Week of October 30, 2008
Dade Commissioner Souto says county has been 'extremely slow' to react to economic downturn, needs to reassess capital project financing plans By Risa PolanskyMiami-Dade officials need to wake up and smell the economic coffee, Commissioner Javier Souto says. In a memo to Mayor Carlos Alvarez and fellow commissioners, he accuses the county of "being extremely slow to react to the steady downward spiral in our economy." Some major projects planned for Miami-Dade — including a Marlins ballpark, tunnel to the Port of Miami and revamp of Bicentennial Park into Museum Park — are set to be funded by community redevelopment dollars, which depend on property valuations, and by tourism taxes. In August, county Convention Development Tax collections — generated by a tax on hotel and other temporary accommodation rentals — hit $3.2 million, up from $3 million during the same period last year. But in today's "collapsing national economy," that money is not guaranteed to continue coming in at normal levels, Mr. Souto insisted. "My main objection [to the projects] has been based on building facilities using a financing structure that depends on a growing tourism-based economy (tourism taxes) and real-estate economy (CRA financing)," he wrote. He expanded on the point later in the memo: "New construction for residential and commercial properties has come to a halt with the collapsing economy and banking industry, so there will be no new construction beyond what currently exists in the CRA [community redevelopment] areas for the foreseeable future, which means little new revenue generated for CRA-financed projects. "The tourism and visitor dollars and passenger fees that pay for the airport expansion, seaport cruise terminal expansion, Museum Park and the baseball stadium depend on a healthy tourism economy, which you don't have to have a PhD in economics to know is going to be severely impacted by the collapsing economy, rising fuel crises, bank failures, shrinking credit markets, collapsing stock markets in Europe and Asia, etc." In the memo, Mr. Souto asked that time be reserved before each Board of County Commissioners meeting to discuss the economy and the financing of major county construction undertakings. "I think that it is prudent to reassess the financing plans for all of these ambitious capital projects," Mr. Souto wrote. He called upon the county economist and board of economic advisers to address the issues. Robert Cruz, the county's chief economist, said in an interview recently that "we haven't yet addressed that issue specifically, but we'll be looking at that." It's too soon to offer off-the-cuff analysis on the economy's effect on the projects, he said, though his office has done some analysis on the economic impact the projects could have in the county if built. In his memo, Mr. Souto suggests the county reevaluate its plans for some major endeavors. "The administration needs to provide this commission with new and independently verified financial plans for financing all these ambitious projects based on today's and tomorrow's economy, and not the economy of yesterday," he wrote. "Once we have accurate and credible financial numbers before us, we need to make difficult policy decisions on which projects to curtail or cut back, which projects to cancel altogether so we can cut our losses before they grow to critical levels, and which projects to abandon altogether before we embark on a doomed folly." In an interview recently, he clarified that he's not asking officials to kill all the projects. "I'm not saying cancel," he said. "I'm saying, let's watch everything carefully, not just jump on the wagon and say "let's do it.'" Even if the new projects are expected to create jobs, someone has to pay the employees' salaries, he said. He pointed out also that many of the projects would involve building infrastructure. "How are we going to pay for that? It's millions of dollars." Economic conditions are deteriorating globally, Mr. Souto said, and it seems to him that some county officials just don't understand that. "It's not a matter to take lightly, and I don't think a lot of people in 111 NW First St. [County Hall], in that building, know exactly what's going on." |
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