ITEM DEFERRED TO MARCH 18, 2020

A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING A REVISED PRELIMINARY REPORT SET FORTH AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION, CONCERNING A FINDING OF NECESSITY FOR THE REDEVELOPMENT OF A CERTAIN GEOGRAPHIC AREA LOCATED WITHIN THE CITY OF MIAMI BEACH, DESCRIBED GENERALLY AS BEING BOUNDED ROUGHLY BY 87TH TERRACE TO THE NORTH, 65TH STREET TO THE SOUTH, THE ATLANTIC OCEAN TO THE EAST, AND RUE NOTRE DAME TO THE WEST, AS SHOWN ON THE MAP SET FORTH IN "EXHIBIT A" HERETO, AND REQUESTING MIAMI-DADE COUNTY TO DECLARE SAID AREA AS A BLIGHTED AREA AND DELEGATE REDEVELOPMENT POWERS TO THE CITY OF MIAMI BEACH IN ACCORDANCE WITH PART III OF CHAPTER 163, FLORIDA STATUTES, SO AS TO PERMIT THE CITY OF MIAMI BEACH TO ESTABLISH A COMMUNITY REDEVELOPMENT AGENCY FOR THE AFORESAID AREA.

The Administration recommends approval of the attached resolution, which accepts an updated finding of necessity and directs the City Manager to transmit the revised report to Miami-Dade County for approval of the North Beach CRA.

The Community Redevelopment Act of 1969, Chapter 163 of the Florida Statutes, allows local governments to use property taxes generated in designated communities for economic revitalization purposes within the district. Following a public hearing process, counties may designate a special taxing district to fund neighborhood and community improvement projects tailored specifically for the district’s needs. Existing conditions that adversely affect quality of life and neighborhood character have long been a complaint of residents and the community in North Beach. Such conditions pertinent to CRA designation were detailed in Dover Kolh’s 2016 North Beach Master Plan and were also identified recently as issues of paramount importance in the 2019 Resident Satisfaction Survey. The City has limited funds to address these conditions and the CRA process has had proven success historically in Miami Beach as a valuable tool for funding neighborhood improvement projects.

Tax Increment Revenues/Financing

Formation of a CRA allows for designating a special funding district, wherein the incremental increase in property taxes is used for specific purposes within the geographic boundary area (a process called tax increment financing or “TIF”). Any TIF funds generated within the CRA must be used for specific revitalization purposes in the district, as contained in an adopted community redevelopment plan that outlines planned projects addressing the area’s unique needs.

Tax increment revenues generally consist of the difference in the amount of ad valorem taxes generated by the tax levied each year on the taxable property contained within the CRA boundaries, from the amount that would have been generated by the levy of the same millage rate on the taxable property within the CRA area on the most recent assessment roll prior to the effective date of the ordinance creating the tax increment area.

Essentially, the dollar value of all real property in the CRA boundaries is determined as of a fixed date, also known as the “frozen value.” The City and County continue to receive property tax revenues up to the amount of the “frozen value,” for their general fund purposes.  However, any increases in tax revenues above the “frozen value,” (i.e., the increment due to increases in real property values), are deposited in the CRA trust fund and dedicated to CRA purposes for the life of the CRA.  Although CRAs do not always issue tax bonds, the CRA may issue bonds to fund capital projects by pledging the tax increment revenues, without implicating the restrictions applicable under Florida law requiring referendum approval with respect to the pledge of ad valorem revenues.

The CRA does not impose additional taxes on property owners; it diverts existing property taxes from remittance to taxing authorities and keeps the taxes for public use within the CRA boundary. In essence, it is a financial windfall for the CRA district, as it requires the expenditure of tax money that otherwise would be spent outside of the district.

Past Miami Beach Redevelopment Areas

The City of Miami Beach has established two CRAs in the past, both of which are considered the two most successful CRAs in Florida’s history, with the largest incremental growth in real estate value and CRA tax revenue generation. The 250-acre South Pointe CRA was active between 1987 and 2006, during which time the assessed property values increased from $59 million to approximately $2.5 billion. Responsible for transforming the South of Fifth neighborhood from blighted conditions, the South Pointe CRA is one of the most notable in the country and serves as a model for the transformative power of redevelopment districts.  

The 332-acre City Center CRA, established in 1993, has witnessed taxable values increase from $292.6 million to approximately $6 billion as of January 2018.  The City Center CRA was established to promote convention center hotel development and to foster civic, cultural, and entertainment uses throughout the urban core near the Convention Center.  Transformative projects resulting from public and private CRA investment included: the Anchor Shops parking garage; the public beachwalk extension from 21^st Street to Lummus Park and beach renourishment programs; community policing funding; addition of residential properties to the affordable housing stock; the Frank Gehry-designed New World Campus; and a Cultural Arts Campus Master Plan, featuring a new regional library, the Miami City Ballet headquarters, renovation of the Bass Museum, and restoration of Collins Park; and two hotels developed as private/public partnerships, the 800-room Loews and the 425-room Royal Palm Crowne Plaza.

The Plan for North Beach

Economic development is a primary citywide goal, and the City Commission has emphasized a focus on North Beach, the area of Miami Beach north of 63^rd Street.  Within North Beach, there exists a defined geographic area containing a large number of deteriorated buildings and substandard housing units, which pose a public concern and demonstrate economic distress, as defined in Section 163.340, Florida Statutes. This area is generally bounded by 87^th Terrace to the north, the Atlantic Ocean to the east, 65^th Street to the south, and Rue Notre Dame to the east (the “Proposed Boundary”), as depicted in Attachment “A” (Proposed Geographic Boundary). The establishment of a CRA, pursuant to Chapter 163, Florida Statutes, could serve as a catalyst to reversing the economic decline of this area.

Both the 2014 North Beach Revitalization Plan, adopted pursuant to City Commission Resolution No. 2014-28879 and the 2016 North Beach Master Plan, adopted pursuant to Resolution No. 2016-29608 and reaffirmed by Resolution No. 2017-30013, identified use of a CRA as a potential funding mechanism for the numerous planning and improvement initiatives necessary for North Beach.  

Recognizing a need for funding to implement the vision of the North Beach Master Plan, on December 13, 2017, the City Commission referred discussions to the Finance and Citywide Projects Committee (FCWPC) and the Neighborhoods/Community Affairs Committee (NCAC) to explore financing for North Beach enhancement.

On February 14, 2018, the Mayor and City Commission adopted Resolution 2018-30170, accepting the recommendation made by the FCWPC at its January 19, 2018 meeting, and authorized discussions with Miami-Dade County regarding creation of a CRA in order to enhance North Beach.  Similarly, on February 14, 2018, the Mayor and City Commission also adopted Resolution 20108-30171, accepting the recommendation made by the NCAC at its January 24, 2018 meeting, and authorized development of a quality of life plan consistent with the North Beach Master Plan.

On June 20, 2018, the NCAC further discussed its quality of life plan projects from the North Beach Master Plan and recommended creation of a CRA in North Beach. On July 25, 2018, the Mayor and City Commission adopted Resolution 2018-30432, accepting the recommendation of the NCAC to commence CRA discussions with the County. Following adoption of the County’s FY 2019/20 budget, the Administration reached out to County staff to discuss the first procedural step required by statute, a “finding of necessity” for the distressed area.

To prepare the finding of necessity report (FoN), the Administration engaged a consultant, BusinessFlare Economic Development Solutions. Principal Kevin Crowder, an IEDC Certified Economic Developer (CEcD), served 15 years at the City of Miami Beach and the Miami Beach Redevelopment Agency (“RDA”) as the Director of Economic Development and Government Affairs. In addition to the Miami Beach RDA, Mr. Crowder’s redevelopment experience includes CRA planning for North Miami, North Miami Beach, Dania Beach, Naranja Lakes, Palm Bay, Cape Coral, Davie, Mount Dora, and Martin County.

In order to designate a CRA, the Community Redevelopment Act of 1969, Chapter 163, Florida Statutes, requires that the FoN, an economic survey of the targeted area, determine the existence of a minimum two of fifteen specific conditions that the statute refers to as “blight” conditions. Upon enactment of the Community Redevelopment Act in 1969, the Florida Legislature used the term “blight” to establish these conditions necessary for CRA designation and the legal term “blight” has not been modified since the original date of enactment. As used in the statute, this term is not the same definition found in Webster’s Dictionary and differs significantly from common everyday usage.

Upon completion of a draft FoN, a local government transmits the study to the County, requesting the County to accept the finding’s results and proceed with creation of a CRA, including its governing body and taxing powers.  As required by statute, the City has provided notice to all taxing authorities who would be impacted by the creation of a special taxing district. The City’s consultant will assist City staff throughout the County approval process, for which the anticipated steps are as follows:

1. adoption of FoN by City Commission and transmittal to Miami-Dade County;
2. meeting with County staff to review the FoN;
3. presentations to County TIF Committee and Commission Committee;
4. presentation to, and acceptance of FoN by, the County Commission;
5. preparation of the community redevelopment plan with public input; and
6. adoption of plan at public hearing of City Commission and County Commission;
7. negotiation and approval of an interlocal agreement with the County.

North Beach Finding of Necessity

The geographic area recommended for designation as the North Beach CRA includes the North Beach Town Center, Ocean Terrace, the Normandy Fountain commercial plaza, the West Lots, and North Shore Open Space Park.  Although only two criteria are necessary to establish the need for a CRA, the consultant’s FoN report identified the presence of nine (9) of the fifteen criteria legally necessary to designate an area as blighted and then proceed to formal consideration by the County. (Although the statute provides that a CRA may also be designated upon the existence of conditions signifying “slum,” the City did not pursue such an analysis and the City does not suggest that “slum” conditions exist in North Beach.)

In addition to physical site visits, the FoN cites several sources to establish each of the 9 criteria. These sources include: U.S. Census data, City of Miami Beach records of fire, police, and emergency service calls, and building and code enforcement violations; Miami-Dade County Property Appraiser records; and planning strategies such as the Miami Beach Transportation Master Plan, the North Beach Master Plan, and the Plan for the West Lots.

The nine criteria identified in North Beach by the economic consultant:

1. predominance of defective or inadequate street layout, parking facilities, roadways, bridges, or public transportation facilities;
2. aggregate assessed values of real property in the area have failed to show appreciable increase over the five years prior to the finding of such conditions;
3. faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
4. unsanitary or unsafe conditions;
5. deterioration of site or other improvements;
6. inadequate and outdated building density patterns;
7. fire and emergency medical service calls to the area proportionately higher than in the remainder of the county or municipality;
8. a greater number of violations of the Florida Building Code in the area than the number of violations recorded in the remainder of the county or municipality; and
9. diversity of ownership or defective or unusual conditions of title which prevent the free alienability of land within the deteriorated or hazardous area.

Adoption of the July 2019 Original Boundary

On July 17, 2019, the City Commission adopted Resolution No. 2019-30892, containing an earlier version of the FoN. The July 2019 resolution directed the City Manager to initiate the process of requesting the CRA at the County level. County Commissioner Sally Heyman, whose District 4 includes North Beach, agreed to sponsor the item before the Board of County Commissioners. Prior to a vote of the  County Commission to consider the CRA, the proposal must first be presented before two County committees, the County Tax Increment Finance and Coordination Committee and a County Commission committee. Before a CRA is formally created, there is no formal planning by the City of which projects would be create in North Beach, because the County must first take formal action on a geographic boundary and negotiate tax revenue sharing with the City before we may know the CRA’s projected funding and the geographic area that would generate such funding.  

On October 31, 2019, the City of Miami Beach presented the FoN to the County TIF Committee, which included County staff from Planning, Housing, Budget, and the Property Appraiser. The committee accepted the declaration of necessity contained in the FoN and made a motion to recommend that the City consider extending the boundary to include the Crespi and North Shore areas. The committee indicated that the expanded boundaries would help retain existing housing stock and create opportunities to leverage City and County programs and services for attainable housing. For comparison, the previous version of the boundary without Crespi that was originally adopted by the City Commission last July is attached as Attachment “B” (Prior Geographic Boundary)

For several years, the City Commission has emphasized the importance of workforce housing solutions, which the City recognizes should be included in any planning for North Beach. At its December 10, 2019 meeting, the City’s Affordable Housing Advisory Committee adopted a motion, as contained in Letter to Commission 639-2019, that the CRA prioritize the preservation of affordable housing in North Beach. Pursuant to the recommendation made by County staff at the TIF Committee meeting in October 2019, the City revised the FoN report to include Crespi and North Shore within the Proposed Boundary and emphasize the role of housing solutions will play in the forthcoming redevelopment plan. Prior to advancing to the next County Commission committee meeting, the City Commission must formally accept the revised FoN with expanded boundaries (Attachment “C” – Revised FoN).

Public Outreach and Community Engagement

At its January 15, 2020 meeting, the City Commission deferred consideration of the boundary expansion so the Administration can better educate and inform the community about the CRA and how it will benefit North Beach by implementing the goals of the NOBE Master Plan.  Following the January 15 City Commission meeting, staff has employed multiple methods to increase public education of the proposed CRA, including a social media campaign; the launch of a CRA website; publishing multilingual informational resources (www.miamibeachfl.gov/CRA); hosting walk-in office hours at the Building Department’s North Beach office; informational booths at two Normandy Fountain community events; meeting with leaders of North Beach neighborhood associations and community groups; and a February 18^th community meeting at the North Shore Youth Center attended by over 150 members of the North Beach community.

The community engagement proved helpful for the Administration to answer questions and better understand concerns from community stakeholders that should be incorporated into a future CRA planning processes. Some concerns appear to have originated by the lack of familiarity with CRA function and operation and misconceptions concerning with the limited powers Florida law authorizes to CRAs.  Among other topics that the City has been able to discuss with the public:

• Benefit for North Beach: the CRA does not levy any new tax, but it allows for more of the property tax revenue paid by North Beach property owners to be leveraged and retained within the North Beach CRA for the public benefit of the district, rather than being distributed elsewhere throughout the County.

• Public Use of CRA funds: pursuant to a redevelopment plan that would be developed with public input and adopted at public hearings of the City and County Commissions, the CRA could fund projects like those suggested in the NOBE Master Plan, including improved streetscapes, sidewalks, and landscaping; parking facilities; historic preservation, building renovation, and life safety upgrades; resiliency and environmental programs; community policing; and parks and beaches; housing and community and economic development initiatives. Until a boundary is determined and the County authorizes the CRA, we cannot know how much or they type of funding available to the CRA, or what projects it would first implement.  The identification of projects, funding and prioritization will take place through a CRA planning process if the County approves the creation of a CRA for North Beach.

• CRA governance: unlike other CRAs, the governing board which administers CRAs in Miami Beach, called the Miami Beach Redevelopment Agency, or “RDA” for short, is composed of the City Commission and a County Commissioner, without any private citizen appointees. Miami Beach’s CRA board model has even been recognized[1] as the statewide exemplar for CRA administration because the presence of elected officials ensures the accountability to voters of any action taken by the CRA. 

• Housing Component of CRA: workforce housing is important for both the City and County; in fact the City Commission is seeking expansion of the CRA boundary—at the County’s request—to encompass more multifamily properties and have a greater ability to provide housing solutions in a CRA plan. The tools that the CRA will use to do this won’t be specified until the CRA plan is prepared with community input, but this could include funding to preserve and renovate existing residential buildings, as well as incentivize more workforce and attainable housing.
• Land use or regulatory powers of a CRA: per the statute, a CRA does not have any regulatory, zoning, or “super” powers. In 2006, the Florida Legislature prohibited eminent domain or the condemnation of private property by CRAs.

Although it appears that some of the community are understandably unfamiliar with how a CRA operates, there has been significant public support expressed for the City’s proposal for a CRA to enhance North Beach. In order to safeguard the trust and support of the community, the City will endeavor to maintain active public involvement and input as the CRA process continues.

The finding of necessity report identified nine of the 15 criteria identified by statute as necessary for establishing a CRA, and these quality of life conditions have been identified long before by residents and the North Beach community. The CRA process is one of the most effective legislative tools available for the City to implement the North Beach Master Plan, because it uses taxes generated in North Beach rather than sending the taxes elsewhere. If the County Commission authorizes its designation, the CRA will play a critical role in the future of North Beach. This planning process will continue to unfold in a public manner to ensure community participation at every step.

The Administration recommends that the City Commission accept the revised finding of necessity and transmit the report to the County in continuation of the process to create the North Beach CRA.