WEEK OF THURSDAY, FEBURARY 2, 2017
A Singular Voice in an Evolving City
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Bankers awaiting federal relief from cumbersome rules, pg. 13 BARE CONSTRUCTION GAIN: With a 39% dive in the value of construction starts in December from December 2015, starts for all of 2016 barely squeezed out a gain in 2016 for South Florida, rising just 3% overall for the year, Dodge Date and Analytics reported last week. As the year ended, large gains turned to losses month by month, with nonresidential construction for the year actually down 4% and residential construction values up 7%. In December both categories fell, with nonresidential construction down 64% and residential construction down 7% from December 2015. Total construction value for 2016 was just above $10.9 billion for the region, with more than 65% of that residential, a figure that includes both single family and multifamily residences.
City’s administration building, Underline in EB-5 mix, pg. 16
The Achiever
By John Charles Robbins
HOTEL REVENUES SLIP: As hotel rooms in Miami-Dade increased by 3,351 last year, room nights actually sold and the prices of those sales couldn’t keep pace, according to year-end figures from STR, a firm that compiles statistics on hotels across the nation. The room increase was 4.2% to end the year at 54,469 rooms, but actual sales of rooms rose only 1.4%. Revenue per available room fell further, 5.5% to $143.95 from $152.37 in 2015; the average daily rate fell 2.9% to $189.77, and average daily occupancy fell 2.7% to 75.9%, according to the figures distributed over the weekend by the Greater Miami Convention & Visitors Bureau. PRICE RISES SPEED UP: Consumer prices rose faster in South Florida than in the nation as a whole in 2016, paced by a far larger increase here than nationally in healthcare costs, according to figures from the US Bureau of Labor Statistics. The overall price increase in South Florida for the year was 2.9% while the national rise was 2.1%, according to bureau reports, but the cost of medical care here rose 9.2% in the 12 months while nationally health services costs increased 3.9% and healthcare commodities increased 4.7%. Housing costs also increased far faster here, rising 4.5% here for shelter versus 3.1% for the nation as a whole. The pace of price gains here accelerated in the last two months of the year, rising 0.8% in the period. FUTURE OF PARKS: Miami-Dade Mayor Carlos Gimenez says he plans a March report to county commissioners recommending the future of the county’s parks system. The report is to prioritize unmet park needs and the costs to complete the Park and Open Space System Master Plan that the county commission approved in 2008 and was thereafter approved by the county’s 34 municipalities and the school board.
Ernie Cambo
Photo by Cristina Sullivan
Halfway in developing Opa-locka Executive Airport The profile is on Page 4
836 first corridor to get new federal transit funds By Catherine Lackner
Members of the governing board of the Miami-Dade County Metropolitan Planning Organization (MPO) voted Jan. 26 to accept a $960,000 federal grant to study transit-oriented development along State Road 836, but at least one member wants to make sure the county isn’t locked into any particular mode of transit. “This represents new federal transportation funds coming into our plan,” said Aileen Boucle, MPO executive director, referring to the Strategic Miami Area Rapid Transit plan, which identifies six corridors for transit improvements. “This is the first corridor to bring new federal funds here. This is critical to the development of our plan.” The east-west corridor runs parallel to State Road 836 from the Miami Intermodal Center to the Tamiami campus of Florida International University. “Originally, CSX rails were considered the first viable plan on this,” said Joe Martinez, MPO member and county commissioner. “When did this switch, when I was asleep for four years? The alignment and the mode changed.” “On the east-west corridor, one of the alternatives was to look at CSX,” and also the extension of Metrorail, said Albert Hernandez of the
EB-5 visas may benefit keystadium
Miami-Dade Transportation and Public Works Department. “That’s not going to happen; we know that’s not going to happen,” Mr. Martinez said. “We either continue being who we’ve always been – a lot of nice dreams but not getting it done – or maybe change to something that may be more viable. It’s your call.” “This particular grant is for the transit-oriented development of the stations along the corridor,” Ms. Boucle said. “I believe that work is necessary. The stations need to be developed.” “This is a high-level program, and it’s planning,” Mr. Hernandez said. “This is step one. Within the corridor you can have different alignments; the corridor is 836. One of the things we want to look at is what opportunities there are for development close to station areas.” Stations could be built at Blue Lagoon on Northwest 57th Avenue, as well as on Northwest 87th Avenue and near Florida International University, he said. “When Federal Transit Administration looks at your program, you get more points if there’s more future development potential. We’re not going to look at the specific type of technology – whether it’s heavy rail or light rail – but what kind of transit-oriented development can we put along the corridor.”
Miami Marine Stadium, finally destined for a multi-million-dollar rebirth, might benefit from foreign investment funds. Plenty must happen first, but if plans move forward, the stadium’s rebuilding will be eligible for foreign funds through the City of Miami EB-5 Regional Center. Mikki Canton, the center’s managing director, said that is contingent upon survival of the EB-5 program, which Congress extended in December to April 28. The EB-5 immigrant investor visa is designed to create jobs and spur economic development. The program enables foreign nationals to invest in enterprises that create local jobs and satisfy key requirements in return for a Green Card. For several years, as critics sought changes, the program has gotten a series of short-term extensions. City-owned Marine Stadium on Virginia Key has been closed and deteriorating since Hurricane Andrew hit in 1992. After years of interest in restoring it, city commissioners in November approved borrowing $45 million to renovate and improve the stadium along with other work on the island. And last month commissioners approved a contract with R.J. Heisenbottle Architects for architectural and engineering work for the stadium, kick-starting the long awaited restoration. Ms. Canton said the city’s EB-5 regional center has decided that the stadium restoration deserves a preliminary designation as an eligible EB-5 project. “Once we determine a project complies … then we move forward and get documents together, then put it out for investors,” she said. “We’re in that process right now and within two months – assuming nothing changes with immigration [and the EB-5 law] – we’ll get the documents out for investors. “We are working with our legal counsel and economists now. We’re working very diligently on that one,” she said of Marine Stadium.
“I’m curious if the alignment will be where the CSX is currently,” Mr. Martinez said. “That hasn’t been determined,” Mr. Hernandez said, because prior environmental studies are dated and have to be conducted again. “Part of that process would be to look at all types of technologies and alignments, one of them being heavy rail, which is an extension of Metrorail.” When MPO leaders traveled around the country to see what other cities are doing, “the linkage between the land use and the transportation was very strong in the areas we visited, in the [San Francisco] BayArea, LosAngeles, New York, San Diego,” Ms. Boucle said. “They have an ability to put together a project that shows a sustainable mix of commercial, residential, open area and recreational uses along a corridor. This type of grant is that first step to look at that land-use linkage. The project development and environmental study – which is a separate study – will be looking at the mode and the engineering. We want to package that together so we can go after those federal funds.” “As long as we’re not tied into a mode of transportation or a specific alignment,” Underline in visa’s lineup, pg. 16 Mr. Martinez said, “then we’re totally, EB-5 view in Washington, pg. 16 totally cool.”
TOURISM, DEVELOPMENT GROUPS TOLD TO OPEN BOOKS ...
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VIEWPOINT: STOP TILTING COUNTY’S RULES ON BIDDING ...
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MIAMI GIVES COUNTY LAND TO HELP JACKSON EXPAND ...
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LITTLE HAVANA WINS LABEL AS A NATIONAL TREASURE ...
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NEW PROGRAM WINGING LATAM’S PRODUCE TO EUROPE ...
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PUBLIC ART IS TAKING BEATINGS IN WYNWOOD, GABLES ...
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SCIENCE MUSEUM 95% FINISHED, OPENING DATE UNSURE ...
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BOAT SHOW IMPACT LAUNCHING WATERBORNE TRANSIT ...
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MIAMI TODAY
TODAY’S NEWS
The Insider STUDYING INLAND PORT: County commissioners last week unanimously voted to have the administration identify land on which to locate an inland port and study the potential design, development, construction, operation and impacts on the surrounding area. The study is to include an analysis of how an inland port will benefit PortMiami, which its officials have said is often crowded with parked vehicles and empty containers waiting to be shipped out on vessels. Port Director and CEO Juan Kuryla said he and his team will be looking countywide at any areas that exceed 70 to 80 Juan Kuryla contiguous acres, which have a nearby rail link or be on a site where an additional spur could be added, and it should also be surrounded by a good highway system.
House speaker orders financial data of 38 tourism, development groups By Catherine Lackner
Under threat of subpoena, Richard Corcoran, speaker of the Florida House of Representatives, has demanded detailed revenue and expense records from 38 economic development and tourism organizations throughout the state, including the Miami-Dade Tourist Development Council and the Beacon Council. “Recent spending abuses and KISLAK COLLECTION SPLIT: Miami Dade College and the Univer- unwarranted secrecy in the tourism and economic development arena sity of Miami will share a 2,300-item collection of rare books, manuscripts, pre-Columbian artifacts and in Florida raise legitimate concerns historic materials valued at $30 million, all donated among both taxpayers and elected by the Jay I. Kislak foundation. Miami Dade College officials,” Mr. Corcoran said in a plans a permanent 2,600-square-foot public exhibiletter that the organizations received tion gallery of its collection in its Freedom Tower in mid-January, with a deadline of on Biscayne Boulevard. The University of Miami is Feb. 1. “Recent news media reports renovating its special collection center, to be named the have only heightened that concern Kislak Center, for much of its share of the donation. and reinforced my belief that it is Jay Kislak Jay Kislak, a Miami resident for more than 60 years, time we take a close look at where has long collected materials focused on Florida and development money is being spent, the Caribbean exploration, navigation and the early Americas. UM FOCUS ON STEM: The University of Miami plans a modern sci- how it is being spent, and whether these expenditures are returning ence and engineering building on its value to the taxpayers. Coral Gables campus and is creating “Consequently, the Florida the Frost Institutes for Science and House of Representatives is exEngineering to grow an interdisciplinary network focused on scientific amining tax-supported economic discovery and solutions. The bulk of development initiatives in Florida. a $100 million gift by Dr. Phillip We are requesting detailed inforand Patricia Frost announced a mation about the revenues and year ago will be used to construct expenditures of your organization. the building, with $30 million of Patricia and Phillip Frost You can help us better understand the gift to create at least 13 chairs for educators and $3 million for graduate student support. The aim is to elevate science, technology, engineering and mathematics – the STEM disciplines – to help solve pressing global issues. PRESIDENT TO RETIRE: St. Thomas University President Msgr. Franklyn M. Casale plans to retire next January after 22 years at the helm of the 144-acre Miami Gardens institution, the university announced last week. The university’s board of trustees, chaired by John J. Dooner, plans a search for a new president, working with Msgr. Casale on the transition. Msgr. Casale, 75, has been the longest-serving president of St. Thomas and has the longest tenure of any South Florida college or university president. The university now offers more than 45 undergraduate, graduate and post-graduate Franklyn M. Casale degrees. CONDO BARGAINS: Good condos on and near the beach are still a bargain here – at least, compared with prices in global hot spots – based on figures from EWM Realty International. For a well-located 1,300-squarefoot apartment, the price per square foot hit $760 in Miami Beach 2014 and 2015 and $410 in Fort Lauderdale. But based on currency exchange rates at the end of December, the price per square foot would have been $4,349 in Monte Carlo, $2,374 in Hong Kong, $2,348 in London, $2,089 in Manhattan and $1,341 in Singapore. For a real bargain, try $405 in Sao Paulo. NO NATURALIZATION CEREMONIES IN SIGHT: The City of Coral Gables’ passport office, which moved out of city hall last spring, has still made no progress in working with the US Department of Homeland Security to receive approval to hold naturalization ceremonies. City officials have been toying with the idea for almost a year and a half. According to city clerk Walter Foeman, “Nothing has been done, as of this date.” INAUGURAL VOLARIS FLIGHT: Mexican low-cost carrier Volaris launched service at Miami International Walter Foeman Airport this week, with its first of four weekly flights to Guadalajara and daily flights to Mexico City. All flights will be on Airbus A320 aircraft. Guadalajara will become MIA’s sixth destination within Mexico, while Volaris will be the airport’s fourth airline serving Mexico and its eighth low-cost carrier. OFFICES FOR NET: Miami commissioners approved an agreement with not-for-profit Olympia Center Inc. for use of about 690 square feet at 20 SE Second Ave. for a general office for the city’s Neighborhood Enhancement Team, or NET. The deal is for one year at an annual license fee of zero dollars and common area costs estimated at $2.82 per square foot, payable at $162.15 monthly. Downtown hasn’t had a NET office or a full-time NET administrator in more than five years. The last office to serve the area at Mary Brickell Village wasn’t a full-service NET office and was closed in the summer of 2015. The NET plans to operate out of the Olympia space, where it will serve the largest concentration of businesses in the area. A staff memo says the new location benefits the public in many ways: It’s at ground level, providing easy access to pedestrians and the physicallyimpaired; it’s one block east of the First Street Metromover Station and a block west of a Metrobus stop; it’s adjacent to on-street parking; and it’s less than two blocks from a Miami Parking Authority garage. CORRECTION: There was an error in a story published Jan. 26 regarding MiamiCentral. All Aboard Florida, owned by Florida East Coast Industries, offered the South Florida Regional Transportation Authority the opportunity to run tracks and Tri-Rail trains into the station it’s building downtown.
WEEK OF THURSDAY, FEBRUARY 2, 2017
Richard Corcoran claims abuse in spending, unneeded secrecy.
publicly funded economic development by providing the following information in an electronic format that allows for the sorting and filtering of the data.” The letter demands records of the following revenues for fiscal year 2015-16, received through a tax collection or distribution: Received from other government sources and identify each source. Received from the private sector. Received from fees or charges for goods and services. Received by each board member
by name and include whether the payment is a requirement of board membership. It also requests details of expenditures for fiscal 2015-16, including money spent for: Advertising. Economic development projects, including the funding provided to each private and public sector recipient of funds. Each event, including the number of participants per event and the specifics of the expenditure, for example, food and beverage, facility rental, sporting event tickets, or other entertainment. Travel expenditures, including the names of travelers, location and event attended and total travel reimbursement for each trip. Lobbyists representing the organization by name, including the amount expended per individual lobbyist. All employees by name, position, title and individual compensation, including salary, bonuses and any stipends or allowances. Reimbursements to each individual board member by name and the nature of the reimbursement. “We appreciate your attention and cooperation with this request,” Mr. Corcoran’s letter concludes. “Your input is important.”
City land will help Jackson expand By John Charles Robbins
The City of Miami has turned over a portion of Northwest 19th Street to the county to help facilitate the expansion of the Jackson Memorial Medical Center campus as part of a billion-dollar capital improvement plan. The Miami City Commission on Jan. 26 approved a quitclaim deed conveying to Miami-Dade County, in care of the county’s Public Health Trust, a city-owned property on Northwest 19th Street between Northwest 10th and 12th avenues. The resolution declares the property surplus and authorizes City Manager Daniel Alfonso to execute a quitclaim deed containing a reservation of easement and a reverter provision. Abackground memo says the city owns title to a private drive known as Northwest 19th Street. The county requested the property to develop portions of the University of Miami/ Jackson Memorial Medical Center, as part of its approved $1.4 billion capital plan – the Miracle-Building Plan. Portions of the county’s MiracleBuilding Plan include construction of new facilities, renovation and redesign of existing facilities and improved access for emergency vehicles, all of which include a redesign of Northwest 19th Street. Carlos A. Migoya, president and CEO of Jackson Health System, addressed the city commission and spoke of the hospital’s growth over the last 70 years. The requested deed will help the Public Health Trust to gain a unity of title for property in the area of the medical center campus, he said, which is needed for the capital improvements. The construction includes a new
A planned new rehabilitation center on Jackson Memorial’s campus.
rehabilitation center and a new urgent care centers across Miamiinpatient tower, said Mr. Migoya. Dade County, and a new home for Section 29-B of the City of the Miami Transplant Institute. Miami Charter allows for conveyance or disposition of city-owned property in connection with projWe want to hear from YOU! ects of any governmental agency Phone: (305) 358-2663 without being subject to competitive bidding or fair market value Staff Writers: return to the city, according to the Camila Cepero background memo. ccepero@miamitodaynews.com “It is necessary that the property now owned by the city and not needSusan Danseyar sdanseyar@miamitodaynews.com ed for city purposes, be conveyed to the county to enable the proposed John Charles Robbins construction and improvements,” jrobbins@miamitodaynews.com it reads. Letters to Editor The property will be conveyed editor@miamitodaynews.com “as is,” according to the resolution. People Column Jackson Health System, one of people@miamitodaynews.com the nation’s largest public health systems, recently embarked on a Michael Lewis $1.4 billion, 10-year capital plan that mlewis@miamitodaynews.com includes new construction, renovation of facilities and infrastructure improvements. Like us: Jackson’s capital plan, which is Miami Today partially supported by $830 million in voter-approved bond borrowing, Follow us: includes renovations at every Jack@MiamiTodayNews son hospital, the opening of multiple
TODAY’S NEWS
WEEK OF THURSDAY, FEBRUARY 2, 2017
MIAMI TODAY
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New ocean-to-air program wings LatAm produce to Europe By Marilyn Bowden
Two days after arriving at Port Everglades, several tons of Guatemalan snow peas were to be air-shipped last night (2/1) from Miami International Airport to Amsterdam via Centurion Cargo, the culmination of four years of planning and negotiations. The flight launched the airport’s long-awaited Ocean-to-Air Transshipment Program, says Ernesto Rodriguez, Miami-Dade Aviation Department’s marketing section chief. The program, he says, expedites delivery of perishables from Latin America to overseas markets by transferring them from cargo ships arriving at PortMiami or Port Everglades to planes at MIA. It’s expected to save time and money for cargo shippers, which will not be required to pay customs duties, Mr. Rodriguez says, and will also bring fresher Latin American produce to overseas consumers. “For the past four years,” he says, “we’ve been working very hard with the US Department of Agriculture to get a permit to start this pilot program. The first company to apply was Customized Brokers, a subsidiary of Crowley Maritime Corp., and they
Centurion Cargo was set to carry the snow peas from Guatemala to Amsterdam after four years of work.
were granted the permit. We have been working with them to get the approvals we need.” “One of our business models,” says Customized Brokers Vice President Kimberly Wakefield, “is to listen to our customers. They were telling us how hard it is to get perishables to Europe. That’s what started it.” Getting from that inspiration to last night’s inaugural transshipment took about three years
of negotiations with a number of government agencies, says Crowley Vice President Nelly Yunta, who coordinated the process. “Trying to comply with every government agency involved was very time-consuming,” she says. “The most difficult part was to prove to them that we are prepared to handle the project. We had to address every potential risk. But as a company we do have excellent relationships with them, and
they helped us look at things we might have overlooked.” A solution to give customers more options to get fresh produce from Central America to European and other global markets also had to be worked out, says Alexis Castillo, manager of logistics for perishables. “There’s high demand but low logistical solutions from other parts of the world into the US,” he says. This pilot program “will
open up a portfolio of Central American projects into those markets.” The Crowley subsidiary’s director of reefer logistics, Janet Ramos, says keeping a clear communications flow between government agencies, seaports and the airport has been crucial. The permit, Mr. Rodriguez says, requires that an entire shipment – for yesterday’s inaugural load that was eight to 10 tons of snow peas – must leave on the same flight. “Customized Brokers will be able to do four shipments a week,” he says. “It’s a pilot program for the first year, and everybody wants to make sure it works smoothly. We are going through detailed logistics to make sure that the project continues.” Several European and Asian freight operations and shippers are eager to start on the program as well, Mr. Rodriguez says. “We want to start with one permit, but we envision it will open up additional business with permits to other companies. “It’s a tremendous opportunity for shippers and freight operators in Latin America and importers in Europe, Asia and the Middle East, and I think it will create more jobs locally.”
Science museum 95% finished, opening date still uncertain By Camila Cepero
Work on the Patricia and Phillip Frost Museum of Science is nearly finished, with some estimations placing it at roughly 95% complete and with a projected springtime opening. The museum is still awaiting its temporary certificate of occupancy (TCO), the issuance of which has been pushed back several times. “The building construction is progressing really well along with the fabrication and installation of exhibitions,” said Frost
Science President Frank Steslow. “For example,” Mr. Steslow said, “water is circulating in the aquarium, technology is being installed to support the building and exhibits and the planetarium has only minor finish work remaining.” In October, Mayor Carlos Giménez told county commissioners that the TCO would be delivered in the third week of December. When December rolled around, the museum’s board was notified that the delivery would be pushed into January. Now, however, “the museum and the construction team are managing the
project for the shortest path to opening rather than focusing on the TCO,” Mr. Steslow said. “This prioritizes the completion of the exhibit galleries so the exhibitions and equipment can be installed and tested while the remaining life safety items for the TCO – such as exterior concrete topping finishes, railings and lighting – are completed,” Mr. Steslow said. Michael Spring, senior advisor to the mayor and director of the Department of Cultural Affairs, told Miami Today in December that certificate is contingent
upon “getting the building to the point that it can go through inspections.” A one-month delay in a temporary certificate of occupancy, he said, is less important than making sure the building gets done properly. The City of Miami is the permitting authority in this case and holds buildings to a rigorous set of stan-dards before granting certificates of occupancy. “We will be announcing an opening date,” Mr. Steslow said, “once we are sure that the building and exhibitions will all be ready for the public to enjoy.”
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MIAMI TODAY
VIEWPOINT
WEEK OF THURSDAY, FEBRUARY 2, 2017
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
More tilting of county’s contract rules is too costly to public
Miami-Dade commissioners are trying to raise the cost of county purchases and lower their quality. They’re doing it by rejecting bids from out-of-town companies so that local firms must win. They say the reason is to add Michael Lewis local jobs, but in the process they’re going to cost the local economy far more than it gains. Last month a commission committee forced the Aviation Department to reject five bids for $15 million in signs at Miami International Airport because no local firms won a contract, although four of the 16 bidders were local. The committee sent the airport back to figure out a way to get new bids that local firms will win to add jobs. In other words, they want rigged bidding that outsiders can enter but can’t win. But the process is already rigged to favor local firms, who in most county bidding get a 5% advantage. They win on price if they cost 5% more than an out-of-town firm. In the case of the sign contracts, that would be
a $750,000 head start. If the firm is not only local but also locally headquartered, the price advantage jumps to a huge 15%, which would be $2.25 million total advantage on the sign contracts. That already tilts the playing field to put out-of-town bidders at a huge disadvantage. So if out-of-towners still win, they have to be far superior on price, quality or both. Commissioners say forget superiority, just give us local contracts. But taking anything but the best bid raises county costs. At the airport, higher costs are borne by airlines. To cover added costs, airlines raise fares to passengers, who include local taxpayers and visitors who might then choose Fort Lauderdale instead at lower costs. The higher the cost to fly here, the fewer visitors we may get – and the visitor industry is still our number one job engine. So giving inefficient, higher-cost local businesses airport contracts they don’t deserve will boomerang on the far larger visitor industry, which creates many more jobs than sign manufacturing. Apply this same new county handicap to contracts outside the airport and it’s not airlines that will pay the initial costs: it’s taxpayers, who in the end absorb higher county costs on their tax bills. Should we be taxing ourselves more to support contractors, especially those who can’t win bids even with a 5% to 15%
L etters Marine Stadium could get cash from convention tax
Michael Lewis presented issues facing the City of Miami in efforts to not only renovate the Miami Marine Stadium but to also manage, operate and maintain it. He warned leaders to proceed with caution before moving forward, but his ideas lacked knowledge. Assume the Marine Stadium is the Miami Beach Convention Center. The City of Miami Beach owns the center as well as the land. The city managed the facility but the cost became a drain and the city opted to seek outside management. Since the center is a regional facility, a negotiated agreement provided the city an annual contribution of $4 million from the Convention Development Tax, imposed on Miami Beach hotels, to be used for operational deficit and maintenance. Companies that bid for the management were asked to make a substantial cash contribution toward expansion of the center. In return, the successful company received a 10-year agreement with options. In addition, the city provided a booking policy which I authored that they had to follow. In addition to the base contract, the company was eligible for performance bonuses. The company reported each month to the center advisory board, which I chaired for nearly 20 years. The board also approved the rental structure. Food service and concessions were bid to a separate company. This agreement had a separate fee structure that included a commission structure with the city approving prices, dress code, staff training, etc. The company also made a substantial cash contribution to the kitchen facility. There was never a ticket surcharge. With this blueprint, I would proceed with this plan: 1. The stadium, by statute, is eligible for CDT tax. Why not go to the county and work
head start? Commissioners have asked administrators to find a way for more local businesses to win bids. That isn’t a hard question: the best way to win is to offer better quality at lower costs, which is what county bidding is all about – or should be, if commissioners didn’t grandstand about building local jobs at whatever cost to the public. We already have local preferences to tilt the playing field and exclude good out-oftown bidders who might only be 3% or 4% less expensive than a Miami bidder, in which case they would automatically lose to a 5% preference advantage. So any local preference already raises costs to taxpayers. As for building up local companies, as preferences spread from place to place our local firms find themselves at a bidding disadvantage elsewhere in the nation. In the end, preferences raise costs of government nationally by pushing bids artificially higher than they would be in fair bidding, because protectionism always backfires. (The same thing applies to tariffs among nations that raise costs to consumers, but that’s another story.) The county commission’s drive to ensure local winners has another insidious impact: in a county that says it’s a national and global business hub, we are putting a “Keep Out of Miami-Dade” sign on our borders. We can’t
to the
out an agreement, since CDT is collected on Miami hotel rooms? 2. The formal request for management should include the details that were part of the MBCC agreements including a cash contribution. No revenue sharing; straight fee with bonuses. 3. A Marine Stadium Advisory Board should be named to operate the facility and flex park. A booking policy needs to be written before the company is selected so they know what can be booked, available dates plus pricing structure for each type of event. 4. Food service and concessions as a separate bid or packaged. 5. Ten-year term with options. Fixed fee, bonuses and criteria for the bonus. 6. No foundation funding. 7. Wages and diversity in hiring a part of the agreements. 8. The city retains all parking fees, naming rights and negotiates with the operator for sharing of sponsorships and advertising while ticket sales and management/food service are part of the management company. This is not a Marlins deal. This tried and true formula works. It will insure the taxpayers are protected and the operator is not in control. Stuart Blumberg
E ditor
area including the visual boundaries of the RFP, did not attend the last city commission meeting. If the developers can have a 75-year lease, why can’t the citizens have the same 75-year moratorium on any development of our bay, property and parks? Why do we need to continually fight to retain their sovereignty? The entire bay area north of the current marina RFP and stadium need to be controlled by the city Parks and Recreation Department. Lastly, why was the alternative of the city better profiting by developing and managing the marina shut down by the opinion of one company that has the history of working along with and being employed by private developers? (They claim it is too risky for the city financially, yet the city will be guaranteeing the developer’s loan with a bond.) It’s because the public does not have the availability to lobby the inner workings of the city employees as do the developers in the wording of these leases. The city manager and city lawyers recently shouted down the suggestion of a couple of city commissioners to hire a lawyer who specializes in real estate transactions. Our city employees should be looking to remove any loopholes, not creating them. Bob Deresz
Including submerged land Turn ‘flex park’ into park in marina plan questioned Your suggestions [about a marine stadium Why does the new 75-year Virginia Key marina lease request for proposals (RFP) still include almost all of the bay area (submerged land) north of it and half of the whole bay north of the Miami Marine Stadium? The 300 additional boat slips that were to be built in this sensitive area have been removed due to strong public opinion, yet the many acres of submerged land are included in the new RFP. I wondered why the developers, with their large visual displays of the marina
have it both ways: we want business and investment from everywhere, but we want only local companies to do that business. Business and trade work best when all sides win, not favoring less efficient and more costly local companies. And when local companies know going in that they’re going to win bids, they’re far less likely to sharpen their pencils and offer the county good prices. Costs will balloon. Miami-Dade has a solid bidding process and solid professionals who vet those bids. Every time the county commission overrides its process and its professionals, the public loses. That doesn’t happen at the state level, because the legislature doesn’t get involved with contracts: the professionals do. That doesn’t happen at the federal level because Congress doesn’t get involved in contracts: the professionals do. Yet commissioners made clear last month they want to be far more involved in who bids and who wins county contracts. It should be just the opposite. In fact, when a team reviews the charter this year, as law requires, the review should look closely at formally keeping commissioners’ hands off contracts. That would come at two costs: many lobbyists would lose a lot of work, and commissioners would lose some campaign contributions. We think the gains for taxpayers would far outweigh those loses.
operator] are more than reasonable, but this is after all Miami and things usually don’t get done based on logic, i.e., funding first the “Signature Bridge” instead of Baylink or a Miami River tunnel. That said, may I humbly suggest that part of any marine stadium deal is to nix the boat show and that Frankenstein monster known as a “flex park.” Removing the boat show alone will bring some harmony back to Key Biscayne residents and anyone trying to get to the beach during said show.
As for the “flex park,” just make that land a “real park,” you know, one with shade trees and open spaces to run freely and to play any game you want – and not just soccer. You know, like Greynolds Park. DC Copeland
What of maritime center?
What a novel concept! A park placed where there was supposed to be a park according to the city’s own 2010 master plan. The boat show usurped the public’s strong preference for less commercial takeover of the area. And the boat show does not need to remain in that place on such a large scale. The city manager can vacate the lease with 300 days notice. And what of the maritime center from the master plan? The whole marine stadium basin needs to be looked at more holistically in the coming months – the way it should have been after 2010. It’s not all just about city revenue but smart planning for the public’s benefit. Gregory Bush
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WEEK OF THURSDAY, FEBRUARY 2, 2017
Petition drive for vote falls short, so Gables sculptures stay By Catherine Lackner
Neighbors who wanted two modern-art sculptures moved out of traffic circles on Segovia Street in Coral Gables lost their battle last week when leaders refused to place the issue on the April citywide ballot. Commissioner Jeannett Slesnick said she has been repeatedly contacted by people who don’t like the Alice Aycock passionflower-inspired sculptures or who objected to their placement at Biltmore Way and Coral Way. A petition drive mustered only 1,174 signatures; 6,133 were required to add the item to the ballot. During Art Basel, “people came from all around the world to see the sculptures,” said Nina Burgos, a member of the city’s Cultural Development Board. “We want more art to come here. A situation such as this needs to be resolved so we can move forward and have these international works in our city.” Ms. Aycock, she said, has a stellar reputation and her works have been displayed on Park Avenue in New York City, among other cities. Residents who spoke said they respect the artist and her work but that the metal sculptures are not in context for the city. “Does it match Coral Gables’
Photo by Marlene Quaroni
Alice Aycock’s sculpture at Segovia Street and Biltmore Way was one of two that triggered objections.
vision? No it doesn’t,” said resident Olga Ramudo. “Let the residents decide.” “When you were elected, we trusted you to preserve the aesthetics of the community,” said resident June Frost. “If the majority prefers not to look at the sculptures, let them say so at the ballot box. If the majority likes the ultra-modern sculptures, let them say so at the ballot box,” she said, to strong applause from
the crowd. “It’s all about the money,” said resident John Davis, “$1 million to decorate a traffic circle. This does nothing to produce clean air, help the traffic flow, prevent crime or do anything for our health, welfare and lifestyle other than to look nice.” Some residents pointed out that the city must approve the colors they paint their houses and has other restrictions meant to protect
CITY OF MIAMI, FLORIDA NOTICE OF PUBLIC HEARING A public hearing will be held by the City Commission of the City of Miami, Florida on February 9, 2017, at 9:00 A.M., at City Hall, located at 3500 Pan American Drive, Miami, Florida, 33133, for the purpose of granting the following: A RESOLUTION OF THE CITY OF MIAMI COMMISSION, WITH ATTACHMENT BY A (4/5THS VOTE) RATIFYING, APPROVING, AND CONFIRMING THE CITY MANAGER’S FINDING THAT COMPETITIVE NEGOTIATION METHODS AND PROCEDURES ARE NOT PRACTICABLE OR ADVANTAGEOUS, PURSUANT TO SECTION 18-85(A) OF THE CODE OF THE CITY OF MIAMI, FLORIDA, AS AMENDED; WAIVING THE REQUIREMENTS FOR SAID PROCEDURES; AUTHORIZING THE ALLOCATION OF FUNDS, IN THE AMOUNT OF $368,324.00 TO THE AGENCIES AS SPECIFIED IN ATTACHMENT “A”, ATTACHED AND INCORPORATED, FOR PUBLIC SERVICES ACTIVITIES; WITH FUNDS ALLOCATED FROM THE SOCIAL SERVICES GAP PROGRAM FUND, ACCOUNT NO. 00001.910101.882000; AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENT(S), IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, WITH SAID AGENCIES, FOR SAID PURPOSE. The Miami City Commission requests all interested parties be present or represented at the meeting and may be heard with respect to any proposition before the City Commission in which the City Commission may take action. Should any person desire to appeal any decision of the City Commission with respect to any matter to be considered at this meeting, that person shall ensure that a verbatim record of the proceedings is made including all testimony and evidence upon which any appeal may be based (F.S. 286.0105). In accordance with the Americans with Disabilities Act of 1990, persons needing special accommodations to participate in this proceeding may contact the Office of the City Clerk at (305) 250-5361 (Voice) no later than five (5) business days prior to the proceeding. TTY users may call via 711 (Florida Relay Service) no later than five (5) business days prior to the proceeding.
Todd B. Hannon City Clerk #25362
the city’s aesthetics and Mediterranean flavor. Some also said the sculptures are distracting to drivers, particularly the larger of the two, on Biltmore Way. “We took a look at the traffic from June to November, and accidents were roughly half of what they were when the sculpture wasn’t there,” said Mayor James Cason. The sculptures were funded through a renegotiation of the city’s debt, he added.
“Of course it’s not Mediterranean,” he said. “The guidelines for Art in Public Places call for art that is different and playful.” In a representative democracy, he said, voters delegate decisions such as these to experts in the field. The expertise of the Cultural Development Board in choosing the art works should be trusted, he said. “I feel very, very strongly that it’s the death of Art in Public Places if we allow the secondguessing of art,” the mayor said. He has not received any emails about the issue in months, he added. “People have stopped writing you because they have given up hope that you will change your mind,” Ms. Slesnick said. “People have written to me about what they’d like to do with the sculptures; all but about seven would like to have them moved. I’d like to see them have a voice.” “There has been a democratic process” involving 31 public meetings, said Commissioner Vince Lago. “Art is supposed to engage you, to make you think. We need to have a little bit more tolerance on this issue.” Ms. Slesnick’s resolution to place the issue on the ballot was not seconded by any other commissioner and failed.
Wynwood aims to exit all Art in Public Places By Catherine Lackner
As the City of Miami moves forward with its own Art in Public Places program, art-centric Wynwood would like to be excluded, board members of the Wynwood Business Improvement District (BID) reiterated Jan. 17. The Miami commission deferred the group’s request to be excluded Jan. 12, but its presentation was well-received, said board member David Polinsky, who chairs the district’s Planning and Zoning Committee. “We should have a carve-out.” “This preserves what we’re doing,” said BID chair Joe Furst, Goldman Properties’ managing director for Wynwood. If the group succeeds, Wynwood would be the only neighborhood in Miami-Dade County to be excused from the requirement that developers pay an impact fee for art. The Wynwood Design Review Committee’s role should be strengthened and it should be charged with putting together an art plan for the district, said Mr. Polinksy, who is a principal of 250 Wynwood. He said he would like to see more artists serve on
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the committee, but not necessarily to see it grow. The committee is set up now to include architects, engineers, general contractors, and artists or cultural institution representatives, as well as business people who rent space within the district. “The Wynwood BID continues to have productive discussions with the city about a carve-out in the Art in Public Places legislation for the Wynwood area,” said a spokesperson for the BID via email. “Wynwood is already known worldwide for its vast public art, which has been in place for many years. The BID does not want the area to now be painted with the same brush as the rest of the city and potentially lose the public art component that has been central to the area’s transformation. “As part of the carve-out, the Wynwood Design Review Committee, which is already established as the review board for design of new projects in the area, would also serve as the body that implements the Art in Public Places program in Wynwood. In the coming months, the BID will work with the city’s Planning Department on how exactly the Wynwood carve-out will work.” ORGANIZED BY:
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WEEK OF THURSDAY, FEBRUARY 2, 2017
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Boat show impact launches waterborne transportation plans By John Charles Robbins
Success of the 2016 Miami International Boat Show in carrying more than 50,000 attendees by water taxis, coupled with continued City of Miami pressure, helped motivate county officials to begin planning waterborne transportation to alleviate road traffic. Use of water taxis was a panel discussion topic at “The Waterfront,� a Jan. 18 program by the Greater Miami Chamber of Commerce. “We have an amazing waterfront,� said Irene S. Hegedus, chief of transportation enhancements for Miami-Dade County, “but we’re not using it for transportation purposes.� The success of the water taxi system used during the 2016 boat show made it clear that people would be willing to use waterborne transportation, she said. Ms. Hegedus talked about the county’s aim to soon use water transportation routes. While much work needs to be done before waterborne transportation is a routine here, the county is working on a plan with two components: a commuter service that would be an extension of the existing Metrorail, Metromover and Metrobus system running on fixed routes and schedules; and an on-demand service, perhaps using private water taxis. She said the county is working with the state Department of Environmental Resources Management on potential stops along Biscayne Bay and the Miami River for vessels. The 2016 boat show was held for the first time at the Marine Stadium Park and Basin on Virginia Key, a city-owned site. Of the more than 100,000 people who came to the show in February, 53,000 arrived in a fleet of water taxis lined up by the organizer, the National Marine Manufacturers Association. It was telling that hundreds of people were willing to wait in long lines to be taken to Virginia Key over the water instead of on available shuttle buses, said Spencer Crowley, who moderated the panel discussion. The chamber program invited Ben Wold, boat show manager, to discuss the new venue. Mr. Crowley said the boat show moving to Virginia Key was a little controversial, yet it seemed like a very good idea to put to use a waterfront property that for the most
200,000 hotel room nights, he said. About 33% of exhibitors are based in South Florida. The organizers thought attendance might drop in 2016 with a switch in locations, but instead the event attracted 100,279 people, 4% more than 2015, he said. For the 2017 show, organizers have lined up 10 partner hotels, five shuttle bus routes and four water taxi stops, Mr. Wold said. There are to be 10,000 parking spaces downtown and 4,000 on Virginia Key, plus a direct mini-shuttle from Virginia Key parking lots to the show tents and waterfront docks. The show will have dedicated Uber and taxi drop-off areas, new food and beverage partner Great Performances, VIP boating More than half the guests at 2016 boat show arrived at the Virginia Key site by water taxi, organizers said. experiences and a 35% increase tors from 35 countries make their in in-water boat displays. part has been dormant for years. year this year. The money the city gains from He said the boat show is a global way to the show each year. Mr. Crowley said, “It’s great to The show generates nearly $600 see the show growing.� licensing the site for the boat show destination that puts boating and can be spent on improvements to Miami on an international stage, million in economic impact annuDetails: www.miamiVirginia Key, he said. supporting 6,592 full-time jobs ally, Mr. Wold said. boatshow.com The show also translates to Of the boat show organizers, and 55,000 jobs in Florida. VisiMr. Crowley said, “They’re pioneering water taxis.� “The city needs to reconnect with the waterfront,� he said. “It was a great show and the water NOTICE IS GIVEN that a meeting of the Miami-Dade County Board of County Commissioners will be held on Tuesday, taxis were really a great thing.� February 7, 2017, at 9:30 AM, in the Commission Chambers, located on the Second Floor of the Stephen P. Clark Center, In his opening remarks, Mr. 111 N.W. First Street, Miami, Florida, wherein, among other matters to be considered, a public hearing will be held at such Wold reminded everyone that time that the item is called on the following: “it’s boat show time,� as the Resolutions: show is to unfold Feb. 16-20. t 3FTPMVUJPO EFDMBSJOH BOE mOEJOH QVSTVBOU UP 4FDUJPO 'MPSJEB 4UBUVUFT DFSUBJO HFPHSBQIJD BSFB PG $JUZ PG “We’re really looking forward )JBMFBI BT CPVOEFE PO UIF /PSUI CZ )JBMFBI %SJWF /8 4USFFU PO UIF 4PVUI CZ 4UBUF 3PBE PO UIF &BTU CZ UIF $49 to our second year at our new 3BJMSPBE USBDLT BOE PO UIF 8FTU CZ 4& $PVSU /PSUIXBSE UP 4& 4USFFU UIFSFBGUFS 4& "WFOVF UP CF B CMJHIUFE BSFB location,� he said. SFIBCJMJUBUJPO DPOTFSWBUJPO BOE SFEFWFMPQNFOU PG UIF BSFB UP CF JO UIF JOUFSFTU PG UIF QVCMJD IFBMUI TBGFUZ NPSBMT BOE Mr. Wold said the new venue XFMGBSF PG SFTJEFOUT PG $JUZ PG )JBMFBI DSFBUJPO PG $PNNVOJUZ 3FEFWFMPQNFOU "HFODZ BOE EFMFHBUJOH DFSUBJO DPNNVOJUZ can’t be beat, with its one-of-aSFEFWFMPQNFOU QPXFST UP UIF $JUZ PG )JBMFBI kind panoramic view of Biscayne t 3FTPMVUJPO (SBOUJOH 1FUJUJPO UP $MPTF UIF "MMFZ 4PVUI PG 48 4USFFU 'SPN 48 "WFOVF UP 48 "WFOVF 3PBE Bay and the backdrop of Miami $MPTJOH 1FUJUJPO /P 1
Marine Stadium, which is scheduled for restoration. t 3FTPMVUJPO UBLJOH BDUJPO PO B $MBTT * QFSNJU BQQMJDBUJPO GPS OPO NBJOUFOBODF ESFEHJOH XJUIJO UIF .JBNJ 3JWFS BU “It’s a showcase to the world,â€? BOE 4PVUIXFTU 4PVUI 3JWFS %SJWF JO UIF DJUZ PG .JBNJ BOE UXP QSPGGFSFE SFTUSJDUJWF DPWFOBOUT SVOOJOH XJUI UIF MBOE he said. JO GBWPS PG .JBNJ %BEF $PVOUZ “Our exhibitors said it was the t 3FTPMVUJPO UBLJOH BDUJPO PO B $MBTT * 1FSNJU "QQMJDBUJPO UP JOTUBMM OFX UPFXBMMT BOE mMM UJEBM XBUFST BMPOH UIF /PSUI TJEF best show ever,â€? Mr. Wold said PG 1PSU.JBNJ JO #JTDBZOF #BZ of the 2016 event. Exhibitors t 3FTPMVUJPO UBLJOH BDUJPO PO B $MBTT * 1FSNJU "QQMJDBUJPO UP JOTUBMM B OFX TFBXBMM BOE UP ESFEHF BOE mMM UJEBM XBUFST BMPOH saw sales increase 20% to 400%, UIF /PSUI TJEF PG 1PSU.JBNJ JO #JTDBZOF #BZ UP BVUIPSJ[F QFSNJU GPS B QFSJPE PG UFO ZFBST he said. The success of the water taxis t 3FTPMVUJPO DPEFTJHOBUJOH UIBU QPSUJPO PG /8 CMPDL BU JUT JOUFSTFDUJPO XJUI 'POUBJOFCMFBV #PVMFWBSE BT A +PTĂ? .JMUPO was a pleasant surprise, he said. 8BZ Organizers were hoping to transt 3FTPMVUJPO OBNJOH BO PGmDF CVJMJEJOH UP CF DPOTUSVDUFE BU 0QB -PDLB &YFDVUJWF "JSQPSU A 5IF $BSSJF 1 .FFL #VJMEJOH port about 25,000 on water taxis BOE OBNJOH UIF $$3& .FFL -FBTFIPME BU 0QB -PDLB &YFDVUJWF "JSQPSU A 5IF $BSSJF 1 .FFL *OUFSOBUJPOBM #VTJOFTT 1BSL and were very happy when the total topped 50,000 people. Resolution Approving the Following Plats: “We couldn’t keep up with t 3FTPMVUJPO BQQSPWJOH UIF 1MBU PG /8 4JYUI 4USFFU 4UPSBHF CPVOEFE PO UIF /PSUI CZ /8 4USFFU PO UIF &BTU CZ /8 them,â€? he said. "WFOVF PO UIF 4PVUI BQQSPYJNBUFMZ GFFU /PSUI PG UIFPSFUJDBM /8 4USFFU BOE PO UIF 8FTU BQQSPYJNBUFMZ GFFU The 2017 boat show will offer &BTU PG UIFPSFUJDBM /8 "WFOVF
increased and streamlined water t 3FTPMVUJPO BQQSPWJOH UIF 1MBU PG 5FEWJMMF &TUBUFT ** CPVOEFE PO UIF /PSUI CZ 48 4USFFU PO UIF &BTU BQQSPYJNBUFMZ taxi service, doubling capacity to GFFU 8FTU PG 48 $PVSU PO UIF 4PVUI CZ 48 4USFFU BOE PO UIF 8FTU CZ 48 "WFOVF
125,000, he said. Resolution Approving the Following Waiver of Plat: Mr. Wold spoke of the sigt 3FTPMVUJPO BQQSPWJOH UIF 8BJWFS PG 1MBU PG (3* &2: $PODPSE --$ BOE 4VO5SVTU #BOL % CPVOEFE PO UIF /PSUI nificant economic impact of the BQQSPYJNBUFMZ GFFU 4PVUI PG UIFPSFUJDBM 48 4USFFU PO UIF &BTU CZ 48 "WFOVF PO UIF 4PVUI CZ 48 4USFFU show, which celebrates its 76th
Public Notice
BOE PO UIF 8FTU CZ 48 "WFOVF
"MM JOUFSFTUFE QBSUJFT NBZ BQQFBS BOE CF IFBSE BU UIF UJNF BOE QMBDF TQFDJmFE JO BDDPSEBODF XJUI UIF #PBSE T 3VMFT PG Procedure. The proposed ordinance listed below will have a Second Reading to be considered for enactment by the Board at the time and place speciďŹ ed above. t 0SEJOBODF SFMBUJOH UP UIF *OmMM )PVTJOH *OJUJBUJWF 1SPHSBN SFWJTJOH EFmOJUJPOT PG MPX BOE NPEFSBUF JODPNF IPVTFIPMET EFMFUJOH SFIBCJMJUBUFE EXFMMJOH VOJUT FYUFOEJOH GSPN POF ZFBS UP UXP ZFBST FTUBCMJTIJOH DPOEJUJPOT GPS DPOTUSVDUJPO MPBOT BOE PUIFS mOBODJOH SFWJTJOH SFRVJSFNFOUT VOEFS XIJDI IPNFT DBO CF SFOUFE BNFOEJOH "SUJDMF 7** PG $IBQUFS PG UIF Code "MM JOUFSFTUFE QBSUJFT NBZ BQQFBS BU UIF UJNF BOE QMBDF TQFDJm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agendco@miamidade.gov BU MFBTU mWF EBZT JO BEWBODF PG UIF NFFUJOH )"37&: 367*/ $-&3, $)3*4501)&3 "(3*11" %&165: $-&3, Photo by John Charles Robbins
Spencer Crowley addresses the waterfront discussion’s audience.
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MIAMI TODAY
WEEK OF THURSDAY, FEBRUARY 2, 2017
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Financial Trends County’s interest rate swaps save taxpayers $10.5 million Miami-Dade County saved more than $10.5 million in interest in the past fiscal year through five interest rate swaps with two global financial organizations, one of them troubled Deutsche Bank, a report from Mayor Carlos Gimenez shows. The highly complex financial transactions come with at least six separate types of financial risks that the mayor’s memo to commissioners details, as well as safeguards against those risks that are also outlined. One of those safeguards came into play last year in the case of the Deutsche Bank deals. But, the mayor states, “the county does not enter into swaps for speculative purposes.” The swaps include three deals totaling nearly $437 million in contract amount with Deutsche Bank AG and two deals of just over $405 million with Bank of New
York Mellon. The swaps are contracts between the county and a bank in which the two parties swap their interest rates in a group of bonds, with one side exchanging a fixed interest rate for the other party’s variable interest rate. The fixed rate doesn’t change through the swap, while the variable rate flows in conjunction with an underlying interest rate such as LIBOR – the London InterBank Offer Rate. The banks dealing with the county act as swap dealers, earning a profit for arranging and carrying the swap. The county earned more than $10.2 million in the past fiscal year on its two swaps with the Bank of New York Mellon based on Water and Sewer Department bonds issued in 2007 and 2013. The county also earned $261,105 on a
swap with Deutsche Bank based on $15 million in Industrial Development Bonds issued in 2000. Receipts were suspended for its other two swaps with that bank for Convention Development Tax special obligation and refunding bonds issued from 1997 to 2004 because the swap was restructured, with receipts due again at the outset of this calendar year. Deutsche Bank, Germany’s largest bank, last month halted bonuses for many of its senior managers after it faced $14 billion in potential US Department of Justice fines for misselling mortgage securities. Some feared for the bank’s survival, and the company’s stock lost more than half of its value. In January, the bank agreed to settle for $7.2 billion. Under a September 2014 county agree-
ment with Deutsche Bank, the bank is required to post collateral equal to the county’s exposure to the bank if Deutsche Bank is rated A3 or lower by Moody’s rating service or rated A- or lower by Standard and Poor’s. Both ratings organizations did downgrade Deutsche Bank in the midst of its troubles during the past fiscal year, so the bank did post collateral for the county deal that totaled more than $64 million at the end of the fiscal year. Such collateral is one means the county uses to prevent a loss in the event a bank doesn’t fulfill its obligations to the county. The other means, the mayor’s memo said, is “diversification, preventing the county from being overly exposed to a single” bank in its swaps.
Miami bankers looking to relief from cumbersome rules By Catherine Lackner
Relief from what are regarded as cumbersome and over-reaching regulations is the Miami banking industry’s hope for the new administration. Steven Mnuchin, the administration’s pick for treasury secretary, has expressed support for repealing or simplifying parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act, said Richard DeNapoli, managing director, chief trust officer and chief fiduciary counsel of Coral Gables Trust. The cost of complying with the regulations puts an undue burden on small banks and inhibits mortgage lending, he said. “Rolling back Dodd-Frank would have a big impact nationwide on the real estate market.” Big banks, he said, might oppose changes as they can more readily absorb compliance costs, giving them a competitive advantage. He said he likes Mr. Mnuchin’s desire to “strip back parts of the Volcker Rule that inhibit lending.” The Volcker Rule, part of DoddFrank, restricts banks from making certain kinds of speculative investments that do not benefit their customers. “I support the Volcker Rule, but there needs to be proper definition around the Volcker Rule so banks can understand what they can do and what they can’t do,” Mr. Mnuchin said Jan. 19, as reported by Bloomberg Politics. As it stands now, “It’s hard to get a mortgage if you’re retired, or even if you have millions in assets,” Mr. DeNapoli said. “I’d like to see reform, because the pendulum has swung too far” since the Great Recession, which inspired the new laws. “It’s yin and yang. Overall, I hope Steve Mnuchin is approved.” Corporate tax reform and tax cuts for the middle class, both campaign promises made by the new administration, would be
Richard DeNapoli: a big impact.
welcome, he said. “South Florida has a lot of corporations, and when consumers have more money in their pockets, they spend more.” The Obama administration had set in place an initiative to hold brokers who handle retirement accounts to fiduciary – rather than suitability – standards, he said. “It’s a higher standard. With the suitability standard, you buy things that are suitable for that client. With a fiduciary standard, you are looking out for their best financial interests. There’s a possibility [the launch] might not happen. Again, it creates compli-
ance issues.” On the other hand, tariffs or currency devaluations could be a challenge to trade and an obstacle to foreign investors in South Florida. “Their money goes less far than it used to, so they can’t buy or invest as much. That could impact us, because of the unique place that South Florida is.” “Relief is really what everyone’s looking for,” said Alcides I. Avila, founding partner of the Avila Rodriguez Hernandez Mena & Ferri law firm and member of its corporate and financial services practice. “I am not aware of any pending legislation that would have as large an effect on banking as would regulatory relief.” The banking community would like to see changes at the Consumer Financial Protection Bureau, which was created by Dodd-Frank, he said. “The Trump administration has promised less regulation of banking and the stock market, and stocks have skyrocketed,” he said. “Community banks have so been slammed that a lot have stopped lending. Some bankers spend more time on compliance than on being bankers.” Ironically, one component of
John Allen: not many changes.
the financial industry may benefit from regulation. The Office of the Comptroller of the Currency, the regulator of federally chartered banks and savings associations, is considering creating a charter for financial technology, or FinTech, companies, Mr. Avila said. These new entities function like banks but are privately held and operate – usually online – without regulation, offering what seem like better deals than conventional banks do. Many consumers look askance at their operations, but creating charters for the new enterprises might serve to legitimize them,
Mr. Avila said. “The interest rate environment is so low now that they have an advantage over banks. This could put them in a nice position and they could become real competition for banks.” John Allen, vice president of Home Financing Center and chair of the Coral Gables Chamber of Commerce, said he doesn’t see many changes ahead that would affect consumers of financial services. Revamping the tax code might make the mortgage interest deduction obsolete, but “the majority of people file their taxes on a 1040 form; a staggeringly low amount of people itemize. You’re buying a house to live in, and the tax deduction is a secondary consideration.” Fannie Mae and Freddie Mac, federal guarantors many banks rely on, “will stay as they are, long-term,” Mr. Allen said. “Both are doing well and the new administration has bigger fish to fry.” Dodd-Frank “may be reined in a little, but I don’t see that happening without President Trump having one heck of a discussion with Sen. Elizabeth Warren,” he said. “It’s onerous, and puts a burden on community banks, but it needed to be implemented.” In fact, he said he has seen some lightening up of requirements, with Freddie Mac and Fannie Mae waiving physical appraisals in some cases if everything else in a borrower’s file lines up properly. “They will sometimes allow an automatic appraisal, which you never saw in 2008-09,” he said. “Sometimes, though, we order a physical appraisal out of an abundance of caution.” Mr. Allen said he could not predict whether the Obama administration’s efforts to stop money laundering by imposing rules on large cash home purchases would continue. The campaign targeted shell corporations and individuals who purchased multi-milliondollar homes in Miami and Manhattan. “In the mortgage industry, we don’t have that,” he said.
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