Miami Beach’s city manager on Wednesday rejected a revised financial proposal that one of the two finalists bidding for the $1 billion convention center project submitted after a city deadline.
While it’s unclear what the final consequences may be, this latest decision by Manager Jimmy Morales has raised a new round of questions about the city’s handling of what has been described as one of the most important projects in the city’s history. It comes two days before the commissioners will begin debating which of the two teams they’ll pick for the project.
Mayor Matti Herrera Bower said Wednesday she was “definitely not happy’’ with this latest twist although she agreed with the manager’s decision. “We need to be very careful about what’s going on and how we continue. We need to be more prepared for these things not to happen.’’
The controversy stems from a last-minute recommendation by Morales to dramatically down-scale the project. In a memo released July 1, the manager called for eliminating the housing that developers proposed to build around the convention center. He also proposed significantly reducing the square footage of retail and restaurant space that would have helped to pay for the project.
Both teams — Portman-CMC and South Beach ACE — were given a 5 p.m. July 5 deadline to submit revised financials based on the reduced plan. Both teams met the deadline, according to a July 8 memo by Morales.
A city representative evaluating the bids asked Portman-CMC to clarify its proposed lease payments for the city’s 17th Street Garage. Portman’s proposal assumed it would still be responsible for building a new garage. But the city manager’s recommendation said the city would finance the garage construction.
The teams “interpreted the recommendation language differently, thereby offering divergent proposals,” according to a memo by the city manager.
Portman submitted a new bid on July 8.
The difference between Portman’s July 5 and July 8 proposals is significant.
In its July 5 proposal, the team offered to pay Miami Beach $2.3 million in the first year of retail leases throughout the convention center site. With the financial responsibility of the garage out of the picture, Portman’s July 8 proposal included retail lease payments to the city of $5.2 million in the first year. That’s comparable to ACE’s proposal of $5.2 million in lease payments for the first year.
ACE asked the city to toss Portman’s second submission. “In a government procurement process, when a government asks both parties to submit offers by a certain date, it’s so that no party has a competitive advantage of knowing the other team’s bid,” said ACE attorney Al Dotson Jr. “That’s why deadlines are set and parties are asked to come to their own conclusion of their best offer.”
An attorney for Portman said on Wednesday the team did not see ACE’s new proposal until after both of their revised proposals were submitted.
“We never had the benefit of knowing what the other side had,” said Lucia Dougherty, a partner with Greenberg Traurig.
Morales on Wednesday released a memo that said Portman’s follow-up revisions won’t be considered “in order to continue to treat both teams equally.”