Talks to sell City of Miami’s riverfront HQ continue with commission approval

http://www.miamiherald.com/news/local/community/miami-dade/article119736228.html

 

BY DAVID SMILEY

 

Miami commissioners on Thursday authorized further talks with a developer looking to acquire the city’s riverfront administrative headquarters and build a new office elsewhere in the city, but clashed over how to conduct the negotiations.

By a 4-1 vote, the commission allowed administrators to continue working with Adler Group, which offered this summer to pay $335 million to the city over the term of a 90-year ground lease for the Miami Riverside Center campus at 444 SW Second Ave.

The developer wants to use the public land to expand a residential project planned immediately next door into a massive complex of apartments, shops and hotel units on the water. Adler would also construct a new office building elsewhere for the city, at an estimated cost of $123 million.

The proffer was endorsed in October by a city selection committee with the caveat that the city ought to fight for a better financial return. At issue: the gap between the estimated cost of the city’s new office building and the $70 million present-day value placed on money Adler would pay the city over the life of its lease if it builds its project as planned.

“I’m sick and tired of the city of Miami getting ripped off and doing sweetheart deals,” Frank Carollo, the lone commissioner to vote against further negotiations, said Thursday.

Real estate director Daniel Rotenberg, however, told commissioners that preliminary talks have already yielded significant changes to Adler’s original offer, which was not set in stone in its costs or its structure. He said the goal is to come back for final approval with a deal that will cost the city nothing.

”What we’ve been negotiating at this point is a net zero cost to the city," he said.

Commissioners said they believe the deal being considered carries promise for the city. How to get to the best value, though, was an issue.

An initial motion to approve negotiations and hire an outside real estate attorney to lead the talks and craft the agreements — a recommendation made by city consultant CBRE due to the complexity of the agreement — was rejected by a 3-2 vote. Commissioners instead chose to have a consultant review the agreement after it’s reached, following warnings from City Attorney Victoria Méndez that hiring private counsel could cost the city around $250,000.

“I think it’s a mistake to proceed without outside counsel,” said Commissioner Francis Suarez, a real estate attorney who argued the city doesn’t have the expertise on its legal staff.

Miami commissioners must approve any agreement before it is finalized. The city would also have to hold a referendum due to regulations surrounding waterfront land in the city’s charter.

The potential replacement of Miami’s administrative building may be the first in a trend for the city. Suarez asked commissioners Thursday to quickly bring back a similar solicitation to replace the city’s aging police headquarters.