A tax-incentive program approved more than 15 years ago by Miami voters in order to boost business and improve the local economy looks like it will end up costing taxpayers millions after city officials failed to properly establish the system and ignored applications from dozens of companies.
Miami commissioners are poised to vote Thursday on a pending $12 million settlement to close a class-action lawsuit filed by Museo Vault, one of some 67 companies that applied for tax breaks after opening or expanding their businesses inside a city enterprise zone. Museo, a storage and services company for fine art that opened in Wynwood in late 2008, fought to force the city to repay excessive tax bills paid by jilted companies.
Had the city established its enterprise zones and granted applications, qualified businesses would have received tax breaks worth up to 100 percent of the assessed value of their improvements. The exemptions — available only on the portions of tax bills paid to the city — were to remain available on a diminishing scale for a decade.
But only one application was ever approved — and that went to a business that ultimately waived its $109 in annual savings.
“We are excited for those taxpayers who ultimately will receive tax rebates after waiting several years for a resolution of this matter,” said Pardo, of Pardo Jackson Gainsburg.
Pardo, who initially represented a consultant who’d filed applications on behalf of 20 businesses, wrote in 2010 to the city’s top administrator that “not a single application for a tax exemption has been reviewed by the City Commission, much less approved for an exemption.” The consultant’s clients included some high-profile businesses, including Michy’s Restaurant, Graspa Group, Epic Hotel, Bayside Chili’s and Met II.
In 2016, Judge Rosa Rodriguez granted the class summary judgment on its claim and the city appealed, leading to a decision in March by the Third District Court of Appeal in favor of Museo Vault. At the time, the company’s attorneys claimed the city owed more than $30 million in damages.
Miami Mayor Francis Suarez, a city commissioner back when the lawsuit was filed, did not immediately respond to a text message seeking comment. Nor did City Attorney Victoria Mendez. A Museo Vault spokeswoman said a statement would be forthcoming.
Should commissioners approve the settlement Thursday, the deal would still need to be finalized by a judge. It’s not clear how the settlement, first reported by the South Florida Business Journal, would be paid out.