‘The voters will know every single detail about the lease,’ says Jorge Mas before Miami commissioners vote on his stadium prospect
This is one of two articles examining the ballot question Miami voters will answer on the proposal for Miami Freedom Park. Read the other one here.
The owners of Miami’s future Major League Soccer team say they need a fast-tracked, no-bid deal to build a sprawling commercial and stadium complex on Melreese golf course because time is of the essence. The league wants to see progress toward a stadium, which has taken numerous twists and turns over the five years David Beckham has sought to field a team.
But once Beckham’s partners moved their stadium plans from Overtown to Melreese and pushed for a referendum asking for voters’ approval, the process accelerated to a headlong rush. That burst of speed has raised significant questions about whether the city and team owners truly crossed their t’s and dotted their i’s before asking for voters’ blessing to negotiate a 99-year, no-bid lease for the development of Miami Freedom Park, a $1 billion retail, office, hotel and stadium complex, along with public soccer fields and a 58-acre public park, to be built east of Miami International Airport.
The proposed 25,000-seat stadium for Club Internacional de Fútbol Miami (shortened to Inter Miami) would be a 10-acre corner on 73 acres of developed land.
The plan was drawn up, presented to the Miami City Commission and placed on the November ballot in five months, with the public becoming privy to the details only a few days before the vote in July.
Even if the referendum passes, Miami Freedom Park is not guaranteed. There is no lease right now because voters have to authorize its negotiation first. If a majority of voters say “yes,” city administrators and team officials would hammer out a lease that would still require approval from four of five city commissioners.
Jorge Mas, MasTec chairman and managing partner of the ownership group for Inter Miami, insists that taxpayers would not pay any of the costs associated with preparing Melreese for redevelopment, including necessary utility work, underground infrastructure, road improvements and a pedestrian bridge over the Tamiami Canal to connect the park to the Miami Intermodal Center.
But do voters have all the information they need to make an informed decision? On July 16, Mas told a room full of Miami Herald editors and reporters that voters would have the necessary details before the election.
“The voters will know every single detail of the lease,” Mas said.
Voters may have an outline of what that the lease would include, but there is no lease. There are some nuanced questions that remain.
Apart from the basic question of whether voters want to see the golf course replaced with the proposed complex, concerns remain about soil contamination, the financial aspects of the plan, the value of public parks, traffic the development would generate and the fate of First Tee Miami, a youth golf program at Melreese.
Melreese sits on a plume of toxic ash, the product of an old city incinerator used decades ago. Any development will require some level of environmental cleanup, which could range from the expensive removal of toxic material to sealing the dirty fill with clean dirt or concrete. The Beckham group has agreed to pay for the remediation with an estimated budget of $35 million — but is that a realistic number?
The dirty soil has caused issues in the past. In 2005, when the city built Grapeland Water Park adjacent to the golf course, workers had to remove tons of contaminated soil before construction and place a cap of clean soil over it, a costly process. Erosion has exposed pockets of toxic ash at Melreese, which were fixed. Even without the ash, any golf course would come with environmental baggage because of the pesticides and other chemicals used to maintain the greens.
At Melreese, soil and groundwater tests have detected high levels of arsenic, believed to be caused by the ash, according to records kept by the Miami-Dade Division of Environmental Resources Management (DERM).
Mas said his consultants are confident the team’s $35 million budget for environmental issues should be enough, and an independent consultant who spoke to the Miami Herald suggested the figure is a reasonable estimate.
“It’s a good, conservative number,” said Howard Nelson, a partner at Bilzin Sumberg who specializes in environmental law and development.
Nelson, who is not affiliated with Miami Freedom Park and helps his clients understand land conditions and environmental requirements before development, said the owners could talk to DERM about a preliminary strategy for dealing with the ash and arsenic. Developers can seek a “comfort letter” from DERM, early feedback that can help guide planning for the cleanup.
Wilbur Mayorga, chief of DERM’s environmental monitoring and restoration division, said no such letter has been issued to the Beckham group or anyone regarding Melreese.
If it is required, the removal of tons of contaminated soil could drive up costs and inflate the remediation budget. But Nelson and Mayorga said that depending on the existing conditions and the site plan, soil could be shifted around and capped in a way that could keep costs down while complying with regulations.
State law does require the entity that originally contaminated land to clean it up. In Melreese’s case, this would mean the city of Miami, a point raised by detractors of the Miami Freedom Park plan. Nelson said the lease would have to ensure the soccer team’s owners are legally agreeing to shoulder the cleanup costs.
“The magic is going to be in the language,” he said.
Rent is due
The Beckham team will pay the city annual rent. Under preliminary terms, the rent would be the greater of two amounts — either the fair market value of an annual lease as determined by two independent appraisers ($3.6 million annually), or 5 percent of gross rent revenue collected from tenants at the site.
The ownership’s financial projections say the complex will generate about $425 million in total revenue every year. Given the bold financial predictions, is the proposed rent arrangement fair to the city and its taxpayers?
Because Mas, Beckham and his partners could land a no-bid deal to redevelop public land and reap private profits, opponents have cried foul on what would be a significant real estate transaction. One such critic is Related Group’s Jorge Pérez, who argued the city should have gone through a meaningful public input process, then a public bid, before considering such a deal.
“I am opposed to taking a large piece of public open space and giving it to the private sector,” Pérez stated in a text to the Herald. “I have the highest respect for Jorge Mas and his family and what they have done for Miami. So, it is difficult for me to be against this development. But, this was supposed to be land for a soccer stadium not for a billion dollar commercial venture.”
Pérez argued that the city should solicit proposals “to obtain the highest value possible.”
There’s also the question of whether the city would get the best value out of the land. Michael Fay, principal managing director of real estate firm Avison Young, maintains the Melreese property is worth $200 million to $250 million, which would yield a rental rate that is millions higher than what is being proposed.
“If I was asked to be the listing broker to go out and procure offers … I would tell you, this would garner no less than a dozen to two dozen real qualified groups that would love to do something on this site,” Fay said.
The city of Miami ordered two appraisals of the land, which estimated a value of $143 million to $160 million. Mas insists the Beckham Group plans to pay fair market value to lease the land, and based on the city appraisals, $3.6 million is an appropriate annual lease. Area real estate agents say that’s too low, and provide estimates as high as $16 million annually. Mas scoffs at that figure.
“You will find absolutely no one in their right mind who will pay $10 million to $16 million [a year] for Melreese,” he said. “It’s impossible.”
He maintained that the fair market value for the property might be lower than some people think, based on its location, the need for soil cleanup and the fact the property is not zoned for this kind of development.
“This land has challenges,” he said. “It’s proximate to an airport. So, a significant portion of the land has severe restrictions on its development. More than half of the whole golf course facility is very restricted to one story building, with a certain use — no housing, no schools. Frankly, the only thing you can put on that area is what we’ve designed.”
The northern end of the parcel will accommodate greater heights, and will be where the stadium, hotels, office and retail will be situated.
Value of parks
Some critics simply believe Melreese should remain a golf course. Chief among them: the participants of First Tee Miami.
First Tee is a respected organization that teaches youth golf, provides mentoring and offers academic tutoring. Mas says First Tee will have a home at Miami Freedom Park. But instead of an 18-hole golf course, the program would be run out of a golf entertainment facility, like Top Golf.
Mayor Francis Suarez secured an commitment from the city of Miami Springs to host the First Tee at its country club, but it’s unclear which option the program would choose if the referendum passes.
Children and parents from First Tee formed the largest and most visible opposition to the stadium plan when commissioners placed the question on the ballot. Wearing orange shirts synonymous with the group, they passionately defended the value of their organization and the importance that it be based at Melreese the way it is today.
Others think the Miami Freedom Park deal could open the door to measuring the value of parks by how much money they make, a question that was raised on the City Commission dais.
“It sets a terrible precedent and we will have developers targeting every one of our parks for development in backroom, no-bid deals,” said David Winker, a real estate broker and attorney who is voting no. “How long before developers go after prime waterfront property like Kennedy and Peacock parks if they pull this off?”
Winker is the assistant treasurer for a new political committee founded to oppose the project called Save Our Green Space, Inc. They’ve spent nearly $2,500 on political ads mailed to residents asking voters to say no. Among those supporting the committee: Auto magnate Norman Braman, who has invested millions in local political campaigns.
“The citizens of Miami deserve green space to maintain a reasonable quality of life, especially for their children,” he said.
There are fears the development will cause a traffic nightmare by the airport. The Miami Freedom Park group insists the development won’t have that kind of impact.
Mas has touted a plan for cars to line up on the property in a way that minimizes congestion on adjacent roadways. He envisions people having access from all four directions, according to the site plan for the project. The property will be situated near the Miami Intermodal Center, a hub for public transit north of the property on the other side of the canal. Team owners want to build a pedestrian bridge across the canal so people could get to games easily on public transit.
Mas has shared diagrams showing the proposed flow of traffic onto and off the property from State Road 836/Dolphin Expressway, LeJeune Road and Northwest 37th Avenue. He has said a traffic study owners commissioned shows minimal impact. But he has not released the full traffic study.
Mas said when he went door-to-door and spoke to about 100 people in the adjacent Grapeland Heights neighborhood, residents were most concerned about driving too fast down Northwest 37th Avenue. They talked about adding traffic-calming features to the area, which Mas said he would seek from the government.
Some voters aren’t convinced that the development won’t lead to congestion.
“There are other suitable locations for a soccer stadium,” said Steven Leidner. “And goodness knows Miami has enough retail malls and the traffic they bring.”