Miami Should Form Selfperpetuating Trust To Save Its Assets
Written by Michael Lewis on August 18, 2011
By Michael Lewis
Headline contrasts reveal community losses:
"White knight executive to save Gusman," the Miami Herald blazoned atop page one last Sept. 23.
"Gusman parking funds lifeline ending Sept. 30 with trust aid unsettled," Miami Today headlined last week.
In just 11 months, the historic Olympia Theater at the Gusman Center for the Performing Arts reverted from rescued asset to its oft-endangered role under City of Miami stewardship, or lack thereof.
If this gem were alone in city neglect we’d be talking about a slip through a crack or judgment error or sudden revenue fall.
But it’s hardly alone. In all city crises — which hit whenever construction booms end — cash to maintain civic assets exits first. We spend mightily to build or obtain them but we don’t maintain them, so assets become losses.
The Gusman joins other seemingly unbearable burdens to city hall. Astute reader Howard Kleinberg lists the Orange Bowl, Bobby Maduro Stadium and Miami Marine Stadium along with the Gusman as allowed "to deteriorate to near oblivion."
The Orange Bowl hit oblivion. The city razed a famed venue rather than properly repair it. The vacancy cleared the way for the county to commit almost $3 billion to replace a stadium we couldn’t maintain with another that we must maintain.
The city let Bobby Maduro Stadium, our professional baseball stadium, crumble, then sold the site for housing.
Miami Marine Stadium has been shut almost two decades because the city wouldn’t repair it. In his campaign, Mayor Tomás Regalado vowed to restore it to glory. But the city hasn’t put a red cent into the site and it rots on.
That’s just a start. Think about the James L. Knight International Center, Coconut Grove Convention Center, Miami Arena and Bayfront Park.
The Knight center, at the Brickell bridge, was a joint venture among the Hyatt Regency Miami, University of Miami and city to link meeting, performance and convention space with educational and hospitality endeavors. It lingers underused as the city tries to sell its asset.
The city let the Grove center decay along with its bookings until it decided to tear it down and leave open space. That stalled when cable series "Burn Notice" sought a production hub. It leases the center on borrowed time, as commissioners nudge it to flee to a building the city is revamping for filming so they can tear down its Grove base.
Miami Arena is a memory, wasteland at downtown’s edge where two decades ago the city built the Miami Heat basketball team’s home.
Though it was a fine arena, the Heat quickly sought even better and exited. The city wound up selling the site, keeping nothing after it paid remaining construction debt. The new owner leveled the arena.
Bayfront Park holds two wasted assets, a laser tower — have you seen it? — and the Mildred and Claude and Pepper Fountain, poster child for city neglect.
The fountain rose as splashy centerpiece at what the city proudly called its front door at the heart of downtown. It would symbolize Miami’s waterfront much as Buckingham Fountain does in Chicago’s Grant Park.
The city didn’t skimp on the 32-acre park’s fountain, designed by world-famous sculptor and landscape architect Isamu Noguchi. It opened in 1990 at a cost of $3.25 million, a turbulent eye-catcher spewing a fantastic computerized array of plumes.
Then the city discovered it cost money to operate. It cut water shows to weekday lunch hours and 90 minutes a night. Cuts continued until only enough water flowed to keep the pipes from rusting up. Then the city ripped out the million-dollar-plus computerized plumbing.
Finally a bone-dry, 170-foot-diameter basin was left like an inverted flying saucer to save the city $61,000 a year. Next, Miami leased the site for balloon flights with the fountain as launching pad but didn’t get paid.
That’s how Miami handles assets. It spends big to buy, build or acquire them, then lets them rot.
Fortunately, to save money the city gave the county its airport and seaport, preserving our key economic engines. Can you imagine if the city had kept them to crumble? Miami International Airport might be Miami Regional Airstrip, and we might never have had cruise terminals.
The cycle begins again as we convert an old building to film production. We can revamp the site, but where are funds to maintain and operate a film hub beyond a creative "income" line on a sketchy business plan?
Each time the city acquires an asset, it should fund it long term. Given the short-term thinking of officials whose idea of "future" is next election, that’s impossible in annual budget crises.
Officials must create a trust fund to protect assets over decades, not election cycles. Given its current crisis — merely our recurrent crisis on steroids — Miami can’t take this from thin air.
But the commission and mayor today should create a trust fund to be fed by income from existing assets, contributions from a public seeking to preserve those sites and sales of buildings such as the Knight Center, if the city ever gets a buyer. That way, our assets would fund their own futures.
Any income from the new film studio should go to the new trust, as should current payments from "Burn Notice" producers. And, if the Gusman trust doesn’t gel, funding meant to save the historic theater could help fill the pool.
The city usually lacks the will to protect assets. New, splashier creations soak up available cash. But a trust set up now with small but guaranteed income flows from current assets could cushion invariable city hall neglect. Otherwise, today’s spending dissipates money that assets generate, robbing us of a better future.