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Accusations of impropriety fly in Miami Beach Convention Center project

A new voice has weighed in on Miami Beach’s oft-criticized process to select a development team for the city’s massive convention center project: Dan Tishman, who heads one of the two teams competing to land the deal.

On Thursday, Tishman sent a letter to the mayor and city commissioners saying he was “troubled” by “highly suspicious” events of the last few days and claiming that procurement law had been broken.

“These matters must be addressed; otherwise I fear we are all at risk,” Tishman wrote.

Tishman heads South Beach ACE, one of two finalists being considered for what could be a billion-dollar overhaul of the city’s 52-acre convention-center district. Tishman is up against the Portman-CMC team, headed by Portman Holdings in Atlanta.

City commissioners will meet Friday afternoon to debate which team should be hired to renovate the Miami Beach Convention Center, add a hotel, build new restaurants and shops, and possibly develop housing on a vast swath of public land in the heart of South Beach.

Tishman’s letter put into writing concerns that the team has already raised with the city about two major issues:

• The post-deadline submission of financial proposals by the Portman-CMC team.

•  The South Beach ACE team’s reluctance to sign a waiver not to sue the city.

The letter took aim at Jeff Sachs, a city consultant handling the convention center bid. “He tried to get us to make our offer to the city worse while working with our competitors to improve their offer in suspiciously similar terms to ours,” Tishman wrote.

Replied Sachs: “Absolutely not.”

Tishman is referring to revised financial proposals that both teams were asked to submit after City Manager Jimmy Morales came out with last-minute recommendations to dramatically reduce the convention center project.

The manager’s recommendations had a financial impact because under the scaled-back plan, the city would lease less property to developers, thus costing the city more.

On July 2, the city gave both teams a 5 p.m. July 5 deadline to submit their revised financial projections. Both teams met the deadline, according to a memo by Morales.

After the bids came in, Sachs contacted Portman to ask for a “clarification.” Portman had proposed to pay to rebuild the city’s 17th Street Garage, but Morales’ recommendations had called for the city to pay for the garage.

Portman submitted a new bid on July 8, in which the city paid for the garage construction. The team’s lease projections also changed, going from $2.3 million in the first year of retail leases in its July 5 proposal to $5.2 million for the same period in its July 8 proposal.

ACE’s proposal called for $5.2 million in lease payments for the first year.

Tishman noted in his letter that Portman changed its financial projections for parts of the project unrelated to the garage.

Wrote Tishman: “... the revised Portman-CMC proposal looks remarkably like our proposal, which I don’t believe is coincidence.’’

He added that allowing Portman to make another proposal past deadline was “in violation of procurement law.”

An attorney for Portman, Lucia Dougherty, said that’s not the case because the city is past the procurement stage and is now in a “very fluid” negotiations phase.

“This is hearsay, rumor, innuendo. This is just part of the whole attempt to try to intimidate the commission,” Dougherty said.

City officials, Sachs, and Portman have maintained that neither team saw the other’s revised financial projections until after Portman’s July 8 submission.

Still, the city on Wednesday decided to toss Portman’s later submission.

Tishman’s letter also calls it “highly suspicious” that Miami Beach asked both teams to sign agreements not to sue the city before it became public that Portman had submitted a follow-up financial proposal past the city’s deadline.

He added the team was given a short deadline to sign the agreement not to sue, which didn’t give their lawyers a chance to rework the agreement with city attorneys. Al Dotson Jr., an attorney for ACE, has said the agreement as proposed by the city is overly broad and may be illegal.

“Unfortunately, this lack of preparation time on the city’s part created a significant problem for us. You were left with the impression that we were being difficult, when actually we have done our due diligence and were being mindful of the law,” Tishman wrote.

In an email to the Miami Herald sent Thursday, the ACE team said it wants Miami Beach to, among other things: “investigate how and why Portman-CMC’s July 8 submission came to be remarkably similar to our July 5 submission, including why their rent would change on the retail north of 17th Street, which had nothing to do with the ‘misunderstanding’ purported by Portman-CMC; and acknowledge publicly that the City Consultant should not have solicited Portman-CMC’s July 8th memo to begin with.”

Miami Beach’s city manager, city attorney and mayor did not respond to requests for comment Thursday night.

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