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In November 1998, construction of the new arena was delayed following a fire in the upper section of the facility. On December 31, 1999, the American Airlines Arena opened. The first event was a Gloria Estefan concert. Three days later, on January 2, 2000, the Miami Heat played their first game in the new arena.  The Miami Sol, a WNBA women's basketball team, began play at the American Airlines Arena in 2000, but the team was folded by the WNBA following the 2002 season.  The American Airlines Arena is an arena located in downtown Miami, Florida along Biscayne Bay and is used for basketball games and concerts. It was constructed as a replacement for the Miami Arena.

The Heat acquired superstar center Shaquille O'Neal on July 14, 2004 in a historic trade with the Los Angeles Lakers in which Miami shipped Lamar Odom, Caron Butler and Brian Grant out west. Wade and O'Neal worked well as a pair and each solidified their position as NBA elites with both averaging over 20 points per game. The season also reunited several former club members. Ron Rothstein, the Heat's inaugural head coach, became their assistant coach and both Steve Smith and Alonzo Mourning rejoined the team as role players. The Heat had their second best record in franchise history: 59-23. They were seeded first in the playoffs, and swept through the first two rounds by winning eight consecutive games against New Jersey and Washington and advancing to the Eastern Conference Finals against defending champion Detroit. The teams split the first four games, before Miami pushed the Pistons to the brink of elimination with an easy 92-78 victory in Game 5 - but in the process lost Dwyane Wade to a strained rib muscle suffered on an attempted crossover. Without Wade, the Heat were routed, 91-66, in Game 6 in Detroit, setting up a deciding Game 7 in Miami. In that game, Wade returned, and the Heat held a 6-point lead with 7 minutes remaining before a series of missed shots and turnovers down the stretch cost the Heat the game and the series to the Detroit Pistons, 4-3.

 

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