Loading...
HomeMy WebLinkAboutExhibit-SUBCITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM TO: Mayor Manny Diaz DATE: City Commissioners SUBJECT: Ballpark Report FROM: Pedro G. Herne " P,E. REFERENCES: City Manager ENCLOSURES: March 8, 2007 A motion was passed at the March 8t"` Commission meeting that the location of the subiect stadium would not be "site specific". The City of Miami has been supportive of retaining the Florida Marlins baseball team in South Florida and, as such, has worked diligently over the last several years to assist in these efforts, including evaluation of various potential stadium sites within the city limits. The purpose of this memorandum is to provide an overview and status report on our latest efforts to build a new ballpark for the Florida Marlins. Significant progress has been made in determining the viability of a new ballpark in downtown Miami utilizing publicly owned land next to Police Headquarters and the Stephen P. Clark Government Center. In addition, the City of Miami, Miami -Dade County, Marlins and Major League Baseball (MLB) are working toward an agreement for future City and County Commission consideration that will include project costs, required funding and the roles of each project participant. BACKGROUND As stated, the City of Miami has been actively committed to the ballpark project for more than 4 years. During this time we have evaluated numerous sites throughout the city, including waterfront property on Biscayne Bay or the Miami River and sites near the Miami Arena and the Orange Bowl. Each of these sites presented various types of site complications, impacts to surrounding residential neighborhoods, involved costly assemblage of land or conflicted with existing land uses and higher priority city objectives. On November 21, 2006 Miami -Dade County released a Ballpark Project Update Report identifying a new potential site in which all parcels are publicly owned located directly south and east of Police Headquarters and north and west of the Stephen P. Clark Government Center. We have determined that the Government Center site currently holds the best opportunities to make this project a reality. GOVERNMENT CENTER SITE The general boundaries of the site are the Police Headquarters and State Division of Natural Resource buildings on the north, Government Center on the south and west, the Metrorail line on the east, and the Downtown Charter School and the Hickman Building on the west (see attached maps). The site is approximately nine acres and is 100% publicly owned, consisting of a small portion of one City parcel and portions of three County parcels. During our initial assessment of this location, we looked at the Government Center site attributes compared to criteria used to evaluate potential sites for the new Washington D.C. ballpark for the Washington Nationals. The D.C. site evaluation largely focused on elements that would provide for the Tong -term sustainability of a ballpark for the city and the franchise. Listed below is how the Government Center site compares to these criteria: 1. General Design Opportunities (site shape, potential ballpark orientation) ,(Rectangular site, small site, but sufficient size for development, northeast orientation, excellent views of downtown 2. Access (regional highway systems, public mass transit, Metro, commuter rail) ✓1-95 north -south, east -west connection from SR 836, 112 & 1-395, 1-195, main station for MetroRail & Metromover, adjacent to proposed Streetcar alignment 3. Parking (existing or developable) ✓Excellent existing public parking and opportunity for private parking development 4. Impact on Existing Communities (non -displacement of residents) "No residential impact or displacement 5. Parcel Availability (public vs. private ownership, number of owners) ✓All parcels publicly owned (county & city), no impact to tax roll 6. Site Issues (known environmental or soil conditions) ✓No known major issues, environmental studies required, good soil for development 7. Regulatory issues (local zoning or federal oversight) /County & City zoning regulations, traffic study & OR1 amendment required 8. Economic Development / Return on Investment Potential (public & private) V'Excellent development potential on abutting nearby private parcels; would provide anchor investment to spur other development 9. Cost (acquisition and construction) 1No land acquisition cost, no major demolition, good existing infrastructure The Government Center site clearly has positive attributes when evaluating it for the ballpark. From an accessibility standpoint, it is arguably the best site we have considered as it is directly next to the main transit station for MetroRail and Metromover, in very close proximity to the downtown bus terminal, adjacent to the proposed Streetcar alignment and has immediate access to Interstate 95 and nearby east -west connections to State Road 836 and Interstates 395 and 195. The site is in walking distance for much of the downtown business community and completely accessible to all of downtown by way of the Metromover and future Streetcar. There are numerous existing public and private parking facilities nearby to support the ballpark. The City has over 5,200 existing public parking spaces located within 5/8 of a mile from the site. In addition, the County currently has approximately 2,000 garage parking spaces and plans to add 580 spaces for the Overtown Transit buildings, for an approximate total of 7700 public parking spaces. The vast majority of ball games scheduled during weekdays (all but 4 for the 2007 season) are played in the evening beginning at 7:05 p.m., thereby allowing this public parking inventory which is filled during the day to empty out prior to the start of baseball games. We would also expect a portion of the fan base to come from people already working or living downtown with easy access to Metromover or Streetcar, which would somewhat ease parking demand. Aside from being an extremely accessible site, this location would also allow for private development opportunities next to and nearby the site, While downtown has experienced an enormous amount of development, it has largely been concentrated in close proximity to Biscayne Boulevard, the Brickell area and near the Performing Arts Center. 1 strongly believe that the ballpark will act as an anchor, much like the experience of the Performing Arts Center, that will attract investment and development to downtown's west end. This area of downtown, which includes the OvertownfParkwest Community Redevelopment Agency district and the City's 24 hour entertainment district, has many undeveloped parcels as well as properties with redevelopment potential. With 81 games infusing over two million people per year to the area, private investment and development opportunities will be ripe. The addition of a professional ballpark would provide a unique public asset to the Government Center area which is the heart of our already existing public service center. That being said, a ballpark is a very large and complex development project with inherent challenges. There are underground utilities on the site that run under NW 2" Avenue and NW 3ro Street that will need to be relocated. We are coordinating with the County as they obtain as -built documents from all utility companies in order to determine the exact locations of utilities and the potential locations for their future relocation. The large scale nature of this project requires careful and sensitive planning on how it would impact existing city and county facilities at the site. The Miami Police Department Headquarters and Downtown Charter School buildings are of particular concern. Accessibility to both of these buildings would need to be maintained with particular sensitivity to their respective and unique considerations. Police Headquarters utilizes a helipad on the roof of their building, while the Charter School requires defined and protected drop off and pick up areas for the children (K through 5). The City currently has a 30 year lease with the DOA, which has a sublease with the Downtown Miami Charter School, Inc., that would need to be modified to support the ballpark project. The ballpark requires encroachments onto this property for a supporting column as well as the stadium retractable roof structure. The current lease terms allow infringement onto the existing property for utilities to serve other adjacent city owned properties and impacts to the existing school parking solely to facilitate the police collegeftraining facility, with conditions specified. In this regard, MLB and the Marlins have committed to work very closely with the City and County, including giving us significant input regarding the design and construction of the ballpark. By far the most important site consideration we face is the ability to secure an acceptable and preferably better alternative site for the new Coiiege of Policing and Public High School of Law Studies, Homeland Security, and Forensic Sciences, which is planned to be built on the site directly south of Police Headquarters and east of the Charter School. In order for this to be a viable site for the ballpark. an alternative location for the joint College of Policing and High School must be identified. The plans for this facility are nearing completion with an anticipated timeframe for groundbreaking of November 2007, BALLPARK AGREEMENT The City, County, Marlins and MLB are developing the fundamental elements of a proposed agreement that will set forth the major business terms and conditions of this project. We hope to have an agreement formalized for consideration by both the City and County Commissions by the end of April. This agreement would be similar in many respects to the Memorandum of Understanding (MOU) approved by the City, County, and Marlins in March 2005. However, unlike the MOU, it will be a binding agreement with termination rights where the remedy afforded to the non -terminating party will include reimbursement for agreed upon out-of-pocket expenses incurred. A primary reason that the agreement must be binding is the fact that the Marlins will be required to spend significant funds to undertake a redesign of the ballpark to fit the specific conditions of the Government Center site. in doing so, the Martins will need a firm commitment from all parties that the project will move forward. Because this agreement will be binding ati of the terms and conditions must be fully defined and clearly understood by the parties. The City and County would be responsible for delivering the site in a buildable condition. Therefore, we must conduct due diligence in determining physical site conditions, street vacation and site re -platting, utility relocation needs, and public infrastructure considerations in order to make a recommendation to our respective governing bodies. The agreement will provide that the Marlins control design and construction of the ballpark and are responsible for cost overruns. As with the MOU, it will provide that the County issue debt on behalf of the team, secured by the County's covenant to budget and appropriate non -ad valorem revenues. Debt service on these bonds would be paid by the team or directly from revenues generated from the stadium. Although the team would repay the debt service on the bonds, this would be County debt. Therefore, the structure of this financing must be done in a manner that would significantly mitigate any exposure to risk in the event of a payment default. Designated stadium revenues would have to be strong with adequate coverage ratios, contractual in nature and secured to protect the County. Other provisions in the agreement, to name a few, would be the ballpark budget, funding commitments from the parties, timing of debt, parking requirements for the team, design, development and construction of the ballpark, maintenance, repair and capital replacement funding requirements and responsibilities and team commitments for community events and community benefits. Once the City and County approve the ballpark agreement, we will then have to negotiate final ballpark contracts consisting of a non -relocation agreement, construction administration agreement and management agreement. These final agreements would also have to be brought back before the City and County Commissions for approval. BALLPARK BUDGET AND FUNDING The ballpark would be a first-class Major League Baseball stadium owned by the County, having a retractable roof, natural grass playing field, and capacity of approximately 37,000 seats including approximately 60 suites, The ballpark scheduled completion date is April 2011 based on a construction start date of May 2008. The estimated cost to design, develop and construct the ballpark at the Government Center site is $490 million. This figure could fluctuate slightly depending on whether or not the County's chilled water plant can support the ballpark. In the past, the City and County expressed concern over the estimated budget and perceived the Marlins construction cost and schedule to be aggressive. At this point, both the Marlins and MLB have spent a considerable amount of time with the team's architect and construction manager to ensure that the budget is firm, accurate and that the construction schedule is not aggressive. The County and City have worked with the Marlins and MLB on the budget and we now have a greater comfort level than we did with the previous estimated budget. Additionally, the Marlins will be responsible for all cost overruns in excess of $490 million. The increased cost of the ballpark does not come as a surprise. Construction costs for both tabor and materials have increased dramatically for all projects — public and private. It has been almost two years since we last had an agreement with the Marlins. At that time that ballpark was scheduled to open in 2008. We have all recognized that in order to continue to work towards the completion of this project, all parties need to increase their respective contributions. To fund the increased ballpark costs, the Marlins contribution consists of a combination of cash and private financing in the amount of $45 million and the repayment of $162 million of team rent in bonds issued by the County. The County's contribution would consist of $145 million from a combination of Convention Development Tax (CDT) and Professional Sports Facilities Franchise Tax, both of which are tourist bed tax revenues. The City would contribute $108 million, primarily from CDT revenues previously allocated to the Miami Arena as agreed to in the previous baseball MOU and a portion of the Tourist Development Tax revenues currently required to be spent within the City of Miami. In addition, the City and the County are assessing the feasibility to use a very limited amount of tax increment financing proceeds for the project that would be conservatively expected to materialize from investments and developments stimulated as a result of the ballpark project, The amount of funding above totals $460 million. This leaves a gap of $30 million, which represents the present value of the funding we are requesting from the state in the form of a professional sports facilities sales tax rebate. Stadium bills have been filed in both the House and the Senate, On February 20 two Senate bills supporting this rebate were heard in the Commerce Committee and passed unanimously. We are fortunate to have had these bills heard and passed in committee prior to the beginning of the State legislative session. It is critical that we all work with our state delegation, the legislative leadership and Office of the Governor in support of funding for the ballpark. As you are aware, MLB is very involved in this project. The time, resources and commitment put forth by MLB is a direct acknowledgement of just how important the South Florida market, Miami -Dade County and the City of Miami are to Major League Baseball_ I greatly appreciate the time and effort they are making to help all of us succeed. It is my intent to continue to work with all parties to resolve any remaining open issues and submit a recommendation and ballpark agreement for your consideration in April. Through the leadership of the City, the County, the State of Florida, the Florida Marlins, and Major League Baseball, I do believe we will be successful in developing a new ballpark and ensuring professional baseball remains in South Florida. c: Jorge L. Fernandez, City Attorney Priscilla A. Thompson, City Clerk Mayor Manny Diaz CITY OF MiIA +te. 1-4.C`►k[fFAA INTER -OFFICE MEMORANDUM ©ATE February 274007 Citynrissioners suexrc:r: Ballparlfeport rk011: Pedro G`Nertlandez, P.E, City Manager REFERENCES: ENCLOSURES: - The City of Miami has been supportive of retaining the FioridaAviarlins baseball team in South Florida and, as such, has worked diligently over the last several years to assist in these efforts, including evaluation of various potential stadium sites within the cityyi`mits: The purpose of this memorandum is to provide an overview and status report on our latest effortto build a new ballpark for the Florida Marlins. Significant progress has been made in determining the viability of a new ballpark in downtown Miami utilizing publicly owned land next to Police Headquartefs and the Stephen P. Clark Government Center. In addition, the City of Miami, Miami -Dade County, Merlins and Major League Baseball (MLB) are working toward an agreement for future City and County Cotmission consideration that will indude project costs, required funding and the roles of each project parcipant. BACKGROUND As stated, the City of Miami has been activet+ committed to the ballpark project for more than 4 years. During this time we have evaluated numerQllls sites throughout the city, including waterfront property on Biscayne Bay or the Miami River and sites' near the Miami Arena and the Orange Bowl. Each of these sites presented various types of site complications, impacts to surrounding residential neighborhoods, involved costly assemblage of land or conflicted with existing land uses and higher priority city objectives. On November 21, 2006 Miami -Dade County released a Ballpark Project Update Report identifying a new potential site in which all parcels are/publicly owned located directly south and east of Police Headquarters and north and west o4 the Stephen P. Clark Government Center. We have determined that the Government Center site currently holds the best opportunities to make this project a reality. GOVERNMENT CENTER SITE/ The general boundaries of the site are the Police Headquarters and State Division of Natural Resource buildings on the north, Government Center on the south and west, the Metrorail line on the east, and the Downtown Charter School and the Hickman Building on the west (see attached maps). The site is approximately nine acres and is 100% publicly owned, consisting of a small portion of one City parcel and portions of three County p reels. During our initial assessrtient of this location, we looked at the Government Center site attributes compared to criteria used to evaluate potential sites for the new Washington D.C. ballpark for the Washington Nationals, The D.C. site evaluation largely focused on elements that would provide for the long-term sustainability of a ballpark for the city and the franchise. Listed below is how the Government Center site compares to these criteria: 1. General Design Opportunities (site shape, potential ballpark orientation) 7Rectangular site, small site, but sufficient size for development, northeast orientation, excellent views of downtown 2. Access (regional highway systems, public mass transit, Metro, commuter rail) *f1-95 north -south, east -west connection from SR 836, 112 & 1-395, 1-195; rnain station for MetroRail & Metromcver, adjacent to proposed Streetcar alignment 3 Parking (existing or developable) ✓Excellent existing public parking and opportunity for private parking development 4. Impact on Existing Communities (non -displacement of residents) V No residential impact or displacement 5. Parcel Availability (public vs, private ownership, number of owners) ✓All parcels publicly owned (county & city), no impact to tax roll 6. Site Issues (known environmental or soil conditions) No known major issues, environmental studies required, good soli tar development 7. Regulatory Issues (local zoning or federal oversight) ✓ County & City zoning regulations, traffic study & DRI amendment required 8. Economic Development / Return on Investment Potential (public & private) ✓Excellenf development potential on abutting nearby private parcels; would provide anchor investment to spur other development 9. Cost (acquisition and construction) ✓No land acquisition cost, no major demolition, good existing infrastructure The Government Center site dearly has positive attributes when evaluating it for the ballpark, From an accessibility standpoint, it is arguably the best site we have considered as it is directly next to the main transit station for MetroRail and Metromover, in very close proximity to the downtown bus terminal, adjacent to the proposed Streetcar alignment and has immediate access to Interstate 95 and nearby east -west connections to State Road 836 and interstates 39.5 and 195. The site is in walking distance for much of the downtown business community and completely accessible to all of downtown by way of the Metromover and future Streetcar. There are numerous existing public and private parking facilities nearby to support the ballpark. The City has over 5,200.existing public parking spaces located within 5/8 of a mile from the site. In addition, the County currently has approximately 2,000 garage parking spaces and plans to add 580 spaces for the Overtown Transit; buildings, for an approximate total of 7700 public parking spaces, The vast majority of bail games scheduled during weekdays (all but 4 for the 2007 season) are played in the evening beginning at 7:05<p.m., thereby allowing this public parking inventory which is filled during the day to empty out prior to the start of baseball games. We would also expect a portion of the fan base to come from people already working or living downtown with easy access to Metromover or Streetcar, which would somewhat ease parking demand. Aside from being an extremely accessible site/this location would also allow for private development opportunities next to and nearby the site. While downtown has experienced an enormous amount of development, it has largely been concentrated in close proximity to Biscayne Boulevard, the Brickell area and near the Performing Arts Center. 1 strongly believe that the ballpark will act as an anchor, much like the experience of the Performing Arts Center, that will attract investment and development to downtown's west end, This area of downtown, which<includes the Overtown/Parkwest Community Redevelopment Agency district and the City's 24 hour entertainment district, has many undeveloped parcels as well as properties with redevelopment potential. With 81 games infusing over two million people per year to the area, private investment and development opportunities will be ripe. The addition of a professional ballpark would provide a unique public asset to the Government Center area which is the heart of our already existing public service center. That being said, a ballpark is a very large and complex develoopment project with inherent challenges. There are underground utilities on the site that run under NW 2 Avenue and NW 3fd Street that will need to be relocated. We are coordinating with the County as they obtain as -built documents from all utility companies in order to determine the exact locations of utilities and the potential locations for their future relocation, The large scale nature of this project requires careful and sensitive planning on how it would impact existing city and county facilities at the site. The Miami Police Department Headquarters and Downtown Charter School buildings are of particular concern. Accessibility to both of these buildings would need to be maintained with particular sensitivity to their respective and unique considerations. Police Headquarters utilizes a helipad on the roof of their building,. while the Charter School requires defined and protected drop off and pick up areas for the children (K through 5). The City currently has a 30 year lease with the DDA, which has a sublease with the Downtown Miami Charter School, Inc., that would need to be modified to support the ballpark project. The ballpark requires encroachments onto this property for a supporting column as well as the stadium retractable root structure, The current lease terms allow infringement onto the existing property for utilities to serve other adjacent city owned properties and impacts to the existing school parking solely to facilitate the police coiiegeltraining facility, with conditions specified. In this regard, MLB and the Martins have committed to work very closely with the City and County, including giving us significant input regarding the design and construction of the ballpark. By far the most important site consideration we face is the ability to secure an acceptable and preferably better alternative site for the new College of Policing and Public High School of Law Studies, Romeland Security, and Forensic Sciences, which is planned to he built on the site directly south of Police Headquarters and east of the Charter School, In order for this to be a viable site for the ballpark, an alternative location for the joint College of Policing and High School must be identified. The plans for this facility are nearing completion with an anticipated tirneframe for groundbreaking of November 2007, BALLPARK AGREEMENT The City, County, Marlins and MLB are developing the fundamental elements of a proposed agreement that will set forth the major business terms and conditions of this project. We hope to have an agreement formalized for consideration by both the City and County Commissions by the end of April, This agreement would be similar in many respects to the Memorandum of Understanding (MOU) approved by the City, County, and Marlins in March 2005. However, unlike the MOU; it will be a binding agreement with termination rights where the remedy afforded to the non -terminating party will include reimbursement for agreed upon out-of-pocket expenses incurred. A primary reason that the agreement must be binding is the fact, that the Marlins will be required to spend significant funds to undertake a redesign of the ballpark to fit the specific conditions of the Government Center site. in doing so, the Marlins will need a firm commitment from all parties that the project will move forward. Because this agreement will be binding all of the teams and conditions must be fully defined and clearly understood by the parties. The City and County world be responsible for delivering the site in a buildable condition. Therefore, we must conduct due difi ence in determining physical site conditions, street vacation and site re -platting, utility relocation nee s, and public infrastructure considerations in order to make a recommendation to our respective go) erning bodies. The agreement will provide that the Marlins control design and construction of the ballpark and are responsible for cost overruns. As with the MOU, It;vvill provide that the County issue debt on behalf of the team, secured by the County's covenant to bud9et and appropriate non -ad valorem revenues. Debt service on these bonds would be paid by the teen or directly from revenues generated from the stadium. Although the team would repay the debt service on the bonds, this would be County debt. Therefore, the structure of this financing must be done in a manner that would significantly mitigate any exposure to risk in the event of a payment default. Designated stadium revenues would have to be strong with adequate coverage ratios, contractual in nature and secured to protect the County. Other provisions in the agreement, to name a few, would be the ballpark budget, funding commitments from the parties, timing of debt, parking requirements for the team,;design, development and construction of the ballpark, maintenance, repair and capital replacerinent funding requirements and responsibilities and team commitments for community events artd community benefits. Once the City and County approve the ballpark agreement, we will then have` to negotiate final ballpark contracts consisting of a non -relocation agreement, construction administrattbn agreement and management agreement. These final agreements would also have to be brought back before the City and County Commissions for approval. BALLPARK BUDGET AND FUNDING The ballpark would be a first-class Major League Baseball stadium owned by the County, having a retractable roof, natural grass`playing field, and capacity of approximately 37,000 seats including approximately 60 suites. The ballpark scheduled completion date is April 2011 based on a construction start date of May 2008. The estimated cost to design, develop and construct the ballpark at the Government Center site is $490 million. This figure could fluctuate slightly depending on whether or not the County's chilled water plant can support the ballpark, In the past, the City and County expressed concern over the estimated budget and perceived the Marlins construction cost and schedule to be aggressive. At this point, both the Marlins and MLB have spent a considerable amount of time with the team's architect and construction manager to ensure that the budget is firm, accurate and that the construction schedule is not aggressive. The County and City have worked with the Marlins and MLB on the budget and we now have a greater comfort level than we did with the previous estimated budget. Additionally, the Marlins will be responsible for all cost overruns in excess of $490 million. The increased cost of the ballpark does not come as a surprise. Construction costs for both Tabor and materials have increased dramatically for all projects — public and private. It has been almost two years since we last had an agreement with the Marlins. At that time that ballpark was scheduled to open in 2008. We have all recognized that in order to continue to work towards the completion of this project, all parties need to increase theft respective contributions. To fund the increased ballpark costs, the Marlins contribution consists of a combination of cash and private financing in the amount of $45 million and the repayment of $162 million of team rent in bonds issued by the County. The Gtunty's contribution would consist of $145 million from a combination of Convention Development Tax1CDT) and Professional Sports Facilities Franchise Tax, both of which are tourist bed tax revenues. The City would contribute $108 million, primarily from CDT revenues previously allocated to the Miami Arena as agreed to in the previous baseball MOU and a portion of the Tourist Development Tax'revenues currentiy required to be spent within the City of Miami, In addition, the City and the County/are assessing the feasibility to use a very limited amount of tax increment financing proceeds for the project that would be conservatively expected to materialize from investments and developments stir iulated as a result of the ballpark project. The amount of funding above totals $460 million. This leaves -la gap of $30 million, which represents the present value of the funding we are requesting from the state in the form of a professional sports facilities sales tax rebate. Stadium bills have been filed in both theHouse and the Senate. On February 20 two Senate bills supporting this rebate were heard in the Cmerce Committee and passed unanimously, We are fortunate to have had these bills heard and passed in committee prior to the beginning of the State legislative session. It is critical that we all workwith our state delegation, the legislative leadership and Office of the Governor in support of funding fgrFthe ballpark. As you are aware, MLR is very involved in thislioject. The time, resources and commitment put forth by MLB is a direct acknowledgement of just how Important the South Florida market, Miami -Dade County and the City of Miami are. to Major League Baseball. I greatly appreciate the time and effort they are making to help all of us succeed. It is my intent to continue to work with all parties to resolve any remaining open issues and submit a recornmendation and ballpark agreement for your consideration in April. Through the leadership of the Cify, the County, the State of Florida, the Florida Marlins, and Major League Baseball, I do believe we will sae successful in developing a new ballpark and ensuring professional baseball remains in South Florida. c: Jorge L. Fernandez, City Attorney Priscilla A. Thompson/City Clerk