Job Creation Is Key To Omni Malls Quest For Redevelopment Money
Written by Risa Polansky on May 22, 2008
By Risa Polansky
Community Redevelopment Agency funds could back the ongoing $142 million revamp of the Omni mall should Miami commissioners agree the finished product offers enough permanent jobs to merit incentive payments.
The owner of the downtown complex, 1501-1701 Biscayne Blvd., is requesting about $7 million in tax rebates from the agency, promising first to deliver the pledged investment.
The project includes about 300,000 square feet of offices, space for big-box retailers and a supermarket, more than 500 new parking spaces and a renovated hotel that recently opened under the Hilton flag.
No redevelopment money would be paid upfront, said attorney Al Dotson Jr. on behalf of mall owner Argent Ventures.
"If we don’t perform, we get zero," he assured commissioners, who serve also as the redevelopment agency board.
Commissioner Tomás Regalado, who usually pushes infrastructure and housing as the best use of redevelopment money, rallied behind the request.
"I support this investment — it’s a no-brainer," he said. "It’s an investment that will guarantee that all types of people, poor or rich, from the Grove or Aventura, will come to this area" to both work and play.
He reminisced about the complex’s glory days, when US presidents visited the hotel and families flocked to a movie theater and shops.
"I’m biased about the Omni because I have very, very good memories," Mr. Regalado said.
Commissioner Marc Sarnoff, whose district includes the Omni area, was warier.
"To me, the Omni CRA needs to be a catalyst for jobs," he said.
The project would create about 1,000 office jobs, 290 to 350 retail jobs, 55 hospitality positions and 500 to 600 construction jobs, the owner says.
"I don’t care about your temporary jobs," Mr. Sarnoff said. "I do care about your permanent jobs."
His concern: paying more than each job is worth.
"I think it comes down to, how much is it costing us?" he said.
In dividing the expected 1,300 new permanent jobs into the requested $7 million, the agency would be paying about $5,380 per job.
Mr. Dotson said jobs could pay from $20,000 to $150,000 a year.
But the math isn’t so straightforward, he warned.
A redevelopment agency generates revenue by capping the value of real property in the area and collecting the increment above the cap. The increment above the cap occurs as property values rise.
Should commissioners approve the funding request, the Omni mall would, after certifying performance, receive a rebate of 65% of the taxes its increase in property value generated above a base-year value — an estimated $7 million over 10 years, but not an exact science.
The base year would probably be 2007, Mr. Dotson said.
The owner is asking also for a 2.5% bonus — up to 10% — for every 5% of employees that live within Omni or Southeast Overtown/Park West redevelopment agency boundaries or within an enterprise zone or empowerment zone, and a one-year bonus for up to five years if at least 33% of employees live in those areas.
Mr. Sarnoff said he’s "not very big on bonuses."
He does, however, support the logistics of the incentive.
"The nice part of your presentation is, we’re on the back end," he said, referencing the performance-based payout plan. "That’s the comfortable part."
Agency Executive Director Jim Villacorta agreed "this is a good way to fund projects," but feared Miami-Dade County commissioners would also have to approve the request, as is required in pledging tax increment funding over a number of years.
County commissioners have withheld support from the agency before, voting to take back county-owned land in Overtown set for an affordable housing project and threatening to deny requests to expand the agency if the city plans to use redevelopment funds to revamp Bicentennial Park.
But the county won’t even have a chance to approve or deny if the city doesn’t move forward first, Mr. Regalado said.
He told commissioners that "this is not only about creation of jobs… it’s about bringing people to the Omni area."
Because Commissioners Michelle Spence-Jones and Joe Sanchez were absent during the discussion, the board agreed to vote on the issue next month.
Said Mr. Sarnoff, "I’m going to consider it real hard."