Convention Center Revamp Hinges On Probe
Written by Scott Blake on August 23, 2012
By Scott Blake
Now that Miami Beach voters have approved a resort tax increase to better the city’s time-honored convention center, city commissioners have to figure out exactly what to do with the money.
And there’s a lot to decide.
Mayor Matti Herrera Bower and Commissioner Jerry Libbin said they and other commissioners want to await the outcome of a corruption investigation before deciding how to move ahead with the Miami Beach Convention Center project.
Some expect a September or October announcement in the probe of the city’s former procurement director, Gus Lopez, related to the convention center bid process.
Commissioners then will look to interim City Manager Kathie Brooks for a recommendation on how to proceed — and hopefully, they said, it won’t take long.
"Nothing can happen… until the city manager recommends something," said Mr. Libbin, who also is president and CEO of the Miami Beach Chamber of Commerce.
"We don’t know when that’s going to come up," added Mayor Herrera Bower.
Two issues that need to be settled are whether the city should continue or restart the procurement process and what should be the size and scope of the project.
Currently, the plan calls for selecting a development team or teams to partner with the city to redevelop up to 52 acres of city-owned property, including the convention center and its surroundings, in an effort to make Miami Beach more competitive in the meetings industry.
A lot of money could be at stake. The meetings industry generated $113 billion in spending in the US in 2009, a study found.
The Miami Beach Convention Center, meanwhile, has been a work in progress. When it opened in 1957, the building had only 108,000 square feet of exhibit space. In 1968, the exhibit space was increased by 130,500 square feet. More support facilities were added in 1974.
In 1989, a $92 million renovation was completed that doubled the center’s size to its current 1.2 million square-foot footprint.
In 1998 and 2003, respectively, the 790-room Loews Hotel and the 425-room Royal Palm Hotel were completed in South Beach with public financing to improve the convention center’s ability to accommodate large events.
The convention center competes with major markets such as Orlando and Atlanta, and other cities in the eastern US, for nationally-rotating conventions and tradeshows.
Today, the convention center has 503,000 square feet of exhibit space and 127,600 square feet of meeting space, still smaller than convention centers in a number of major US cities.
And, unlike many top-tier convention centers, the Miami Beach facility does not have a connecting hotel, nor does it offer space dedicated for banquets and related functions.
Last week, Miami Beach voters approved a ballot question to allow commissioners to increase the city’s resort tax by up to 1% to help fund improvements in the convention center. The measure passed handily: the unofficial final vote was 4,783 (67.2%) to 2,334 (32.8%).
City officials estimate the tax increase will produce $8.5 million to $9 million a year in additional tax collections on room rates at Miami Beach hotels and other short-term rentals.
The money would pay debt service for the convention center upgrades. Once the debt is paid, the ongoing revenue from the tax increase would be placed in a capital renewal fund for the center.
Mr. Libbin said commissioners will decide when to start imposing the tax increase, although they already have agreed not to do so until an agreement with a developer is reached.
If the project involves a lease of city land for 10 years or longer, such as for construction and operation of a hotel near the convention center, he said, city voters would have to approve the lease.
If the investigation involving Mr. Lopez finds that the procurement process, which has yielded seven development teams vying for the project, was tainted or unfair, Mr. Libbin said, commissioners could decide to scrap the process and start over.
Other options would be to have the project’s evaluation committee reevaluate the development teams or disband the committee and form a new one to evaluate the teams.
Commissioners also could decide to limit the project’s scope, perhaps only renovate and expand the convention center and leave surrounding properties, or a portion of them, untouched, Mr. Libbin said.
The scope of the project will affect the total cost, which officials will have to set an exact formula for paying.
Generally, however, the chosen developer or developers will be expected to contribute, with the city, through the tax increase and other monies, paying the remainder.
At this point, officials estimate the city’s contribution will be $140 million to $155 million.
"It’s a very important project… It’s not an easy project," said Mayor Herrera Bower. "It’s going to take a combination of monies to be able to do this."
The commission’s next scheduled meeting is Sept. 12. If not then, the interim city manager and commissioners could address the project in October, pending results of the investigation.
"I’m convinced we need the upgrades," Mr. Libbin said. "We’ve fallen behind other cities" with better convention centers.
Despite that, "our economy has done very well," he added. "But I think it could have done significantly better with a better convention center."To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.