Miami-Dade County

From French firm, a bid to jump-start Bay Link

Miami Dade Mayor Carlos Gimenez speaks to the media after speaking at the 2014 State of the County Address in Hialeah on Wednesday 26, 2014
Miami Dade Mayor Carlos Gimenez speaks to the media after speaking at the 2014 State of the County Address in Hialeah on Wednesday 26, 2014 EL NUEVO HERALD

The push for a railway connecting Miami and Miami Beach has been stalled in the planning process since Ronald Reagan was president, but that hasn’t stopped a French company from bidding on a piece of the project.

Alstom recently proposed creating a $148 million wireless streetcar system for Miami Beach that would run on almost five miles of light-rail tracks on Washington Avenue between Fifth Street and the city’s convention center. It’s designed to connect with a future Bay Link, the common name for a light-rail system connecting the mainland with South Beach on tracks running over the MacArthur Causeway.

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Tax dollars would ultimately fund construction and operations, and Miami Beach officials expect the entire project to cost the city about $1 million a month for decades. Alstom and its partners want to finance the construction tab upfront, and then operate it for the resort city on an exclusive contract that could run for 35 years.

Multiple hurdles remain for Alstom in Miami Beach, including a bidding process that would kick in should city leaders vote to consider the proposal. Alstom is a major player in the light-rail industry, but also got snagged last year in a global corruption scandal that ended with its paying a $772 million criminal penalty to the United States.

Miami Beach Mayor Philip Levine said Friday he expected to recommend that city commissioners reject Alstom’s unsolicited proposal, which called for giving competitors only until Oct. 22 to bid against Alstom’s plan. But Levine said he still wants Miami Beach to pursue a deal by drafting a request for proposals to build and finance the kind of street-car system that Alstom suggested.

“What I’m concerned about is the time period,” Levine said. “We need to give [bidders] more time to analyze our systems and our needs.”

Alstom’s submission marks the most significant move yet to build Bay Link, which was first the subject of a study in 1988. Connecting the county’s largest business district with its most popular tourist destination, Bay Link was part of a package promised to Miami-Dade voters in 2002 when they approved a new half-percentage transit sales tax.

The Miami Beach line would employ electric streetcars on dedicated lanes carved out of existing roadways. The Alstom proposal estimates 23,000 riders a day, with eight or 10 stations spaced out between Fifth Street and its end point on Dade Boulevard. It would utilize powered rails that only energize when in contact with the vehicles.

If built, the Miami Beach street-car system would account for about a third of the full Bay Link system as envisioned in the latest planning round — a 14-mile street-car system running from Miami’s Government Center to the Miami Beach Convention Center. While only involving Miami Beach, the Alstom proposal carries high stakes for the $532 million Bay Link project, since elected leaders have already said they want a single operator and compatible cars.

Freddy Balsera, who helped Alstom lobby for a Miami street-car project until late last year, said the French company saw value in getting started with a smaller system on either side of the bay.

“The theory was that if Miami builds its own streetcar system, and maybe Miami Beach would build its own streetcar system, maybe the county would come in and connect it,” said Baslera, president of Balsera Communications in Coral Gables. “Alstom would have a competitive advantage.”

The Miami Beach proposal could be a milestone in the privatization push under way in Miami-Dade, as lobbyists, businesses and elected leaders champion financing arrangements widely known as private-public partnerships (and dubbed “P3” for short).

Miami-Dade Mayor Carlos Gimenez recently returned from a tour of Denver organized by business groups and centered around that city’s use of P3 deals to expand its transit system. A typical deal involves a private consortium agreeing to finance, build and operate a public-works project in exchange for decades worth of payments from the government.

Alstom’s proposal, filed by a consortium called Greater Miami Tramlink Partners, does not lay out what the group wants to charge Miami Beach for the street-car project. At the request of the consortium, city lawyers blacked out the proposed fee schedule when they released a copy to the Miami Herald.

The framework assumes Miami Beach will not pursue federal transportation grants, which can absorb half of a project’s cost but require an application process that takes years.

Previous Bay Link funding reports looked at using a mix of hotel taxes, state grants, property taxes along the rail route, transit sales-tax dollars and revenue from naming rights. In an April 29 memo, Miami Beach staffers said they were pursuing higher parking fees to help pay for the street-car system, too.

The city also estimated a P3 bidder would probably require between $12 million and $17 million a year in exchange for building and operating a street-car system for Miami Beach. That doesn’t include the cost of maintaining a depot for storing and repairing the street cars.

The June 29 submission follows years of lobbying by Alstom at the city and county level, including meetings with both Gimenez and Levine at rail facilities in France, according to interviews.

Like Levine, Miami Beach City Manager Jimmy Morales also talked to Alstom executives in Bordeaux during a tour of rail facilities there, according to his office. A company representative said an Alstom executive was there when Gimenez toured Paris light-rail facilities in June during a trade mission mostly dedicated to a global air show.

Both Gimenez and Levine serve on a county board dedicated to Bay Link. The panel, a subcommittee of the countywide Metropolitan Planning Organization, recently endorsed a request by Levine to allow Miami Beach to explore its own light-rail system rather than continuing to pursue Bay Link as a single project. Gimenez serves as chairman of the committee.

One of Gimenez’s sons, Carlos J. Gimenez, works at Balsera Communications and was part of the team lobbying for Alstom’s street-car efforts in Miami. That system would have run from the Design District until it connected with Bay Link around NE Sixth Street. In November, Balsera secured clearance from county ethics chief Joseph Centorino for his firm to lobby the MPO, which would have okayed state and federal funding if the city had pursued the project.

Centorino said Friday that Miami’s street-car project was clearly distinct from the effort led by Mayor Gimenez. “The mayor is on a committee looking at Bay Link,” he said.

Balsera Communications broke with Alstom shortly after seeking clearance from Centorino, filing suit in December over $146,000 in fees that Balsera said Alstom owed from a $12,000-a-month contract. The agreement, included in the lawsuit, shows the contract was signed a year before the younger Gimenez joined Balsera’s firm in 2013 and did not mention Bay Link.

“The project I was working on had no money contemplated from the county,” Balsera said. “It was strictly discussed with Miami.”

The Miami Beach proposal describes Alstom as a minority investor in the consortium pursuing the street-car project. Alstom has clients across the world, including New York City’s transit department and Amtrak’s Acela line.

In December, Alstom pleaded guilty in Connecticut to federal charges tied to the Foreign Corrupt Practices Act that arose out of alleged bribes the company made while pursuing deals in Indonesia, Saudi Arabia, Egypt and the Bahamas.

The company agreed to pay a $722 million criminal penalty for a scheme a Justice Department press release described as “astounding in its breadth, its brazenness and its worldwide consequences.”

Alstom executives declined requests for interviews on the record. A spokesman Friday forwarded a press release from the December settlement that included a statement from CEO Patrick Kron pledging to conduct business “in a responsible way, consistent with the highest ethical standards.”

“There were a number of problems in the past and we deeply regret that,” Kron said.

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