A plan to use Miami-Dade property taxes for an expanded Miami Beach Convention Center is helping county Mayor Carlos Gimenez narrow a looming budget gap.
As part of a complicated swap with Miami Beach, Gimenez wants to delay paying $18 million in property taxes to the resort city this year and another $14 million in 2016.
In exchange, Miami-Dade would add about 20 years to the life of a special taxing district around the Lincoln Road area — which is forecast to cost Miami-Dade about $800 million in diverted property taxes during the extension through 2045.
By resetting the current 2023 retirement date of the City Center taxing-district, Miami-Dade would allow most of the diverted taxes to go toward a $580 million redevelopment of the decades-old convention center.
“One of Mayor Gimenez’s top priorities is to have a first-rate convention center in Miami-Dade County,’’ said Mike Hernández, communications director for Gimenez. “Unfortunately, right now we have a second-rate facility at best. At worse, third-rate.”
The deal, reached between Gimenez and city leaders in recent weeks, offers the county short-term relief from a budget squeeze that has Gimenez warning of layoffs and service cuts without union concessions.
What was once a $210 million revenue gap has slowly dwindled. The latest estimate from County Hall hit $64 million, thanks in part to the $18 million windfall from the Miami Beach deal.
But the deal also dramatically increases Miami-Dade’s long-term obligations in Miami Beach, since the City Center taxing district (known as a CRA) is set to expire nine years from now. Miami Beach leaders have pressed Gimenez to extend the CRA in order to back up city funds for the long-sought renovation, but had not received a formal commitment until now.
“It gives us additional revenue in the future, and it allows the county relief with their budget in the short term — and that’s what all sides needed,” Miami Beach Mayor Philip Levine said.
Many city and county leaders assumed Miami-Dade would eventually extend the life of the City Center district, so the move could be seen as giving Gimenez some short-term budget relief in exchange for future costs that the county was bound to incur anyway.
Miami-Dade commissioners must approve the agreement. Miami Beach commissioners gave the deal preliminary approval at an emergency meeting called last week by City Manager Jimmy Morales. The timing was so hasty that Levine and Commissioner Joy Malakoff participated via speakerphone and Skype, long-distance attendance allowed once city attorneys declared the topic constituted an “extraordinary circumstance.”
The deal includes a number of sweeteners for Miami Beach, while rewriting restrictions on two special taxing districts in the city. The delayed payments totaling $32 million come from the city’s South Pointe taxing district, which allows Miami Beach to retain county property taxes from that area and spend them in the neighborhood.
The agreement would lift county restrictions requiring the money be spent within the taxing district, which runs south from Fifth Street. Freed to spend the dollars citywide, Miami Beach plans to use at least part of the cash fortifying the city against rising sea levels, according to a draft proposal.
The deal also earmarks an additional $1.5 million in hotel taxes for the city if it goes forward with plans for a headquarters hotel next to the convention center. Both sides also agreed to explore letting Miami Beach take over county beach-maintenance efforts in exchange for assuming control of a profitable county bus route in South Beach.
The revised payment schedule does not alter the amount of diverted county taxes from South Pointe; it’s still slated to total $85 million by 2022. The difference is that instead of paying out $32 million in the next 24 months, Miami-Dade would pay it between 2017 and 2022. But while a payment schedule simply shifts in the South Pointe district, the City Center taxing district would continue as a revenue-drain for Miami-Dade through 2045.
Jorge Gonzalez, the former Miami Beach city manager, said the agreement highlights the legacy of the 2009 decision by Miami-Dade to spend hotel taxes on Marlins Park. By tying up hotel taxes for the stadium — ballpark debt is slated to take up $9 million in hotel taxes this year — Miami-Dade can’t dedicate tourist-generated dollars for the convention center.
“Yes, we’re using hotel taxes for the baseball stadium,’’ said Gonzalez, now manager of Bal Harbour Village. “But we’re using property taxes for the convention center.”