In pitching a $45 million bailout for the Frost Science Museum’s beleaguered construction effort, Miami-Dade Mayor Carlos Gimenez said the infusion of cash would be the last money the nonprofit should ever expect to receive from the county.
But that doesn’t mean millions of dollars in county property taxes won’t provide Frost with a crucial operating subsidy for years to come.
Miami-Dade officials are floating the possibility of a downtown anti-blight district supporting both Frost and its sister property in Museum Park, the Pérez Art Museum Miami. A recent memo by Gimenez listed the subsidies, along with housing projects and other priorities he wants if city and county officials agree to delay the planned retirement of the Omni Community Redevelopment Agency in 2030.
The special district on the northern edge of downtown Miami spends property taxes that otherwise would go into the general funds of the city and county, and it already supports PAMM and the Adrienne Arsht Center for the Performing Arts .
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The potential for redevelopment dollars heading to Frost helps clarify one of the big questions of Gimenez’s rescue plan for the new $275 million museum: How could Frost afford to operate without millions in subsidy dollars from Miami-Dade?
County subsidies are crucial to other cultural institutions in the area. The PAMM is receiving $3.5 million in county hotel taxes this year, and the county-owned Arsht Center gets about $8 million annually for operations. Until the recent bailout plan was announced, Frost had been planning on significant yearly help from Miami-Dade hotel taxes once it opens in its new downtown location.
This budget year the science museum, which last August closed its longtime home near Coconut Grove to prepare for the move downtown, is set to receive $2.5 million from Miami-Dade hotel taxes. A county planning document shows that subsidy climbing to $4 million a year through 2041. In all, about $100 million is earmarked for Frost operating help for the next 25 years.
But in accepting Gimenez’s rescue terms, Frost would need to forgo those planned subsidies, since the mayor would use that same hotel-tax stream to guarantee the $45 million that Miami-Dade needs to borrow now to pay Frost’s construction crews.
Miami-Dade already is using property taxes to pay back $165 million in construction debt for the Frost, the centerpiece of the original plan for the county to support the institution’s new home on downtown Miami’s waterfront.
“The public doesn’t want to give any more money to the institution. They were pretty generous to begin with,” Gimenez said. “The solution is to go to other entities. And to step up their fundraising. … Not opening up is not an option.”
Gimenez drew a distinction between additional Frost funding that would deplete county coffers, and taxing district money that the redevelopment agency would spend anyway.
“I’m just saying: Don’t come to the county,” he said. “The [Community Redevelopment Agency] is not the county.”
For now, everything involving Frost and public dollars remains in the planning stages. County commissioners must approve Gimenez’s rescue plan for construction of the museum, which would bring a massive aquarium, planetarium and other family-friendly science showcases to a downtown where tourist attractions are in short supply.
Securing redevelopment dollars for Frost is even more complex: Gimenez recommended the long-term Frost operational help in a Jan. 14 memo addressing the possibility of adding 15 years to the life of both the Omni Community Redevelopment Agency and the nearby Overtown/Park West Community Redevelopment Agency.
Some city and county leaders want the districts extended to continue funding neighborhood projects. While the planned retirement dates aren’t until 2030, extending them now could provide the redevelopment agency with more borrowing ability to raise additional funds in the near future.
Gimenez wrote that extending the Omni Community Redevelopment Agency should include money for the proposed Baylink light-rail system connecting Miami with Miami Beach, funds for Museum Park itself, and financial support for affordable housing projects.
Not opening up is not an option.
Miami-Dade Mayor Carlos Gimenez
Extending the Omni’s life by 15 years would cost Miami-Dade about $293 million in property taxes that otherwise could fund general services such as police, transit and roadwork countywide. (Miami contributes more property taxes to the redevelopment agency , and the district would keep $479 million of municipal revenue through 2045, according to county projections.)
Ken Russell, the newly elected Miami commissioner who chairs the Omni Community Redevelopment Agency board, said he’s opposed to using the anti-blight funds to ease pressure on museum budgets.
“To me, there is a core mission of a [community redevelopment agency] and it does not include the operating expenses of a museum,” said Russell, whose District 2 seat traditionally comes with the Omni chairmanship. “It should be affordable housing, it should be job training, it should be for residents who live within that [community redevelopment agency].”
Gillian Thomas, Frost’s CEO, said she has not yet met with Omni redevelopment agency leadership but does expect a meeting “at some point.” She said the museum can survive without county operational help, and says the museum’s new 500,000-gallon aquarium and waterfront location should give it an advantage in trying to sustain itself with admission revenues and catering dollars.
Yes, we can manage without it. That’s what we’re going to be doing.
Frost Museum CEO Gillian Thomas on county hotel-tax subsidies
“Yes, we can manage without it,” Thomas said of the $4 million in county dollars previously planned for Frost. “That’s what we’re going to be doing.”
In the Frost financial woes, Gimenez faces a confluence of some dicey issues in county finance and government. First, there’s the election-year lift of securing a $45 million assistance package for an institution named after a local billionaire, healthcare investor Phillip Frost, and his wife, Patricia.
Gimenez’s opponent in the 2016 mayoral race, school-board member Raquel Regalado, said she opposes the bailout. “The mayor is always championing the private sector, and in this case the private sector has failed to meet its commitment. They need to raise the money like they said they would,” Regalado said. “We have other priorities. The county should not cover this tab.”
There’s also the broader controversy over how to spend revelopment money. Miami-Dade currently has 14 of the anti-blight districts, and they collectively cost county coffers about $37 million a year. Critics see the districts as revenue sources that tend to operate outside the scrutiny of the normal budget process. (The lead item in the Omni Community Redevelopment Agency website’s “What’s New” section is the district’s annual report from 2013.)
Redevelopment money comes from a portion of new taxes generated by higher property values and new construction in the years after the district is created. That leaves local governments collecting only a portion of the property taxes generated in the district, with redevelopment money being spent within the district itself on projects that are supposed to combat slums and blight.
The Omni Community Redevelopment Agency spent more than $11 million on a new production studio for the neighborhood, is paying back $50 million worth of debt for the PortMiami tunnel, and covers about $4 million of yearly debt payments for the Arsht center.
It also gave the PAMM $1 million in 2015 after Gimenez struck a similar funding boost from his proposed budget and used those hotel taxes to shore up spending at the county police department.
We have other priorities. The county should not cover this tab.
Miami-Dade mayoral candidate Raquel Regalado
Miami-Dade finance chief Ed Marquez said Omni’s support for PAMM and Arsht make it “a natural place to go” for Frost, and Gimenez called the museums “two great venues” in his memo on the redevelopment agency’s potential extension. But critics see the plan as more evidence that elected leaders don’t use redevelopment agencies to help poor residents.
“Basically, they’re using poverty money to subsidize the rich,” said Frank Schnidman, a Florida Atlantic University professor and a top critic of current redevelopment practices in South Florida. “Why should poverty money be used so that admission to the Museum of Science is less?”