Second attempt to rebuild Virginia Key marinas runs aground after bids are thrown out
An attempt to redevelop city-owned marinas off the Rickenbacker Causeway capsized Monday after Miami commissioners rejected all proposals and agreed to start from scratch — the second time in six years that all bids were thrown out.
The city has long sought to redesign the area with robotic boat storage, expanded wet slips and a new restaurant complex, a transformation of the west end of Virginia Key into a destination for locals, tourists and boaters. Turning that vision into a reality has sparked controversy at Miami City Hall for years, where redevelopment teams hurled accusations of dishonesty and impropriety.
Administrators sought to sign a 75-year lease with RCI Group, which partnered with Suntex Marinas to propose an $80 million overhaul of marinas on Virginia Key. City Manager Art Noriega, the third city manager to issue a recommendation on this matter, sided with his predecessors on Monday when he advised commissioners that the city should make the deal with RCI and take the issue to the voters. Leases of waterfront land in Miami must be approved by referendum.
After debate over whether the city could dismiss RCI’s bid alone — City Attorney Victoria Méndez advised against it — commissioners voted 3-2 to throw the whole process out. Commissioners Joe Carollo, Manolo Reyes and Alex Díaz de la Portilla voted in favor. Commissioners Ken Russell and Keon Hardemon, in his final meeting before taking his seat on the Miami-Dade County Commission on Tuesday, voted no.
Noriega is expected to take each commissioner’s temperature before determining a path forward.
“The city manager should meet with each of us, and he could discuss it either at the next meeting if he’s had the time or if not the one after that,” Carollo said. “Then we could go from there.”
Allegations fly
The current operator, Aabad Melwani, led the second-place team Biscayne Marine Partners in challenging the selection committee’s rankings. The third-place firm, GCM Contracting Solutions, did not participate in Monday’s hearing.
After the vote, Melwani will remain the operator of the current facility until the city pursues another arrangement, if that happens..
“I’m grateful that we’re still there, that my family and I are still there to operate,” he told the Miami Herald on Monday evening.
Melwani’s team has argued for years that RCI should have been disqualified from the bid for failing to disclose its role in a major Biscayne Bay sewage spill in 2000. One of RCI’s subcontractors, working without a permit, drove a piling through a 5-foot sewer main and sent an estimated 25 million gallons of raw sewage into the bay.
The argument resonated with Russell, who made the first motion to reject RCI.
“Our bay is in a very delicate position,” Russell said. “And I think if we are making this decision and awarding this to a company, we need to know that one, they’re very honest about their history, and two, that they have a good history. And I don’t feel that either has happened in this case.”
RCI’s attorney, Al Dotson, refuted Russell’s description of the incident. He said the sewer pipe was not noted on maps, so no one working on the project knew it was there, and that environmental regulators determined Miami’s land was not harmed by the spill.
“We’re prepared to have the city hire whoever they want to hire to oversee our work on our dime,” said Dotson, who earlier had pointed out that the courts had ruled there was no issue with RCI’s ranking in the selection process. “If you really believe we’re not responsible, then do that.”
Dotson had earlier taken aim at Melwani’s finances, accusing the marina operator of owing the city about $155,000 in rent, late fees and audit costs. The attorney cited an audit that has yet to be completed and is not yet public — a disclosure that surprised Melwani and Noriega.
“If this audit is in fact still in draft form, and thus exempt from public record, it’s a mystery to me how counsel for the other team actually has this report,” Melwani said.
Melwani defended his company’s accounting, and said he’s chosen not to dispute the city auditor’s finding that he owes the city about $14,000, out of good faith and because it would cost more to litigate. Through the bidding war, Melwani’s team has maintained that his is the only group with proven technology for robotic boat storage, and touted his family’s decades-long stewardship of the existing marina.
Reyes said he was sympathetic to Russell’s concerns but after hearing each side poke holes in the other’s proposals, he found fault on both sides. Reyes suggested the city take over the marina’s operation and pursue renovation on its own.
“With a clear conscience, I cannot award this to anybody,” he said.
Carollo said the request for proposal on this redevelopment has remained fraught since the first go-around.
He resurfaced an allegation that the city’s former director of real estate, Daniel Rotenberg, failed to disclose a conflict of interest stemming from a business relationship with a firm that partnered with RCI in 2016 during the first round of bidding. That firm, Tate Capital, wrote to commissioners saying Rotenberg had left the company in 2012, and Rotenberg signed a notarized statement saying he had no financial ties with the Tate family. Rotenberg, who said one of the bidders was “grasping at straws” at the time, recently left his City Hall post.
“If this whole thing wasn’t rigged from the first RFP, to the second RFP, it’s a hell of a good impersonation,” Carollo said, adding later that he agreed the sewage spill issue could not be overlooked.
What happens next
Before the vote, Díaz de la Portilla cautioned commissioners to avoid stumbling into a legally precarious position, advocating against rejecting the RCI bid alone. He also questioned the wisdom behind resetting a six-year process to develop a state-of-the-art marina facility that would be lucrative for City Hall.
“What is the format for moving the city forward so we can have a world-class marina?” he asked. “Let’s have that conversation today, at least, so we have some direction or give our city manager some direction on how we’re going to get there eventually.”
Dreams of a swanky marina and restaurant complex on some of Miami’s most desirable waterfront real estate have spanned two mayors, three city managers and multiple commissioners. The initial bids were thrown out in July 2016 amid mudslinging and claims of back-room deals. Making improvements to Virginia Key was a priority under former Mayor Tomás Regalado, so administrators rushed to launch a second competition in 2017. Many of the same players, albeit a bit rearranged, participated. Suntex, which submitted its own bid in round one, partnered with RCI in the second round. Each team mounted an intense lobbying effort.
The selection of RCI as the top-ranked bidder spurred a bid protest, followed by a lawsuit and multiple deferrals by the commission. The delay dashed Regalado’s hopes that he’d be in office to see the deal finalized. Mayor Francis Suarez was elected in November 2017.
Noriega estimated a new solicitation would take another two to three years.
Another variable: The future of the seat that will be vacated by Hardemon. Commissioners are scheduled to meet Wednesday to discuss appointing someone to complete the last year of Hardemon’s term before the 2021 municipal election, or call a special election sooner.
In some of his final comments before leaving the dais, Hardemon noted the city’s prolonged stalemate on Virginia Key, pointing out that it’s become clear that in a competition where RCI comes in first place, the city won’t pick that team.
“I’m walking away from this saying, ‘Hey, if we knew this is where we wanted to be, meaning a rejection of all of the recommendations, then we should’ve done this a long time ago instead of today,’ ” he said.
If the city opened another bid for the redevelopment, Melwani said he would jump back into the fray.
“One hundred percent. Absolutely,” he said after the vote. “This has been my life’s work.”
Representatives for RCI did not immediately respond to a request for comment Monday evening.
This story was originally published November 16, 2020 at 8:07 PM.
