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Miami Heat asks Miami-Dade County to extend arena contract

The Miami Heat, which won a second championship this year but has yet to pay Miami-Dade a dime in profits after 12 years at its bayfront arena, wants to extend its 30-year agreement with the county for another decade.

The existing agreement doesn’t expire until 18 years from now, in 2030. But, as permitted in the contract, Eric Woolworth, the team’s president of business operations, sent Mayor Carlos Gimenez a letter last week asking the county to begin negotiations on two five-year extensions.

The team wants to plan for its future at the county-owned AmericanAirlines Arena in downtown Miami, said Sammy Schulman, chief financial officer for the Heat Group, the team’s parent company.

“We’re here. We’re a long-term partner. We’re not going anywhere,” Schulman told The Miami Herald on Monday.

The Heat’s request comes on the heels of a title-winning season that generated about $62 million in revenue — bringing it closer than ever to the threshold that would require the team’s arena-operating arm to fork over some of the money to the county. A separate entity handles Heat-related finances such as player salaries.

As part the county’s 1997 accord with the Heat, the team owned by Micky Arison financed construction on county land of the $213 million arena, which the team says ended up costing $239 million, after it bonded out a state sales-tax rebate. Miami-Dade agreed to let the arena keep profits up to $14 million a year, with the county set to receive 40 percent of any additional profits. The team has yet to reach that number since it debuted at the arena 12 years ago, essentially remaining at the facility rent-free.

Most of the Heat’s revenues have gone toward reimbursing the team for the money it borrowed to build the arena and to pay off past operating losses, with interest, as stipulated in the contract with the county. The arena ran a deficit through 2010; its finances improved with the arrival of LeBron James, the reigning league most valuable player.

More here.

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