South Point Update

Eminent domain and its potential for court tie-ups is risky business for the city, too. And it's expensive. In 1988 city administrators put together a large tract by condemning private property for the Cobb town-house project, a three-block chunk of real estate between First and Second streets, and Alton Road and Washington Avenue. Mel Mendelson, a former city commissioner, demanded three-million dollars to cover the cost of relocating his 5000-square-foot meat packing plant, which stood at 833 First St. The city offered him $669,000, the highest of two independent appraisals. Mendelson hired eminent-domain attorney Toby Price Brigham and went to court. Both parties eventually settled at $1.2 million. But after three years city administrators still need to agree on deals for the purchase of eleven of the 23 properties required for the Cobb project. All those cases will most likely be decided in court.

So far the city has spent more than five million dollars in land acquisition, relocation costs, and fees for lawyers and consultants for the Cobb project. They've got another $1.65 million if needed, says Bill Harrison, deputy director of the redevelopment agency. Cobb, in turn, will pay the city only $4.6 million, a price it negotiated before the condemnation process began. "Because of the cost of litigation involved in condemnation, where the [city] pays attorney costs on both sides plus all consultant fees, the days of large-tract acquisition are behind us," Harrison says. "After the dust clears, the only people who will come out of this making a lot of money are the lawyers."

Regardless of whether commissioners wield the power, eminent domain in South Pointe means the area remains designated as a redevelopment district. And that designation translates into increased options for city funding. According to Carla Talarico, who took over as acting city manager when Rob Parkins left town, the financially strapped city needs to maintain that designation to keep open the option of financing future development. Seven-million dollars in tax-increment revenue bonds were sold to cover the cost of acquiring the Cobb tract, says Talarico, and funds for repaying those millions are available only as long as the redevelopment agency exists. Tax-increment financing, which is based on the assumption that property taxes will rise as redevelopment occurs, allows city and county property-tax money to be earmarked to pay off specific bond issues. Talarico says the city administration will ask the state legislature in the 1992 session to extend the life of South Pointe's designation as a redevelopment district for ten years beyond its current expiration date of 2003.

Assistant City Manager Stuart Rogel asserts that with county, federal, and state monies dwindling, the city must hold on to all the authority it possibly can. "The only thing available is the redevelopment authority," he argues. "The real estate market is terrible. We just need to learn our lessons on South Pointe, which are many. We don't give enough incentives for small development, and we are looking at that. One of the things we learned is that having eminent-domain powers throughout an entire redevelopment area casts too much of a cloud on the ability to develop. We have to be more specific on what sites we are going to pursue eminent domain."

South Pointe Association president Tamra Sheffman doesn't take much comfort in Rogel's assessment or in Bill Harrison's assurance that the city is unlikely to grab any more big chunks of land. Her board of directors wants commissioners to ban all condemnation that benefits private developers. "Hearing that the city might not do more large-scale condemnations doesn't make me feel any better," says Sheffman. "I don't believe it. The redevelopment agency is in place and it can be called on to be used."

In November, after a typically contentious election campaign, Miami Beach voters brought many new faces into city hall, and with them some changes in attitude. Among the new commissioners only one - Sy Eisenberg - feels the status quo is fine as far as South Pointe is concerned. The two incumbents, Martin Shapiro and Abe Resnick, have said the city should restrain its impulse to invoke eminent domain. Mayor Seymour Gelber, who campaigned on a platform of chasing special interests out of city hall, is even more firm in his conviction. "I'm opposed to the menace of eminent domain," he says. Newly elected commissioner Neisen Kasdin observes, "It's finally sunk in that the restrictions on small-scale development were counterproductive. South Beach began to come back with small-scale development and rehabilitation, and the city failed to recognize that South Pointe was the same market. The forces driving change north of Sixth Street should be given free rein south of Sixth Street."

This past week the commission asked city administrators for options regarding how best to deal with South Pointe and the problems of its redevelopment designation. A discussion of the issues is scheduled for early January.

The commission's new perspective has led many South Pointe residents and small developers to believe their situation might improve. "What I can't figure out is that it took so long to realize what's going on in the neighborhood," says developer Kay Statz, who has undertaken renovations all over South Beach. "Everything that has happened to this point in South Beach has been because of private incentives. But it's not because the city was smart enough to help these people. On the contrary, they did everything to stop them. Now the city is waking up, after they started making tremendous revenue from the sales tax."

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