The Administration recommends adoption of the proposed Fourth Amendment which incorporates the following provisions:
- The allocation of $6,914,221 of the excess Trust Fund revenues to the Convention Center Project to fund additional costs in connection with expenses resulting from Hurricane Irma, among other unforeseen circumstances.
- The Fourth Amendment is projected to generate $6.6 million to the City in FY 2017/18 ($5.1 million net of beach renourishment), which would grow each year proportionate to property tax values in the RDA through FY 2022/23, for a total of approximately $42 million over the next six years (approximately $33 million net of beach renourishment).
The distribution of certain excess Trust Fund revenues (based on each entity’s proportionate share of the total payments expended for Administration, Community Policing) be distributed to the County and the City beginning FY2017-18, and continuing until FY2022-23, with the County and the City each setting aside $1.5 million per year from the foregoing distribution of excess Trust Fund revenues to fund beach renourishment efforts, which can be used to leverage State or Federal funding for beach renourishment projects. It is estimated that this would generate $6.6 million to the City in FY 2017/18 ($5.1 million net of beach renourishment), which would grow each year proportionate to property tax values in the RDA through FY 2022/23.
Under the proposed amendment, the City funding for beach renourishment will be limited to projects in Miami Beach, while the County share may be used within Miami Beach and adjacent jurisdictions.
- The distribution, from excess Trust Fund revenues, an amount up to $20,000,000, to fund the Lincoln Road Project previously authorized as part of the Third Amendment, for a total project amount of up to $40,000,000 for the Lincoln Road Project.
Further, the Administration recommends that the amount of additional funding to be allocated from the Fourth Amendment for the Lincoln Road Project be determined through the annual budget process.
On January 26,1993, Miami-Dade County (the “County”) adopted Resolution No.R-14-93, which, among other things, (i)found the area of Miami Beach (the "City") 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 (the "City Center Redevelopment Area" or "Redevelopment Area") to be a "blighted area" within the meaning of Part lll of Chapter 163, Florida Statutes, and (ii) 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 February 3, 1993, the City adopted Resolution No. 93-20709, which established a community redevelopment agency (the "Miami Beach Redevelopment Agency" or the "Agency"), and declared the members of the City Commission as the members of the Agency. Subsequently, on February 12, 1993, the City adopted Resolution No. 93-20721, which adopted the Agency's City Center/Historic Convention Village Redevelopment and Revitalization Area Plan (the "Plan") for the redevelopment and revitalization of the Redevelopment Area.
The County and the City then approved and entered into the lnterlocal Cooperation Agreement, executed on November 16, 1993 (as amended by the First, Second and Third Amendments defined below, the "lnterlocal Agreement"), by which the County delegated to the City certain redevelopment powers granted by the Act, including but not limited to the creation of the Redevelopment Area and implementation of the Plan.
The 332-acre City Center/Historic Convention Village Redevelopment and Revitalization Area (“City Center RDA” or “RDA”), established in 1993, provided the funding mechanism to foster the development of a new convention hotel development (ultimately the Loews hotel) within proximity of the Miami Beach Convention Center and established the necessary link between the City's many core area civic, cultural and entertainment uses in order to create the fabric of a true urban downtown.
The Board of Miami-Dade County Commissioners (“the Board”), through Resolution No. R-889-03, and the City Commission, through Resolution No. 2003-25241, also approved an amendment to the lnterlocal Agreement ("First Amendment") to delegate to the City the power to implement the community policing initiatives.
The Board, through Resolution No. R-958-04, and the City Commission, through Resolution No. 2004-25560, also approved a second amendment to the lnterlocal Agreement ("Second Amendment") whereby (i) the County, City, and Agency agreed that the Agency would remit one and one-half percent (1.5%) of the Tax lncrement Revenue paid to the Agency for said fiscal year to the County to defray administrative costs for oversight and processing Agency related items. After debt service and all other obligations related to the bonds or future indebtedness issued by the Agency and approved by the County was satisfied for the fiscal year, and (ii) the County approved the Agency's issuance of refunding bonds in an amount not to exceed a principal amount of $101,090,000.00 to refinance all or a portion of the outstanding principal
amount of bonds issued with respect to the Redevelopment Area.
The Board, through Resolution No. R-512-14, and the City Commission, through Resolution No. 2014-28835, also approved an amendment to the Redevelopment Plan and lnterlocal Agreement ("Third Amendment") to provide a share of funding for the Miami Beach Convention Center (“Convention Center”) Renovation and Expansion Project:
i. amended the Plan to include the Convention Center Renovation and Expansion Project;
ii. amended the lnterlocal Agreement to, among other things, extend the life of the Redevelopment Area to March 31, ,2044;
iii. authorized the issuance of tax increment revenue bonds in one or more series by the RDA in an amount not to exceed $430,000,000 for purposes of refunding current outstanding debt, funding eligible community redevelopment project costs, including the Convention Center Renovation and Expansion Project, and any reserves and costs of issuance;
iv. provided for an ongoing adequate operating and maintenance subsidy for the Miami Beach Convention Center, in addition to the existing $4.5 million per year and annual year-end revenue sharing that the City currently receives from Convention Development Taxes through 2048;
v. provided for ongoing funding of City operations in the RDA;
vi. established that from FY 2014-15 through FY 2021-22, any funding not used for debt service and operating expenses will go into a fund to be used for shortfalls and eventually prepayment of debt;
vii. established that from FY 2022-23 until FY 2043-44, the County will receive a refund of City Center Agency operating expenses based on its proportion of revenues contributed to the Trust Fund; and
viii. any remaining funding will be used to extinguish debt early.
With respect to the prepayment of debt, although the County extended the life of the RDA to March 31, 2044, the City and the County anticipated that the RDA Bonds would be repaid well before March 31, 2044. In January, 2015, when the City entered into the Interlocal Agreement, the City estimated that the RDA bonds would be paid off by Fiscal Year (FY) 2036/37 (based on growth rates between 3.5% and 5%). Assuming a similar rate of growth, the City currently estimates that the RDA Bonds may be paid off as early as FY 2026/27, as actual growth rates since we entered into the Interlocal Agreement have averaged approximately 10%.
To this end, the year-end audited fund balance for excess RDA trust fund revenues in FY 2015/16 was $19.5 million. Pending our year-end close-out for FY 2016/17, the City estimates that the balance of excess RDA trust fund revenues will be approximately $34 million.
During the December 13, 2017 City Commission meeting, the Administration presented the Fourth Amendment to the Interlocal Agreement (the Fourth Amendment). The Fourth Amendment was proposed as a way to further address and fund the impacts from Hurricane Irma and the August rain bomb on the Convention Center. The items within the proposed amendment are as follows:
1. Of the approximately $34 million in revenues remaining on deposit in the Trust Fund as of the Agency’s year-end for FY2016/17, the Agency shall disburse $6,914,221.00 to the City, for the limited purpose of funding a portion of the additional construction, delay and repair costs for the Convention Center Project arising from Hurricane Irma and the rain bomb in August.
2. After disbursement of $6,914,221.00 to the City, for the Convention Center Project, the Agency shall disburse to each taxing authority, by March 31, 2018, the total of 50% of the revenues remaining on deposit in the Trust Fund, in the proportionate manner as it was deposited. It is estimated that this would generate $7.6 million to the City in FY 2017/18.
3. In addition, beginning FY2017/18, the Agency shall annually disburse to each taxing authority, by March 31 of each year, the total of 75% of the current fiscal year’s projected excess revenues to be deposited in the Trust Fund, if any, in the proportionate manner as it was deposited. It is estimated that this would generate $5.9 million to the City in FY 2017/18, which would grow each year proportionate to property tax values in the RDA.
As part of the discussion on the item, a request was made by representatives of the Lincoln Road Business Improvement District that the amendment also include an allocation of $13 million from the available balance for the Lincoln Road capital improvements project. The Mayor and City Commission approved Resolution No. 2017-30119 adopting the proposed amendment as outlined above without the additional $13 million for the Lincoln Road capital improvements project. However, the City Commission directed the City to explore with Miami-Dade County the possibility of including an allocation of $13 million in funding for the Lincoln Road capital improvements project.