Balancing act vital as Miami ponders future of city assets
Written by Michael Lewis on March 20, 2018
Miami is weighing the best uses of its assets. New commissioners Joe Carollo and Manolo Reyes are asking hard questions about properties that could yield hefty income were the city to sell or lease them.
These commissioners point to large looming obligations – a court case and an employee settlement – and see city properties as a lifeline as well as a buffer against other unmet needs or some future property tax slump. So they’re asking pointedly about the highest and best uses of lands.
Other commissioners seem to see the city retaining lands or turning them to nonprofit uses that residents can most enjoy.
Cases in debates now are a possible soccer stadium on a municipal golf course and an expansion of the Miami Children’s Museum on city-owned Watson Island.
Both commission viewpoints seek maximum value. But one concept of maximum is highest income for the city while the other is best service to residents.
No formula can tell which choice is best at any site. It’s probably a bit of both. The final judgment will rest on each commissioner’s concept of service coupled with a realistic look at the city’s fiscal needs.
But one other key factor affects any decision: using valuable property to plug budget holes works only until you run out of property. The more the city deals away, the less there is left for future big emergencies that always arise.
Miami long has been a poor steward. It ran into the ground many properties it operated – the Orange Bowl Stadium, Bayfront Park’s Pepper Fountain, the Coconut Grove Convention Center, Miami Marine Stadium or… you name it.
Miami has had a large appetite for municipal assets but a small budget to maintain or run them, repeatedly handing assets to operators that failed to maximize either revenue to the city – think of the Coconut Grove waterfront – or the value of the assets to residents.
Mr. Carollo is looking at city-owned Melreese Golf Course that is now leased to a private club with the thought that a developer could hand the city a very large revenue stream for all 179 acres.
The city now has a deal with the golf course operators. Setting that aside, any other use would strip away urban sports parkland that now yields little cash to the city but great value to the users. How could the city balance the value of grass and public enjoyment against the undoubted value of either a continuous revenue stream or a one-time payment to a needy city?
It’s complex. Multiple moving parts include not just each asset but everything else going on in city hall. That means officials can’t make these tough decisions based on the land asset in isolation.
We have long advocated for a City of Miami trust to care for its assets like its marine stadium, its waterfront parks, its Knight Center on the river and more, using revenue from some assets to maintain others that serve the public but never yield profits.
There are reasons for that advocacy. The city over the years has dumped its biggest assets rather than properly fund them. Some it gave away to save money: Miami International Airport, PortMiami and water and sewer infrastructure all once belonged to the city, not the county. All three are cash generators now, key community assets, but the city gave them all away to cut costs back then.
The city also yielded Bobby Maduro Stadium, our old baseball stadium; the Orange Bowl Stadium; the Coconut Grove Convention Center; the Miami Arena, and more. Show us, please, any valuable assets it got in return. In the case of the Miami Arena, the city was left afterward with $26 million in construction debt and no arena.
Part of the puzzle is the true purpose of municipal government. If it’s just to maximize income, the city should sell off city hall, police headquarters, fire stations and so on and halt all services. If it’s just to provide everything residents could possibly want, we can have hundreds of parks, build low-cost public housing, do anything we can think of and tax residents to pay for it all. The only limitation would be the allowable tax ceiling.
Clearly, neither extreme is desirable. The basic question commissioners must wrestle with is where to draw the line.
Discussion of that line at city hall is healthy. One faction will lay out all the potential fiscal showers likely to rain down on the city. The other side will stress the impact of municipal assets that can never pay their way. If a city was a profit machine, after all, there would be no need for taxes.
So commissioners, as always, will juggle as they try to balance one aim against another of similar importance. If they do that civilly and thoughtfully, they will fulfill their elective roles.
Let’s hope they also do so wisely. We’ve already given away the airport, the seaport, the municipal utility and major sites on our waterfront. There should be no more unrewarded gifts.