Miami Mayor Regalado distances himself from SkyRise subsidy

When developer Jeff Berkowitz needed Miami voters to approve his privately financed SkyRise Miami tower this summer, he found an ally and campaign spokesman in Miami Mayor Tomás Regalado. But now that Berkowitz is seeking millions in county funds, he may have no bigger opponent.

Regalado on Friday distanced himself from SkyRise and called on Miami-Dade County commissioners to reject Berkowitz’s request for public money, saying he and the developer campaigned on a pledge that the 1,000-foot tower behind Bayside Marketplace would be built with private dollars. Should the county commission vote to give Berkowitz the $9 million approved Thursday by a county economic-development committee, the developer would receive a subsidy funded by property taxes.

“We can’t continue to do things differently from what we promise the people,” Regalado told The Herald. “This isn’t about $9 million. It’s a moral issue.”

Berkowitz said the money he is seeking would actually fund public infrastructure improvements. The developer said he’s keeping his promise that the city of Miami won’t spend public funds on SkyRise, despite at least one campaign ad featuring Regalado and funded by SkyRise that flatly stated taxpayers wouldn’t be charged.

“One hundred percent of the EDF [Economic Development Fund] dollars are to be committed to public infrastructure,” said Berkowitz. “Not the tower.”

For almost a year now, Berkowitz has promoted SkyRise, a hairpin-shaped tower on a spit of public land behind Bayside, to host theme-park rides, a nightclub and amphitheater. Berkowitz, Regalado and regional business boosters have promoted the project as Miami’s version of the Eiffel Tower, and Berkowitz has estimated that the project will inject more than $1 billion into the local economy each year.

Berkowitz has also advertised the $420 million project as a privately financed endeavor. He told The Herald that some $270 million is expected from foreign investors through the EB5 visa program, $50 million from a large, institutional investor, $70 million from investors courted personally by Berkowitz and another $30 million from the developer himself.

But Berkowitz has in the past courted public money for the tower. He requested $10 million from the state, which gave him nothing after Gov. Rick Scott vetoed a $2 million allocation by the Legislature. And in February, Berkowitz submitted an application to the county for a $15 million economic development subsidy out of a pot of $75 million approved 10 years ago by county voters.

That county application, however, wasn’t put into the approval pipeline by the county administration until after the August referendum in Miami, during which 68 percent of voters supported the Skyrise project, which was tied to a lease amendment and improvements to Bayside. During that campaign, Regalado, Berkowitz and Bayside operator General Growth Properties told voters that the deal would bring the city of Miami millions in upfront payments, millions more in increased lease payments, and without cost to the public — though all say the latter promise was that the city wouldn’t have to invest public funds.

“This means more rent and an advanced payment of $10 million for the city of Miami,” Regalado said in one Spanish-language ad paid for by Friends of Bayside Marketplace. “Taxpayers win without putting in a cent.”

Regalado now says he wasn’t aware that Berkowitz was seeking money from the county, and that he was glad Scott vetoed the Legislature’s funding of the project because he thought it helped sell SkyRise. He says he didn’t mislead the public and he doesn’t believe Berkowitz misled him. If anything, Regalado says he was simply uninformed.

But the mayor said turning around and getting $9 million from the county in money that would elevate property taxes — albeit likely by pennies for the average taxpayer — is the kind of move that “contributes to the cynicism voters have for government.” He said he made that clear when Jack Osterholt, Miami-Dade Mayor Carlos Gimenez’s deputy in charge of economic programs, asked him weeks ago to send a letter of support for Berkowitz’s application.

“I don’t have control over the county but I do feel the county should consider what the people of Miami voted for and were told,” Regalado said.

Osterholt told The Herald on Friday that Regalado declined to send a letter of support, but he said Gimenez doesn’t view the money as subsidizing a private project. Three Miami commissioners — Keon Hardemon, Marc Sarnoff and Francis Suarez — signed and sent letters of support.

“The mayor’s position is he’s not putting money into SkyRise. He’s putting money into the landscaping and walkway around SkyRise that probably would have good use even if SkyRise never got built,” Osterholt said.

In total, Berkowitz’s county application shows the project has $35 million in infrastructure costs, including $4.5 million for site lighting, $2.2 million for a public baywalk and street work, $3 million for the city’s marina and another $18.6 million for the Bayside garage and “other garage” construction.

Berkowitz acknowledged before Thursday’s hearing that a discussion about SkyRise’s impact on property taxes might have changed some of the dialogue around the project. But he disputed that he’s increasing property taxes.

“I don't view it as seeking tax dollars,” he said. “Ten years ago, the voters spoke, they [voted] to authorize the expenditure of money for game-changing projects. As far I am concerned, we are the the first project that qualifies for that kind of money.”

On Friday, he added: “For [Regalado] to suggest we should not be entitled to economic development dollars that the voters have approved for purposes for game-changing purposes such as SkyRise, it’s just wrong.”

Miami Herald staff writer Douglas Hanks contributed to this report.

This story was originally published October 17, 2014 at 6:37 PM with the headline "Miami Mayor Regalado distances himself from SkyRise subsidy."