Miami Today: Week of Thursday, February 18, 2016 by Miami Today

WEEK OF THURSDAY, FEBRUARY 18, 2016

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River Landing signs Publix, T.J.Maxx, Burlington, pg. 13 BUILDING UP MIAMI: The Miami metropolitan area was second in the nation for dollar value of commercial and multifamily construction starts last year at $6.3 billion, according to Dodge Data and Analytics. Even so, Dodge reported, the dollar value of starts was down 8% in the Miami area in 2015. New York City led the nation with $34.9 billion in construction starts, up 66% from 2014. Rounding out the top five were Dallas-Fort Worth at $6 billion, up 35%; Chicago at $5.9 billion, up 14%; and Washington, DC, at $5.9 billion, down 4%.

Duty-free giant renews lease at Aventura location, pg. 15

THE ACHIEVER

BY JOHN CHARLES ROBBINS

GOING UNDER(GROUND): Miami City Commissioner Francis Suarez hasn’t given up on the idea of putting some downtown traffic underground. On Feb. 11, the city commission approved a resolution authored by Mr. Suarez urging the Florida Department of Transportation to study the feasibility of a “cut and cover” option as part of the upcoming I-395 improvement project, which includes a signature bridge. The way the legislation is written, it suggests a “cut and cover” option be added to the existing project. It reads, “…implementing a ‘Cut and Cover’ design in the Biscayne Boulevard area, within the existing Project scope, could potentially allow for the recapturing of valuable acreage, allowing for a more efficient overall Project design.” A state evaluation found traffic tunnels in that area unfeasible for many reasons, including potential flooding and expected environmental clean-up from an old fuel storage site. PUTTING UP THE CASH: Miami City Commissioner Ken Russell chaired his first meeting of the Coconut Grove Business Improvement District board last week and members approved allocating up to $400,000 to the city for the purchase of two trolleys for the Grove. The deal is contingent on the city absorbing all maintenance and operational costs, and an improvement-district-approved route. In addition, he said he has a commitment from neighboring city Coral Gables to connect its trolleys with Miami trolleys in the West Grove. GAS DROP FLEETING?: Average retail gasoline prices in Miami stood at $1.86 per gallon to start the week, down 51.5 cents from the same date a year earlier but above the national average price of $1.69. Nearby, Sarasota prices averaged $1.70, Naples $1.81 and Cape Coral $1.70. “These incredibly low prices won’t be here forever, as refineries talk of production cuts with crude oil at a 13-year low,” said Jeff Pelton, a senior analyst for price-tracking service GasBuddy.

Jay Pelham

Photo by Marlene Quaroni

Seeks to add public focus as new TotalBank president The profile is on Page 4

Miami looks at city-wide trolleys linked to others BY JOHN CHARLES ROBBINS

Miami city commissioners have extended the hours of the Coral Way trolley and are considering a final push to make the popular trolley service city-wide. Other commissioners agreed last week to a suggestion by Francis Suarez to ask City Manager Daniel Alfonso to study the estimated costs to extend the rubber-tired trolleys to the north end of the city and to the west. “When the trolley started, the idea was to serve the entire city,” said Mr. Suarez as he advanced the idea for “one last expansion.” The city manager has 60 to 90 days to report back on expanding north and west. Today, the city operates trolleys in Allapattah, Biscayne Boulevard, Brickell, Coral Way, the Health District and Overtown. During baseball season a stadium route runs to Marlins Park. Those operations cost more than $3 million a year. In May 2015 commissioners directed the launch of new routes in Little Havana, Wynwood and Coconut Grove within six months. They also wanted longer hours for the Coral Way trolley.

AGENDA

Miami sets its own path for Baylink

When these changes still hadn’t been made going into the new year, frustrated commissioners on Jan. 14 demanded answers from the administration. Two weeks later, Mr. Alfonso promised the three additional routes would begin March 1. The additions to the fleet will be about 10 smaller cut-away vans temporarily until the vendor can provide the full-sized trolleys, Mr. Alfonso said. Talk of a final expansion of the free public transit came as commissioners approved a resolution extending the hours of the Coral Way route, which was operating 6:30 a.m. to 8 p.m. Monday through Saturday. The new hours are 6:30 a.m. to 11 p.m. Monday through Saturday and 8 a.m. to 8 p.m. Sundays. The same resolution set identical hours for the new Little Havana route, running to the Flagler and Calle Ocho transit areas. The Little Havana route is to also serve local events such as Viernes Culturales, or Cultural Fridays, on the last Friday each month. Expansion of the Coral Way route hours will enhance connections to Miami-Dade transit bus, Metromover and Metrorail services

and grow commuter movement throughout the city, the resolution says. Connection to other trolley systems in neighboring municipalities is a priority of the commissioners of late. Wifredo “Willy” Gort likes the idea of a comprehensive study on connecting the various cities’ trolley routes with each other and with existing public transit services. The Miami-Dade Metropolitan Planning Organization is said to be launching such a study. And as he has on several occasions, Mr. Gort on Feb. 11 called for a study of how the city will maintain and pay for the trolleys in the long term, including “all options” when it comes to operating revenue – including a fare. “We need to make sure we can maintain the trolley system,” he said. Operating funds now come from reserves from a half-penny countywide sales tax. City commissioners late last year created a new transportation trust fund to set aside funds for new transportation projects and operations. Established in 2011, the Miami trolleys carry about 360,000 riders monthly.

Miami has OK’d its end of a deal for a transit connector with Miami Beach. City leaders also spoke in favor of kick-starting a streetcar system. Mayor Tomás Regalado brought the rail link to a Feb. 11 vote, after a Feb. 4 meeting saw Miami-Dade County and Miami Beach officials agree to sign the same six-page understanding. “It is important to understand, once we approve this we can go our separate ways,” said Mr. Regalado. He said it’s possible to accomplish dual goals: become eligible for federal funds for a connector and “move forward with the streetcar.” The Miami Beach and county commissions have yet to approve the understanding but have agreed to do so, Mr. Regalado said. Miami Beach has already begun a solo plan to solicit proposals for a rail project on the island. Mr. Regalado told Miami commissioners that Miami Beach Mayor Philip Levine has promised his city will approve the understanding. Mr. Regalado said each city could build its own line and the “connector” across the bay might be built later with federal aid. The agreement is to build what’s termed Baylink, a fixed-guideway corridor linking downtown Miami near Government Center to the Miami Beach Convention Center via the MacArthur Causeway. The Florida Department of Transportation is also party to the understanding. The catch in the four-way accord is the need for a long, costly federal environmental study that’s not universally favored. The study could take years and cost about $10 million. The cities and county agree to chip in $417,000 each, the state $5 million and the Citizens Independent Transportation Trust $3.75 million. “All parties are on board,” said Mr. Regalado. Light rail connecting Miami Beach with the mainland could cost more than $532 million.

MIAMI DENIES A COMMERCIAL ENCROACHMENT BID ...

SPORTS AUTHORITY’S POWER OVER LAND CHANGING ...

VIEWPOINT: THUMB ON SCALE IN AIRPORT DEALING ...

‘SHOCKED’ PARTNER LOOKS AGAIN AT CAR SHARING ...

COUNTY SAYS AIRPORT BAGGAGE HANDLED BETTER ...

BAYFRONT’S REDEVELOPMENT BRIGHTENS TOURISM ...

TRANSPORTATION PLANNERS ASSESSING OWN PATH ...

GRAND JURY REPORT WAS COUNTY ‘WAKE-UP CALL’...

MIAMI TODAY

VIEWPOINT

WEEK OF THURSDAY, FEBRUARY 18, 2016

MIAMITODAY Miami Today is an independent voice of the community, published weekly at 2000 S. Dixie Highway, Suite 100, Miami, Florida 33133. Telephone (305) 358-2663

Commission thumb tips scale toward bad airport business The bad old days at Miami International Airport weren’t so long ago that we can ignore a county commission move to reassert control over retail and dining choices. This month, commission- Michael Lewis ers told officials to sign no-bid leases with two specific food purveyors, get them prime space for 10 years and be certain that they don’t fail. That order backed the airport into a corner. If your boss orders you to lease to someone and the other side knows it, you have no leverage. The tenant can win terms that others could not because the airport can’t say no. Remember the $3 billion sweetheart deal for Marlins Park? The county manager had to cut a deal that elected officials demanded, so Marlins owners knew they could ask for virtually anything and get it. They did so, in spades. To a lesser degree, that’s what happened when commissioners demanded that Jackson Soul Food and Chef Creole get prime airport space and not fail – a guarantee that no other business gets from anyone. That can lead to low rent, easy terms and subsidies for 10 years. No matter how good these tenants are, they get a free head start that nobody should get. Now, handling Miami International Airport’s retail slots has always been tricky. Everybody wants to get in be-

Photo by Maxine Usdan

Customers now are frequent and plentiful at nationally-known retailers at the airport.

cause of the huge foot traffic, but space is limited. The airport is a mall that has no expansion room but rapidly growing traffic – more than 44 million passengers in 2015, up 10% in one year. What mall gains that fast? In the past, airport tenant selection was political, with a few insiders controlling most food and store operations. These powerhouses kept out national names, leaving Miami International with a dull blend of profitable generic stores that had a virtual monopoly. In the past decade the grip on airport space has loosened, to the benefit of bigname, high-quality national tenants that make the airport far more cosmopolitan and inviting, while the local flavor has been retained as airport staff curated local standouts to achieve a good mix. That’s vital to the airport for several reasons. One is to provide a top passenger experience, keeping Miami a quality

L ETTERS

gateway that lures more and more traffic, as the airport clearly has done. But the airport has another practical reason to keep retail strong and alluring: it gets a cut from tenants, generally 15%, that helps cover operating costs. That cash is vital. Taxes don’t pay airport costs. The money comes mostly from leases and from fees that airlines and cargo operators pay. The more of the load retail can lift, the less the airport must get from airlines and thus the less travelers pay for tickets. Added tenant income can help lower landing fees, making flights to Miami more affordable compared with competitors. In a county whose top industry is visitors, that’s vital. As it is, we’re far behind nearby Fort Lauderdale-Hollywood International Airport, where in 2014 the cost per passenger was $4.52 versus Miami’s $20.56. Our rate was $20.14 in 2015, going down to $20.13 this year, but the gap

TO THE

with Broward is still huge – a gap that airline passengers ultimately fund, putting us at a competitive disadvantage of more than $15 per ticket on every flight. Low-cost airlines fly their growing passenger loads to places where landing costs are also lower. They cluster in Broward, not Miami. So any tiny thing that reduces tenant revenue – like sweetheart leases that don’t maximize income – adds pressure on airlines and passengers to pay more, and makes Miami a bit less attractive. Granted, these two small retail leases won’t be a blip on the radar even if they simply give away the store. But tilting the balance is a bad precedent. That should concern not just businesses and residents but also the Federal Aviation Administration, which safeguards airport resources, since airlines fund shortfalls. In the past that agency ordered the airport to stop wasting revenue when commissioners ordered airport funds spent on parades and festivals. While these leases aren’t even a drop in the revenue bucket, neither were the parades and festivals the last time the feds cracked down. Please note that the airport was already negotiating with Jackson Soul Food and Chef Creole before commissioners on Feb. 2 ordered no-bid contracts with no-failure oral add-ons. Clearly, these are tenants the airport was interested in and might be great additions. But when commission orders upset the balance of business deals it’s almost always bad business. A commission thumb on the scale tilts the cost balance and moves a step back toward the bad old days in airport retail. Trying to help two good businesses by commission order is not helpful.

E DITOR

Costly Miami 21 added more piecemeal zoning

I support The Fair’s relocation to Peter to pay Paul. Naturally, Paul sup- thetic reasons. They want to force it into narrow streets prone to flooding. South Dade and our leaders should as ports it. Andrew Terhune No logic there, but then engineers are well. We must not forgot that every not running the world. great city has a great public university. After millions of dollars and years in DC Copeland Arthur “AJ” Meyer what was claimed to be a comprehensive, citywide zoning plan that would The Alpha-male mayor of Miami Beach prevent the piecemeal zoning changes is pushing the Beach’s incompatible sysall over the city, which we had, Miami tem through. A system from the very We love going to the Grove to hear 21 allows even more piecemeal zoning beginning of Baylink was never advomusic and have drinks. We live by the areas. Last week the Cutler Bay Town Councated. Falls area. We go three to four times a But the base is that it greatly upzoned cil followed the lead of the Homestead I remember the original engineering month – or we used to. The last times much of the city, and now developers City Council, with a unanimous resolufirm hired to come up with a plan had we have gone there has been no music. can get even much more – in use and tion to welcome The Fair to South Dade. initially advocated a system that was not Can’t wait for something to change. size. Developers made out, land use I could not be more proud of our city’s built at grade along the MacArthur CauseJackie Caso attorneys get to make even more asking leadership. This is the kind of vision and way but instead had its own “lane” that for changes in the new code. Everyone aggressive pursuit of economic develhung on an elevated track on the south but residents (who end up with a city opment we need in our area. Now we side of the MacArthur. where developers still rule) is better off. just have to persuade The Fair to make In fact, one of its spokespersons Ray Stein its new home in South Dade. miamitodaynews.com regaled us with a story about him – a My wife and I, both FIU alumni, also FOUNDED JUNE 2, 1983 rather hefty man – actually diving into VOLUME XXXIII No. 39 are proud of the role FIU plays within ENTIRE CONTENTS © 2016 Government Cut to see for himself the our ever growing community, now the To contact us: I’m glad that the I-395 project will go feasibility of sinking pilings to support fourth largest university in the country. News (305) 358-2663 Advertising (305) 358-1008 forward and after it’s built the immense the proposed rail line. He said it would The plan proposed by FIU – complete Classifieds (305) 358-1008 majority will be happy and satisfied, work, and his company proposed that with educational components and busiSubscriptions (305) 358-2663 solution – until Miami Beach nixed it. Reprints (305) 358-2663 because it will improve traffic, mobility, ness incubation elements – will lead to a As I remember, the engineering firm Editor and Publisher / Michael Lewis parks and parking. Kudos to the Miamibetter South Dade for all of us. Vice President / Carmen Betancourt-Lewis Dade County Board of County Commis- had suggested that it attach to the downtown Metrorail station and that it ride on sioners for the land swap Add Your Views Jose Pepe Cancio pillars over the congested and narrow streets of Miami Beach, the complete Have an opinion opposite of what the mayor and his on an issue of importance? MIAMI TODAY (ISSN: 0889-2296) is published weekly for $145 per rubberstamp council want. year; airmail: to Europe $190 per year, the Americas $145 per year. Why not just have the transit users Why do they insist Baylink be built at Send your letter to editor@miami Published by Today Enterprises Inc., 2000 S. Dixie Highway, Suite 100, Miami, Florida 33133, USA. Periodicals postage paid at Miami, pay for what they use and the road users grade as light rail? They don’t want todaynews.com, with Letter to the FL. POSTMASTER: Send address changes to MIAMI TODAY, Editor on the topic line. pay for what they use? This is robbing Baylink elevated in their city for aes2000 S. DIXIE HIGHWAY, SUITE 100, MIAMI, FLORIDA 33133.

No logic in Baylink plans

Cutler Bay votes to bring Where is Grove music? Fair to South Dade home

MIAMITODAY

Great land swap for I-395

On tapping tolls for transit

TODAY’S NEWS

WEEK OF THURSDAY, FEBRUARY 18, 2016

MIAMI TODAY

County cites noticeably improved airport baggage handling BY SUSAN D ANSEYAR

Although airlines do not share how long it takes a suitcase to leave the plane and reach the baggage claim areas at Miami International Airport, county officials say there’s been a noticeable improvement over the past six months in baggage delivery. A report included in this week’s county commission package analyzes the baggage handling system at the airport and the efficiency of baggage delivery, concluding that the operations are getting better, as evidenced by a reduction in complaints, and Aviation Department staff is aiming for continued improvement. “Miami-Dade Aviation Department continues to discuss service-related issues in airline forums at Miami International Airport (MIA) in an attempt to further enhance service,” Mayor Carlos Gimenez wrote in a report requested by commissioners seeking information on the efficiency of the airport’s baggage delivery system and linkage among its three terminals. The department received only six complaints on delivery of baggage from October 2014 to October 2015.

Photo by Maxine Usdan

Incoming baggage comes through manual unloading of planes by either airlines or a services provider.

Mr. Gimenez also reported the North and South Terminal baggage handling systems have no direct impact on the delivery of luggage for customers who choose Miami as their final destination. The system is in place to handle outbound flights and, in many cases, the baggage of passengers transferring through MIA.

The Aviation Department is currently designing and building the South and Central baggage handling system, which will link the two terminals, according to the report. At this time, there are no plans to link them to the North Terminal’s system. Mr. Gimenez reports the pro-

cess for incoming baggage delivery – for both domestic and international arriving flights – is manual unloading of the plane by either the airline or its general aeronautical service provider. In a wide-body aircraft configuration, checked baggage is loaded in a container and moved

into the plane. When the flight arrives, the baggage is taken in those containers to the baggage carousels. In a narrow-body aircraft configuration, each bag is moved separately and then placed in a cart for delivery to the carousels. “Most of the airlines have delivery standards that range from 20 minutes for the first bag to 40 minutes for the last bag,” Mr. Gimenez wrote. “In most cases, those standards are met.” However, the report states, in some instances delivery “exceeds those standards” because of such factors affecting delivery as weather, distance from carousel devices, ground equipment and manpower. Ironically, the Feb. 2 report was written just a week before a group of county politicians returning to Miami endured an hour-long wait for their luggage after it was misplaced at the airport. Commissioner Audrey Edmonson, one of the passengers on the charter plane coming home from a lobbying trip, described her annoyance during the Feb. 11 Trade and Tourism Committee meeting. Other members expressed concern over the incident’s effect on the airport’s reputation.

Building code fine, lien amnesty cut $23 million A total of 2,426 homeowners who had faced civil penalties and liens for Miami-Dade County building code violations have been relieved of more than 92% of what they owed under an amnesty ordinance created in 2011 to avert economic hardships. The homeowners had owed more than $25.6 million, an average of $10,574 apiece, a report from Mayor Carlos Gimenez shows, They wound up paying a bit more than $1.9 million, an average of $798 each, the report shows. The original 2011 legislation had been meant to apply for six months, but the program continues, the mayor’s report shows. The legislation said that the county commission “wishes to encourage compliance with the building code while being mindful of the hardships that result to homeowners from the strict application of the county’s system of fines and penalties relating to building code violations.” The legislation said the commission wanted to create “a limited exception from civil penalties and liens resulting from building code violations upon a homeowner’s compliance with the building code.” To gain the exemption, homeowner must get a permit to bring the home into code compliance, then bring it into compliance and pay merely the “direct costs of the Building Department in connection with

prior enforcement…” Since the program’s first partial month, settlements at the lower rates have ranged from a low of eight cases per month to a high of 92. During that period, the county relieved property owners of paying more than $23.7 million that they otherwise would have owed, settling for about 7.5% of the debt. In his memo, however, Mayor Gimenez makes clear that these settlements in themselves were not total losses to the county, because prior policy would have seen homeowners settling for the former lien collection rate of about 19%.

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MIAMI TODAY

WEEK OF THURSDAY, FEBRUARY 18, 2016

With director aboard, transportation planners assess own path BY CATHERINE LACKNER

Now that Aileen Boucle has been hired as executive director of the Metropolitan Planning Organization, it’s time to evaluate the way forward, said Dennis Moss, chair of the planning organization’s Transit Solutions Committee. “We have to determine where we go from here,” he told committee members Feb. 5. “I’ve talked to Ms. Boucle and asked the MPO staff put together a matrix, an outline of all of the various evaluations and studies that have been done in the past.”

Various transit and other agencies, including the South Florida Regional Transportation Authority, have collected data and filed reports; now is the time to combine them all in an attempt to find consensus, he said. “I’ve asked staff to come back with a technical recommendation for transit, to finalize a plan to bring before this committee for its review in March, so we can make a recommendation to the full MPO,” said Mr. Moss, who is a MiamiDade County commissioner. “What is our vision?” The report would take into

“We’ve never really gotten a plan together that we can move forward on”: Commissioner Dennis C. Moss.

consideration ridership as well as technologies that could be

used along each transit corridor and the costs associated with them, he added. “I agree 100% with your idea and I’m excited to see it,” said committee Vice Chair Francis Suarez, who is a Miami commissioner. “Here in Miami we’re experts at hitting a brick wall,” said committee member Maurice Ferre, who is a former Miami mayor. “But sometimes the wall has a side opening; if you study it carefully, there are solutions. “I’m fully in support of your idea,” he told Mr. Moss. “We have not used good judgment in

the past nor have we come up with doable solutions. We want champagne excellence but we have a beer pocketbook.” “We’re seeing a different kind of commitment to finding transportation solutions than we have in the past,” Mr. Moss said. “The cities have stepped up and there’s an unprecedented desire to help from the state and the federal government. We’ve never really gotten a plan together that we can move forward on. Once we do that, we can press various sources and look at a different set of funding options. These are exciting times.”

It was the sports and exhibition authority that planned and built the Miami Arena for the Miami Heat and the Florida Panthers. The teams called the now-razed building inadequate.

Miami starts to alter its sports authority’s power over land BY JOHN CHARLES ROBBINS

Miami city commissioners have begun altering the powers of the Miami Sports and Exhibition Authority, building in more oversight. What some see as a shakeup of the 11member authority comes on the heels of a delayed and prolonged review of a lease of prime city-owned waterfront property to a private company. The authority leased property on the southwest corner of Watson Island as part of a plan to revive a seaplane base and heliport. A seaplane operation has been on the island since the 1920s. Newly elected Commissioner Ken Russell questioned the authority having the power to manage valuable city assets and wanted a close inspection of the lease. He also asked to see detailed plans for the new seaplane base. Mr. Russell said it would have been nice to have the public weigh in on use of the city-owned island property, but it appeared the new lease was a done deal.

Fellow commissioners explained that the lease was partly the result of decades-old litigation over the property. On Feb. 11 commissioners approved the first reading of an ordinance amending the powers of the authority. The changes would remove an exception used by the authority to avoid requiring voter approval for the sale or lease of city-owned waterfront property. The change in the legislative pipeline basically says all waterfront leases have to go to referendum. Another change would subject the sale or lease of any city property to prior approval of the city commission. The sale or lease of surplus city property would also require prior commission approval. And finally, the ordinance would require that the appointment of the authority director be subject to approval by four-fifths of the commission. The original draft of the ordinance included a new membership structure for the authority. Currently, every commissioner gets two

appointments to the authority, and they can appoint themselves. The mayor also serves. Mayor Tomás Regalado is the current chairman, and Commissioners Keon Hardemon, Francis Suarez and Wifredo “Willy” Gort are authority members. Commissioners decided Feb. 11 to remove language from the ordinance regarding membership and include that in a separate amended ordinance. The commission is expected to discuss the membership issue Feb. 25. The Watson Island lease review led Commissioner Frank Carollo to open a discussion of abolishing the Miami Sports and Exhibition Authority. He said the time had not been ripe for abolition a few years ago, but he sensed an appetite now to abolish the authority or modify its powers. Talk of abolition melted into reforms of the authority’s duties and powers. But the debate over the authority concerned some commissioners who serve on it, and several came to the defense of the appointed authority. Mayor Regalado also defended the authority and praised

its work over the years. Commissioner Russell said his intent was not to “demonize” the authority but to simply question whether it ought to manage assets for the city. He suggested considering whether it is best to have commissioners also serving on the authority. “To be fair, MSEA has had great successes but also some difficulties,” said Commissioner Suarez. “But MSEA has done a lot of good things.” Commissioner Gort agreed, saying it was the authority that brought the Heat basketball team to Miami, and it was responsible for construction of the old Miami Arena, long since razed. Mayor Regalado said the authority built the arena for the Heat and the Florida Panthers. The authority also managed the Children’s Museum on Watson Island. “I am in support of keeping MSEA,” the mayor said. He also said having commissioners serve on the authority along with citizens elevates the authority’s importance.

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WEEK OF THURSDAY, FEBRUARY 18, 2016

TODAY’S NEWS

MIAMI TODAY

‘Shocked’ city partner looks to other car-sharing services BY JOHN CHARLES ROBBINS

The departure of car-sharing company car2go in Miami and Miami Beach caught many by surprise, including business partner the Miami Parking Authority. “I was certainly shocked,” Authority CEO Art Noriega said of the January announcement from car2go that it is calling it quits in Miami. Mr. Noriega was asked about his view of the matter by Stephen Nostrand, acting chairman of the Off-Street Parking Board, during the board’s monthly meeting. Mr. Noriega explained he was shocked not so much by the news of the departure but “by the timing” of the announcement. The company told its customers: “We have made the difficult decision to pause car2go service in Miami and Miami Beach effective March 1, 2016. We are forever grateful for the support from our members and the broader Miami community. While we think the Miami community can benefit from the car2go service, Florida’s carrental tax doesn’t reflect the innovation we bring to the rental car sector, which makes Miami one of the most expensive cities in North America for one-way carsharing. We will continue to operate as normal in both Miami and Miami Beach until March 1st.” Mr. Noriega said the company had given the parking agency a “heads up” that it was contemplating taking “a different direction.” “The business needs to be profitable and it was not,” he said. “Ultimately, it was a purely economical decision.” The car2go program began in Miami as a pilot program in 2012. The Miami Parking Authority was the first in the US to partner with a car-sharing service. Users of car2go pay a membership fee and then pay for car use by the minute, hour or day. As part of the partnership, car2go members can park the cars free in any lot the parking authority controls. Car2go paid in advance to use the parking areas. The fleet of small Smart cars employed in the car2go service here had grown to 300. The company moved about 100 of the cars to Miami Beach in October. In a newsletter to its customers, car2go mentioned factors that led to the suspension. “Since our launch in 2012, we have received strong support from our members in Miami, as well as the broader Miami community – and for that we are incredibly grateful. Together, we’ve been able to explore exciting new ways to help people move throughout urban areas with greater ease.” The company mentions the state’s rental car tax as having a big role in driving up the cost of business in Miami. “Other services have also entered the mobility market, and

Photo by Maxine Usdan

Pioneer car-sharing firm car2go brought Miami a fleet of tiny cars in 2012, some shown in Brickell photo.

are not subject to this additional tax. This, in part, has contributed to a slower adoption of our service in Miami compared to other car2go cities. As a result,

we have decided to suspend operations in the area until car2go’s presence here is better aligned with our mission to provide a sustainable, afford-

able transit option,” the company said. Mr. Noriega said he views the move as a suspension of service, leaving the door open for

revival of car2go in Miami. “I don’t want to see this as a permanent departure,” he said. In the meantime, Mr. Noriega said the authority will focus on other car-sharing services including Zipcar, which also has a contract with the parking agency. Staff will look into expanding the footprint of Zipcar in the city, he said. The company currently has about 90 vehicles at specific locations throughout Miami and South Miami, near the airport and in more than a half-dozen areas on Miami Beach. “We’ll pursue every available option,” he said, noting the continued growth of other ridesharing services like Uber and Lyft. Mr. Noriega told the board that he sees the authority providing the public with more than parking lots and garages. “I see us,” he said, “as a transportation organization.”

Now more than ever, transportation determines the future shape of our community. Transportation limitations are potential roadblocks to our future. On February 25, Miami Today will produce a special section focusing on transportation, its challenges and opportunities, ranging from our roads to our airports and ports. This section will contain vital information that will discuss our transportation future. • Over 68,000 readers • 77% rank Miami Today higher than any other local publication for credibility of business and civic news. č w }ÕÀiÃ vÀ > ÃÕÀÛiÞ Ài i>Ãi` Óä£x LÞ i >Û À> -V i Vi ,iÃi>ÀV °

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MIAMI TODAY

Replace courthouse via public-private deal, task force says BY SUSAN D ANSEYAR

A task force to survey Miami-Dade’s trial court infrastructure concludes the civic court should be in a purposelybuilt structure with 21st century attributes and that the historic building at 73 W Flagler St. can no longer support its functions. The Miami-Dade Court Capital Infrastructure Task Force’s final report, sent to the county commission this week, states the “Dade County Courthouse is no longer able to support the operational and spatial needs of the civil court and related functions in an environment that is functional, flexible, secure, accessible, dignified and technologically current.” The seven-member task force, created by the commission on Feb. 3, 2015, concluded after nine meetings that through 2035 the county will need 53 courtrooms to accommodate 53 judicial officers for the circuit civil, probate and county civil courts and the associated operations of the Administrative Office of the Courts and Clerk of Courts; appropriate jury assembly and grand jury space; law enforcement area; law library/community space; as well as security and building management functions. Additionally, the task force recommended, the facility should be downtown near related courts, and as near as possible to a major transportation hub with adequate parking. The deterioration of the Dade County Courthouse, built in 1925, has long been discussed, with some judicial leaders saying the building has system collapse and significant electrical and air quality issues. But in 2014, voters rejected a tax increase to fund a $390 million replacement. After the election, Chief Judge Bertila Soto said she and others were asking elected leaders to find $25 million to repair deteriorating support columns. Judge Soto set a priority of finding a new building even before problems with basement supports were uncovered. Cost estimates for a new, 600,000-square foot civil courthouse were about $361 million plus land and parking. In 2004, the Building Better Communities General Bond Obligation program allocated $90 million to expand court facilities. Of that allocation, $11.8 million went to the Joseph Caleb Center Tower Renovation and another $30 million was set aside for emergency repairs to Dade County Courthouse. After paying for repairs at court facilities, the allocation is down to $46 million. There are four main courthouses in the county: the Dade County Courthouse, the Richard E. Gerstein Criminal Courthouse, the Lawson E. Thomas Family Courthouse and the new Children’s Courthouse. There are seven branch courthouses: North Dade Justice Center, Coral Gables, South Dade Justice Center, Hialeah, Miami

August 2013 repairs targeted damaged exterior courthouse areas.

jail and correctional components. Prior courts master plans – for 1986, 2002, 2007-2008 and the 2015 Civil Courthouse Master Plan draft – haven’t included the jails, so the scope is being reviewed with the Corrections and Rehabilitation Department and the Administrative Office of the Courts to begin early this year. Task force members requested presentations during meetings from July 17 to Dec. 17 to gather information to review trial court infrastructure needs, identify needed repairs to facilities as well as current or future expansion needs; recommend ways to finance repairs or expansion; and review the court infrastructure master plan Photos by Maxine Usdan and recommend amendments. The 1925 vintage Dade County Courthouse, which has been under repair for years, might be sold and leased back or else vacated, the Internal Services Director Miami-Dade Court Capital Infrastructure Task Force report suggested. Sara Smith discussed ongoing courthouse projects, 40-year Beach, Joseph Caleb and to the main facility. Members certification and vacant and parOvertown Transit Village South. studied two alternatives: repair tially filled county buildings The Feb. 11 report states avail- the existing courthouse and proalong with the pros and cons of able funds can’t meet Miami-Dade vide additional courtrooms in their use and Dade County court capital infrastructure’s ex- other locations, or build a new Courthouse operating/maintecivil courthouse to satisfy protensive needs. nance costs for five, ten and 15 The task force said the main jected 2035 courthouse needs. years. Additionally, a one-member need is a larger facility with 50 Deputy Mayor and Chief Ficourtrooms for the civil court. minority report recommends nancial Officer Edward Secondary needs include those complete remodeling of the Dade Marquez highlighted financial of the Richard E. Gerstein County Courthouse, in which needs, funding options and lesCriminal Courthouse, the jails some renovations are already sons learned from other cities. (for which there’s a federal funded. In addition to the remodMr. Marquez brought Robert consent decree regarding over- eling, the report says space could Warren from the Regulatory and crowding) and correctional fa- be added by renovating the 140 Economic Resources Departcilities; the expansion/remodel- W Flagler Building. ment to detail the pros and cons Most task force members deing of branch courthouses, and of using a public/private partthe possibility of adding a West cided building a new courthouse nership for courthouse infrawould ultimately cost less over Dade branch courthouse. structure financing. The task force limited its work 30 years than the other choices. Other presenters were Eleventh Judicial Circuit Chief Judge Bertila Soto, Circuit Civil Administrative Judge Jennifer Bailey, who discussed the master plan and current/future needs of the courts and provided a tour; All Aboard Florida representatives and HOK architects for the new Children’s Courthouse, who discussed the standards and requirements used to approximate costs of a new civil courthouse; and Marv Hounjet, vice president of corporate development for the Plenary Group, who discussed publicprivate partnerships. Gary Winston of the State Attorney’s office; Richard M. DeMaria, chief assistant public defender; and department representatives from the Office of Budget and Management, Internal Services facilities and construction management answered A courthouse visit two years ago found court records stored where building’s sections were crumbling. questions from the task force. If the old courthouse were repaired, with space added elsewhere, total capital costs were seen as $253,950,707, or $277,137,544 in three locations. The 30-year timeline for operating and capital costs would be $392,223,257 for two locations or $446,249,164 for three locations. The report compares those costs with a $361 million project budget including all capital costs for a new civil courthouse and $509,680,390 for the 30-year timeline of operating and capital costs. Members requested that policymakers and staff seek opportunities to fund a new courthouse from existing revenues and seek financing options that complement various scenarios, such as selling the Dade County Courthouse at “as is” value with a county leaseback (estimated at $31,281,857) or selling “as is” with the county vacating (estimated at $21,561,857); an allocation of $46 million from the Building Better Communities General Obligation Bond Program to expand court facilities; adopt a new impact fee ordinance; and pass legislation that would urge the Florida Legislature to review the court filing fees structure for the county. The task force recommends considering a public-private partnership for the project. In coming months, a scope is to be outlined for the larger phase of the entire courts system master plan to include

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Commercial Real Estate 2I¿FH 6SDFH River Landing signs tenants Publix, T.J.Maxx, Burlington BY JOHN CHARLES ROBBINS

From the beginning, the plan for a large mixed-use development called River Landing Shops and Residences was to include a grocer for the area near Miami’s Health District. Now developer Andrew Hellinger is pleased to have secured a lease with a major grocery chain, along with locking in two other anchor stores for the project. “We are substantially preleased with anchor and junior anchor spaces,” Mr. Hellinger told Miami Today this week. Publix Super Markets Inc. has signed a lease for 43,000 square feet at River Landing, said Mr. Hellinger, manager of River Landing Development LLC. The two other major anchor stores are T.J.Maxx, leasing 26,000 square feet, and Burlington Stores Inc. penning a deal for 50,000 square feet. The initial goal was to attract a food store to the project. “That area of the city was in need of another grocer,” said Mr. Hellinger. Founded in 1930 by the late George W. Jenkins in Winter Haven, Publix has grown from a single store into the largest employee-owned supermarket in the US with more than 1,100 stores across six states. T.J.Maxx, established in 1977, bills itself as the nation’s largest off-price retailer, with more than 1,000 stores spanning 49 states and Puerto Rico. Burlington (Burlington Coat Factory) is a national off-price retailer offering apparel and more at 546 stores in 45 states and Puerto Rico. River Landing is planned for 1480 NW North River Drive on the Miami River. It’s to rise on the site of former Mahi Shrine Auditorium, which was demolished in 2014. The 8.14-acre development is to include about 430,000 square feet of retail and restaurants, about 475 market-rate apartments in two towers, and parking for about 2,200 vehicles.

Photo by Maxine Usdan

River Landing is to be built on the site of the former Mahi Shrine Auditorium, which was razed in 2014.

“We’ve got to button up our Asked when construction is It will also include a new riverfront park, thanks to an agree- expected to begin, Mr. Hellinger construction loan so we can do ment between the developer and said he’d like to say soon but he that,” he said. “We’re working towards that now.” Miami-Dade County government. did not have a solid date.

River landing is “substantially preleased with anchor and junior anchor spaces,” says Andrew Hellinger.

River Landing Development is an affiliate of Hellinger Penabad Cos., a real estate investment, management and advisory firm in Coral Gables. HPC is led by Mr. Hellinger and Coralee Penabad. Mr. Hellinger has said that River Landing will be a catalyst for urban renewal in the Health District. “It will help fill the district’s gap and demand for shops, restaurants and market-rate apartments,” he said. In March 2015, the developer was awarded $7.5 million from the county from an economic development fund. The developer requested the funds as reimbursement for infrastructure costs. In order to collect the funds, the developer must complete the project and prove jobs have been created. The county’s economic development fund was part of a $2.9 billion voter-approved Building Better Communities General Obligation Bond Program. As part of his application for county funds, Mr. Hellinger’s company detailed economic impact projections affecting the Health District neighborhood and beyond. “When River Landing is completed, the households occupying the proposed rental units and workers at the project during their work day will spend approximately $10.1 million annually in retail and food and beverage establishments,” the application stated. It’s anticipated that at least 85% of these expenditures will be within the City of Miami. “When completed a total of 980 workers will be employed at River Landing inclusive of retail and food service workers as well as people involved in project leasing and operations, maintenance and parking,” the application said. Economic impact to the area, the application said, includes about $15 million to the county and city in impact fees, water and sewer connection fees, building permits and other surcharges.

Hilton Garden Inn anchors complex at former immigration site BY MARILYN BOWDEN

A 139-room Hilton Garden Inn will anchor The Triton Center, a residential and commercial project at the site of the former US Immigration & Naturalization Service at Biscayne Boulevard and 79th Street, according to the website for the project. The hotel will occupy floors 2-12 of the converted building, with retail on the ground floor. Hotel accommodations are to include a swimming pool, two whirlpools and a fitness center, with a gallery corridor dedicated to art exhibitions. In addition to the hotel conversion, plans Principal Jon Cardello of Stantec. for the Triton Center involve three residen-

tial towers with a total of 325 apartments. Amenities for residents are to include an infinity pool and whirlpool, fitness center, sunbathing deck, sauna, lounge bar and bike storage. The complex – advertised as a LEED silver-certified complex and a green community – also is to incorporate more than 585 indoor parking spaces, according to the website. A 20-foot pedestrian walkway is to surround the hotel block. Built in 1962 as the Gulf American, the original structure at 7880 Biscayne Blvd. from 1983 to 2008 housed the US Immigration & Naturalization Service, which in 2003 changed its name to the US Citizen-

ship & Immigration Services as a division of the Department of Homeland Security. According to Miami-Dade property records, Fullview International Group, whose principal is Leo Wu, bought the 2.7acre block for $12.5 million in 2013. Principals of Fullview could not be reached. The general contractor for the Triton Center, according to the website, is Comar Castle. Stantec, the project’s architect, announced in September that structures surrounding the former INS building have been razed in preparation for development, but so far no construction schedule has been made public.

WEEK OF THURSDAY, FEBRUARY 18, 2016

COMMERCIAL & OFFICE SPACE

MIAMI TODAY

In major industrial lease, duty-free giant renews at Aventura BY MARILYN BOWDEN

DFASS Group, a leader in duty-free retail, has renewed a 193,588-square-foot lease at Aventura Industrial Center for just over seven years, one of the biggest industrial real estate deals in the county over the past year. The company’s name is an acronym for Duty Free Air & Ship Supply. “This was one of the largest industrial leases in Miami-Dade County in 2015,” said Jonathan Kingsley, executive vice president at Colliers International South Florida. Mr. Kingsley represented the landlord, Stockbridge Capital, along with Colliers’ Stephen Rutchik and Ryan Goggins. Jonatan Sredni of US Property Management represented the tenant. Mr. Kingsley said DFASS is by far the larger of two tenants in the industrial complex, occupying about two-thirds of an original building and all of a second structure that was purpose-built for the duty-free retailer in 2011. According to DFASS Chair-

Photo by Marlene Quaroni

Benny Klepach: “We are distributors of duty-free luxury goods and this is our central distribution center.”

man & CEO Benny Klepach, who founded the company in 1987, his business has maintained its headquarters in Aventura Industrial Center for

nearly 10 years. “We are distributors of dutyfree luxury goods,” he said, “and this is our central distribution center. We converted the space

into a Free Trade Zone. We’re right next to the turnpike and the expressway, so it’s a good location for us. “We also have about 400,000

square feet at the airport and in Miami Gardens.” From its beginnings in Latin America and the Caribbean, Mr. Klepach said, DFASS has grown to become the world’s largest in-flight concessions company, with more than 600 full-time employees staffing operations Asia, Africa, the Middle East and Europe as well as the Americas. “We service a lot of momand-pop duty-free shops as well as the bigger ones,” he said. “We also operate duty-free stores in Chicago, Newark, Orlando, Fort Lauderdale and Dallas. All combined, we have 84 retail operations worldwide.” DFASS has satellite hubs in Singapore, Panama and several Middle East locations as well as Miami, Mr. Klepach said. In January of this year, DFASS Singapore formed a 50-50 jointventure with SATS, which provides airport gateway and inflight services to the aviation industry and has a presence at 43 airports and 11 countries across Asia and the Middle East. The new entity is known as DFASS-SATS.

High demand, tight supply spur small office building prices BY SUSAN D ANSEYAR

The market for small office building sales is robust, in large part because demand surpasses supply, industry experts concur, with some also saying the increased value for such properties has been due in large part to zoning changes that allow other uses. Demand for single-user office buildings, generally defined by brokers as under 10,000 square feet, is extremely high for the simple reason that fewer and fewer are available as they have been – and are still being – bought in land transactions, said William Kerdyk, president and CEO of Kerdyk Real Estate and Kerdyk Referral Service. “Less product is equal to more demand,” Mr. Kerdyk told Miami Today week. “Some of these buildings are being taken down and used for multi-use development.” As long as we have sun and no income tax, small of- Bill Kerdyk fice building values will go up, Mr. Kerdyk said. Or, at the very least, he added, the value will increase in the long run. “Trees don’t grow to the sky,” Mr. Kerdyk said. “There might be a leveling off [in sales price appreciation] when demand is sufficient.” However, Mr. Kerdyk said, something in the economy would have to change before demand is satisfied. “Small-user buildings are prevalent in areas that have central business districts,” he said. “Demand remains high in Coral Way, Coral Gables, Coconut Grove, South Miami and Aventura.”

Mr. Kerdyk’s firm focuses primarily on South Dade County. “We’re seeing a lot of people coming to us after owning [a small office building] for a long time and are ending their careers,” he said. “The buyers are often just coming into their business and want to own their own building.” With fewer single-user office buildings available, Mr. Kerdyk said, some businesses are forced to purchase office condos if they want to own their own space. “There’s a dramatically different concept between an office building and an office condo,” he said. “Establishing one’s business in an office building where you’ll stay for the long run solidifies the business model.” Some single-users may definitely feel they’ll be losing their persona and certain dynamics such as signage without their own buildings but will lose the opportunity to sell at Myles Stepner greatly appreciated prices, said Myles Stepner, investment sales associate for Avison Young. “Singleuser buildings are being priced out of the market.” He pointed to several recent transactions of small office buildings that were analyzed for “highest and best use,” including one at 3350 S Dixie Highway in Coral Gables, 9,500 square feet, marketed as a development site and tripled in value. Miami 21, the city’s new zoning code that took effect May 20, 2010, “shifted everything,” said Donna Abood, principal and

managing director of Avison Young’s Miami office. The code allows the seller or buyer to change a property to mixed use including retail and multi-family, often more profitable than Donna Abood mere office space, she said. The zoning revision for the entire city of Miami has been a boon for some property owners but detrimental for others, said Jeremy Larkin, co-chairman of NAI Miami Commercial Real Estate Services, Worldwide. If a land parcel or small building lot is too small, he said, there’s potential for problems. For example, Mr. Larkin said in some cases one can’t tear down a building on a 5,000-square-

foot lot and rebuild anything on the property because of Miami 21. “This effectively reduces the property’s market value.” He agrees there’s been steady appreciation in sale prices of single-use office buildings – under 10,000 square feet – in affluent areas such as Aventura, Coconut Grove, Coral Gables, Pinecrest and South Miami. However, in other markets where there’s a lack of demand for office space such as West Kendall, Homestead, Miami Lakes and Miami Gardens, Mr. Larkin said, sales prices hover between flat and declining. “The office market sector is changing dramatically,” he said. “We still haven’t recovered from the last recession.” The typical metric for office space used to be about 200 square feet per employee, Mr. Larkin said. In 2007, 9 million jobs were lost in the country.

“If half (4.5 million jobs) were in the office sector, that’s 900 million square feet of office space back in the market for use,” he said. “There was a glut that’s slowly getting absorbed. At the same time, the metric for office space has now shifted to 150 square feet per employee, which enhances the glut and stretches the period of recovery.” For small-office users, unless you’re a stable business [not shrinking and not growing], Mr. Larkin said, the cost to exit and enter ownership is expensive. “It’s usually more reasonable to lease,” he said. Moreover, Mr. Larkin said, the incubator spaces that used to go to Class B buildings in the suburbs are going to shared work space offered by companies such as Pipeline, Serendipity and Regus.

TODAY’S NEWS

MIAMI TODAY

WEEK OF THURSDAY, FEBRUARY 18, 2016

How Founding Fathers ‘breathed life into the Constitution’ BY MARILYN BOWDEN

Congressional friction and factions are nothing new. In his new book, “The First Congress: How James Madison, George Washington & a Group of Extraordinary Men Invented the Government,” historian Fergus M. Bordewich gives a lively account of the posturing, shenanigans and backroom deals that “breathed life into the Constitution, established precedents that still guide the nation’s government and set the stage for political battles that continue to be fought out against the political landscape of the 21st century.” Mr. Bordewich is guest speaker at a Prologue Society luncheon at noon Feb. 24 in the Riviera Country Club, 1155 Blue Road, Coral Gables. The society, dedicated to the appreciation of history, is sponsored by Brickell Bank, Miami Today and Books & Books. (Details: theprologuesociety@gmail.com or 305-323-1154). When delegates from the 11 original states – North Carolina and Rhode Island had not yet accepted the Constitution – convened in New York in 1789, the nature of the federal government was still a matter of much debate. Members “remained so aggressively partisan on behalf of their sections that their interests seemed close to irreconcilable,” Mr. Bordewich writes. Self-styled Federalists saw the creation of a strong national government as the Union’s only hope of survival. Anti-Federalists were wary of giving up any of their hard-won independence to an ill-

After the Constitution was ratified in 11 states, in 1789 its elected officers assembled in New York City.

defined central authority. “Many viewed the president as something close to a monarch and his government as a regime that resembled a royal court,” Mr. Bordewich writes. “Their imaginations strained, often unsuccessfully, to see Washington as something other than an American version of George III.” High on the agenda was the controversial business of adding amendments to the Constitution, so recently ratified in its original form by representatives of state governments who might now acquired,” the author says, balk at revisions. “Considering the gravity that “Congress’s debate over ‘that the first 10 amendments have Great and Delicate subject’ was

remarkably short, snappish and driven by the politics of the moment rather than by appeals to lofty ideals.” Perhaps even more pressing was the question of how the new, essentially bankrupt nation would be financed. To most delegates the very idea of debt was anathema. Few had a welldeveloped grasp of international finance. Alexander Hamilton, who did, faced a difficult task in explaining why more debt was the oil that would keep relations with European creditors lubricated. “At bottom,” says Mr. Bordewich, “the debate was about the American future and

about what kind of nation the United States was going to be, one in which capitalism would be the driving engine of federal policy or whether it would be trumped by a rejection of creative finance and a largely mythical vision of self-sufficient agrarian innocence.” Fergus M. Bordewich, who holds degrees from the City College of New York and Columbia University, has been an independent historian and writer since the early 1970s. His award-winning books include “The Making of the American Capital,” “Bound for Canaan” – a history of the Underground Railroad – and “America’s Great Debate: Henry Clay, Stephen A. Douglas, and the Compromise That Preserved the Union.” He lives in San Francisco. The First Congress, by Fergus M. Bordewich, 416 pages, is $30 hardbound from Simon & Schuster. Details: www.SimonandSchuster.com.

Coral Gables, FIU partner in series of sea level rise sessions In partnership with Florida International University’s Sea Level Rise Solutions Center, the City of Coral Gables is hosting a sea level rise discussion series to analyze mitigation and adaptation strategies for the community. Due to the region’s geology and topography and value of assets, South Florida is among the US locations with the highest risk of feeling sea level rise impacts. As a result, Coral Gables is planning by undergoing a community vulnerability assessment to identify at-risk infrastruc-

ture and propose adaptation and mitigation strategies to deal with the projected effects of sea level rise. The series includes the following discussions: Dr. Todd Crowl: The Basics of Sea Level Rise, was to be held Feb. 16 at Coral Gables City Hall, Commission Chambers, 405 Biltmore Way, second floor. Dr. Crowl, director of FIU’s Southeast Environmental Research Center, was to provide an overview of the causes

of sea level rise and its potential future impacts in South Florida. Dr. Ryan Stoa: Public Policy Implications, 6-7 p.m. March 8 at Coral Gables Museum, 285 Aragon Ave. Dr. Stoa, who holds a joint appointment with the College of Law and the College of Arts and Sciences, is to discuss the public policy implications of sustainable development in Florida. Sea Level Solutions Center Interdisciplinary Studio: Climate Responsive Design of Resistant Built Infrastruc-

ture, 6-7 p.m. April 13 at Coral Gables Museum, 285 Aragon Ave. FIU graduate students will bridge knowledge and expertise from a range of disciplines, including architecture and the arts, engineering and computer sciences, biology, law and public health, to design resilient and sustainable infrastructure. The studio will culminate in a showcase of student work. Details: www.coralgables.com/ sustainability (305) 460-5008.

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