At the same time out of work construction workers swarmed the grounds where the Orange Bowl once stood for a shot at a job on the Marlins’ $515 million ballpark, critics were gasping over the $2.4 billion it is expected to cost to pay off the construction bonds for the project.
Miami-Dade County officially released the financing costs for the bonds late this afternoon, but the Miami Herald had already published the numbers. The $2.4 billion is the cost over 40 years to pay off $409 million in bonds, most of which will go to the ballpark.
There’s been no shortage of criticism of the numbers, including by our own Mike Mayo, especially since County Manager George Burgess told commissioners last week he didn’t know the final costs, as he was asking commissioners to approve increasing the interest rate on a portion of the bonds. The financing schedule takes into account the higher than anticipated interest rate and backloads higher debt service payments to ensure the county has collected enough tourist tax dollars to cover the payments.
In his memo with the financing schedule, Burgess stressed the county is working hard to avoid dipping into the general fund, which has been pledged as a secondary funding source, should tourist tax dollars fall short.
“The bottom line is that the transaction was structured within the constrained tourist tax revenue streams in a way that will significantly minimize any exposure to the secondary pledge of the bonds,” Burgess wrote.
There’s also the possibility the bonds can be refinanced when credit markets improve.
Put simply: there’s no question the project relies on a huge sum of public dollars. County officials call them tourist tax dollars, which have a restricted use. That’s true, but they are still public dollars.
But don’t forget that when you buy a house, you pay a lot more than the asking price over the life of your mortgage. For example, if you bought a $200,000 home with 6 percent interest, you’d end up paying $431,626 over 30 years – or more than double the sale price.
The bonds for the stadium construction, which were mainly sold to institutions, are scheduled to close July 14. The team has scheduled an official ballpark ground-breaking at 10 a.m. July 18.