Midtown project to get up to $170 million from tax district
By Susan Stabley
Up to $170 million in revenues from a special tax district created by the City of Miami and Miami-Dade County will help build the $1.2 billion Midtown Miami project.
The funds will be used to create a pair of parking garages and install infrastructure in the 56-acre development planned for the former Buena Vista railyard in the Wynwood neighborhood. The district, approved this month by the city and county commissions, is expected to generate the largest amount of public funds for Midtown Miami among a package of deals.
"The Marlins deal is a fat subsidy," said City Commissioner Johnny Winton, whose district includes the Midtown Miami site. "This is self-generating." Only property owners in the Midtown project will be taxed, he said.
City documents show that the project could qualify for a $2 million Economic Development Administration grant from the US Department of Commerce, a $2.5 million Florida Department of Transportation grant, an $800,000 loan from the South Florida Regional Planning Council and a $400,000 Brownfields Economic Development Initiative loan from the county.
Also in the works is a $20.6 million Section 108 loan by the US Department of Housing and Urban Development through the county for infrastructure, according to city documents.
The project area - bounded by Northeast 36th Street on the north, rail tracks along Northeast Second Avenue on the east, North Miami Avenue on the west and Northeast 29th Avenue on the south - has been designated as a brownfield site. Brownfields, properties that have been polluted or contaminated, qualify for federal cleanup funds to encourage redevelopment.
Midtown Group, one of the developers, opened a 16,000-square-foot sales center last week at 3110 NE Second Ave. The mixed-use half of the Midtown project is to include 3,000 condo units, 900 rental units, office space, retail space, a hotel and a spa.
Developers Diversified Realty of Ohio will create the other half, a 600,000-square-foot commercial center called The Shops at Midtown Miami. Groundbreaking on the site, on 26 acres of the railyard parcel, took place May 6, and construction is to begin this summer, according to the company.
Midtown Miami is to be built in six phases. The first two, scheduled to cost $500 million, are to be completed within three years. Developers say more than 700 full-time jobs will be created in the seven years expected for construction.
Public funding is possible with the creation of a political subdivision called the Midtown Miami Community Development District. The subdivision was formed after a petition drive by developers. The Miami City Commission approved it in November and county commissioners in December.
The community-development district would own and control the parking garages. Representatives of the developers make up the board of the district and meet every two weeks, said Paul Abrams of Midtown Group. After condos are sold, some homeowners would join the board, he said. City officials are not allowed by state law to sit on the board, said Otto Boudet-Murias, economic-development adviser for Mayor Manny Diaz.
The district would pay off bonds through a tax levied by the redevelopment area. Payments are tied to the completion of phases, and the bonds would be structured so no principal payments would be required for three years, according to the county.
Tax collection will begin as parts of the project are completed and go on the tax rolls, Mr. Winton said.
Revenues from the tax district will be used to repay 30-year bonds worth $76 million. The bonds cover the $51 million garage with more than 2,900 spaces and a public plaza, according to city documents. County documents estimate the cost of the garage at $45 million.
The site lacks infrastructure and roads. City documents peg the total cost of building infrastructure for the project at $106 million.
The district would construct roads, water and sewer systems, storm-management systems, streetscaping and landscaping as well as parking garages, according to the agreement among the developers, the city and the county. Several public areas would be built - including public squares and liner parks.
The new roads would be East Coast Avenue, Northeast 36th Street, Midtown Boulevard, Northeast 32nd Street, Northeast 34th Street, Northeast 31st Street, Buena Vista Avenue, Northeast 35th Street and Northeast 30th Street. All except East Coast Avenue would be public streets.
The financing plan stipulates that the city and county are not responsible for costs of the garage project other than debt service. Once the bonds and county loans are paid off, the agreement would end.
The city anticipates reaping $314.5 million in tax revenues in 30 years, according to Miami's Department of Economic Development. In a "worst-case scenario," the city would take in $198 million if only two phases are built, according to an April 27 memo from City Manager Joe Arriola.
Miami-Dade County stands to bring in $215.8 million.