MDM still on hold for $115M in subsidies from Overtown CRA

An up-to-date rendering of the MDM hotel, left, and an early version, right
The developer of a downtown Miami convention center and hotel is still on hold for a $115 million subsidy package from the Miami community redevelopment agency charged with eliminating slum and blight in Overtown.
At their monthly CRA meeting Wednesday, Miami city commissioners rejected MDM Development Group’s proposal, citing concerns the developer was not offering enough incentives for the poor residents of Overtown.
“I don’t know if we are there,” said Commissioner Frank Carollo. “I just don’t see you getting the support tonight.”
Instead, city commissioners instructed MDM representatives to return to the negotiating table and offer stronger community benefits, including the possibility of giving the Southeast Overtown/Park West CRA a minority share in the project’s ownership or its annual revenues – a stipulation the developer has suggested is a deal breaker. The matter was tabled until April 25, the next time city commissioners meet as CRA board members.
Commissioner Keon Hardemon, the Overtown CRA chairman, said staff didn’t bargain enough with MDM. “Every agreement we move forward should be better than the last one,” Hardemon said. “We should have more benefits. I am of the opinion that there is still more work that can be done.”
MDM is proposing a 600,000-square-foot expo center and 1,700-room hotel on the site of the old Miami Arena and within the footprint of the Miami Worldcenter development district. In order to build the project, MDM needs at least a 65 percent rebate on its annual property-tax bill to help finance construction, according to the firm’s attorney, Javier Fernandez.
He said his client needs the tax break because publicly run convention centers typically operate at a loss in order to draw conventioneers to area hotels, restaurants and shops. MDM offered to spend millions of dollars extra by paying higher wages and recruit a percentage of its construction and hospitality workers locally. Fernandez told commissioners that MDM had presented its best offer.
“We have spent the better part of 18 months in conversations and negotiations with the CRA just to get to this point,” Fernandez said. “The chasm is so large, I’m not sure we’ll be able to bridge the gap.”
Overtown community activists also criticized MDM for offering a deal weak on community benefits. “I am extremely disappointed,” said Darryl Holsendolph of the Miami-Dade NAACP. “We need to make a difference today and vote down this project so we will get a chance at the table.”
Added Bishop James Adams: “Why is it that a project that has been touted that is going to help Overtown doesn’t have a revenue sharing agreement? Until they are willing to give Overtown a partnership, this item should be shelved.”
Should MDM secure an agreement with the CRA, the company would still need to get city and county approval by the end of 2017 to get the tax rebate. Miami-Dade would also need to extend the life of the Overtown CRA until 2042 to increase the value of the subsidies.

Source: The Real Deal Miami