Can the largest mall in America get built without some financial help from Miami-Dade County?
That’s the question well-funded opponents of the American Dream Miami project want answered before county commissioners give preliminary approval Wednesday to a zoning change needed to build the $3 billion retail theme park planned for Northwest Miami-Dade.
The large malls that would compete with American Dream want commissioners to preemptively ban the planned six-million-square-foot complex from pursuing a special taxing district that could divert millions of dollars from Miami-Dade coffers and into infrastructure expenses that developer Triple Five would otherwise have to pay.
“If you can use your own tax dollars to fund your development, that’s a scary thing,” said lobbyist Alex Heckler, who represents the owners of Bayside Marketplace, the Dolphin Mall and other shopping destinations opposing the American Dream plan. “When you have the ability to lower your rent to such a level that a lot of these other malls can be hurt significantly.”
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We’ve told American Dream Miami from the get-go we’re not interested in doing any tax-increment financing.
Miami-Dade Mayor Carlos Gimenez
At issue is whether Triple Five pursues government money known as tax-increment financing. Best known as the device that underpins Community Redevelopment Agencies, the districts retain portions of taxes generated by higher land values — money that would otherwise go into government coffers to fund police, transit and other core services.
Mayor Carlos Gimenez said the subject of government financial assistance came up during his meetings with American Dream representatives.
“We’ve told American Dream Miami from the get-go we’re not interested in doing any tax-increment financing,” said Gimenez, who in 2015 led a successful effort to have Triple Five purchase public land for a portion of the mall site where I-75 meets the Florida Turnpike.
Miguel Diaz de la Portilla, the former state senator and American Dream lobbyist, declined to say Tuesday whether the project was interested in tax-increment money.
Diaz de la Portilla argued public funding wasn’t relevant yet, since commissioners only are being asked whether to send American Dream’s development proposal onto state agencies for review before a final county vote later this year. He said he would only discuss public financing if asked by commissioners on Wednesday.
“We’re willing to address any topic,” he said, “no matter how tangential it may be.”
Last year, before he lost his Florida Senate seat, Diaz de la Portilla was a sponsor of legislation that would have given Florida counties the authority to create TIF districts. A lawyer with Miami-Dade’s County Attorney’s Office reported at the time the bill was designed to benefit American Dream. Diaz de la Portilla denied that.
If American Dream does pursue a TIF district, it’s bound to spark a debate on what constitutes a public subsidy. Developers pursuing the financial assistance argue the money constitutes a rebate on taxes that the government wouldn’t collect if not for the project. Since the money can go only to expenses considered public infrastructure, like roads and parking garages, advocates say the money boosts the surrounding area rather than the for-profit project.
The American Dream windfall would be significant for Miami-Dade’s government. In its land-use application, American Dream projects it would pay about $13 million in property taxes a year after adding about a $1 billion to the county’s tax rolls. That’s on top of another $24 million a year in taxes not tied to real estate, including sales, utility and other government fees. The estimates would make American Dream the county’s second-largest taxpayer, behind Florida Power & Light.
Triple Five, the family-owned developer with headquarters in Edmonton, Canada, has tapped government financing for its two other huge retail projects: the Mall of America, in Bloomington, Minnesota, and the original American Dream, an unfinished shopping theme park under construction at the old Meadowlands stadium site in New Jersey.
When the Mall of America opened in 1992, its home city of Bloomington didn’t see a property-tax windfall from what was then the country’s largest shopping center. The city agreed to a TIF district that funded Triple Five’s infrastructure costs, such as public parking garages and new roads. Twenty-five years later, the districts are set to sunset and Bloomington is readying for its property-tax influx from the mall. The Twin Cities Pioneer Press reported the extra money should be enough to lower the average city resident’s tax bill by 5 percent.
In New Jersey, Triple Five secured government incentives worth an estimated $1 billion for its American Dream Meadowlands. That includes a projected $390-million grant from the New Jersey Economic Development Authority for the $3-billion project. The subsidy would come from a portion of American Dream Meadowlands’ own sales-tax bill, which the state would rebate in the name of economic development. A state analysis cited forecasts of more than 12,500 full-time jobs from American Dream Meadowlands and up to $2 billion in sales.
Gimenez, who helped negotiate the land deal that brought Triple Five to Miami-Dade, said he wasn’t opposed to the developer seeking financial assistance from Florida, or using one-time development fees to alleviate some costs. But he said he was against any effort to lower the county’s revenues by redirecting property taxes back into the mall project. “They asked from the first day: Could we do this, could we do that,” he said. “I told them that we couldn’t do the things they were asking for.”
A lobbying team that includes the manager of Gimenez’s 2016 reelection campaign, Jesse Manzano-Plaza, has aligned with the large malls fighting Triple Five and urging commissioners to insist on a deed restriction barring public dollars as part of Wednesday’s approval vote. Manzano-Plaza works at the LSN lobbying firm, where Heckler, a top Gimenez fundraiser, is a founder.
They represent the South Florida Taxpayers Alliance, a group formed by Taubman Centers, Simon Property Group and General Growth Properties, the retail giants that own Miami-Dade’s largest malls. The group is circulating private polling data showing deep opposition to using “public funds or taxpayer money” for American Dream.
Toby Rittner, president of the Council of Development Finance Agencies, said letting a project keep some of its tax revenue for infrastructure work is a popular tool to bring jobs into areas struggling to lure investment dollars. He said governments need to weigh whether a local economy would truly expand by sacrificing tax revenue in a special district, or if granting the subsidy only means extra money for businesses that would open anyway.
“These are the kind of projects that really need a lot of scrutiny,” he said. “Is this the right use of our precious public resources?”