The most difficult part of building the new Florida Marlins ballpark is coming up, as bond agencies evaluate Miami-Dade County’s ability to repay bonds issued for construction.
The three major bond agencies — Moody’s, S&P and Fitch — will be dissecting the financial plans for a new Florida Marlins ballpark next week and evaluating the revenue sources Miami-Dade County are pledging to repay them.
To say this is the most important step for construction of the new ballpark isn’t an understatement: the whole deal hinges on borrowing money at an affordable rate. And given some of the "creative" financing deals we’ve been hearing about lately for sports facility, some involving zero-interest bonds and 9 percent interest rates, financing isn’t a sure thing.
The big issue for the bond agencies will surely be Miami-Dade County’s plan to back bonds with tourism taxes. Receipts from these taxes plunged 22 percent last month, but county officials are budgeting a rather prompt and healthy recovery in this sector. If the bond agencies see this as being overly optimistic, they’ll ding the county, causing higher interest rates. In previous bonds the county has capped its rate at 7 5 percent — which is still fairly high, even in this economy.
If the bonds come back with unfavorable ratings, the county does have the option of walking away from the deal; the agreement with the Marlins says the county has until July 1 to close financing. That’s not likely to happen — but given the economy, you never know.
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