Contract spat leads Miami Downtown Development Authority’s longtime PR firm to walk
After 13 years together, the public agency created to promote Downtown Miami and the public relations firm paid to promote its efforts are breaking up. And the split isn’t exactly amicable.
Once the firm’s current contract expires April 30, Schwartz Media Strategies will walk away from a bid to win a six-figure contract to represent the tax-funded Downtown Development Authority. Principals Tadd Schwartz and Aaron Gordon confirmed the split in a letter sent Tuesday to Miami Commissioner Manolo Reyes, who serves as DDA chairman.
The letter suggests the relationship between the firm and the DDA’s administration had soured.
“This decision was not taken lightly,” the letter reads. “We are stepping aside due to a lack of strategic direction and internal accountability within the Miami DDA, the disruption caused by the continuous departure of talented Miami DDA team members, misrepresentations made by Staff to Board Members which have compromised our role, and operational inefficiencies that undermine our Firm’s productivity.”
The letter follows a somewhat awkward debate at Friday’s DDA executive board meeting. Months after the board expressed their satisfaction with Schwartz Media and voted to skip bidding and negotiate a new contract with Schwartz Media alone, the board on Friday voted to end no-bid negotiations with the firm after DDA Executive Director Christina Crespi said talks had reached an “impasse.”
“I was under the impression from my last meeting with Tadd and Aaron on Friday that we were at an agreement,” Crespi told board members. “And I was told this week that we were not.”
Schwartz and Gordon dispute Crespi’s description, saying they were provided a contract on Feb. 22 and asked to quickly sign it. The firm wanted more time to review the document.
“It’s a five-year agreement,” Gordon told the board. “I think it requires due diligence for the benefit of the board and our firm, and we need a little more time to review it internally and with our legal counsel. That’s it.”
Gordon’s comments stirred up the conversation among board members, some of whom were annoyed Schwartz Media’s request for more time was not discussed before the vote to open up bidding for the contract.
Since November, the DDA and Schwartz Media had discussed an increased public relations workload for the firm, including event planning, video production, international marketing and expanded social media and influencer campaigns.
The parties had negotiated higher fees for the additional responsibilities and hours. The current contract, in place since 2019, called for Schwartz Media to be on retainer for $12,500 a month, or $150,000 a year. According to emails and public documents, Schwartz Media had in January proposed a budget of $20,000 a month, with 3% annual increases for the services the city wanted. In the final draft contract sent to Schwartz Media on Feb. 22, the fees were lowered to $16,000 a month with the same annual increase.
One board member who opposed the no-bid negotiations with Schwartz Media, attorney Richard Lydecker, suggested Schwartz was raising its fees because it had no competition. He referenced Schwartz’s business dealings directly with individual board members’ companies. Schwartz’s firm either currently or has previously contracted with companies that have seats on the DDA board, including Miami Worldcenter, shared office space company Pipeline, and law firms Bilzin Sumberg and Lydecker Diaz.
The comment created some tension and spurred disclosures, although board members who have hired Schwartz have also voted on the firm’s DDA contract in the past. Reyes said bidding should be opened up because the DDA was asking for a large scope of work, leading to talks about higher fees.
“The vote that was taken by the board, in my opinion, was to continue the same type of contract,” Reyes said to board members. “Once we changed the scope, and it is not accepted, then all the negotiations end.”
Reyes and several board members repeatedly complimented Schwartz’s work publicizing the work of the agency, which controls about $14 million annually, and downtown’s growth.
They encouraged Schwartz to bid. But Tuesday’s letter seemed to end any hopes of that.
“This chain of events is representative of the difficulties we have experienced working with Staff as of late, marking a shift from past years,” reads the letter.
This story was originally published March 2, 2022 at 4:13 PM.
