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P3 for Soccer Stadium Shouldn’t Be Ruled Out

New Miami Blog

Blog
February 26, 2014

The arrival of David Beckham in Miami has incited a new kind of soccer fever in the city known to frequent soccer games in crowds of over 70,000. Most newsworthy right now is the talk of building a soccer stadium in Miami. The Miami Herald reports that Beckham and his team hope to purchase land from Miami-Dade County for his team’s new stadium.

As we discussed in a prior post, the sale of a public asset (such as County property) for a private operation is not a public-private partnership (P3). Rather, a P3 requires that the private partner and public entity share in both the risks and benefits of the project.

Accordingly, Beckham’s contemplated purchase of land from Miami-Dade County would not be a P3. This is not surprising, however, as P3s are still relatively new to Florida. In fact, the proposed stadium for rival Sunshine State MLS team Orlando City SC, whose stadium will be built using tourist development tax funds and funds from the City of Orlando, will also not use a P3 structure.

Properly Designing a P3
However, with the right structure, a P3 could work very well for a soccer stadium. A properly designed P3 would allow both the team and the local government to leverage their expertise to create a true partnership that highlights the best that both partners have to offer. In general, a P3 for the building of a stadium works best when:

  1. the public entity’s main contribution is land and infrastructure, and the private entity’s primary contribution is financing and construction of the stadium (including maintenance and repairs), the two cost-intensive risks that draw the most ire from taxpayers, and
  2. the facility is able to generate substantial sales, retail and development revenue that can be shared by the two partners. Having a public partner in a stadium project can expand support in areas such as transportation, and facilitate inter- and intranational exchanges that can generate revenue for a stadium. Having a private partner in a stadium project will alleviate the costs and risks that the public bears and provide the opportunity to collaborate with highly skilled, high-profile professionals who can implement creative methods of attracting customers and growing business.

A P3 designed along these lines could create a “win-win” situation for both the team and the County, as compared with the more traditional model currently contemplated. A P3 is not simply about dividing the pie. A P3 can be used to bake a bigger pie, i.e., deliver a better product for both the partners and the community. The option of using a P3 for the construction of the new soccer stadium should not be ruled out.

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Albert E. Dotson, Jr.

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