Time-out.
More than three years after a voter referendum gave the Miami commission the green light to negotiate a lease for a real estate complex disguised as a soccer stadium on the city’s Melreese golf course, the Miami Freedom Park team is still not ready to play.
The Inter Miami soccer team owned by former soccer star David Beckham and Miami millionaire businessmen Jose and Jorge Mas has already been playing in Broward, home to their training facility, since 2020. But the plans for a no-bid, 99-year lease to build a real estate complex disguised as a soccer stadium on 156 acres of public green space owned by the city of Miami have been sidelined.
And it got one Wednesday when Mayor Francis Suarez, Inter Miami’s VIP cheerleader, postponed the vote scheduled for Thursday to April 7. It’s just as well because the public notice got it wrong, listing the date as Wednesday instead.
Suarez gave no reason in his memo. But we suspect it has something to do with the fact that it was very premature. Either that or it became impossible for commissioners to read the 99-page lease in four day.
Or maybe he just didn’t have the votes. This needs a super majority four out of five and everyone knows Commissioner Manolo Reyes is a hard no, so Suarez needs to get every other one.
Read related: Closing Melreese is political drama to benefit soccer mall developers
Outside attorneys that have already cost the city $3 million were surprised when Suarez decided to present the deal to commission this week. It’s not your typical lease. There are four “deal documents” — two ground leases, a non-relocation agreement and a construction administration agreement — to approve. And it wasn’t ready.
“We were not aware that any final agreement had been reached and we were not given any advance notice with respect to release of the documents,” reads a memo from Shutts & Bowen LLP, O’Melveny & Myers LLP and Fowler White Burnett, P.A.
“The last internal version reviewed by us and others still contained open items previously raised by us or the City Attorney such as, among other things, location and requirements for easements, definition for gambling, requirement that subtenants comply with permitting, signage restriction with respect to illegal businesses and a final reading of the documents to correct any clerical or other errors or omissions.
“We wanted to remind you of the continued existence of certain issues (non-comprehensive list) raised by counsel during negotiations.”
Key word: non-comprehensive. A list of 28 issues and it’s non-comprehensive? Among the problems still hanging over this bad deal:
- The cash security deposit went from $8 million to $3.5 million and may be in the form of a letter of credit. A $12 construction escrow deposit was eliminated entirely.
- The rental amount is based on the lower of the two 2018 appraisals.
- Annual rent increase is capped at 4%.
- There is no penalty for late payment.
- MFP can renew lease for up to 99 years even if it doesn’t complete the project contemplated by the referendum within the first 39 years.
- Full rent does not begin until the stadium is completed and the per annum rent increases do not begin until the year after. “This, combined with the limited security deposit in the form of a letter of credit means no money is due to the city at signing,” the attorneys wrote. Based on the time periods allotted to MFP and the possibility of excused delays and extension options, there may be a 10.5 year period without full rent and/or with no rent adjustments. There are also no periodic adjustments to base rent based on market conditions (i.e., re-appraisal every 10-15 years and prior to exercising option to renew).
That’s bad enough, but get this.
“The City is hoping for major tax revenue,” the attorneys wrote. “However, it is important to note that MFP is not obligated to build the commercial development.”
Um, what?
Even if they do, remember, the city gets all kinds of delays on the rent, which is based on 2018 appraisals. Furthermore, the city gets no percentage or participation rent from the commercial space unless and until the sublease rent payments to Miami Freedom Park reach $75 million.
Say whaaaaat? Oh, and, that’s not all. Get this:
Miami Freedom Park can sell its interest during the start-up period — which could be up to about 12 years from the execution of the lease — without giving the city one red cent. In legal speak: “City does not participate in a capital transaction during the period between lease execution and commencement of construction of commercial development. MFP could flip/sell for a profit during that period and City does not get its 1%.”
No, no, that’s not all, folks. Miami Freedom Park could sublease the entire project to one or many contractors. “This leaves open the possibility that City could have direct leases with subtenants for up to 99 years and no stadium,” the attorneys wrote.
Who in their right mind would agree to this? How is Postalita Mayor Suarez going to sell something that gives the developers everything and gives the city squat? Oh, maybe that’s why the delay. He needs more practice time.
Read related: PACs pop up in Miami to push ‘yes’ on strong mayor, stadium park, MRC lease
Baby X did not return calls and texts from Ladra over the last few days. Más — who wrote a pretty picture op-ed propaganda piece last week that doesn’t address any of the issues — also dodged calls and emails. His assistant said he would call Ladra Monday afternoon, pero nada.
Then this postponement happened. Certainly, Más will come back with a new and improved version that is still inadequate but will be so much better than this abysmal and absurd offer that some might say it’s okay.
But the whole thing still stinks in the way it was pushed on voters in the first place and the hard sell they are getting now.
In his rose-colored Miami Herald op-ed — which should have been a paid advertisement — Más says the project does not use any city funds and is privately funded. So what? It’s still a public land grab and giveaway where the city gets the short end of the deal based on old appraisals and bad terms.
He says that more than 60% of Miami voters approved the deal in a 2018 referendum. “You voted to convert a golf course into a privately funded world-class entertainment, sports and recreational destination for all to enjoy,” he wrote.
But that’s not really true. This is the actual ballot language from 2018:
“Shall Miami’s Charter be amended authorizing city to negotiate, execute 99-year lease with Miami Freedom Park LLC, for approximately 73 acres of city land, waiving bidding, converting Melreese Country Club (1400 Northwest 37 Avenue) at no cost to city to: soccer stadium; minimum 1,000,000 square feet office, retail, commercial uses; minimum 750 hotel rooms; living wage for on-site employees; 3,5788,365 minimum annual rent; $20,000,000 for 58 acre public park or other green space?”
Key word: negotiate.
Voters approved a charter change that authorizes negotiations, not the project. They don’t have to accept these terrible terms. The voters simply said in 2018 that the city manager could negotiate. He is authorized to negotiate. He is not forced to accept whatever Miami Freedom Park wants.
But this is why they had that referendum before the lease agreement in the first place: So that Más could say it’s a mandate.
From the get-go this has been a bad deal. You don’t need a letter from attorneys pointing out 28 different issues to realize the city is giving away the farm, or rather the golf course, for nada.
This has always been a real estate project disguised as a soccer stadium. Even on the MLS team’s own website, the description of Miami Freedom park leaves the soccer stadium for last.
“Miami Freedom Park will become a recreation destination that all Miamians can enjoy, providing 58 acres of public parks and green space, a tech hub, restaurants and shops, soccer fields for the community, a 25,000 stadium for Inter Miami, and many more features,” it says.
Restaurants and shops come before the actual stadium because that’s what it really is about.
“With this vote, the residents have indicated that they want the City to negotiate and execute a lease for the proposed land for specific project.
“Miami Freedom Park will deliver an array of benefits to the community unlike any other sports-related development in our city. It will pay fair market value rent, as well as living wages for all onsite employees. Miami Freedom Park will contribute more than $40 million in annual tax revenue to the City of Miami, Miami-Dade County, State of Florida and Miami-Dade County Public Schools, and generate more than 13,000 jobs.
“Miami residents can show their support for the project by urging city commissioners to approve the project.”
Or they can show their opposition by urging city commissioners to vote no on April 7.
That is, if it’s even ready by then.
Memo from Miami outside counsel on Miami Freedom Park deal by Political Cortadito on Scribd
Premature and postponed: Miami Freedom Park deal not ready for vote added by Ladra on
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