Miami taxpayers are going to love this.
A huge miscalculation by the city regarding the four new parking garages near the new Miami Marlins stadium could end up costing citizens a great deal in unexpected taxes.
The city borrowed $100 million in the bond market to build the parking garages and assumed that they would be exempt from property taxes, as many other parking garages are. But the Miami-Dade property appraisal office informed an apparently stunned mayor Tomas Regalado that in order for a garage to be exempt, it must be used entirely for public purposes.
In the case of the new parking garages at the stadium, the city leased all 5,700 spaces to the Marlins at $10 a spot, for every home game (81 of them) and any other event the team puts on. The team is able to charge whatever it would like for the parking spots.
What that means is that at least part of the time, the structures will function as a commercial operation by the Marlins, and that would make it eligible to be taxed as commercial property.
So the Marlins will make a nice profit on the parking while the average citizen will have to foot some of the bill for the new structures.
The Miami Herald covers the story here.
The tax bill is estimated to fall between $1.5 million and $2 million, which will fall to the city to pay. Why the city and not the team? Because the contract for the garages between the city and the Marlins has a clause that clearly says that the city is responsible for all taxes. That’s odd, because in almost every case, the tax burden falls to the tenant.
Mayor Regalado, who as a city commissioner was against the stadium project, said the revenue from parking would not be enough to cover the tax bill and so the city will have to find the money in its budget.
The garages are scheduled to go on the tax rolls in January and at that point a final determination will be made as to its tax standing, but with the contract, there seems little that can be done to shift the burden from the city to the team.
The garage fiasco is just the latest in the story of the stadium project, which was approved two years ago with the county and city getting $487 million in public financing for the $642 million project.
The disagreement over the garages does not involve restaurant and retail space built into two of the structures, the Herald said. The city and county agree that those spaces are subject to property taxes. It is simply a matter of the parking spaces.
Regalado said that the fact that the Marlins control the parking spaces for a particular period doesn’t matter because the garages fall under the agreement the support the county-owned stadium. Florida law says that county-owned property is automatically exempt from property taxes. For example, the new stadium, because it is owned by the county, will not owe property taxes.
In the case of most municipal parking garages, they are available to the general public and the proceeds from them go to the government.
In all, the bonds will total more than $223 million when including interest. To pay it off, the city must collect an average of $7 million a year from the garages through 2026, according to the Herald. The deal with the Marlins should generate more than $4 million and the additional $3 million would come from county tourism tax dollars.
But again, that’s simply to pay the bond off. Money to pay off property taxes would have to come from another source. If the city is not successful in making a case to get a tax exemption, that expense could fall to the average tax payer.
