David Beckham, Norman Braman At Odds Over Land Use In Miami

MLS newsSoccer star David Beckham has been pitted against Royal Caribbean Cruises and billionaire Norman Braman over dirt, concrete and a warehouse at the port of Miami. Beckham wants to use the land to build a $250 million stadium for a Major League Soccer expansion team. Royal Caribbean and Braman have welcomed Beckham’s team but don’t want the stadium to interfere with the largest cruise ship hub in the world.

A real estate consultant in Deerfield Beach, Jake McCabe, said “while it sat empty for years, that land’s suddenly become very precious. It’s amazing what celebrity interest will do.”

Miami is borrowing money to make their port read for the widening of the Panama Canal so that it can attract larger cruise ships. The expansion to the canal is scheduled to be completed in 2016. The Mayor Carlos Gimenez and Miami-Dad County commissioners will help determine how much money the port has in order to pay down debt that is going to exceed $1 billion after a tax-exempt bond sale next week.

This standoff for the land crates a risk that the county’s borrowing costs might increase and that would affect their mounting debt.

Justin Land with Wasmer, Schroeder & So said, “With the yields as low as they are today in general, I just can’t imagine it will price at a level where we would be compensated for all the future unknowns.”

Last year revenue from cruise and cargo operations was lower than promised levels and Moody’s indicated in August that the port was not bringing in enough revenue to cover their future debts.

Investors have demanded 1.5 percentage points of extra yield this year to buy Miami-Dad County seaport bonds maturing in October of 2009. That is nearly double the average spread for revenue debt graded at one step higher.

Miami-Dad issued $383 million in debt last September for use in the $2 billion renovation of PortMiami. Those funds will be spent on deepening water and building tunnel truck access to nearby highways.

The county plans on selling $206 million in tax-exempt revenue bonds on May 6th, which will be repaid with the port’s proceeds. This brings the total debt for the project to $1.1 billion.

In February, David Beckham was awarded a Miami expansion team by Major League Soccer. The team will play its first season in 2016.

Before Beckham proposed the stadium, officials at the port planned to use the land for offices, retail and hotels. The stadium could be better option since the team will pay rent to the county for use of the stadium.

John Alschuler, chairman of HR&A Advisors, who is assisting Beckham with the stadium said, “We’re the only idea out there ready to come tomorrow, pay market rent and help the port meet its debts.”

One of the biggest bargaining pieces in this debate could be that the team isn’t asked for county tax dollars for their project.

A spokesman for Royal Caribbean, Rob Zeiger, expressed concern over the traffic problems a stadium could create. “This if the only port we have and we think its real estate that ought to be preserved for port-related purposes. We don’t see how trying to bring 30,000 people into this area on a regular basis can do anything but create traffic problems.”

Mayor Gimenez has suggested that he is open to the idea of a stadium at the port, but county commissioners have also expressed concerns about the traffic and costs.

Last August, Moody’s downgraded PortMiami’s rating to just four steps above junk. Their projected revenue was not sufficient to make payments on their growing debt and so they would need to use their reserves as soon as 2017, according to Moody’s. To further their problem, on April 3rd investors were alerted that auditors had discovered an accounting error that made revenue for 2013 below what was promised at $45.3 million.

A report last July by the port projected that revenue from cruises and cargo shipping would boost income by 10 percent annual through 2018.

John Fox, Royal Caribbean Vice President, said “The alliance (Miami Seaport Alliance) cannot understand what putting a soccer stadium in the middle of a busy port can do to further business and create jobs.”

Braman has openly opposed public financing for stadiums in Miami and assisted in defeating the Miami Dolphins’ big for tax dollars to upgrade their stadium last year. While Beckham’s group hasn’t asked for local tax dollars, Braman indicated that it would be unwise to give up public land that has been upgraded with tax dollars.

 

 

Kevin is an American born soccer fan dating back to the NASL in the 1970′s. He began his journalism career then and has been published on numerous sports websites and publications

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