Miami-Dade County

Miami to vote Wednesday on potential $115 million expo center subsidy

A rendering of the planned Marriott Marquis Miami Worldcenter Hotel & Expo. Developer MDM Development Group says it will build a smaller project if Miami commissioners don’t approve a $115 million subsidy package.
A rendering of the planned Marriott Marquis Miami Worldcenter Hotel & Expo. Developer MDM Development Group says it will build a smaller project if Miami commissioners don’t approve a $115 million subsidy package. Courtesy Nichols Brosch Wurst Wolfe & Associates

Miami commissioners will decide Wednesday whether to give up to $115 million in subsidies to a developer planning to build a convention center and 1,700 hotel rooms on the former site of the Miami Arena.

MDM Development Group is seeking roughly $4 million a year in public money in order to help finance the construction and operation of the $750 million Marriott Marquis Miami Worldcenter Hotel & Expo. The money would come out of the estimated $6 million property-tax bill the developer would pay to an Overtown redevelopment agency once the project is built and opened.

With the subsidies, the developer is planning a 600,000-square-foot expo center with a 1,500-seat theater and an exhibition floor of about 100,000 square feet, as well as two hotel towers. Although not referenced in the agreement, MDM previously indicated that without public money, it would build a far smaller expo center and hotel — and in turn draw far fewer business travelers into a growing destination.

Development of large convention hotels requires significant capital investment and a level of risk greater than for smaller hospitality projects.

MDM attorney Javier Fernandez

“Development of large convention hotels requires significant capital investment and a level of risk greater than for smaller hospitality projects,” Javier Fernandez, an attorney negotiating on behalf of MDM, said in a statement. “Nearly all large convention hotel projects incorporate some level of public financial support.”

Hoteliers and retailers have clamored for years for an area convention center under the expectation that it would lure in steady scores of high-spending business travelers downtown, filling shops and hotel rooms. Tourism boosters say an on-site hotel is a crucial component of successful expo centers.

But the agreement comes just one year after a similar subsidy package awarded to the adjacent (and related) Miami Worldcenter complex proved highly controversial. And Wednesday’s vote falls on the heels of a Miami-Dade grand jury critique of redevelopment agencies that suggested tax-funded entities have focused too much on incentivizing development and too little on their mission of eliminating slum and blight.

It is NOT the Marriott’s tax dollars, it is the public’s tax dollars…

CRA expert Frank Schnidman

“Please keep in mind that the city of Miami and Miami-Dade County are among the poorest in the nation,” CRA critic Frank Schnidman wrote Monday in an email to downtown-area Commissioner Ken Russell, in which he argued that MDM is merely padding its bottom line. “It is NOT the Marriott’s tax dollars, it is the public’s tax dollars levied against property to pay for the cost of government.”

In an interview last week, Miami Commissioner and Overtown CRA Chairman Keon Hardemon said he hadn’t made up his mind about the proposal. But he defended the agency’s negotiation of tax-rebate agreements by highlighting demands that developers ensure local jobs and higher pay in return.

I think we owe our due diligence to the community to make sure we have incentives that make sense

Miami Commissioner Keon Hardemon

Under the proposed agreement with MDM affiliate P&G Investors LLC, construction workers must be paid higher wages and a set percentage must be hired locally. Once open, the expo center and hotel would need to hire one in five employees from Overtown and the redevelopment area. The developer, which values the promises at around $20 million in today’s dollars — or about one-third the value of the subsidies — faces penalties if it fails and may get nothing if it delivers a project smaller than advertised.

The CRA has also fought back against allegations that it’s done too little to address housing, sending out a press release last month that stated the agency has spent $148 million on the creation of more than 1,000 residential units.

“I think we owe our due diligence to the community to make sure we have incentives that make sense,” Hardemon said.

If commissioners approve approve the deal as proposed during a 5 p.m. hearing at Camillus House, 1603 NW Seventh Ave., they will agree to give back up to $50 million through 2030, when the Southeast Overtown/Park West Community Redevelopment Agency is currently set to expire. If CRA officials convince county commissioners to add an extra 12 years to its life, as MDM has asked, the agreement is worth up to $115 million.

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