Fire up convention center negotiations fast and play straight
Written by Michael Lewis on September 25, 2013
“I think it’s just a bump in the road,” Commissioner Jerry Libbin said after an appeals court last week threw out a vote on a Miami Beach Convention Center rebirth.
Yes, but it’s a big bump – or a small mountain.
Still, the city must surmount it. Not to update the aged center, a key to the city’s economy, is unthinkable.
But if the city and the region don’t want the unthinkable at a failing economic engine, they’ll need thinking instead of the usual name-calling. It’s time to stop looking for villains and find solutions.
What must be solved?
First, even before city voters in November decide whether it will take the present 50% of them or 60% to permit a lease like the one for the convention center, the city must hammer out details.
Leases, contracts, the development agreement and design plans for the center and its surroundings are still conceptual. The court ruled that voters need details of the $1.1 billion project to approve it, and they can’t know details until the city and the developers go beyond conceptual agreements.
Complicating talks will be a November election that will change the mayor and up to three commissioners. In volatile Miami Beach, new officials might sabotage a deal and shift to other developers that covet one of the nation’s major urban upgrades.
Infighting among fixers, publicists and big local names marked the developer selection. Name-calling that sullied the images of the finalist teams continues.
The answer isn’t to start over, however, but to in good faith play out fair negotiations between the city and developer South Beach ACE. If the city can get what it wants, move ahead. Only developer intransigence, not politics, should cause thought of a new partner.
For talks to begin, the city needs top outside negotiators who have handled massive public-private projects, plus an owner’s representative and a construction expert to deal with developers.
We like City Manager Jimmy Morales and his staff, but – let’s face it – the other side will have very high level attorneys and negotiators.
The public frequently gets hurt in such dealings. Bringing aboard experts, who will be costly, will save big public dollars and heartaches.
Mr. Morales planned to hold off hiring until voters decided whether to proceed. But since the court has ruled that there can be no up-or-down vote until a deal is firm, the city must bring in experts now or be certain the public won’t be adequately represented. As Mr. Morales, who is an attorney, knows, a lawyer who represents himself has a fool for a client.
The key question has never been which developer could build better – both would do just fine – but what deal voters would get: amenities, costs, monetary payback, business growth, quality of life, and protection if things go wrong.
If the city doesn’t hire its outside team now, a deal will be cut and a public vote taken before Miami Beach can maximize benefits and minimize costs. Consent of elected officials to hire that team might be the project’s biggest hurdle.
Meanwhile, another bump in the road grows higher daily: construction costs. As major projects move forward in the area, the number of trained and reliable construction teams – slimmed during the recession – is low. Announcement of condo and other projects outpaces the reassembling of subcontracting groups. All projects won’t be born – they never are – but enough will rise to cause labor pains.
Those rising costs complicate a convention center deal. Estimates made just months ago might be far too low.
These difficulties do not outweigh several excellent decisions.
City voters were right to approve a hotel tax to expand the vital convention hub.
Commissioners were right to go ahead with the project.
Mr. Morales was right to position a new convention center toward higher-value meetings with longer hotel stays and away from locally oriented events.
The court was correct that when a project requires voter approval, voters must see the relevant facts.
With so much right, it would be wrong to derail a plan that had been on track. It will be hard enough to achieve with all involved acting in good faith. It would be impossible if infighting took over.
City officials before the court ruling had said they expected developer negotiations to take four to six months. That means voters won’t know if the final deal passes the smell test until spring.
The city needs to augment its team and talk seriously now. The court was right to delay a vote, but delaying a modern convention center more than absolutely necessary is unthinkable.