Miami-Dade County

Miami-Dade mayor Carlos Gimenez wants veto power over who runs Frost Museum

Video: Miami-Dade mayor on Frost museum

Miami-Dade Mayor Carlos Giminez discusses the county's involvement with the Frost science museum in downtown Miami.
Up Next
Miami-Dade Mayor Carlos Giminez discusses the county's involvement with the Frost science museum in downtown Miami.

Under the terms of a $45 million county bailout for the Frost Museum of Science, Miami-Dade’s mayor would gain veto power over who gets to run the beleaguered non-profit.

Along with giving at least a third of the museum’s director seats to Miami-Dade and the city of Miami, the Frost board would agree to share authority with the county mayor for hiring its next CEO. The provision could give Mayor Carlos Gimenez a central role in charting the Frost’s future as it tries to recover from a troubled construction effort, with current CEO Gillian Thomas’s expected retirement already the subject of board discussions, according to a source familiar with the talks. A museum spokesman said Thomas was not available Wednesday for comment.

The hiring authority marks the latest concession by the independent museum seeking a government rescue of a private fund-raising campaign to finish the $325 million endeavor. In a recent draft memo, Gimenez wrote that his administration was not aware until October that the project budget had grown nearly $50 million higher than what county officials had expected.

Now Gimenez is asking county commissioners to approve a bailout package that would have Miami-Dade borrow about $45 million and use hotel taxes to pay off the debt. Miami-Dade would divert a $4 million yearly subsidy planned for the museum’s operating budget and instead spend it on the bond payments. A provision of the deal requires Frost’s board to sign a pledge not to seek county operating subsidies while the debt remains.

The undated memo released Wednesday sheds new light on the financial crisis that threatened to idle construction crews building the Miami institution’s new headquarters on the city waterfront. Miami-Dade had already allocated $165 million tied to property taxes for the project, but in September Frost officials warned the county that a planned $100 million private-sector loan package might be in trouble.

Those fears proved accurate in October, as the museum reported that plans to borrow against pledged donations were falling short of expectations.

“At this time, the Museum also disclosed to the County that its project budget had now increased from $272 million to $325 million,” Gimenez wrote in the memo, prepared by his cultural chief, Michael Spring.

In a statement, the Frost said the gap between the two figures stemmed from which costs were included. “The budget initially reported by the county was for construction costs only,” read the statement. “Our total project cost has always been over $300 million,” when including transition expenses from the old campus in Coconut Grove, exhibits for the new facility and design fees.

County officials initially told Frost administrators to seek rescue funds from the Omni Community Redevelopment Agency, a downtown tax district formed to combat blight and which already supports the Adrienne Arsht Center for the Performing Arts and the Perez Art Museum Miami.

When the CRA said no for lack of funds, and lenders declined to finance the rest of the project, Frost administrators said they had no recourse but the county. The memo suggested a worst-case scenario was considered, since it notes the cost of preserving an idle construction site would have hit $25 million.

Instead, Gimenez aides crafted the rescue package set for an initial vote before the 13-member county commission on Tuesday. “In light of the significant county investment... and the consequences of stopping construction and the prospect of losing the opportunity to complete this major civic and cultural institution,” Gimenez wrote, “a plan is being recommended that can complete the Museum without requiring additional County funding beyond what had already been planned for this project.”

While the Frost subsidy was laid out in a hotel-tax projection tied to the 2014 Miami Dolphins stadium aid package (where the team receives up to $5 million on years when it hosts Super Bowl or other major sporting events), the operating payout would not be locked into the county budget the way it is once money is borrowed. In 2014, under a revenue squeeze, Gimenez announced $1 million he initially planned to allocate to PAMM for operating help would instead be shifted to the police budget.

The proposed Frost rescue has thrust the museum’s leadership into the spotlight. Patricia and Phillip Frost, the billionaire couple whose $45 million pledge granted them naming rights for the museum and its signature planetarium, last month succeeded in having the entire board replaced in exchange for an $11 million short-term loan to keep construction crews working until the county dollars could be approved.

In his memo, Gimenez revealed the Frosts have agreed to lend an additional $4.3 million to cover construction overruns beyond an existing $3.5 million contingency budget. Museum officials have cut $20 million from the construction budget by eliminating some design features and tech extras, including an exterior light show for the planetarium dome.

With Miami-Dade providing $45 million and lenders willing to pay $38 million based on the pledges, the museum’s construction manager wrote in a letter accompanying Gimenez’s memo that the additional money should be enough to finish the remaining 30 percent of the project by the end of 2016.

No county official served as a voting member of the prior Frost board, and Gimenez’s rescue package requires significant government representation on the new slate of directors. Miami donated the land on the city’s Museum Park, and it would get five seats on a slimmed down board with a maximum of 30 slots. Miami-Dade would receive an additional five seats, with Spring and county CFO Ed Marquez guaranteed slots on the smaller executive board.

The veto power over the CEO’s hire mirrors the authority Miami-Dade holds over the Arsht Center, which operates in a county-owned and funded facility. But PAMM, the Frost sister property in Museum Park that was also largely built by county dollars and now receives a $3.5 million yearly subsidy from hotel taxes, is free to hire is CEO without approval from the mayor, Spring said.

  Comments