Financing set to bring Tri-Rail trains into MiamiCentral Station
The last piece of the financing puzzle to bring Tri-Rail trains into MiamiCentral Station next year fell into place Oct. 31 when directors of the Southeast Overtown/Park West Community Redevelopment Agency agreed to fund $17.5 million of the project.
The agency had previously pledged that amount, but concerns that it might be on the hook for a shortfall should revenue projections fail had cast a cloud over the final agreement.
It’s a done deal, said Bonnie Arnold, spokesperson for the South Florida Regional Transportation Authority, Tri-rail’s parent, on Tuesday. Signed contracts are expected shortly, she said.
At the meeting, Francis Suarez, agency board member and Miami commissioner, urged fellow directors to finalize the agreement, saying that having Tri-Rail come into downtown is just as important as renovating public housing and establishing a grocery store in a food desert, both of which the agency has accomplished.
“We need to sign the document and move on, because this will be the catalyst for mass transit in Miami and Miami-Dade County,” he said. “This is part of the holistic revitalization of Overtown. With all respect to the lawyers, this deal has been over-lawyered. It has become the sum of all of our fears.”
Projections are that the station will increase property values – hence tax increment revenues to the redevelopment agency – enough for it to meet the $17.5 million it has agreed to give, but there are no guarantees, said Keon Hardemon, agency chair and Miami commissioner.
“We have a great responsibility to ensure neighborhood benefit comes from tax increment dollars. I’m skeptical we can move forward” without some guarantee that the agency wouldn’t have to make up a shortfall. “If we move forward, we’re going to put community organizations at risk,” because money would probably be taken from them to meet the shortfall, he said.
But Mr. Suarez said the present deal is the product of many negotiations and is probably the best that can be reached. “We pushed the envelope,” he said. “I really believe in my heart that this project will generate all the money we need” to meet the commitment. “We did this with the Omni CRA and the PortMiami Tunnel.”
The Overtown redevelopment agency isn’t assuming the risk alone, he said. “This entity [All Aboard Florida] is already building the structure, even after the state welshed on its $20 million part of the deal. At the city level, we fought hard to put more People’s Transportation Plan money into it. Delays create financial issues.”
He reminded the board that the original amount asked from public agencies, about $69 million, has been negotiated down sharply.
All Aboard Florida, a wholly owned subsidiary of Florida East Coast Industries, is building five stations for its Brightline commuter trains and will allow Tri-Rail to use them in South Florida.
“We have been consistently reducing the amount” of money asked from public agencies, said Javier Fernandez, attorney for All Aboard Florida. “We have the downside risk. Here you have a public agency [the regional transportation authority] without a profit motive. Its sole motive is to deliver the transit improvement.” Revenue projections have been extremely conservative, he said.
Wilfredo “Willy” Gort, agency director and Miami commissioner, asked Clarence Woods III, redevelopment agency executive director, whether the other public agencies could accept more risk.
“We’ve gotten to the point that everybody is all in,” Mr. Woods said. “You’d be shaking the trees.”
“Everybody has performed except us,” Mr. Suarez said.
“I am not happy; maybe we shouldn’t more forward without a more structured deal,” Mr. Hardemon replied.
“There is no such deal, and at some point we’ve got to cut [discussions] off,” Mr. Suarez said. “I don’t think the doomsday scenario is going to happen. The future isn’t guaranteed and can’t be written into a document.”
“Context is important here,” said Vincent Signorelli, Florida East Coast Industries CEO. To allow the project to move forward and lock in construction costs, All Aboard Florida started construction without firm commitments from the agencies, he said. “It’s important to understand the leap of faith we took.”
Mr. Signorelli said the company has spent $18 million and has been reimbursed slightly more than $1 million “all in the spirit of making sure this station – unlike other public projects – will be delivered on time and on budget.” All of the real estate components that will generate the anticipated revenue are under construction, he said.
After nearly an hour of impassioned discussion, Mr. Hardemon asked Mr. Woods whether he believed the deal on the table is the best the agency will get. “Yes,” Mr. Woods said.
“Then there’s nothing left to talk about,” Mr. Hardemon said, adjourning the meeting with the direction to Mr. Woods to sign the agreement.