The fate of the downtown convention center and hotel coveted for years by Miami business and tourism boosters now rests on the willingness of county and city of Miami officials to reopen one of South Florida’s most controversial compacts.
Late Monday night, MDM Development Group won a crucial subsidy agreement created to help finance the construction of its 600,000-square-foot convention center and 1,700-room hotel, planned on the former site of the Miami arena. The deal, negotiated with Miami’s Southeast Overtown Park West Community Redevelopment Agency, is worth up to $115 million in property tax rebates.
But MDM says the agreement is all but worthless unless the county agrees to renegotiate a tiny portion of the Global Agreement — the deal that financed the construction of Marlins Park and the PortMiami Tunnel. The developer needs to reopen the pact in order to steer a greater percentage of its property taxes to the Overtown redevelopment agency, which would then reimburse 65 percent to MDM each year.
“This agreement allows us to take the next important step,” MDM attorney Javier Fernandez said late Monday.
The developer also wants the county to extend the life of the redevelopment agency an additional 12 years in order to recapture its property taxes for a longer period. Otherwise, the agreement ends in 2030 when the redevelopment agency folds and is worth only $50 million.
Fernandez says both changes are vital in order to finance the $750 million project. Business boosters have clamored for a downtown expo center for years, saying it would draw in scores of hotel guests and retail shoppers. And MDM notes that most convention centers are either publicly run or subsidized.
But there’s no guarantee talks with the city of Miami and Miami-Dade County will bear fruit. Both Miami-Dade Mayor Carlos Gimenez and redevelopment agency chairman Keon Hardemon have expressed skepticism about the benefits of a deal to allow the redevelopment agency to collect property taxes in and around Overtown until 2042. Hardemon still has reservations about suggestions Gimenez made several months ago as possible conditions of an extension, including the addition of a county official to the tax-funded agency’s governing board, currently run by Miami’s five city commissioners.
“There are a number of issues that concern me about what the county wants,” Hardemon said Monday night, though he said he hasn’t yet started talks with the county.
A spokesman for Gimenez said the mayor wouldn’t comment Monday on future negotiations.
“Mayor Gimenez and his administration will review what the [redevelopment agency] approves,” spokesman Michael Hernández said.
The developer has previously considered the start of 2018 as its deadline in order to launch the project. If MDM is successful, the developer estimates it will receive nearly $4 million in rebates each year from a $6 million tax bill.
In return for the money, MDM agreed to pay higher wages on construction and to hire locally, under threat of financial penalties if it fails to meet benchmarks in the subsidy agreement. MDM also agreed to help fund a redevelopment agency culinary institute and contract with minority vendors. Hospitality union Unite Here! also negotiated a labor peace agreement that should ensure collectively bargained wages for the workers at the planned Marriott hotel.
Those commitments helped sway commissioners Monday, who voted 4 to 1 after 11 p.m. in favor of the agreement. Ken Russell cast the lone dissenting vote, saying he believed that at 65 percent of its property taxes, the developer was receiving too large a cut of agency money. But even so, he noted how many people spoke in favor of the deal Monday.
“You can see not one dissenting voice came to the microphone to say this is a bad deal for the community,” Russell said.
After the meeting, one of Russell’s staffers, Leah Weston, congratulated Fernandez on his victory after so many negotiation sessions and a marathon Monday night.
“Fun journey,” she said.
Fernandez responded: “It’s only just begun.”