City Manager Pulls Out Raid At Developers City Hall Picnic

By Michael Lewis
Has the development bug been exterminated at Miami City Hall?

City commissioners pulled out the can of Raid last week when they indefinitely shelved plans to find someone to develop a hotel on the city’s Melreese golf course.

It was the first time in years that the city had seen any real estate deal it didn’t like. Developers have been the ants at the city’s picnic. The game of choice has been Let’s Make a Deal – our own Monty Halls at City Hall.

For example, the city has a deal to let developers build two hotel towers on Watson Island as part of a mega-yacht marina there. Ex-City Manager Joe Arriola wanted to tear down the bayfront Coconut Grove Expo Center and let someone build there. He also decided to sell the city’s James L. Knight Center downtown. The city sold off the Miami Arena to a developer.

Don’t get me wrong: There are legitimate reasons for the city to develop, to partner with developers or to sell to developers. Any of these deals could be worthwhile.

But with Mayor Manny Diaz, former commissioner Johnny Winton and Mr. Arriola riding high, real estate deal-making moved from the sideshow to the main ring of the city circus – and no, I’m not talking only about the deal-making by the three of them as partners in their highly questionable private property deal. They also used the city’s holdings on their Monopoly game board.

But the balance of power shifted after Mr. Winton was removed from office while criminal charges are pending and Mr. Arriola resigned to head back to a private executive suite. That left only former development company exec Mr. Diaz standing at the Three Amigos Realty Co. He has no more business partners that we know of in City Hall, though other current business partners of the mayor still lease and operate a city facility at Monty’s just up the street.

It was a telling coincidence that our profile photo of new City Manager Pete Hernandez appeared on last week’s front page directly beside the report that he had asked commissioners to suspend indefinitely the city’s quest for developers at Melreese. He’s a career government type moved in from the county, not a career deal-maker temporarily transplanted to City Hall like the Three Amigos team.

Mr. Hernandez’ advantage in the deal-making game is that he isn’t a player at all. At a time when the real estate world is in a whirl at the end of the condo boom and the beginning of who knows what, not playing at all might be the city’s wisest short-term course. There’s no reason the city today must seek development at Melreese or must sell the Grove Expo Center or the Knight Center. Nobody has a gun at the city’s back.

As we’ve noted before, making real estate deals is usually a sucker’s game for government. The other players are almost always sharper – maybe even better than Three Amigos Realty.

Maybe, at last, the picnic is over at City Hall. Advertisement