Miami-Dade Delays $440M Ballpark Deal Due to Injunction, Technicality

BRADENTON, Fla. — Miami-Dade County’s sale of $440 million of revenue bonds for the Florida Marlins’ Major League Baseball stadium has been delayed just over a week because two local residents filed for an emergency injunction to stop the financing, and a last-minute technical issue required a change in bond documents.

The county had planned to sell about $340 million of bonds this week, while a $100 million variable-rate component was scheduled for an initial rate setting on July 13. It is now expected that $340 million of the bonds will be sold June 29-30, while the variable-rate piece remains on track for pricing July 13. The entire deal is expected to close July 14.

“The reason the decision was made to delay was because we received on Monday an emergency motion for a temporary injunction,” said Victoria Mallette, a spokeswoman for the county. “They want to stop the sale of the bonds.”

A hearing was scheduled before a local judge yesterday afternoon on the injunction sought by two local residents who want to stop the issuance of approximately $90 million of refunding bonds that are part of the overall plan of finance for the upcoming sale.

The residents claim in their request for an emergency injunction that “the refunding bonds will not be used to pay the debt service to construct a professional sports franchise facility and therefore by issuing them, the county is exceeding its constitutional tax and spending powers.”

The county’s attorneys have claimed that the request for an injunction is faulty and should be dismissed.

The same two residents also filed suit against the county in February, claiming that officials involved with negotiating the underlying baseball agreements violated Florida’s law requiring meetings to be held in public. The county has contended that the Sunshine Law does not apply to the officials cited in the suit.

The suit is disclosed in bond documents for the upcoming sale. The disclosure said that attorneys believe the likelihood of the suit being successful is remote. And even if one or more counts of the suit succeed, there would be no material impact on the pledged revenue for the bonds, the disclosure said.

“We don’t want a cloud over us,” Mallette said, referring to delaying the bond sale. “We consider the lawsuit to be frivolous.”

In addition to the legal action, county commissioners also are meeting today to make technical changes to the bond documents to alter the flow of funding in order to pay for the letter of credit supporting the variable-rate bonds, which will be provided by Wachovia Bank NA. The change would not affect cash flow or debt service coverage, according to Mallette.

The variable-rate bonds will be secured primarily by professional sports facility tax revenues. The debt also will be supported by a backup pledge of tourist development tax revenues, and a county covenant to pledge non-ad valorem revenues, if needed.

A source familiar with the transaction said it was only discovered recently by the county that because of restrictions in the county code, tourist taxes can only be used to pay debt service and not administrative fees such as those associated with the letter of credit.

To avoid a more lengthy delay caused by amending the county code, commissioners will be asked today to amend bond documents allowing for the LOC administrative expenses to be paid first from professional sports facility taxes. The change was not requested by Wachovia, the source said.

“We’re continuing to work with Miami-Dade on this deal,” said Wachovia spokesperson Ferris Morrison.

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