The Administration recommends that the Chairperson and members of the Miami Beach Redevelopment Agency (the “Miami Beach RDA”) adopt the attached Resolution which establishes the final budgets for the Miami Beach RDA City Center Redevelopment Area, the Anchor Shops and Parking Garage, the Pennsylvania Avenue Shops and Parking Garage, and Collins Park Parking Garage for Fiscal Year (FY) 2023.

On January 26,1993, Miami-Dade County adopted Resolution No. R-14-93, which, among other things, found the area of Miami Beach bounded on the east by the Atlantic Ocean, on the north by 24th Street, on the west by West Avenue, and on the south by 14th Lane to be a "blighted area" within the meaning of Part lll of Chapter 163, Florida Statutes, and delegated to the City of Miami Beach, pursuant to Section 163.410, Florida Statutes, certain powers conferred upon the County Commission as the governing body of Dade County by Part lll of Chapter 163, Florida Statutes, with regard to the Redevelopment Area, so that the City Commission, either directly or through its duly designated community redevelopment agency, could exercise such powers.

On November 16, 1993, the County and the City entered into an Interlocal Agreement, by which the County delegated to the City certain redevelopment powers, including but not limited to the creation of the Redevelopment Area and implementation of the Redevelopment Plan.

The First Amendment to the Interlocal Agreement, approved by the Miami-Dade Board of County Commissioners (‘BCC”), through Resolution No. R-889-03, and approved by the City Commission, through Resolution No. 2003-25241, delegated to the City the power to develop and implement community policing initiatives.

The Second Amendment to the Interlocal Agreement, approved by the BCC, through Resolution No. R-958-04, and approved by the City, through Resolution No. 2004-25560, allowed the Miami Beach RDA to refund certain bonds and provided for an annual fee of one and one-half percent to be paid to the County and City annually to defray administrative costs after debt service and all other obligations related to the bonds or future indebtedness was satisfied for the fiscal year.

The Third Amendment to the Interlocal Agreement, approved by the BCC, through Resolution No. R-1110-14, and approved by the City Commission, through Resolution No. 2014-28835, among other things, allowed the Miami Beach RDA to issue $430 million in bonds to refund existing debt and partially fund the Miami Beach Convention Center (MBCC) expansion and renovation project; required that the use of tax increment revenues to fund the Miami Beach RDA’s expenses for administration, community policing, and capital projects maintenance would not exceed the prior fiscal year’s distribution for such expenses, adjusted by the lesser of the Miami Urban Area CPI or 3% annually to be calculated using the Miami Fort Lauderdale All Urban Consumers CPI from July to June for the prior year; and stipulated that any remaining funding would be used to retire debt early.

The Fourth Amendment to the Interlocal Agreement, approved by the BCC, through Resolution No. R-644-18, and approved by the City Commission, through Resolution No. 2018-30288, provided for the following:

1.     Added certain expenditures to the authorized expenditures of the City Center Redevelopment Area

2.     Allowed the City Center Redevelopment Area to reimburse the City $6,914,221 for construction delays and damages to the Convention Center renovation and expansion project resulting from Hurricane Irma

3.     Included proposed funding in an amount up to $20 million to fund the Lincoln Road project, previously authorized as part of the Third Amendment, for a total project amount of up to $40 million for the Lincoln Road project

4.     Distributed to both the County and the City, beginning in FY 2018 and continuing until FY 2023, a reimbursement based on each entity’s proportionate share of previous year expenses for administration, community policing, and capital maintenance, and required that both set aside $1.5 million of the annual reimbursement for beach renourishment that could be utilized to leverage State or Federal funding for beach renourishment projects

5.     Utilized any excess revenues, after the foregoing distributions, for the early prepayment of debt, as originally stipulated in the Third Amendment to the Interlocal Agreement

 The Fifth Amendment to the Interlocal Agreement, approved by the BCC, through Resolution No. R-256-22, and approved by the City Commission, through Resolution No. 2022-32014, provided in material part that:

1. Until FY 2023, the County shall set aside $1.5 million per year of the excess Trust Fund revenue payments received from the City Center RDA for the purpose of funding beach renourishment for any beaches within Miami-Dade County, as opposed to only beaches within or adjacent to the City of Miami Beach, at the County's sole discretion
2. The City Center RDA shall distribute $27.1 million to the City for the limited purpose of funding and reimbursing the City for the remaining project costs in connection with the Convention Center Project, including payments to the Contractor pursuant to the Final Settlement Agreement approved by the City Commission on September 30, 2021 through Resolution No. 2021-31870

 The FY 2023 budget for the Miami Beach RDA has been prepared to coincide with the overall City budget process and is being presented to assist in providing a comprehensive overview of the City Center Redevelopment Area as set forth in the attached Exhibit A.

CITY CENTER RDA ANALYSIS

 Revenues and Expenditures

 Based on the 2022 Certification of Taxable Value provided by the Miami-Dade County Property Appraiser’s Office on July 1, 2022, property values in the City Center RDA increased by 0.8%, or $45.4 million, over the 2021 Certification of Taxable Value to $6.0 billion. For FY 2023, the City portion of the tax increment totals $31.7 million, and the County portion of the tax increment totals $25.1 million. However, as in previous years, the City has received correspondence from the County advising of the finalization of the tax roll for the prior year, which in the case of 2020, reflects a decrease from the preliminary valuation for the same year and will result in a corresponding adjustment/reduction of tax increment revenues totaling a combined $2.7 million for FY 2023.

 Additional sources of revenue include an estimated $102,000 in interest income and the use of approximately $13.3 million of prior year excess Miami Beach RDA Trust Fund revenues in accordance with the 4^th Amendment to the City Center Redevelopment Area Interlocal Agreement that is recommended to be allocated as follows for FY 2023:

1. $5.9 million reimbursement to Miami-Dade County for year six (FY 2023) of six of the annual reimbursement equal to the County’s proportionate share of prior year administration, community policing, and capital projects maintenance expenses incurred in the prior year
2. $1.5 million to be set aside for beach renourishment
3. $5.9 million contribution to the City’s Fleet Management Internal Services Fund for replacement of General Fund vehicles in FY 2023 with cash instead of debt financing

 Project-related expenditures for FY 2023 account for approximately $12.8 million, which include $5.1 million allocated for community policing initiatives in the City Center Redevelopment Area to continue to provide enhanced levels of staffing and services throughout the area, and $7.7 million for maintenance of existing projects. There is no additional funding for ongoing and/or planned capital projects in the FY 2023 operating budget due to the extension of the Miami Beach RDA for the recently completed renovation and expansion of the MBCC.

 Administrative expenditures account for $886,000, which include a management fee of $606,000 allocated to the General Fund for direct and indirect staff support, $22,000 for annual audit fees, and $258,000 for internal services expenditures.

 The budget also includes $21.7 million in debt service payments to cover annual debt service costs related to the Convention Center bonds issued in 2015, as well as $14.0 million set aside for additional debt service coverage. Funds set aside for additional debt service over and above the annual debt service payment may be used to finance any potential shortfalls in the Miami Beach RDA budget or pay down the Convention Center bonds early, but not prior to FY 2024.

 Other expenditures include those items that, pursuant to the existing bond covenants, may only be expended once the annual debt service obligations have been met. These include a $4 million transfer to the MBCC Fund for FY 2023; $359,000 for the County’s administration fee, which is equivalent to 1.5% of the County’s respective FY 2023 tax increment payment; and $453,000 contribution to the City, which is equivalent to 1.5% of the City’s respective FY 2023 tax increment payment.

 REDEVELOPMENT AREA SHOPS AND GARAGES

 The revenues and expenditures associated with operations of the City Center Redevelopment Area Shops and Garages are presented as separate schedules in order to eliminate any perception that proceeds from the facilities’ operations are pooled with tax increment financing (TIF) and other City Center Trust Fund revenues.

 Anchor Shops and Parking Garage

 Revenues and expenditures at the Anchor Garage are projected at approximately $2.9 million for FY 2023. Revenues are primarily derived from attended parking, monthly permits, and valet parking revenues operations totaling approximately $2.9 million, combined. An additional $20,000 is projected in interest income and other miscellaneous revenues for FY 2023. Operating expenditures, which include a contractual revenue-sharing obligation with the Loews, General Fund administrative fees, and a budgeted subsidy to the Pennsylvania Avenue Garage Fund, total approximately $2.9 million.

 Revenues and expenditures at the Anchor Shops are projected at approximately $1.3 million for FY 2023. Revenues are derived primarily from retail leasing and common area maintenance operations totaling approximately $1.2 million, as well as an additional $19,000 projected in interest income for FY 2023. Operating expenditures, which include General Fund administrative fees and a budgeted subsidy to the Pennsylvania Avenue Shops, total approximately $1.3 million for FY 2023.

 It is important to note that the Anchor Garage and Shops funds are not constrained by the stipulations of the Miami Beach RDA City Center Redevelopment Area Interlocal Agreement.

 Pennsylvania Avenue Shops and Parking Garage

 Revenues and expenditures at the Pennsylvania Avenue Garage are projected at $946,000 for FY 2023. Revenues are primarily derived from transient parking and monthly permits operations totaling $819,000, combined. An additional $4,000 is projected in interest income for FY 2023, as well as a budgeted subsidy from the Anchor Garage Fund of $123,000 to fully fund anticipated garage operations. Operating expenditures, which include General Fund and Parking administrative fees, as well as capital expenditures for renewal and replacement projects under $25,000, total $946,000.

 Revenues and expenditures at the Pennsylvania Avenue Shops are projected at approximately $314,000 for FY 2023. The retail component of this facility comprising approximately 7,655 square feet is occupied by Moonlighter Fablab, Inc., which is a non-profit organization that serves as a Science, Technology, Engineering, Arts and Math (STEAM) education center, co-working space, and digital fabrication lab. Revenues from operations are nominal (base rent of $1.00 per year) based on the current lease agreement, therefore, requiring an annual budgeted subsidy from the Anchor Shops of $314,000 for FY 2023 to fund operations. Operating expenditures, which include a General Fund management fee, total $314,000 for FY 2023.

 Similar to the Anchor Garage and Shops, the Pennsylvania Avenue Garage and Shops funds are not constrained by the stipulations of the Miami Beach RDA City Center Redevelopment Area Interlocal agreement.

 Collins Park Parking Garage

 During FY 2021, operations of the Collins Park Garage commenced. The facility is a seven-story structure comprised of a six-level parking garage with approximately 513 parking spaces, as well as approximately 15,000 square feet of retail space on the ground level.

 Revenues and expenditures at the Collins Park Parking Garage for FY 2023 are projected at approximately $1.3 million. Revenues are derived primarily from transient parking and monthly permit revenues totaling approximately $1.3 million, as well as an additional $2,000 from interest income for FY 2023. Operating expenditures, which include General Fund and Parking administrative fees, total $1.3 million for FY 2023.

The FY 2023 Miami Beach RDA budget totals $67.5 million. The Anchor Parking Garage and Shops budgets total $4.1 million, combined. The Pennsylvania Avenue Parking Garage and Shops budgets total $1.3 million, combined, and the Collins Park Parking Garage budget is $1.3 million.

 In order to address the existing and future obligations of the Miami Beach RDA, it is recommended that the Miami Beach RDA Board adopt the attached Resolution, which establishes the final budgets for the City Center Redevelopment Area, the Anchor Shops and Parking Garage, the Pennsylvania Avenue Shops and Parking Garage, and the Collins Park Parking Garage for FY 2023.