Sports billionaires keep feasting on Florida taxpayers

Florida in Five: Five stories to read from the past week in Florida politics.

Dec 29, 2024

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Welcome to another installment of Florida in Five: Five* stories you need to read from the past week in Florida politics.

Next month, at its first meeting of the New Year, the Orlando City Council is expected to approve a new development district in Orlando.

It’s technically known as a “community development district.” And this particular CDD is tiny: Just a single city block, immediately across the street from the Kia Center.

But it comes with a big potential tax benefit for the Orlando Magic, the professional basketball team planning a commercial development on the land within the district.

Creating the CDD will enable the Magic and its real-estate investment partners — who have formed a joint venture called SED Development LLC — to use tax-free debt to pay for a $44 million, privately-owned parking garage and other infrastructure serving the site. Investors who buy tax-exempt bonds issued through the CDD won’t have to pay income taxes on the interest they earn on the deal, potentially saving the Magic and its partners millions of dollars in the form of lower interest rates — all courtesy of federal taxpayers.

The federal tax break is on top of a $42.5 million package of city-funded tax breaks and grants that Orlando leaders have already approved for the project. And it comes just a few months after City Hall pressured Orange County into putting another $226 million of county taxpayer money into the Kia Center — the city-owned arena built specifically for the Magic, which is owned by the billionaire DeVos family, the Amway heirs and right-wing megadonors.

The Orlando Magic’s proposed commercial development would be built just north of the Kia Center. (Source: City of Orlando)

It's also just the latest example of pro sports team owners feasting off Florida taxpayers.

In August, for instance, Florida Gov. Ron DeSantis handed out an $8 million state grant to pay for a new road serving “Miami Freedom Park” — a commercial project under development by the owners of the Inter Miami soccer team that will include a new, 25,000-seat stadium. Inter Miami’s owners include Jorge Mas, the billionaire leader of construction company Mastec Inc.; retired English soccer star David Beckham; and investment-fund giant Ares Management.

The check from DeSantis came right after another $3 million state grant that Florida’s Republican-controlled Legislature tucked into this year’s budget to pay for more infrastructure serving the Inter Miami stadium project.

And it is in addition to more than $300 million in local subsidies supporting the development. That includes more than $70 million for site prep and infrastructure — everything from cleaning up environmental contamination to installing new bike racks and garbage bins — and a new city administration building to be built in Miami Freedom Park at a reported price tag of $250 million.

A rendering of a new office building the city of Miami has committed to build as part of Inter Miami’s “Miami Freedom Park” development. (Source: City of Miami)

Then there’s the Tampa Bay Rays baseball team, whose principal owner is former Goldman Sachs partner Stuart Sternberg — and which has a deal on the table for more than $1 billion in public funding for a new, 30,000-seat baseball stadium in St. Petersburg.

The stadium’s sticker price shows taxpayers in St. Pete and Pinellas County putting up $600 million of a $1.3 billion tab. But look under the hood, and you’ll see that local taxpayers would actually pay more than $2.4 billion when factoring in costs like debt interest, infrastructure, below-market land sales, and lost tax revenue.

A rendering of the Tampa Bay Rays’ proposed stadium and surrounding commercial development in St. Petersburg. (Source: Major League Baseball)

The willingness of so many politicians — Republican and Democrat alike — to spend so much taxpayer money propping up owners of pro sports teams is one reason that owning a sports team is such a lucrative investment.

The Orlando Magic, for instance, has more than tripled in value over the past 10 years, to an estimated $3.2 billion, according to Forbes. Even the Rays, who are one of the least valuable teams in Major League Baseball, have roughly doubled over the past decade, to $1.3 billion. And Inter Miami, one of North America’s newer pro sports franchises, is already worth more than $1 billion, according to Forbes’ valuations.

This is also, of course, why the owners of pro sports teams shower so much money on so many elected officials.

As an example, campaign-finance records show Orlando Mayor Buddy Dyer raised roughly $50,000 for his 2023 re-election from the Magic and its SED Development partners, via an assortment of checks from team employees, executives and affiliated corporate entities.

DeSantis, meanwhile, accepted a $100,000 check in October from Mastec a few months after approving the $8 million grant for the Inter Miami stadium project.

It’s entirely possible that some of these team owners will be lobbying for further handouts when the Florida Legislature gavels open its 2025 session in March.

The Rays, for instance, are reportedly angling for as much as $200 million more from taxpayers.

And the team has been spreading cash around to the people who control the purse strings in Tallahassee: In recent weeks, records show the Rays have given $25,000 each to House Speaker Danny Perez (R-Miami) and Senate President Ben Albritton (R-Wauchula), plus another $10,000 apiece to House Budget Chair Lawrence McClure (R-Dover) and Senate Budget Chair Ed Hooper (R-Palm Harbor).

*To paraphrase Barbossa, five is more what you’d call a guideline than an actual rule.