Higher interest rate for stadium bonds — why?

Someday we may look back and say: “He told us so!” I am referring to the Marlins baseball stadium whose construction was started today. During a Miami-Dade County Commission meeting yesterday there seemed to be another roadblock putting in doubt today’s groundbreaking. But as has been the case since this cause was taken over by County Mayor Carlos Alvarez, the new mantra seems to shout: “THIS STADIUM WILL BE BUILT — no matter what!”

Yesterday’s glitch had to do with the bonds to build the ballpark. They were to raise $306 million. But according to today’s Miami Herald, “County Manager George Burgess announced — as the regular commission meeting was winding to a close Tuesday near 7 p.m. — that the effort to raise $306 million on Monday and Tuesday by issuing bonds backed by tourist taxes was off by $6.2 million.

“The reason for the shortfall, Burgess said, is a portion of the bonds fetched a higher-than-expected interest rate, thereby reducing the proceeds to the county.”

What the Herald reporter fails to tell us is the real reason for the higher than expected interest rate. It’s not that complicated. The bonds must be paid by tourism-generated taxes. If tourism slows down (as it has, based on projections), then payment must come from the county’s general funds. To assure these county funds from our budget (yes, the same budget used to clean streets, keep public transit running etc.) are available Mayor Alvarez will have to lay-off between 3,000 and 5,000 county employees in the near future. Supposedly, from what I understand, many of the layoffs have yet to happen and therefore the higher interest rate based on the risk taken in the issuance of bonds.

In the end, we seem to be mortgaging our future for the sake of a baseball stadium. And wait till we get to the Downtown Miami tunnel. Stay tuned, there’s more info where this came from…

Alvaro F. Fernandez