Now-or-never pitch for county land for Costco is no bargain

You’ve heard it too often: a last-minute deal appears that the county must make now at giveaway prices or lose a great opportunity.

You hear it when a car dealer or stockbroker or realtor tells you a price won’t last if you don’t buy today. The county heard it when owners said they’d move the Marlins to Las Vegas if the public didn’t build a $3 billion baseball stadium now.

We also heard it exactly a year ago when Kionne McGhee told fellow commissioners that if the county didn’t quickly sell land valued at $31 million for just $4.5 million for a Costco store in his district, we’d lose Costco.

“This offer is not going to be here longer,” he said then. “They have other options that are not found within this county, and options like these are not found every single day. If it’s not here, it’s going to be somewhere else.”

Unlike baseball, the county didn’t get caught by that hurry-up lopsided deal, but now we’re hearing the story again. Mr. McGhee dropped an 82-page agreement on a committee the night before a meeting last week to ensure that we’ll get Costco after all.

The new deal, too late for study, didn’t go through the mayor or other commissioners. It raised the offer to $7.1 million for the $31 million land and added $2.5 million in glittering ornaments – better than last year’s $4.5 million but $20 million-plus below market value.

Mr. McGhee didn’t attend, so Commissioner Danielle Cohen Higgins asked developer Swerdlow why the county should give up land it bought for critical water and sewer maintenance to get back either $7.1 million or less-suitable land in a swap?

The answer sounded like the Marlins’: Costco is going to create 215 jobs and we need the store because “this is a big-box desert” – no, I’m not making that up, that’s what Jose Felix Diaz said on behalf of Swerdlow.

The reason for the rush is the same as a year ago: “We’re going to lose Costco, plain and simple,” Mr. Diaz said.

He pitched it as economic development, where the county cuts a sweetheart deal or gives away major incentives to attract targeted jobs and economic multipliers.

Mr. Diaz also said the county wasn’t yet using the land it bought 20 years ago to keep water and sewers flowing in South Dade in emergencies like hurricanes. “It’s within a CRA [community redevelopment area], so this land should be used for economic development,” he said, rather than utilities to aid residents. 

We buy into giving incentives for high-paying jobs or a business that has a game-changing impact.

But Costco? Costco will pay below, not far above, county median wages and bring us a big store. 

Look around: do you see any big-box desert? 

Such stores go where customers are. They aren’t going to Las Vegas or Broward or elsewhere if they seek South Dade shoppers. If we don’t give land to Costco far below market value, they’ll buy on the open market, like everyone else does.

As for jobs, the county doesn’t incentivize low-wage jobs, nor should it. Why make an exception for Costco by handing out a $20-plus million gift?

The county is offered two choices: receive $20 million below market value for land it wants to keep and then try to buy other land with the proceeds, or swap for a site the developers would buy for $7.1 million and try to make that location work.

But lands the developer offers to swap are outside the Urban Development Boundary, which by county policy – occasionally violated – bars such use so near the Everglades.

“The property that we own is a superior location, but these properties proffered aren’t terrible locations,” said Water and Sewer Director Roy Coley under questioning – faint praise indeed. But “the challenge we have with these properties is that they do lie outside the UDB, and as a policy matter we do not build outside the UDB. So, therefore, we would not be able to use these properties for the maintenance facility.”

Even if the county did swap, Mr. Coley said, it would have to spend $1 million to elevate the new site. Mr. Diaz replied the land Swerdlow offers is big enough to excavate part of it at county expense to fill in the rest.

County commission policy says it can’t sell water-and-sewer land unless its replacement is equally good. Mr. Coley says those offered aren’t equal.

There may be more problems with offers: Mr. Coley said he’s looked at eight or ten sites for a Costco deal over the past year but hasn’t done due diligence on any. That would come before the full commission is handed this lopsided deal on May 7.

Maybe by then we’ll know more. Ms. Cohen Higgins, who machinegunned questions last week, vowed a lot more before that meeting, which we welcome.

This deal has been rushed, as commissioners noted, with no study time. Talks have been ongoing more than two years, said Mr. Diaz, who told commissioners they should be very familiar with details because “in April of 2023 this body had the opportunity to discuss this very deal.”

But this is far from the 2023 deal. Prices changed, ornamental benefits appeared, and two alternate sites surfaced in surprise locations. Nobody voting or in the administration had seen the 82-page legal agreement until the day before.

We understand that deals with developers and big-box stores don’t last forever. But as Ms. Cohen Higgins underlined, we’re dealing with the public’s asset, among water-and-sewer assets that are linked to a federal consent decree because Miami-Dade is billions of dollars behind in vital infrastructure. 

Jimmy Morales, county chief operations officer, made the point clearly: “This is a property purchased by a proprietary fund, water and sewer, subject to consent decrees and whatever, so people are watching what we do with the resources of this department… It is important to make sure that fund is made whole one way or another.”

The people who are watching aren’t merely the voters and taxpayers, to whom the land facing a lopsided deal really belongs. The people to whom Mr. Morales referred are regulators who could find the county in violation of the consent decree, with severe penalties.

Don’t get us wrong: Costco is a fine place to shop. Swerdlow is a reputable developer. We would welcome 215 jobs anywhere. All good.

But is it worth a $20 million-plus incentive or accepting an inferior emergency maintenance site to incentivize that private enterprise?

Mr. Morales and Mr. Coley both made crystal clear that the offered sites would cost the county vital infrastructure. And taking $7 million cash for a $31 million asset and telling the county to buy its own replacement also makes no sense.

It’s nice that developers added millions to a ridiculous $4.5 million offer for a $31 million site a year ago to keep from losing a Costco outlet. Their offer today makes little more sense. It’s fine to keep doors open for a totally satisfactory offer, but this one is a non-starter.