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Gimenez: Miami Heat Expense Oversight Was Under Previous Administration

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(Photo Credit: CBS4) Miami-Dade Mayor Carlos Gimenez

(Photo Credit: CBS4) Miami-Dade Mayor Carlos Gimenez

CBS4 Investigates
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I-Team

MIAMI (CBS4) – On Thursday the Miami Dade Inspector General issued a highly critical report of county government officials – arguing that it failed to show even the slightest interest in how the American Airline Arena has been operated by the Miami Heat for the past twelve years.

According to Inspector General Chris Mazella, the county never bothered reviewing operating budgets by the Heat and never questioned any of the expenses at the county-owned arena

By Friday, Miami Dade Mayor Carlos Gimenez was trying to knock down any potential political storm over the IG report by promising he had already begun implementing changes. And he said he would push for a complete financial audit of the arena’s operating expenses.

“We found out really the previous administration did not have the proper oversight, when the reports came in nobody looked at them, nobody questioned them,” the mayor told CBS4’s Jim DeFede. “But we’ve already changed those procedures and it’s not going to happen under this administration.”

The Inspector General’s report followed a CBS4 News investigation last year that showed how the Miami Heat, despite taking in tens of millions of dollars every year — claims its profits are always eaten up by expenses and therefore the team never has anything to share with the county.

“The county’s hands-off approach to an operation that now generates more than $60 million a year is perplexing, especially an operation that has yet to produce sufficient profits to result in profit-sharing.” Mazella wrote.

The county had been promised revenue sharing as part of its 1997 agreement with the Miami Heat, and its billionaire owner, Micky Arison.

Arison had threatened to move the team if a new, waterfront arena wasn’t built on county land and subsidized with nearly $200 million in taxpayer money.

In return for county’s investment, the Heat promised that if the arena generated more than $14 million a year in profit the team would share that money with the county.

But every year, it’s been the same story.  No revenue sharing.

Nevertheless, the IG found the Heat owes the county $3.3 million for unbudgeted expenses at the arena. The IG discovered that the Heat has never submitted annual capital improvement budgets to the county. And even the internal budgets the Heat prepared were often insufficient.

The Heat denies it owes the county anything. In a statement to CBS4 News last week a team’s spokeswoman wrote: “there have been no `violations’ of the agreements nor does [the Heat] `owe’ the County any money.”

Gimenez said Friday he would analyze the report and meet with the County Attorney to determine if they can recover any of the money the IG claims the county is owed.

“So we have to really analyze this fairly closely to put our ducks in a row and then move forward,” Gimenez said.

Gimenez’s opponent in the upcoming mayoral election, County Commission Chairman Joe Martinez, sounded more aggressive when discussing the county’s need to recover the $3.3 million.

“If they owe us money, they owe us money,” he said. “And it’s not us the county’s [money], it’s taxpayers.”

Martinez said it appears the Heat had negotiated themselves a “sweetheart deal” to build the arena back in the late Nineties and it now seems clear “we are not getting our money’s worth.”

In dealing with the Heat, Gimenez faces some thorny issues. One of his closest political advisers and chief fundraisers is Miami Heat lobbyist Jorge Lopez. Gimenez denied he would allow his ties to Lopez to affect how he now deals with the Heat.

“I do what’s in the best interest of Miami Dade County and that’s the bottom line,” Gimenez said. “That’s what I will always do.”

The IG report was not a formal audit, but rather a review of the operating agreements between the county and the Heat. On Friday, Gimenez was asked if he would instruct the county’s auditor, Cathy Jackson, to begin a formal review of how money has been spent at the arena.

“Absolutely,” he said.  “If we have the right to do that, if we actually have the right to do that, yeah absolutely. Every entity that we do business with should be audited every once in a while.”

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