Miami-Dade County

Tensions over public money for SkyRise are sky high

Rendition of Pier Park underneath the SkyRise tower at Bayside Marketplace.
Rendition of Pier Park underneath the SkyRise tower at Bayside Marketplace.

Designed to soar 1,000 feet up into the clouds over Biscayne Bay, SkyRise Miami has been billed as the Magic City’s $430 million version of the Eiffel Tower. But a renewed push for millions in public subsidies is beginning to make the voter-approved project more a lightning rod.

Developer Jeff Berkowitz’s quest for tax-backed funds plunged his project last week into a sticky political web. The imbroglio — centered around a summer campaign that emphasized the lack of public funding for the tower — has pitted politician against politician, and Berkowitz against Miami Mayor Tomás Regalado, who has gone from campaign spokesman to outspoken critic.

Tensions grew Wednesday after the mayor canceled a meeting with Berkowitz at City Hall, saying they had nothing to talk about. Berkowitz responded by demanding a public apology.

“My reputation for integrity and credibility is being widely [but without justification] challenged and I believe I deserve a public acknowledgment from you that I never misled you or the voters about anything,” Berkowitz wrote in a letter he distributed to the media.

Regalado fired back: “The way to resolve this is for him to pull his request and find the money from the private sector.”

The barbs began last week after Miami-Dade Mayor Carlos Gimenez suddenly threw his support behind a SkyRise application to receive money from a $75 million pot of economic-development dollars funded through property taxes. The move was a change in course for Gimenez, who had previously endorsed smaller projects and placed a SkyRise application on the back-burner while awaiting the results of an August referendum that determined whether Berkowitz could build his tower.

Over the summer, Miami voters overwhelmingly approved the project, pitched as part of a new city lease agreement with Bayside Marketplace that included renovations to the old retail center on the bay in downtown. In the deal, Miami was to receive a $10 million payment plus millions more over the course of Bayside’s long-term lease.

SkyRise, a hairpin shaped structure with theme park-style rides and an amphitheater on a spit of land behind the retail center, was the deal’s showstopper.

Berkowitz has made bold projections. He said 3.2 million visitors would come each year, and SkyRise would have an annual economic impact of more than $1 billion.

But, perhaps infamously, Berkowitz also pledged repeatedly that SkyRise would be built at no cost to the city of Miami, a promise that would become a focal point of the campaign to court Miami voters.

Berkowitz maintains that commitment holds true, saying the city pays nothing and county money would pay for public infrastructure such as a baywalk, marina and parking garage around SkyRise. But if he gets the funds he’s seeking, it would push up property taxes. Miami property owners, then, would help fund a small part of Berkowitz’s project.

Regalado, who in one radio spot to “Miami voters” during the summer campaign flatly stated that “taxpayers win without putting in a cent,” says he was caught off-guard by Gimenez’s request for public funds for SkyRise. He called on Gimenez and Berkowitz to withdraw the application last week, saying it flew in the face of what Miami voters were sold.

The spat is problematic for both men. Berkowitz informed the city administration in an April letter about his application for county funds, but did not make it explicit to Regalado during the campaign that he was indeed seeking money that could increase property taxes for Miami taxpayers.

Regalado says he was ignorant about a detail that now appears crucial to a significant project and referendum in the city he leads. Regalado says his administration never informed him of SkyRise’s application for a county grant, and denies responsibility for being in the dark.

“It doesn’t fall on me because I didn’t know the letter existed,” Regalado said.

Berkowitz first went public with SkyRise about a year ago, after submitting initial plans to the city to begin the approval process. In February, he filed an application with the county for $15 million in economic development funds. He also unsuccessfully sought millions in state funds, which he says he’ll pursue again next year.

In April, Berkowitz explained the funding sources for the $430 million project in a letter to Miami Deputy City Manager Alice Bravo. His team wrote that $30 million would come from Berkowitz, up to $110 million from other investors, and $270 million from foreign investors seeking visas through the federal government’s EB5 program. And he also said he was seeking up to $20 million in public funds, including money he had requested from the county, to pay for infrastructure work.

In May, the city commission approved the referendum language, and in June they approved key lease agreements to allow Berkowitz to build with voters’ consent, kicking off a campaign that ended with 68 percent of the voters approving the SkyRise deal.

The campaign included ads funded in part with $125,000 in SkyRise money. Some of the dollars paid for the radio ad featuring Regalado‘s statements about public funding.

The mayor now believes the developer’s quest for county funds was overlooked in his discussions with Miami’s administration amid a heavy focus on how the deal affected the city of Miami. But Berkowitz on Wednesday chided Regalado for faulting others for the mayor’s ignorance.

“I am sorry that your administration did not share that information with you, leaving you uninformed, but that is your issue, not mine,” Berkowitz wrote. “I was upfront, transparent and forthcoming.”

As the dispute lingers on, it throws into question Berkowitz’s chances of securing the $9 million in county funds, which would no doubt help him court other investors. Several county commissioners have come out in opposition to the SkyRise application, and Berkowitz has said he’s unsure what will happen with the proceedings.

The debate over the SkyRise campaign has also tacitly pitted Regalado against Gimenez. Regalado says that giving the developer public money would be somewhat of a bait-and-switch. But Gimenez spokesman Mike Hernández said the project is the type that voters envisioned when they backed the economic development funds 10 years ago.

“Miami-Dade voters knew what they voted for in 2004,” Hernández said. “You’re talking about a very small sum of money for a very large economic impact in a county that could use additional jobs.”

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