In Bayfront Development Deals City Must Enlist Experts Now
Written by Michael Lewis on February 21, 2013
By Michael Lewis
Two game-changing deals on Miami-owned bayfront land could vastly benefit the city, its taxpayers and its economy.
Equally easily, they could be detrimental to public purse and policy.
Given City Hall’s track record of bayfront giveaways, each deal deserves microscopic study by not only city officials but top-level outside experts beholden only to taxpayers, not the developers.
As we revealed last week, the city and the owners of Bayside Marketplace are in talks to remake the quarter-century-old center on city land coupled with a longer lease.
Bayside owners would reportedly finance the makeover, with the city to approve the work and the new lease.
In the second potential deal, a long-planned mega-yacht marina complex on city land on Watson Island reportedly has a deep-pockets investor to finally begin work that was to start a dozen years ago.
Miami Dolphins owner Stephen Ross, also a mega-developer, reportedly has signed a letter of intent to join would-be developers who have tied up the city’s land and struggled to make minimal rent payments.
On the surface, both projects could be boons in multiple ways.
Both, if properly executed, could lure more visitors and serve them better.
Both, if properly executed, could increase local employment.
Both, if properly executed, could funnel more revenues directly to the city by virtue of new lease terms for the sites.
On the other hand, the city has a history of weak contracts for its waterfront, contracts that in the end weren’t enforced or whose payment terms were either not followed or far too generous.
Bayfront is remarkably scarce, and these sites are literally the city’s front doors, one in the heart of downtown and the other on the island leading to the city. The city must be well compensated for the choice nature of these valuable sites in reconfiguring both deals.
Clearly, the deal with Flagstone Properties, the would-be developer of the Island Gardens marina-hotel-retail-residential project now envisioned, is a bust. Land has been tied up for 12 years with minimal or no payments and not a shovel of dirt turned. Collecting the small rent is a chore.
The deal with the Rouse Co., original developer of Bayside Marketplace, might not have been bad, but the project never met stated goals of the 1980s: link with and revitalize downtown across Biscayne Boulevard and jumpstart local minority retailers. Bayside remains an island apart, luring visitors more effectively than locals.
New investments offer the opportunity to meet the original goals at both sites or, alternatively, to recalibrate aims. Downtown no longer needs revitalization, nor need we push for hotel development on Watson Island — in fact, two original hotel towers have been cut to one in current plans.
It will be key for city officials to set and publicize both their goals for the deals and the detailed contracts before they lock in anything.
Big changes at either site probably require a referendum, and the public should debate details before a vote. That’s messy, but the public’s most valuable lands are at stake. Voters deserve to know.
The developers at both sites have good reputations. That’s a terrific start, because the city has a penchant for dealing with unknown or underfunded operators who have failed to keep their contracts for the city’s bayfront.
But while General Growth Properties at Bayside and potentially Steve Ross and his Related Companies are solid and reputable, each deal’s details are crucial.
The goal to improve two sites is great — but how, when, and at what payout to the city? It’s great that they want to do good things — but it’s our land, not theirs, and the taxpayers are senior partners in each deal. Senior partners deserve prime treatment.
No more giveaways.
Of course, these are early days. We know of no deals on the table. But the city needs to hire top experts to oversee each potential deal early, because once a deal is struck it’s too late to do much more than get a few extra crumbs for taxpayers.
No, the city’s manager, employees and elected officials definitely will not serve.
In a city so desperate for funds that it keeps selling permits for such atrocities as massive wall billboards that are shamefully called murals, what looks like big money coming from each site could sway elected officials.
With all due respect to our officials, they aren’t top public-private development negotiators. They need experts at their side long before real talks begin to help sculpt the right deals.
In both cases, deals are possible. Refreshingly, the right players are on the other side.
Miami needs to be sure, however, that it gets the best deal — and that means more than just OK. It means best.