Two years ago, Miami City Hall signed off on a 250-unit apartment complex on the Miami River and cashed a cool $1.2 million in development taxes. Just a few months later, the next big residential project got the green light and paid out $500,000.
It was the beginning of the end of Miami’s epic lull in both construction and construction taxes. Since then, at least a dozen more significant residential and mixed-use projects have secured permits to build, bringing Miami’s coffers more than $20 million in impact fees — of which the city has spent relatively little.
Now, after stockpiling payments from dozens of projects, and with expectations that millions more in fees will roll in next year, Miami is poised to go on a spending spree in 2015. All the city’s commissioners have to do is decide how and where to spend $44 million in highly restricted money.
“I think every commissioner is going to want to get a sense they’re getting a fair share for their district,” said Commissioner Francis Suarez.
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Heading into Tuesday’s budget hearing, City Manager Daniel Alfonso and Mayor Tomás Regalado have proposed nearly $7 million on future improvements to Museum and Regatta parks, close to $8 million to expand and buy new park space, and $4 million on new fire rescue equipment. Coconut Grove’s Elizabeth Virrick Park and Shenandoah Park are getting $2 million each for pools. Grapeland Park will get an $850,000 picnic shelter. And Curtis Park’s baseball field will receive $1.5 million in turf improvements.
The money comes from development taxes reaped last year and this year, and from next year’s projected impact fees. Most of the dollars are reserved for parks and paid by the developers of large projects with residential space, like Metropolitan Miami, Brickell City Centre and 1100 Millecento.
The $44 million to be dedicated in 2015 is a hefty sum worth almost triple what the city allocated from all of 2007 through 2013, according to impact-fee records. For Miami’s neighborhoods, that’s good news. The recession has so strapped the city’s capital budget that this summer Commissioner Frank Carollo chose to raid a quarter-million dollars in impact fees from projects in his own district in order to fund others he said were high priority.
Of course, the city at the time had millions in fees already in the bank, untapped.
Deputy City Manager Alice Bravo said the millions have sat idle because the city didn’t necessarily expect the surge in development taxes, nor did it have a specific plan on how to spend its newfound money. “Now that we know we’re in an upswing in development we’re planning ahead for future impact fees and planning,” she said.
Part of that plan includes old parks projects that have queued up, like the pool at Virrick Park. Alfonso and Regalado have also touted the millions set aside for new parks in undetermined locations, likely a boon for a city with a paucity of park space.
But Miami also has to be careful in how it spends the money, which is paid by developers to offset the strain new condos and shops place on parks, streets and police. The spending is tightly regulated by state and local laws, and paid into separate accounts specifically for expenses related to police, fire, general services and parks. In the late 2000s, the city violated its own laws and drew the attention of federal investigators by using $8 million in impact fees to bolster its waning general fund.
By definition, the $35 million the city has budgeted for parks next year — by far the bulk of the money — is also supposed to be spent near the projects that generated the fees, a stipulation Commissioner Marc Sarnoff says the city has ignored for years. Sarnoff, who represents Brickell and Downtown, where the bulk of Miami’s high-grossing towers are being erected, said his district has not gotten what it should.
“The impact fee should be spent in and around where the impact was felt. You throw a grenade in Brickell, you shouldn’t be fixing a broken window in Bayside,” Sarnoff said.
Sarnoff voiced his concerns ahead of an emergency vote in July to quickly change the city’s laws to allow impact fees to be spent on smaller parks throughout the city. He said at the time that he planned a presentation during Tuesday’s budget hearing to show how the city has mismanaged its parks impact fees.
City Attorney Victoria Mendez countered that “the city attorney’s office obviously has a different take.”
Still, residents in Brickell have complained for years that they get the short shrift. Projects there have generated more than $6.5 million in parks impact fees the last two years, but unless the city plans to buy park land in the area, it isn’t slated to receive any money in 2015. Downtown is also a major generator of fees. Alfonso’s 2015 plan includes millions for additions to Museum Park.
Overall, Alfonso says the city’s spending plan puts impact fees back into the areas that generated the money. He acknowledged that Sarnoff’s District 2, which stretches along the Bay, is getting back a little less than it put in. But he said the differences aren’t drastic.
“We’re not generating it in one tip of the city and spending it in another,” he said.
Sarnoff has said his frustration was more pronounced with previous administrations but added the city will likely be sued if it keeps up spending parks fees too far from where the money is produced. Whether his colleagues agree is yet to be seen.
“We don’t police on the basis of what areas generate more cash revenue. That’s just not the way it works,” said Suarez, whose district is slated to receive the least amount of impact fees. “That’s not what a city is about.”
The city’s first budget hearing is set for 5 p.m. Tuesday at Miami City Hall, 3500 Pan American Dr.
The amount of money generated by new development in Miami this year — and perhaps next — is enormous when compared to previous years.
2015: $11.3 million**
2014: $18 million*
2013: $9.1 million
2012: $4.3 million
2011: $1.3 million
2008: $4.6 million
2007: $4 million
2006: $9.3 million
Source: City of Miami Comprehensive Annual Financial Reports, and Office of Budget Management
*Projected through the end of the month