mr. Reeves could speak with Mr. Robbie and the City Manager.
Where we are at is this: The Manager has met with
Mr. Robbie and came up with a proposal that was acceptable to
the Commission. Then he (Joe Grassie) went back to Mr. Robbie
with a second proposal that was defeated 4 to 1. Mr. Robbie
has held fairly fast to certain proposals which the Manager can
elaborate on. Two weeks ago I spoke with Mr. Robbie with a
feeling we could arrive at negotiating two things: The Commission
had to have confidence that what Mr. Robbie, the Manager and
myself were proposing was being "fair". The definition of what
is fair must take into account lot of things:
1. Who has the concession?
2. Is there a difference between food azd drink con-
cession?
What kind of rental deal does the home team have?
'/•
h
t kited of fihahces does the :ty i
IS there any tax concession?
:Ail these things have to be fair,
Mt, Robbie's contract for the concession is
dice ih
h He also had an extension for the contract for the stadium
that comes due in 1987. One other consideration is he wants to
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be considered by the City for an extension for the concession
to 1987. The concession contract was originally negotiated
by a previous Commission and Mel Reese. At that time Mr. Robbie
had bid 32%. The successor recipient of the award was Restaurant
Associates, that bid 30.5%. I don't know what the other circum-
stances were - why they received the award, there must have
been other reasons. That was in 1972. A four-year contract
with a four-year extension. Prior to the extension, April of
1976, the Dolphins purchased Restaurant Associates' concession
contract. The wording says before 1980, the assignee has the
right to re -negotiate - they have first call - but not an
exclusive. Isere is where we are at: Mr. Robbie took the City
of Miami to Court - is that correct? I mean very recently.
JOE GRASSIE: Let me lay the groundwork. The first
time the City was in Court with the Dolphins the City determined
they were going to grant the concession without going to bid.
Robbie lost. The City retains the right to award without bids.
Previous to today, the concessions pertained only to food.
MAN htLLJMS : Why 'could the ity Bong dd tO
11:t e City did not accept bids?
Jot GRASSIE: It was challenged and the City retained
"he right through Court decision.
MAYOR FERRE: Let us understand this. The roles have
reVersed. Robbie retained Dan Pay. Restaurant Associates had
Marion Sibley and the Court ruled in favor of the City, and the
Dolphinsbought the contract. Now - in addition to that we
recently went to Court with Judge Ferguson, which we lost.
JOE GRASSIE: That pertained to the City Attorney -_
bu Want to get into that?
MAYOR FERRE: I think it is important.
JOE GRASSIE: Four items are in front of us, first the
ease on the stadium itself.
MAYOR FERRE: That is not to be discussed today.
JOE GRASSIE: If concessions are to be granted after
.;.,'1980, the Dolphins have the right to negotiate.
Secondly, concessions for food, extension and modification
on Other tetras that Were ihdtuded ih the•Cohdessiohs in
addition to that, we have a concession agreement which covets
EE food, the desire on the part of the Dolphins to cover beer,
and fourth, a potential agreement on the scoreboard. We have
a disagreement with the Dolphins on whether or not the City
could go unilaterally on the scoreboard. The people who
advertise on the scoreboard want to have what is advertised
served in the Stadium. Those that have a concession have
leverage on the scoreboard - they are affecting each other.
COLONEL WOLFSON: Do you intend to have someone build
MAYOR FERRE: Other peripheral issues are not important.
is concentrate on the concession.
COLONEL WOLFSON: We want to know about the scoreboard
so we will have background information.
MAYOR FERRE: If he opens up the scoreboard issue, the
'next thing you will be involved in is the stadium - whether to
:have a new one, etc.
COLONEL WOLFSON: We aren't
t involved
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tt tt: Lets stick t6 the 66hdetti6h,
COLONEL WOLFSON: We won't solve the food and beef
eoleession with the contracts - which relate to the scoreboard,
boes the City own the Scoreboard?
MAYOR FERRE: It is a bad scoreboard. We could actually
hide the board by advertising. Paul Andrews tried to achieve
that, Joe Robbie stopped it because we can't advertise something
We can't sell.
MITCHELL WOLFSON: If he is permitting someone the right
to build a scoreboard - Coca-Cola, for example, then it might
solve the issue.
MAYOR FERRE: That would be wonderful. If We could
solve that.
GARTH REEVES, SR: Why do we have to have a revenue
producing scoreboard?
MAYOR FERRE: The City of Miami doesn't have the revenue
to pay for a two million dollar scoreboard - Paul Andrews had
a contract for that and Joe Robbie stopped that.
OLONEL WOI,ESON: What you would like) Afid I AM ttite
iti2ens of the community would like, is to .have a piety
fiic scoreboard without costing the City.
MAYOR FERRE: Absolutely.
JOE GRASSIE: We have again during the last two months
b6en in Court with the Dolphins. It is the opinion of the City
Attorney that we could not, or did not have to give the beer
contract exclusively to the Dolphins.
MAYOR FERRE: After in good faith we negotiated it we
id. They turned it down and we put it out for bids. The
bolphins took us to Court and Judge Ferguson ruled that they
had a right to sell beer. That left us with a hiatus. The
City can't sell beer without Robbie's consent, and Robbie
can't sell beer without permission from the Commission.
COLONEL WOLFSON: Does the City have the equipment to
erve beer?
MAYOR FERRE: We can get the beer to the stadium with
pipe. We met with three national wholesalers in the Country.
It was their opinion that the only way to get the beer adequately
distributed is with a pipe system - which would cost $330,000
to install. The initial decision that the City had with the
■
b iphihs was that ahythirig that was a perinaheht iMproVemeit
to the stadium would be paid for by the City, temporary improve
riients would be paid for by the Dolphins. $210,000 permanent
improvements in the course of the implementation would be paid
for by the City, Joe Robbie would pay the $120,000 movable
improvements.
MAYOR FERRE: Was that the first or second proposal?
aot GRASSIE: The second.
MAYOR FERRE: Subsequently it was agreed to that the
``bolphins would pay the full installation and we would charge
$1.25 for beer, which is not unheard of in the industry with
the definition that that would be used to advertise.
COLONEL WOLFSON: The Dolphins would lay out the money?
MAYOR FERRE: That was one of the basic conditions
:that J.R. Plummer set - that the City would not lay out any
money.
Now that we are half -way through the season, Joe Robbie
says we can get this piping system this season - but if we were
to grant the extension of the contract... The new concessionaire
would pick up four -fifth's of the cost and Robbie one -fifth.
That was one consideration.
I■ii ilia iii 11
•
GOLOtitt WOEF'SOM: What is the percentage that the
h6dSSibh pay for food: 315. S% = is that on everythincg?
O SSIE: Everything. It excludes Pro Magatine*
FERRE: Plummer came up with an item in Tampa =
they pay 410. Why would Robbie get 30.5%? What is really a
fair figure? Robbie says Yes, but you are letting the Miami
Orioles have the baseball stadium for 3 %. I don't think
it is a valid comparison. We are looking for Colonel Wolfson
to advise what 'is a fair figure.
BELLAMY: Is the 30.5% net or sales tax? After
sales tax do they give the City 30.5%?
want?
GRASSIE:. Correct.
COLONEL WOLFSON:
he permitted to charge whatever
GrASSIE: That is correct.
FERRE: Let's talk about possible solutions then. Some
the potential answers are if we extend this to 1986, perhaps
we can
determine
the difference between the food and beer concession.
The question of how much the City would put forward, if anything,
cash -flow wise, is something that would also be settled if we have
a longer period of time. I imagine Robbie would be more willing to
9.
i 11111111111111111111111100mENN
a 11 it he had a .bngetiter !1yt iing. e1te?
COLONEL WOLFSON: Perhaps one of the gentlemen from
Touche Ross has something to offer. How much did they charge
at the Dodger Stadium? I'll bet they made a fortune!
GOLDRICH: There is no standard. Contractual arrangements
go from one extreme to the other. Rental payments, how they
cofipare with others - there are professional teams that get
nothing of the concessions - they all stand on their own.
can use some as a guide.
COLONEL WOLFSON: Do you know what they charge i
Tampa for concessions?
We
GRASSIE The highest listing we have is the one the
Mayor mentioned. There are others between the range of 10%
to 45% in our file - anything you want - the average is 29-30%
for all stadiums that would report figures. There are many
stadiums that did not want to divulge that information.
COLONEL WOLFSON: We have vending companies all over
the. U.S., the Caribbean and what usually happens is we pay a
higher percentage on soft drinks than on food. You are exactly
right every time we bid there is a different situation, depending
Nommosommumn.
iiiilitiiiiiiiiiiiii iiiiiii ii 1 ' . • - 1111E11 1111111101111111111111111illiniflIo
441 it they want self,,setvice of vending machines, it is A
eottpticated bidding situation based on many factotss
(IOLbRIclit Who makes the investment? That is
sideredL
be
COLONEL WOLFSON: One of the things we could persuade
Robbie to do is this: If we could get a beer Company, as
Coca-Cola or Pepsi, to pay to sell their product at Disney
World (they both - Coca-Cola and Pepsi - paid very much to
sell there) - •I wonder if we could get one of the beer companies,
if Robbie would agree, to get a beer company to install the
piping for the length of the lease? Perhaps we could get a
beer company to make the payment for Robbie and the City
wouldn't have to pay any money.
GRASSIE: It is a good idea, but it is against the
1aW because it is a restrain of competition. What the beer
companies can do is very restrained. They can bring the beer
to the stadium, but not distribute it.
They can't provide you
with personnel or anything to promote their product.
BELLAMY: Can they advertise on the scoreboari
II11u11I.11IIIIIIIIIIIIIIIIiIIIIIIIIIIIIIIIIIIIIIIIIIIIIII1•••••• Nun
I2ASSt1t Yet, the tie=up is whoeVef days for adVeftising
Wahts to know that whoever has the cdndessibh will se11 their
product.
6
COLONEL WOLFSON: That is something We have to deiihefate
MAYOR FERRE: Each one of these things is a function
of`'the other, I would categorize the Commission in this way.
Rose Gordon is against beer in the Orange Bowl. That is one
extreme. I arnat the other extreme. Three of the members of
the Commission are in the middle. Plummer doesn't want to spend
money. If it is a fair deal - it all comes back to this: If we
can get a fair deal, the majority of the Commission would vote
for this.
COLONEL WOLFSON: What was the members final recommendation
that the Commission turned down?
GRASSIE: The first recommendation I made, Robbie
agreeable to, but there were five votes against him.
MAYOR FERRE: I did not vote in favor of that recommendation
because at that time I was not in favor of an extension until 1987.
III11■IIIIIII■IIIIIIIIIIIm
dfi7g5IEt The second remained the same but eliMihatecl
It involved the terms for a scoreboard:
th concession extension
1. Installation of scoreboard: we are talking about
A board which would not be as expensive as we would like
$36Or000.
2. Fifty-fifty: Each party would be responsible
for about half the money.
3. Dolphis would borrow money to put up the half
of the City and the City would repay it out of earnings from
the scoreboard:
4. They would handle advertising and get 15% as other
agencies get - the City would maintain and operate the board
and get repaid from the board.
5. Then 15t for agency commission, maintenance and
operation costs would be deducted before the Dolphins and the
City would share the rest of the money. The City would have
to have to pay interest on money borrowed, of course, but the
rest would be fifty-fifty.
Next - Concessions: The existing concession agreement
would terminate in 1980.
The Dolphins would front money for a $330,000 pumping
system for beer and the City would repay its portion for putting
in the system from its earnings of the 30.5% which comes off
the top, plus interest.
OOLONtt t alPg t . • the City taoh't qet ahythihc for a
period of years.
G J SSIE: If you a iortited it for three years, the City
wouldn't get money, but if it Went for a longer time, the City
would get money.
'ERRS: If it Were amortized for five years, then Robbie
Voltid,.pay two -fifth's and the next concessionaire three -fifth's.
GRASSIE: The Dolphins agreed to an amortization pick-up
future concessionaire. They agreed to all of the terms
eXCept our proposal without an extension of the concession contract.
FERRE: Which brings us here. What you are saying is
instead of waiting until 1980, you want to re -open negotiations
now.
BELLA►Y : Was the second proposal formulated after the
ruling in the Circuit Court? Would it be possible for us to have
copies of the documents in this case?
GRASSIE: I have some copies here. (Mr. Grassie,
distributed the attached outlines and financial analysis).
' OR PE;RRE: it would be addisable tO haVe AA itt
'salieht points of the beet sales agreement.
JOE GRASSIE: This document was not prepared for
There is one portion - I was trying to deterrihe
what would happen if we stretched the pay-off for the next
seven years - the figures you have are based on seven years,
you can modify it back to three years.
thiS Meeting.
COLONEL WOLFSON: I think this - should we try to
take a decision - the three of us at this time or should we
try to get the other members to go over this? The Mayor said
time is of the essence. It might be embarrassing for just
us three to decide.
MAYOR FERRE: You are an advisory committee to me.
The next Commission meeting is on Tuesday, the 24th. I have
to be in Paris at the UNESCO meeting. I am leaving this
weekend.
JEAN B ELLAMY: What is' Commissioner Rebozo's position?
MAYOR FERRE: He has an open mind, but wants to know
s fair. That is the crux of the matter. I really. thin
Safi deliberate and dome up with a conCiusioh, theaflagef
tAh relay the feeling. It is important because if we Mode We
dah get beer at the last three games,
COLONEL WOLFSON: Mr. ReeVes, you must be at the
meeting. Can we get together with the other members when the
Mayor is not available? We can try to have the committee
together on Friday?
MAYOP, FERRE: I alit afraid youshould not Wait for me
get back.
COLONEL WOLFSON: Would it be practical to go ahead
with the Commission without Robbie?
GARTH REEVES: It wouldn't be fair.
MAYOR FERRE: I feel this is a very sterling committee,
is well-balanced, representing good business people of the
community and that the Commission would accept your proposals.
Let's be very specific. Rose Gordon is against it because
she is against beer. If I am absent, you have to have the
other three votes. �;a
111111111111111111111111111111111111iimmilm
111111111111111111111111111111iimmiil IIIIIIIIIIIIII1111o1
dOLO►VEL WOLFSON: Whefi will the other nembers be back?
MAYOR FFRRE: Tuesday morning,
COLONEL WOLFSON: Why don't we try to meet Tuesday
,mOrrang, if that's agreeable to you all. Tuesday morning at
'10:00 a.m. here. I think it would be necessary for Joe or you
to be here.
MAYOR FERRE: t would want you to,'g _6. ti 'CiS'�ic i f , on
BELLAMY: 8y that time you could get in touch with Joe
16bbie and see what he has in mind.
COLONEL WOLFSON: I think we should come up with what
We think is right - the speak with Mr. Robie and then go to
the Commission and let them know we have come up with something
Robbie has agreed to.
MAYOR FERRE: I am sure the Commission would be available,
because this so important.
BELLAMY: Are you saying we can get a..$300,00
installation done in six weeks?
MAYOR ttftiltf ih time tOk the Jett thtee games and
COLONEL WOLFSON: Can the City Commission do what
they do in Congress - turn the time back on the meeting?
That way we can speak with the Committee and Mr. Goldrich,
who says he can contribute a great deal, speak with Mr. Robbie
it the afternoon and go to the Commission on Wednesday.
At this point, the Citizens Committee with Mayor
Ferre adjourned, with the agreement to meet at the Conference
Roorn of the Executive Offices at Wometco Enterprises, Inc.
on Tuesday, October 24, 1978 at 10:00 a.m. Then we will
have lunch on Tuesday at 12 noon with Mr. Robbie. Later in
the afternoon the Citizens Committee will report to the Miami
City Commission.
Mayor Ferre was interviewed by waiting news reporters
and departed.
1111■■111■1■I■■11111111IIIIu1iiiuiuiiiui
.
ttut I iii ,,11H )Li.ii'1ii�
'8 SEP 5 p14 IZ t
MIAMI DOLP}TINS, 1,1'D. , a Florida
limited partnership, and JOSEPI1
ROBBIE .and SOUTH FLORIDA SPORTS
CORP„ As General Partners of
MIAMI DOLPHINS, L'1D. ,
Plaintiffs,
vs.
T} r rTTV ar -%,11 %'•tT I a mun ei
corporation,
Defendant.
IN THE CIRCUIT COURT OF '1 }IE
JUDICTAI. CIRCUIT 1N AND FOR WDE
COUNTY) FLORIDA
GENERAL JIJRRISDICTION DIVISION
CASE NO. 78-14419 ( )
SERVED)
l 1te .,„, C•SQ '
1 • -i -,
1'l11tDt,
;,at13 Coo iy, FI:r i$
Oy.._ �ll� 13.
amity
TEiPORAR? INJUNCTION
-3 Svc' /`' /7/40-•+ i-i c
1,'.+r. /
i/4.//) .rne
6
This matter came on for herring on Plaintiffs'
application for Temporary Injunction. The Court has reviewed the
verified Complaint and ENhi.bits filed herein and has heard the
testimony presented and argument of counsel for both parties. It
appears to the Court the i!r.mediate issuance of a Temporary
Injunction
is necessary in that:
Plaintiffs have demonstrated they will
rrcparable harm and damage if the Defendant:
(i) accepts bids for a separate
beer or other alcoholic beverage concession
at the Orange Bowl Stadium; and
(ii) makes an award of a beer or other
:alcoholic beverage concesion at the Orange
Bowl Stadium to any person other than Plaintiff.
Plaintiffs have no adequate remedy at law.
Plaintiffs fs have
by the ter':us of the Concession Agreement (Exhibit A to
Complaint filed herein) now in force between the parties
Plaintiffs have demonstrated probable success in proving
demonstrated Defendants are
upon final he•1ring a contr:r►-tur•1l right under such C►.n-
cession ,'tgi»anent to operate an exclusive concession for the
sale of "food, beverages, novelties,
5ob . Stadil ►n,
and tobacco" in the
City
Du
•
' tit
Dx The entry of this Temporary injunction is the
tie interest,
IT 15 '11)E•:REPotiE ORDERED 'THAT!
Pending final hearing
e;tuse, Defendant
of �Ei��rfii, its Commissioners, agent:S .'�%d ,�11 persons
in dontert with them are hereby enjoined and restrained from.
A. Accepting bids for a beer or other alcholic
beverage concession in the Orange Bowl Stadium, and
B. Making an award of a beer or other alcoholic
upon
beverage concession at the Orange Bowl Stadium to any person
other than Plaintiffs.
2. This Temporary Injunction is effective immediately
Plaintiff's posting with the Clerk a surety bond in the
amount of $f2-1 G- • ro conditioned upon this Temporary
Injunction being properly issued and upon service on Defendant.
3. A copy of this Temporary Injunction shall be
served by Dade County Sheriff E. Wilson Purdy and his respective
deputies upon Defendant City of Miami, City Manager, Joseph R.
Grissie and Joseph R. Grassie is directed to inform all of De-
fend:Ints, Commissioners, agents and persons'acting in concert
•
with them 'whom shall be bond by this 'ro]mporary Injunction of its
entry.
Florida,
r y: 1Z.� \Ci 1 .U-; Otte 0
• * l F:,:. << n prid :end u11I ir1 , This ay of
�: � ---, A. •u. 1�.
•..�,ff��: n�_:� II;C iA�D P. CR 1:.[R
I
r.4' ••.•• ►'t tF� %
.7fy, F1c►�y
:.• C 1. r j ••._ +Ci;ECY CERTIFY thit the foregoing is a true and
C • l i r h ri�inai nn ft,e in this oftrca
DONE and ORDERED in Chambers, Miami, Dade
this L"iay of September, 1978.
STATE OF FLORIDA
COUNTY OF DADE )
1RCU1T JUDGE
tv . t .
-2-
County Courts
De "uty Clerk
u 11111111111EII■ni.m■
■
SALIENT POINTS OF SC0REF3I‘.RD AGR NT
_ At; It, years, through and including the 1986 feithaIl §bdSetl4
2. COSI': Scoreboard cost is about $360,000.
2, INSTALLATION TIME: About 6 months from date getcontraet.
4, INNVESTMENT: Dolphins make entire initial $360,000 investment.
City
repays its one-half share ($180,00 ) from
advertising
revenues, over seven years. City repays terest
on its share of Dolphin investment over same seven years.
5. REVENUES: City and Dolphins share net revenue from advertising 50-50
after deduction of sales and operating costs. (See attached
6. OPtRATI0NS: City personnel operate board, and City may use message lit;
for public service announcements. City is reimbursed all
operating costs.
/. SALES COMMISSIONS: Dolphins sell advertising and receive 15% sales
commission.
8. ADVERTISING: City must approve advertising contract forms, rates and
content.
9. TITLE: Dolphins retain title to system until cost is amortized.
10. TER.MINATION: Terminates if Dolphins exercise three-year termination
clause in rental Agreement. Scoreboard becomes City
property if Dolphins move.
•
11.11uu1■ENm■
t;{i InI c A
S"MPLIt VINA:`C`tt L ! t' i„SIS Or t.v5 tLLATItN
O1 A SCZ%i,::D DOWN O:i' GS BOWL
Al Gros., to City
04 Cot to Dolp :ins-
SCOREBO'1PD SYS;:.:.
$179,935
$1`]9,935
Total cost of systei:t
„r Ni . S TSB• MWEINJE PROJECTION
A. Anticipated gross annual revenue from
advertising
8. Lass - 15% fee to Dolphins for advertising
sales commission
Less - estimated interest on investment
mane by Dolphins on behalf of City
Anticipated annual net revenue from
advertising
E. Less - estimated operating cost
F. Net revenue for distribution
G. Net annual revenue to City
H. Net annual revenue to Dolphins
I. City repayment to Dolphins for investment
(over 7 years)
• Net/net to City - first 7 years'
160,000
24,000
,000
$118,000
6,000
$112,000
• $ 56,CCO
$ 56,000
$ 22,857
1
MM
mm
MM
mmm
MEM
MEM
SALIEt POINTS OF BEER SALES AMEOD ENT AND
EXTENSION OF CONCESSION AGREEMENT
'TERM: From present until July 1, 1980. EXtehtioit 6t A§ted ldht
to run to July 1, 1987.
< <' V V r
� `FECT: Alters present concession agreement to pertit sale of beer
(in paper cups► and not to high schools or rock concerts).
3. COST OF IMPLEMENTATION: Dolphins pay all costs of implementation -
estimated at $330,000 for pump system,
refrigerators, and all other fixtures and
equipment.
4. INSTALLATION TIME: About six to eight weeks.
5. CITY INVESTMENT AND REPAYMENT: Permanent improvements to Orange Bowl
represent about $210,000 of the
$330,000 investment. City to repay
that over 7 years from City's 30.5%
of concession gross revenue. City al
repays interest cost on its portion o
investment in same fashion.
b. REVENUES: City's revenues in first year estimated at about $200,000.
After the third year, this increases to about $250,000.
7. TITLE: Dolphins retain title to all equipment fixtures until either
cost is amortized or agreement is terminated.
111
in Ili 111uIIIIIIIIIIIIIIIIIIiIUuIIIUIIIII''Uuiuiiii■
rr
tMAMPLt OF PARTIES INTENTIONS 1 EGAZbtNC
DOLLAR FLOW G? AMORTIZATION AND COSTS
.RELATIVE TO ....:VzNuz FROM BEER SALES AT
THE ORANGE BOWL
Cott, of I;r.nrovcmcnt, Altcrutions, ardEcuipTrent
'•1. CIT - $210,000
2. DOLPHINS - $120,000
:OTAL - $330,000
..
I . Annual Dollar Flow of t_ .o:'tioation and Costs: sts
1. Gross revenue fromsaleof S00,000 fourteen
ounce cups of bear at $1.00 per cup
Less
Lass
- 1/7 Of
- 1/7 of
City investment t
Dolphins investment
Revenue after investment recovery
Less - 30.5% due to City under concession
agreement (reduction for interest
requirement not included)
Less - cost of beer for 800,000 cups
Less - cost of sales of 800,000 cups
at 15% of gross revenue
Less - cost of corporate overhead
at 6% of gross revenue
Net to concessionaire',
$800,000
30,000
17,143
.. $752,857
229.,621
201 1.68
$120,000
48,000
$154,068