On the Block
Fast-forward to Miami 2015. A visitor from Chicago exits I-395 at Biscayne Boulevard and confronts a 23-story steel behemoth known as PIP (Pork Investor Park), home of the long-ago world-champion Florida Marlins. He heads south, hoping to catch a glimpse of that pretty bayfront showcased in the Internet travel brochures. But instead of blue water, he sees only the American Airlines Arena, home of the NBA's never-to-be champion Miami Heat. While passing the Port of Miami entrance, the tourist catches a glimpse of the waterfront: megacruise ships docked at Watson Island.
Next comes Bayside, followed by the Bayfront Park Amphitheater, including its overgrown, gaudy neon sign and gargantuan television screen. Sponsored by telecommunications giant AT&T, it announces the latest festival for citizens exiled from Caribbean nations. Continuing south on U.S. 1, the Chicagoan crosses the polluted Miami River and arrives at the former site of Brickell Park, where a Starbucks welcomes anyone seeking a cup of joe. He's not thirsty so he keeps moving south into Brickell gorge. At the entrance to the Rickenbacker Causeway, the driver looks east and notices the city's newest high-rise hotel on Virginia Key. Then, on Bayshore Drive, the driver becomes frustrated. Despite its bucolic name, this boulevard showcases only concrete. At historic Dinner Key, a gray parking garage is backed by other large buildings. Finally the Windy City escapee hangs a right on to SW 27th Avenue and reaches the Coconut Grove Ritz-Carlton. After a speedy check-in, he steps out on to the balcony of his $1000-per-night room and, ahhhh, takes in the shimmering blue of Biscayne Bay.
If City of Miami planners get their way, this trip will be more than future shock; many of the area's best publicly owned waterfront locations will be leased to the highest bidder. Wealthy investors and rich citizens will profit from developers' schemes, while the majority is turned away. On the market are Watson Island, Brickell Park, a chunk of Virginia Key, and the site of the little-used Coconut Grove Convention Center on Dinner Key. Although the commission pulled Bicentennial Park off the market in December 1998, Marlins owner John Henry has brought it back into play, meeting personally with city commissioners and urging state legislators to approve a cruise-ship tax to help pay for the building. Even an oddly shaped two-acre site on the Miami River may soon be rented away. In all about 123 acres of some of the the most expensive real estate in the southeastern United States -- and the last publicly owned waterfront parcels in Miami -- may soon be up for grabs.
Why are city commissioners rolling out the welcome mat to filthy-rich developers with plans for overgrown condos, sprawling marinas, and upscale retail projects? Simple. Cash. City leaders contend they need revenue to escape the financial crisis discovered after the 1996 arrest of corrupt city officials, including former City Manager Cesar Odio. Indeed much open land is simply wasted, argues Erdal Donmez, director of the city Department of Real Estate and Economic Development.
Two big-bucks builders with deep political connections have already inquired at city hall about the properties: Manny Medina, a Grove developer, and Sergio Pino, former chief of the political powerhouse Latin Builder's Association, and owner of Century Builders Group. (Both men confirmed they are interested but were unprepared to discuss details.) Armando Codina, former business partner of Florida Gov. Jeb Bush and a real estate magnate of incomparable credentials, also has requested details on the city's plans, but does not anticipate bidding.
Development opponents such as Urban Environment League president Greg Bush charge the city is insulting its forefathers' legacy. He notes that Miami's efforts to preserve land for public use date back decades. In 1924 a 4000-foot-long sea wall was erected near downtown, east of Biscayne Boulevard, and dozens of acres from Flagler Street to NE Twelfth Street were filled with muck from the bay bottom. Although Bayfront and Bicentennial Park have long dominated the reclaimed land, developers have slowly taken over chunks of it for a shopping mall, an arena, a large hotel, and an office tower.
Bush's argument for preserving the public land is simple. In Miami, the fourth-poorest metropolitan area in the nation according to the last census, where most residents cannot afford to own a boat, buy a sports team's season tickets, or shop at exclusive stores, the waterfront should be accessible to all. "They never spend time developing parks or public spaces," notes Bob Weinreb, Bush's colleague at the Urban Environment League. "Who ever heard of a city having this wonderful asset that you can't see?"
Dinner Key, where Miami City Hall is located, is the waterfront property ripest for redevelopment. Its history provides some hints as to why builders find it so desirable. The key came into being around the turn of the Twentieth Century, when the federal government dredged Biscayne Bay and connected a tiny island to the mainland. The land served as a Coast Guard base until the Thirties, when Pan American Airways, one of the nation's first commercial aviation services, built a seaplane terminal there. In the Fifties there were several developments: Dinner Key Marina was built, the Pan Am terminal became city hall, and a hangar was transformed into the Dinner Key Convention Hall, which in the Seventies evolved into the Coconut Grove Convention Center.
The convention center was doomed to fail commercially almost from the day it opened. Although its location is picturesque, it is located about a half-mile from the Grove's business district, too far for many visitors to walk. As a result convention organizers and other commercial enterprises have rarely booked shows there. Recently the facility has hosted events like gun, car, and home shows, but has lost approximately $25,000 per year, according to city records. In 1998, responding to a demand by state overseers for more revenue, commissioners instructed the city manager to prepare a plan for redeveloping the sixteen-acre site.
After contracting consultants from the Northeast and holding several public hearings, Donmez and his staff last fall came up with a preliminary recommendation: The current center should be razed, according to the group's report. Four seven-story structures with an adjacent concrete garage should replace it. The buildings should include retail shops on the ground floor, offices on the second floor, and rental apartments or hotel rooms above.
But after the plans were apparently complete, dozens of people who live aboard boats at the 600-slip Dinner Key Marina claimed they had been kept in the dark. In December 1999 they complained to commissioners, who agreed to hold three more public hearings on the project. During spirited meetings the vessel owners questioned the need for more retail. After all, they reasoned, vacancy signs already adorned many Grove storefronts. And the mariners ridiculed the plans for office space, arguing that residents, not executives, deserve access to the waterfront.
In March City Manager Donald Warshaw directed Donmez to hire the nation's best-known marine business, California-based Westrec Marinas, to incorporate boat owners comments into the project. The marina management company has a somewhat dubious history in South Florida. In 1996 Westrecforfeited control of two Dania marinas, Thunderboat and Banyan Bay, rather than make loan payments on those properties. According to a trade journal, Marina Operator International, the company repeated the practice at three marinas in Europe that same year.
Donmez expects to present his final Dinner Key plan to the Miami City Commission before the summer. Commissioners will have to decide whether to solicit bids or order changes to the scheme. "We talked to residents, and they wanted the Grove's character and integrity maintained," Donmez says. "That excluded office towers and an urban entertainment center. They wanted a neighborhood ... [so] we will incorporate a dockmaster's office and parking for the marina."
Local developers, some of whom have garnered sweetheart deals for public land in the past, are already eyeing the site. Sergio Pino recently asked when the city plans to solicit offers. The former Latin Builder's Association leader, who regularly contributes to city candidates such as Commissioners Willy Gort and Tomas Regalado, teamed with a group of investors in 1996 to win a city contract to manage the Melreese Golf Course. The deal costs taxpayers about $25,000 per year, according to Miami Mayor Joe Carollo.
Commissioner Arthur Teele also notes that Manny Medina, who has built some of the Grove's high-end properties, including Terremark Center, has made inquiries. Like Pino, Medina is a regular contributor to city candidates, including Regalado. In 1986 Medina won a contract to pay Miami about one million dollars annually to lease the popular Monty's restaurant and park cars on adjacent city property for free, which activists like Weinreb contend was a bargain. In 1991 Medina sold the lease and restaurant to Steven Kneapler.
The property is drawing interest from more than just the usual suspects. South Beach redeveloper and Design District investor Craig Robins has contacted several lobbyists about bidding for the property, says a city hall source, who declined to be named. Ron Krongold, a local attorney and real estate investor who recently redeveloped a site on South Miami Avenue and SW Second Street, approached freshman Commissioner Johnny Winton in January about building on the key, Winton reports. And a representative from a company called ZOM, Inc., an Orlando-based developer with offices in Boca Raton, mingled among a crowd of boat owners at a January public meeting on the project. (Robins and Krongold confirm they are interested. The ZOM representative declined to comment on the company's intentions for the property.)
Erdal Donmez has only a rough sketch describing the city's vision for the site. He does not know how much money the redevelopment will bring to city coffers, nor does he have a current appraisal of the site, which he argues should be done after the city commission selects a preferred project. "We are appraising the actual project instead of the land," he says.
Weinreb fears the city will cut a deal that pays taxpayers far less than the appraisal for the convention center parcel. "These deals never give the city an honest return," Weinreb complains. "In the past [private developers] have developed city land and they don't have to pay taxes. Just look at Monty's [restaurant].... That's prime waterfront property."
Winton, who represents the district that includes all of the city's bayfront land, supports Dinner Key redevelopment. Unlike some of the other properties on the block, it is already paved over, he reasons. But Donmez's preliminary plan for tall buildings bothers him. "I hope that we end up with a New England fishing village," says the commissioner. "No halls. No big-box retail. No high-rises. I want the buildings back from the waterfront with a fair amount of green space. I see people walking their dog, Rollerblading, riding their bike. And that area needs to be linked by the waterfront to Peacock Park and Monty's."
In developing a blueprint for the future of Virginia Key and the Miami Marine Stadium, city planners wanted to make sure they didn't limit input, as they had for Dinner Key. So this past January, the city paid four experts from a nonprofit organization called the Counselors of Real Estate (CRE) to come to Miami. City staff noted the group featured some of the nation's most brilliant minds. CRE members helped redesign the New Orleans waterfront and counseled the city of Gdansk, Poland, on assembling a master development plan for an island.
The CRE experts included Maura Cochran, a redevelopment specialist from Hartford, Connecticut; Owen Beitsch, an Orlando authority on family entertainment facilities; Richard Perkins, an environmental consultant from Boston; and Marty McIntyre, the company's director of marketing and public relations.
To solicit ideas the four met with more than forty individuals, including three local developers, four hotel managers, three tourism officials, all the Miami commissioners, and the mayor. They spent a day touring the 37-year old marine stadium and the remainder of the 1000-acre island on foot and by boat. They sipped beers at the legendary meeting place, Jimbo's.
It wasn't the first time visionaries had tried to come up with a grand idea for the island. City planners have proposed everything from a golf course to a site for the World's Fair on the key. Since Hurricane Andrew smashed the stadium in 1992, the city has allowed the structure and surrounding land to languish. Commissioners issued an invitation to developers to submit ideas in 1995, but there were no takers.
On January 24, after spending $4500 of taxpayers' money on incidentals, the four consultants unveiled their plan. They crowded into a tiny conference room on the third floor of the Miami Riverside Center along with city administrators and representatives from the Sierra Club and the Urban League, who were eagerly anticipating the results. The lights were dimmed, and the proposal was beamed onto a white wall. It was, unsurprisingly, a city-built marina including hundreds of boat slips in the 168-acre basin. The experts suggested demolishing the stadium and replacing it with shops and apartments. There also was talk of creating a large pavilion, where musicians and other entertainers could perform. The consultants provided no estimate for rent the city could collect from boaters. "The marine stadium is a physical impediment to the development of the site," Cochran explained. "This is a unique environment that could be the last major use of waterfront in the city."
Three developers who met with the consultants expressed interest in the site. They included: 1) Jim Courbier of Equitrac Corporation and the Pier 5 Boatmen's Association. The Pier 5 group, which is composed of tour operators and charter fishing boats based at Bayside, sued the city in 1985, contending they had been treated unfairly. The case was settled when administrators agreed to build a $1.5 million pier at the city-owned Miamarina, which is surrounded by Bayside; 2) Adair Ratliff, of Marinas International, Inc., a subsidiary of Westrec, Inc., the world's largest marina operator. The company is a bidder in Miami-Dade County's effort to privatize its docks; and 3) Ron Krongold, the downtown developer who also inquired about Dinner Key. (Only Krongold confirms he held discussions with the group, but he has not decided whether he is interested. Courbier and Ratliff did not return two calls seeking comment.) Hotel chains Marriott and Sheraton also have contacted the city about building on the key. And lurking in the background is Wometco, owner of the Miami Seaquarium, which has eyed the marine stadium property for expansion since the late Eighties.
Commissioner Tomas Regalado, who heads a recently created economic-development committee, was uninspired by the planners' proposal. "I was very disappointed with it," says Regalado, who envisions a water park on the site. "I would not like to see a hotel or condos." More can be done after an old landfill on the key is cleaned up and the county's water treatment plant is removed. "The marine stadium needs to be developed," Regalado adds. "What? Are we going to leave it to the raccoons?"
But there may be a hitch to any redevelopment program. Back in 1963, when the county permitted the city to build the stadium, Dade County commissioners required preservation of the Virginia Key site as a park. "I don't have a problem with development. But [city commissioners] seem to focus on giving away public park land to developers," notes the Urban Environment League's Greg Bush. "There are many plots of land within the city that are not waterfront. Why not develop the inner city?" The answer again: money. Developers salivate over the bayside property because they can easily sell hundreds of condos and make millions of dollars by offering dramatic views of the bay.
In the inscrutable language of real estate experts, Donmez argues that the Virginia Key proposal will include parks. "You will have open space, but you also have complementary development," he explains. "That way the land is better utilized."
In the end there's likely to be debate, even among political leaders. In 1997 Mayor Joe Carollo dubbed the key a "crown jewel." Leasing it out would rescue Miami from its fiscal malaise. But Winton, the only commissioner with whom the mayor speaks regularly, favors building only on the stadium site. "I just flat don't see development on the rest of Virginia Key," he opines.
Florida Marlins owner John Henry has painted a picture-perfect plan to build a taxpayer-funded, $400 million, retractable-roof stadium for 38,000 fans in Bicentennial Park. The Boca Raton resident has promised to preserve half of the park's 34 acres as publicly accessible green space. He asserts the stadium will spur an economic renaissance across Biscayne Boulevard in the chronically depressed Park West neighborhood. He has even pledged that 90 percent of the baseball team's profits will go to the public. A city official who declines to be identified contends taxpayers may get a bad deal with Henry's proposal, just as they did with Mickey Arison's American Airlines Arena, which is forecast to cost the public $355 million over 30 years. The official says Henry is plotting to construct shops and restaurants on the site, as has been done at recently completed stadiums like Cleveland's Jacobs Field and Coors Field in Denver. The Marlins owner has approached the cable sports network ESPN about opening an ESPN Zone, a combination restaurant, sports bar, and video-game center, the source says. A shopping corridor would stretch from Bayside to the American Airlines Arena site (where Bongos Cuban Café, owned by Gloria and Emilio Estefan, and Jimmy Buffet's Margaritaville will soon open) to the new stadium. (Team president Jonathan Mariner declined to comment.)
In Cleveland and Denver, the team owners have cleverly split their operations into two companies. One controls the baseball team and collects the revenue generated from ticket sales and luxury skyboxes. The other manages the facility and collects all money from stadium parking, concession sales, and retail outlets. If he follows their leads of bifurcating the business, Henry could claim he was losing money, even if profits were high.
The scheme has helped make the Colorado Rockies and Cleveland Indians two of baseball's richest franchises. In 1998 the Rockies generated $124 million in revenue, while the Indians took in $149 million, according to Forbes magazine. The teams cleared $19.5 million and $19 million, respectively. For investing hundreds of millions to build the new stadiums, the public in each of the cities, as well as Baltimore and Chicago, receives a flat rental fee in the $6 million-per-year range, which barely covers the facilities' upkeep, according to the 1997 book Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums, published by Brookings Institution Press. The Marlins have declined to discuss details of their financial plan.
"All of a sudden everyone sees the city land as cheap or free," notes Commissioner Arthur Teele, who wants the stadium located across Biscayne Boulevard in Park West, where it would more clearly spur economic development. "Everything shouldn't have concrete, asphalt, and buildings. There is no reason to offer incentives for waterfront development."
Greg Bush won a battle in the war to preserve the park in February. The tall University of Miami history professor and Marlins vice president Jonathan Mariner squared off before the city's waterfront advisory board in the Miami City Hall commission chambers. Wearing an impeccable dark-green suit, Mariner explained that a ballpark at Bicentennial would offer long-suffering Marlins fans a relaxing bay view. Indeed pictures of Miami's skyline would be beamed around the world during games. "We've listened [to the public]," Mariner concluded. "We ask for people to keep an open mind until our vision is completed."
Bush countered by saying Bicentennial should be redesigned to be more pedestrian-friendly. He ridiculed claims the Marlins had "listened," by pointing out the public had been excluded from meetings between team representatives and city officials. Then he noted the baseball team has hired at least ten lobbyists, including former Florida Secretary of State Jim Smith, former State Rep. Miguel DeGrandy, and a former aide to Miami-Dade Mayor Alex Penelas. The board passed a resolution urging the city commission to preserve and redesign the park for the people. "This is our last large piece of land in the city," Bush commented. "It should be saved for future generations."
So far, a majority of commissioners oppose Henry's plan. Commissioners Regalado, Winton, and Teele would prefer a stadium located away from the waterfront. "Bicentennial needs to have a master plan that includes the entire zone: Park West, Overtown, and the Omni," Winton says.
Henry is not allowing the bad news to deter him from achieving his dream. He recently convinced State Sen. Ron Silver, a North Miami Beach Democrat, to propose a bill in the legislature that would raise $320 million to finance the stadium. The measure would allow Miami-Dade voters to decide whether to tax cruise passengers up to $4 per trip. The fee would raise more than $20 million annually. The cruise industry, led by Miami Heat owner and Carnival CEO Micky Arison, has employed a stable of lobbyists to oppose the measure.
Miami -- Changing at the Speed of Magic is the title of the eight-and-a-half-by-eleven-inch brochure, framed with attention-grabbing yellow borders. The front page includes a large photo of Watson Island, showing its proximity to downtown's waterfront. In small letters at the bottom is a phrase sure to entice investors: "Exceptional lease opportunity offered by the City of Miami."
Inside a colorful map highlights the 45-acre southern half of the island just northeast of downtown. On the left are some suggested uses for the property: a large resort hotel, a recreation/entertainment spot, and a megayacht marina. The pamphlet also contains a description of nearby developments like Parrot Jungle, which is scheduled to break ground this summer. It was printed back in 1998, after the city commission voted to offer Watson Island development rights to the highest bidder.
So far the most credible response has come from an unexpected corner, the public sector. For at least a decade, Port of Miami officials, who run the largest cruise ship terminal in the United States, have searched for a place to expand from their Dodge Island base. The number of cruises leaving the port and the size of the ships has exploded in recent years.
Erdal Donmez and the port have been negotiating for about one year, and are presently hammering out the final details of an agreement. The plan includes two cruise ship terminals covering most of the island's southern half. If it is approved by Miami and Miami-Dade commissioners and the respective mayors, each building will be four stories tall and connected to a 700-car garage. In return for use of the ten acres, the port will pay the city about one million dollars per year in rent. In addition the city will collect garage parking fees. Groundbreaking is tentatively set for 2001, with the first terminal opening sometime in 2004.
Cruise ship terminals and Parrot Jungle aren't all that is in store for this island paradise. Donmez also hopes to attract public funds to build a new three-story building that would include a heliport, a terminal for Chalk's Ocean Airways, and offices for the Greater Miami Convention and Visitors Bureau. A plan for a megayacht/hotel development on the island, which received no response in 1995, remains part of the city's blueprint, though there is no developer in sight.
One of Donmez's central reasons for proposing to lease out the Watson Island space: "At this location you are already seeing cruise ships, so more cruise ships would be okay." That rationale doesn't fly with Commissioners Regalado and Teele. "Building cruise terminals is the easy way out," notes Regalado, a sworn political enemy of Mayor Joe Carollo. "I don't want another county land grab like the American Airlines Arena. I am opposed to doing it that way. We need to develop a vision for Watson Island."
Teele says the gambling cruise ship Casino Princesa pays the Bayfront Park Trust $800,000 per year for the privilege of docking at its sea wall. If one ship can generate that much money, the port should pay much more, he reasons. "No private investor in America would go into a deal if it's not profitable," notes Teele. "I think the city needs to proceed with caution. The city has a very mangled history of waterfront deals."
Winton, on the other hand, supports the port expansion. "Watson Island will never be a pedestrian area. You have to drive there. So I am open to what we need to do to attract business to the island," says Winton. "I am convinced the port is right."
The cruise-ship terminals and other developments are just the latest proposal for Watson Island. Other big ideas, from a Disneyesque theme park to a Statue of Liberty-size monument, to a boat-exposition center with a 300-room hotel have been suggested in the past. This time, though, plans seem more likely to bear fruit. The city recently installed four million dollars' worth of new water and sewer lines, roads, and ramps on and off I-395.
Some describe it as a green oasis surrounded by a desert of concrete and asphalt. Others see it as another prime parcel for development. But Brickell Park, two and a half acres of undeveloped bayfront land that the city commission put up for sale this past November, may be the next giveaway in Miami's grand land fire sale. The vote was 4-1, with Winton casting the lone dissenting vote.
Commissioners believed they were performing a good deed. They were disposing of a property that has been the focus of litigation for the past two decades, and they were donating two million dollars of the sale proceeds to the popular effort to save the Miami Circle, located just to the north of the park. The Brickell Area Association, which opposes the sale, is considering taking legal action against the city, but so far has done nothing.
The Brickell family, one of the area's pioneering clans, deeded the property to the city to be used as a park in 1923. During the Eighties the city tried to sell the land, which led to a lawsuit by the Brickell heirs. Under terms of a 1988 settlement agreement, the Brickell family was to give the city a parcel of land as compensation, then take possession of the property. But the family never met its end of the bargain, so in 1999 the two sides landed back in court. Sale of the land and division of the profits are part of the settlement.
Erdal Donmez, like city commissioners, supports disposing of the park and replacing it with a mixed retail and housing development. It's all part of his philosophy, he explains. "[The city] is not here to make the maximum financial use for the property, just to increase the tax base and revenue," he states. "That's where the challenge is. How much do you leave open? How much do you develop? You will have open space, but you also have complementary development. That way the land is better utilized."
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