MDM Group told to sharpen pencils on exposition center
Written by Catherine Lackner on April 5, 2016
Holding out for a more favorable offer, directors of the Southeast Overtown/Park West Community Redevelopment Agency (CRA) last week told MDM Group to sharpen its pencils and bring back something more palatable than the expo center deal the developer had proposed.
MDM wants 65% of its property tax bills rebated to make its financing package work – a number at least one CRA director said is too high. Directors also said there aren’t enough teeth to ensure the developer’s agreement to hire locals. The city’s five elected commissioners sit as the CRA directors.
In return for the $115 million tax subsidy, MDM offered to build a 600,000-square-foot exposition center and two hotels comprising 1,700 rooms on the former Miami Arena site on Northwest Eighth Street between North Miami and Northwest First avenues. The site, adjacent to the mammoth Miami Worldcenter project, is vacant and privately held.
Key among MDM’s proposals has been the promise to hire as many people as possible from Miami’s inner city, including 20% of its permanent workforce from Overtown. More than 1,300 direct jobs are expected to be created when the hotel and exposition center are fully open. MDM has said it will not disqualify potential hires because of minor criminal records and will offer internships and jobs to students from a nearby high school.
“This project will help anchor the redevelopment of Overtown and Park West,” Javier Fernandez, MDM Group attorney, told a packed house of residents, business people and union representatives at the three-hour CRA meeting. “It will be a generator of economic demand and will make Overtown a leading destination.”
Miami Beach residents last month voted against a convention center hotel there, but Mr. Fernandez said circumstances are different. “On the Beach, there are traffic problems, but not here,” as the project will have access to Metrorail, Metromover and the station where All Aboard Florida and the proposed expansion of Tri-Rail will have their southern terminus.
“The number of Overtown hires is not as high as I’d like,” said Keon Hardemon, Miami commissioner and CRA chair. There are other problems with the contract, he said. “We’ve made progress, but we can do better. We didn’t bargain well enough.”
“A convention center is needed and a benefit for the city,” said Francis Suarez, Miami commissioner and CRA director. “Sometimes we get so bogged down in the details, we lose sight of the bigger picture.”
In response to complaints that the agreement’s penalties for not hiring local workers were as low as $25,000, Clarence E. Woods III, CRA executive director, said penalties could be assessed on a sliding scale. The developer’s total exposure for not fulfilling hiring quotas could be as high as $2.1 million, he said.
“We need to speak about revenue-sharing,” said Frank Carollo, Miami commissioner and CRA director.
But Mr. Fernandez said revenue sharing is usually part of the deal only when a developer is using public land. “This is a markedly different deal,” he said. “We are acquiring the land.”
“Mr. Woods has done a great job,” said Ken Russell, Miami commissioner and CRA director. “They set the table and then we chip away at it. But the elephant in the room is the tax-increment funding,” which he said provides too high a tax break at 65%.
“We all understand the importance of a convention center hotel,” said Wifredo “Willy” Gort, Miami commissioner and CRA director. “But this is a great community that deserves to get something back.” He suggested increasing the living wage for the jobs MDM is offering, and reinforcing the penalties if the local hiring goals are not met.
“We’re talking Marriott here,” Mr. Russell said, insisting further concessions could be attained. He also pointed out that the proposed exposition center hotel is within a stone’s throw of Miami Worldcenter and “what will be the best train station in Florida. It’s not a blighted area.”
“A billion times zero is zero,” Mr. Suarez said, as he recited a litany of projects that were never consummated in the redevelopment area for various reasons. “We know it’s a vacant lot now, and it could remain that way for five, 10 or 15 years.”
“I’m heartened, but we’re not there yet,” Mr. Hardemon said. It was agreed that MDM would come back to the CRA on April 25 with a tweaked proposal, though Mr. Fernandez said there is a limit to concessions the developer could give lest the project become unfeasible.