Miami Beach

'Hostile takeover' or helpful neighbor? Miami Beach weighs annexing North Bay Village

A view of the waterfront in North Bay Village.
A view of the waterfront in North Bay Village.

As the tiny city of North Bay Village is caught up in an increasingly complex and bizarre political drama, some in Miami Beach are talking about a potential takeover of the three man-made islands strung together by the 79th Street Causeway.

One Miami Beach commissioner recently asked the city attorney to explore legal options for annexing North Bay Village. The City Commission plans to discuss the idea at a future meeting.

While North Bay Village's economic stagnation and recent scandals that prompted the overhaul of top brass in city hall might scare off some would-be suitors, Miami Beach Commissioner Ricky Arriola said the strife "presents an opportunity" for a move he thinks would benefit residents of both cities.

"Despite the turmoil there are a lot of strategic reasons why both cities should examine this," Arriola said, citing a possible boost in property values for North Bay Village, streamlined city services and waterfront real estate development, among others.

So far, Miami Beach has explored the idea with little input from North Bay Village officials, prompting the smaller town's mayor, Connie Leon-Kreps, to characterize Arriola's proposal as an attempted Wall Street-style "hostile takeover" of the village. She said that she would do everything in her power to prevent annexation, a sentiment echoed by other city officials and by some residents.

"I suppose they can simply seek to gobble up smaller municipalities because they feel like it," said Leon-Kreps. "Well, the process works both ways. North Bay Village can seek to annex Miami Beach because we wake up and feel like we can run the Beach better."

In reality, it wouldn't be that simple. Annexation is a long, drawn-out process that would require a resolution from the Miami Beach City Commission and a petition by 20 percent of North Bay Village voters before county officials would even consider it. Then the county's planning board and the County Commission would have to okay the move and North Bay Village residents would have to vote on it.

What remains unclear is whether annexation would be possible without the support of the North Bay Village Commission. It's an unusual situation in Miami-Dade County, where annexations typically take the form of a city absorbing nearby unincorporated land. County officials said they could not remember another time when one city had moved to annex another. Whether the proposal could move to the county without the North Bay Village Commission's approval comes down to interpretation of the county code.

"Before the county can act on this, the municipal governments have to approve," said North Bay Village City Attorney Norman Powell. He said the code "can't be any clearer" and characterized the proposal as a non-starter.

But Miami Beach City Attorney Raul Aguila says it's unclear. The county code says the North Bay Village Commission would have to consent if the county planning board initiated annexation, but it's not clear if the same rules apply if the process is initiated by another city, according to a memo Aguila wrote on annexation procedures. The county attorney's office did not respond to a request for clarification and the Office of Management and Budget said its attorneys had "reached out to Miami Beach and are awaiting a response."

An economic boost

Joining Miami Beach could have financial benefits for North Bay Village.

North Bay Village has just over $1 billion in taxable property value, with less than ten percent of that coming from non-residential properties. Despite still-underdeveloped waterfront, the village generated almost no revenue from new development last year. The city was the only municipality in Miami-Dade to raise the tax rate from 2016-2017.

In 2017, its 8,300 residents paid a nine percent higher property tax rate than people living in Miami Beach. Though part of that has to do with debt incurred by pricey infrastructure projects, a big part of the difference is the taxes North Bay Village levies to pay for county fire services. If it were part of Miami Beach, North Bay Village would no longer pay the county for those services because Miami Beach has its own fire department. Both cities' tax rates fall close to average for the county.

In general, Miami Beach has more money to spend on services for residents. Property taxes alone generate $1,600 more available dollars per resident in Miami Beach than North Bay Village, mostly due to taxes levied on commercial properties.

From left-North Bay Village Commissioners Jose R. Alvarez, Eddie Lim, Mayor Connie Leon-Kreps, Vice Mayor Andreana Jackson and Commissioner Laura Cattabriga at a commission meeting on Tuesday, May 08, 2018. Pedro Portal

"We'd get a lot more bang for our buck," said Kevin Vericker, a North Bay Village activist and blogger who says he's undecided on the issue but doesn't think the proposal is farfetched. "I think all of the nonsense in our government has compromised trust. So I think it has a shot."

From Miami Beach's perspective, property taxes from North Bay Village could be a welcome addition to the city's coffers.

"We would not be assuming a low-income population by any means — quite the contrary," Arriola said. "And they've got under-developed commercial areas that if they were to be developed would be quite profitable and a nice amenity for Miami Beach residents."

Philip Freedman, managing director of Compass Development in Florida, said having a Miami Beach address would also likely boost North Bay Village property values.

"I believe that the panache and cachet of Miami Beach is so strong that even though North Bay Village has been a strong community for decades, it would only be a benefit to the residents on the island to have a Miami Beach moniker as a postal code," he said.

For buyers from other parts of the country and from Latin America, Miami Beach has the name recognition that North Bay Village doesn't, Freedman added.

It's all going to come down to how Miami Beach sells the idea to residents, said North Bay Village Commissioner Eddie Lim. While he sees the potential benefits, for a lot of residents of North Bay Village, he says, the economics aren't enough. They like the conveniences of a small town.

"I also know the voters won't vote for annexation," said village resident Jane Blake. "The most important feature in North Bay Village is that police can respond in a few minutes."

An 'attack' on the city's identity

It's unclear whether the Miami Beach City Commission would get behind the proposal. Four commissioners told the Miami Herald they wanted more information before weighing in.

Commissioner Michael Góngora said he thinks both cities should consider the possibility, but doesn't believe the North Bay Village Commission would ever approve. "We can consolidate government and provide efficiencies to save taxpayer money for these communities," especially when it comes to emergency responders like the police and fire departments, he said.

Commissioner Kristen Rosen Gonzalez was less enthusiastic. She said she was concerned North Bay Village residents would see annexation as "an attack on their identity."

"North Bay Village is an island paradise with a storied history and its own culture," she said. "If the people of North Bay Village embrace it, I will."

Tiny North Bay Village, incorporated in 1945, has a rich history of glamor and intrigue. It's been a favorite hangout for both mobsters and celebrities, including Frank Sinatra, who shot a movie in a local club.

A view of buildings on the 79th Street Causeway in North Bay Village. Herald archives

Asked what he thought about the proposal, Miami Beach Mayor Dan Gelber joked about North Bay Village's dining options but declined to take a side. "I understand Ricky [Arriola] is raising an invading army because he's always had his eye on Benihana," he said, referring to the Japanese restaurant. "Personally I think Shuckers [Waterfront Bar and Grill] is a high-value target as well."

Jokes aside, Arriola and Góngora believe annexation could offer real benefits.

Chief among them, for North Bay Village residents, could be Miami Beach's assistance in paying for much-needed infrastructure improvements and preparing for sea level rise, Arriola said.

North Bay Village will need to entirely replace its sewer and stormwater infrastructure within the next decade, said that town's former city manager, Frank Rollason, a project that he said will cost $35 to $50 million. That's a hit the small city can't afford, Rollason said.

Arriola added that the cities, which are connected by the 79th Street Causeway, already share the same public schools. North Bay Village "is a part of our North Beach community," he said. "I think we share a lot of history."

Annexation was scheduled to be discussed at Miami Beach's May 16 commission meeting, but the discussion was postponed. Arriola said on Wednesday that the idea is "very preliminary" and that he had met with some residents and elected officials "just to gauge their temperature."

Annexation has long been a sticky issue in Miami-Dade County, which is home to more than 30 municipalities. Unlike Broward County, which determined years ago that most areas should be part of a city so the county government could focus on regional concerns like transportation and trade, Miami-Dade is a confusing patchwork of unincorporated areas — where services like police and garbage collection are provided by the county — and cities.

For years, the Miami-Dade County map has shifted as cities annex nearby unincorporated areas and neighborhoods form their own cities. Some of the changes, like Sweetwater's 2010 decision to annex the Dolphin Mall, have proved lucrative. Other plans, like a decade-long effort by four Northwest Miami-Dade cities to divvy up a plot of commercial and industrial land west of the airport, have been blocked by the County Commission or fallen through.

Aerial footage of some of Miami Beach landmarks on September 27, 2017. South Beach, Ocean Drive, Versace Mansion and The Betsy Hotel in South Beach.

Miami Herald staff writer Douglas Hanks contributed to this report.