Why Economists Are Skeptical Of Dolphins' Plan To Renovate Stadium With Tax Dollars

Jan 16, 2013

Unlike the Miami Marlins and Miami Heat, Sun Life Stadium is privately owned and does not receive any public money. The proposed bill would change that.
Credit Matt Velazquez (Flickr)

The Miami Dolphins' proposed deal to use state and local tax dollars to renovate Sun Life stadium is getting some big endorsements.

But the  benefits a renovated stadium would bring  the county are questionable, some economists say.

Two South Florida lawmakers, Sen. Oscar Braynon from Miami Gardens and Rep. Eduardo Gonzalez from Hialeah, are sponsoring legislation that, among other things, would allow Miami-Dade County to raise the hotel tax on the mainland by 1 percent. The Miami Herald has details on the proposed legislation:

A bill drafted by the Miami Dolphins would give Florida sports teams $3 million a year in state money to improve older stadiums, provided the owner pays for at least half the cost of a major renovation.


Under the law, the stadium would need to be 20 years old and the team willing to put in at least $125 million for a $250 million renovation. That’s less than the $400 million redo of Sun Life Stadium that Dolphins owner Stephen Ross proposed this week, which he hopes will win state approval thanks to his offer to fund at least $200 million of the effort to modernize the 1987 facility.

Team officials say the renovations to the 26-year-old stadium are necessary for it to clinch South Florida's  bid for the 2016 Super Bowl, which they say could pump up to$1 billion into Florida's economy.

Meanwhile, three major hotels, The InterContinental in downtown Miami, Loews Miami Beach, and the Trump National Doral, have endorsed the plan. Real estate mogul Donald Trump, owner of the latter, said in a press release that the plan is “the right thing for Miami-Dade if we hope to continue attracting the types of sports and entertainment events that fill our hotels and restaurants, such as Super Bowls, college championship games, and international soccer matches.”

However, as the endorsements for the Dolphins’ plan roll in, some economists are raising their eyebrows. Among them is Philip Porter, a University of South Florida economics professor who researches the economics of sports.

"The direct notion of, 'we need to subsidize this team because the team gives back so much income, and sales and wealth to the community,' that's a totally bogus idea,” Porter said. “If the idea is, 'we ought to sponsor the team because it's a cultural entity and we love them and we want to give them money,' well then, I have no argument against that."

Porter said there were several articles published in the early part of the decade that looked at the economic impact of Super Bowls on their host communities.

“There was a host of publications where they looked at different Super Bowls,” Porter said. “They looked at All-Star events and Olympics and they now, after 50 articles or so, won’t even accept them in the journals. It’s just standard knowledge among economists that these events just don’t have an economic impact.”

University of Miami economics professor David Kelly explained that the economic impact is in part diminished by the fact that events like the Super Bowl fall during the South Florida's peak tourist season.

"The hotels and restaurants are already typically full during that season so it doesn't add a lot of out-of-state revenue to the city given the time of year which the Super Bowl is."