Downtown Miami

Miami commissioners reject subsidy proposal for expo center

A rendering of the Marriott Marquis Miami Worldcenter Hotel & Expo, as designed by Nichols Brosch Wurst Wolfe & Associates.
A rendering of the Marriott Marquis Miami Worldcenter Hotel & Expo, as designed by Nichols Brosch Wurst Wolfe & Associates. Nichols Brosch Wurst Wolfe & Associates

Miami commissioners rejected a proposed $115 million subsidy package for the developer of a downtown convention center and hotel Wednesday night, saying MDM Development Group was seeking too much and offering too little.

Commissioners didn’t kill the deal, which MDM representatives have said is critical if they are to build the 600,000-square-foot expo center and 1,700-room hotel coveted by business and tourism boosters. But commissioners made clear they’re willing to walk away from the table if the developer doesn’t offer stronger community benefits, and perhaps even give a minority ownership stake to the Southeast Overtown Park West Community Redevelopment Agency.

“If the developer walks away because we couldn’t get the things we think are morally responsible, or just right, then the shame is not on us,” said CRA Chairman Keon Hardemon. “If they choose to build something smaller because we want something better for our community, we should not feel bad.”

Javier Fernandez, an attorney for the developer, argued MDM needed at least 65 percent of its annual property-tax bill rebated to help finance the construction and operation of the convention center — a facility typically run at a loss by public entities to draw in business travelers to shops, restaurants and hotels. In return for the money, valued the same as a $50 million upfront payment, MDM offered to spend millions extra in higher wages and hire construction and hospitality workers locally.

But most commissioners, who considered the subsidy request Wednesday as CRA board members, believed MDM could give more. While Francis Suarez warned commissioners could push too hard and get nothing, Frank Carollo insisted MDM consider making the CRA a 5 percent partner on the project. Ken Russell said the CRA should impose far stiffer penalties should the developer renege on hiring and wage commitments. Hardemon said wage commitments remained weak.

Hardemon also noted that even with the tax rebate agreement in hand, MDM would still need to convince the city and county by the end of 2017 to waive their rights to the property tax revenues generated by the project in order to make the expo center financially viable. The developer also likely needs to convince the county to extend the life of the CRA until 2042 in order to increase the value of the subsidies.

Without those changes, or a waiver by the developer, the agreement would become moot.

Commissioners ordered MDM to negotiate a better deal and return for a vote on April 25. Now, the question is whether that’s feasible, or whether MDM will reconsider the scope of their project.

“From what I’m hearing, the chasm is so large I’m not sure we’ll be able to bridge the gap,” Fernandez said.

Said Russell: “I don’t want to lose them. But I don’t think we’re gonna.”