May 24–After months of high-stakes haggling, MDM Development Group won a crucial subsidy agreement late Monday night created to help finance the construction of a downtown expo center and 1,700-room hotel.
Now, the hard part begins.
Though the economic incentive package approved after 11 p.m. by Miami commissioners awards the developer up to $115 million in property tax rebates, MDM Group says its project won't go forward without a favorable outcome to several additional negotiations. With annual subsidies now locked in through an Overtown redevelopment agency, MDM Group plans to seek county approval to extend the life of the redevelopment agency by a dozen years and allow it to collect almost all the property taxes due from the convention center and hotel project.
"This agreement allows us to take the next important step," MDM attorney Javier Fernandez said.
In order to finance the convention center portion of the $750 million project, Fernandez says MDM needs the county to delay a sunset date currently on track to fold the Southeast Overtown Park West Community Redevelopment Agency in 2030. Otherwise, the agreement approved Monday night would be worth a maximum of $50 million — too small to build the massive project contemplated.
But there's no guarantee talks with the city of Miami and Miami-Dade County will bear fruit. Both Miami-Dade Mayor Carlos Gimenez and CRA Chairman Keon Hardemon have expressed skepticism about the benefits of a deal to allow the redevelopment agency to collect property taxes in and around Overtown until 2042. Hardemon said after Monday's vote that he still has reservations about some initial suggestions Gimenez made several months ago as conditions of a redevelopment agency extension, including the addition of a county official to the agency's governing board.
"There are a number of issues that concern me about what the county wants," said Hardemon, while noting that he hadn't yet started talks with the county.
A spokesman for Gimenez declined to comment mid-Monday afternoon, saying the mayor wanted to see the outcome of Monday's meeting.
"Mayor Gimenez and his administration will review what the CRA approves. It would be premature to comment prior to that vote taking place," said spokesman Michael Hernandez.
Additionally, MDM wants to reopen the so-called Global Agreement between the city and county that in the mid-2000s tapped Miami's redevelopment agencies to help fund major projects, like the PortMiami Tunnel and Marlins Park. The agreement laid out, among other things, which governments would receive what percentage of property taxes paid on the expo center site, and Fernandez said MDM Group needs the redevelopment agency to collect 95 percent of its property taxes in order to pay back the subsidies needed to finance the project.
Should that happen, MDM plans to build a 600,000-square-foot convention center with an attached Marriott hotel on the site of the former Miami arena. For business boosters, the project presents an opportunity to boost traffic throughout downtown. For people in Overtown, it represents a potential employer.
Commissioners approved Monday night's agreement in part because the package included a series of commitments by the developer to pay higher wages to its employees, award construction jobs to local residents, and fund a culinary institute and minority vendor programs. Ken Russell cast the lone dissenting vote, saying he believed that at a 65 percent of its property taxes the developer was receiving too large a cut of agency money. But even so, he noted how many people spoke in favor of the deal Monday.
"You can see not one dissenting voice came to the microphone to say this is a bad deal for the community," said Russell.
After the meeting, one of Russell's staffers, Leah Weston, congratulated Fernandez on his victory after so many negotiation sessions and a marathon Monday night.
"Fun journey," she said.
Fernandez responded: "It's only just begun."
