A blight on the county budget
South Florida is replete with cities that tell two tales.
On the one hand, there are areas with multimillion-dollar investment that boast of great wealth and luxurious living. Then there are other areas that suffer from urban decay and blight.
The fact is, some of the trendiest districts benefit from taxpayer dollars intended to help the neediest neighborhoods, and it is all perfectly legal. It happens thanks to legislation that allows Community Redevelopment Agencies — CRAs — to be established. It’s the focus of WPBT2’s Issues Reports special airing at noon Sunday.
CRAs were authorized by the state Legislature in 1969 to address slums, blight and the lack of affordable housing. Public incentives would attract private investment to develop projects in marginal neighborhoods; local governments would control the CRAs. But those lines of control are often blurred, and it is difficult to tell just who is in control of the tax-increment financing generated and its investment. Accountability and transparency are woefully lacking.
CRAs operate under different rules than do local governments. Though not a direct tax increase, tax-increment revenue from counties and cities is diverted to CRA districts for redevelopment projects. In Miami-Dade during the past 10 years, more than $285 million that would have been available to the county’s general fund, to enhance transportation, for example.
Most significant, CRAs can issue debt through bonds to be repaid with tax dollars without voter approval. Politicians love this option because projects can move on a fast track without a public vote, eliminating the need to justify the projects.
But do CRAs work to combat blight and decay? That depends. South Pointe in Miami Beach is a success story. In the 1970s, the area was a refuge for the poor elderly who, at night, sat on vinyl folding chairs on dilapidated hotel terraces to get fresh air. A CRA provided incentives to stimulate redevelopment. Today, South Pointe is a trendy area boasting some of the highest real-estate values in the county. It’s easy for CRAs to succeed in such prime waterfront areas.
Greater challenges lie in areas far from the beaches. The Southeast Overtown Park West CRA is another story. Established in 1982 in a gritty neighborhood, there is still little to show for all the effort. This may be changing. City of Miami and county officials are close to signing off on the Miami World Center project that, at the end, will reward developers with $90 million in public dollars if they produce a successful high-end mixed-use project. It will also include a much-touted convention center with an adjacent hotel.
Will taxpayers get a commensurate return on investment? Opinions differ.
Community leaders in the impoverished areas say they have waited patiently for some of the CRA money magic to come to their way. They say that their needs are not taken seriously by local leaders whose decisions favor wealthy developers. They see various CRAs doling out money to the likes of the Pérez and Bass art museums — and even toward Lincoln Road. They aren’t “needy” and are far removed from slums and blight. And now the Miami Beach CRA is being used for the development of a new convention center on 52 acres of prime real estate. Is this necessary, or appropriate?
It is easy to see how CRAs become controversial; they are being used as tools for economic development rather than the eradication of blight and the creation of affordable housing.
Broward County has changed course, taking greater control over CRAs and concentrating on projects that create jobs and reduce poverty. Miami-Dade County doesn’t seem as concerned, even as CRAs function as a government within a government and their budgets are approved by the County Commission after funds are spent. A city or county commissioner can serve on a CRA’s board despite potential conflicts in the two roles. Additionally, if slums and blight are eradicated in a CRA, rather than shutting down, the agency’s life often is extended.
It’s time for Miami-Dade to follow in Broward’s footsteps and evaluate the impact of CRAs in its budget. The $285 million diverted from county general funds is a big chunk of change. A successful CRA accomplishes its goal and sunsets. The ones that are extended make you wonder if these CRAs are another form of corporate welfare.
This story was originally published January 31, 2015 at 2:00 PM with the headline "A blight on the county budget."