County banned American Dream mall subsidies, but public pays for needed sewer project

Miami-Dade is ready to spend $15 million on a pipe project needed to extend sewer service to the American Dream Miami mega-mall site near Hialeah, and county investigators are exploring whether the contract violates restrictions on public dollars for the $4 billion retail theme park.

At issue is a September task authorization for design work originally titled “American Dream Mall 24-inch Sanitary Force Main Improvements” but later edited to say it involved building two miles of 24-inch sewage pipes “to service an area of unincorporated Miami-Dade County along NW 170th Street.”

All mentions of American Dream Miami were scrubbed from the final version of the document released to the public.

As the largest mall in America, with plans for indoor lakes and a ski slope, American Dream is expected to create significant demand for water and sewer service in an area that’s currently wetlands and vacant property.

When the Corradino Group, a county contractor, submitted its draft task authorization to the county’s Water and Sewer Department in July, it was titled “American Dream Mall 24-inch Sanitary Force Main Improvements.” It included an extensive description of the proposed development by Canadian firm Triple Five, which also owns Minnesota’s Mall of America.

“As requested,” Corradino vice president Robert Regalado wrote a county engineer on July 24, we “are pleased to submit this revised proposal to the Miami-Dade Water and Sewer Department [for] the 24-inch sanitary sewer force main improvements for the American Dream Mall.”

Just shorthand

The county now says the American Dream mentions in the early versions of the documents were shorthand for that area of Miami-Dade, since the sewer extension will allow hook-ups by a major new housing development and other projects slated to go up near the planned mega-mall.

“Staff just used the most notable and memorable project for internal communication,” Water and Sewer director Kevin Lynskey said Monday in a text message. “When it came time to issue the public docs, the language was made more accurate and inclusive.”

The deletions of the American Dream mentions were cited in a memo the county’s Office of Inspector General sent Lynskey in November seeking more information on the sewage-pipe project.

The Nov. 9 memo from Inspector General Mary Cagle notes “subsequent changes to the name of the project” and “a much more abbreviated description of the purpose of the project” from early drafts of the task order to the one that the department made public.

Inspector general raises concerns

Cagle said attaching the project to American Dream could be problematic, given restrictions on using county dollars to benefit Triple Five’s 175-acre commercial and retail complex where I-75 meets the Florida Turnpike. Constructing the pipe extension will cost about $8 million, with the $15 million cost estimate incorporating engineering and design costs, inspections and other expenses.

“It is also a matter of record that the responsibility for the installation of sewer service has been accepted by the developer(s) of the American Dream Mall and the other properties north of NW 170th Street,” Cagle wrote. She said Triple Five’s willingness to pay for sewer improvements was a “principal reason cited” by county staff in recommending approval of the mega-mall’s zoning application, which the County Commission approved in May.

The extension would run a new two-foot-wide sewage pipe along 170th Street from the existing system on Northwest 78th Avenue to 97th Avenue, about eight blocks south of the proposed American Dream site.

The end point is where the Graham Cos. plans its own massive commercial and residential project as a paired development with American Dream. The Graham Cos. and Triple Five pursued joint approval of their projects, and the Miami Lakes developer owns some of the land that’s part of the mall site. But the commission did not impose restrictions on public funds for the 300-acre Graham project.

Public funds battleground

Public funds were the primary battleground leading up to the showdown vote by the commission, with a coalition of local mall owners, including the companies behind Bayside Marketplace and Sawgrass Mills, lobbying for legislation passed by commissioners restricting the use of county dollars to help Triple Five.

Commissioner Jose “Pepe” Diaz, who sponsored the no-subsidy legislation for American Dream, said he did not think the sewage project violated those rules. “It’s not just for American Dream,” Diaz said of the sewage project. “If it was exclusively for them, it would not be happening.”

Daniella Levine Cava, the one commissioner to vote against approving American Dream, said she expected Triple Five to lean on government for help as it pursues construction of the largest mall in the country.

“The sewer system,” she said, “is probably just the tip of the iceberg.”

In a response to Cagle, Lynskey wrote that investigators were confusing the rules for sewage projects aimed at certain regions of the county with ones that only benefit a single project. For regional projects, the county pays for the infrastructure while developers fund shorter connections to their properties, Lynskey said.

“It is important to understand how the Department funds regional infrastructure to meet additional service demands that help drive our economy,” Lynskey wrote Cagle.

He said that any sewage extension involving pipes as large as the one heading to the American Dream project are defined as “regional,” since they can serve a large number of projects. Regional pipes are paid from a fund that consists of hook-up fees from small and large projects countywide. Triple Five and Graham eventually would be paying those to Miami-Dade as well.

Once Triple Five is ready to hook up American Dream to the new sewage pipe, it also would pay contractors to install a local connection and Miami-Dade would need to approve the work.

Building the 24-inch pipe also will make it easier for Miami-Dade to keep American Dream and Graham in the county service area, rather than pushing to join Hialeah through annexation, the Water and Sewer Department wrote in a fact sheet about the pipe project.

A county analysis estimated having both massive developments as water-and-sewer customers would generate an extra $2.4 million a year in water fees for the county.

Miguel Diaz de la Portilla, a lawyer and lobbyist representing American Dream Miami, said it would be “inaccurate” to describe the pipe project as designed for his client. The “county is not paying for sewer extension to ADM,” he wrote. Diaz de la Portilla pointed to a string of pending housing projects in Northwest Miami-Dade that would be using the new pipe as well.

The original language of the task authorization identified American Dream as the reason for the county project.

Under the heading “Project Understanding,” Corradino’s submitted draft included two paragraphs describing the American Dream project as “a ‘destination mall’ that will look more like an amusement park than a traditional mall” with “an indoor roller coaster, a lagoon with submarine rides and up to 1,200 stores.”

“To accommodate this proposed development,” the July 20 version of the task authorization read, “the Miami-Dade Water and Sewer Department ... has identified the need to extend their wastewater collection and transmission system..”

By the time Water and Sewer released the final task order to the Miami Herald in an October records request, there was no mention of American Dream Miami in the document.

The need to “extend” the county’s sewage system had become a need to “improve it.” And where the draft order talked of extending the sewer pipes to “where the American Dream Mall development is planned,” the final version simply describes a project to “serve the commercial properties ... west of I-75.”

This story was originally published December 18, 2018 at 6:39 PM.