To create new government office space in the western suburbs, Miami-Dade County is willing to borrow $256 million in a real estate deal approved Tuesday.
The unanimous vote by county commissioners would convert a 1974 office complex originally built for Florida Power and Light into the new West Dade Government Center, a central place to get permitting papers approved.
The commissioners unanimously approved the deal, with three members absent from the vote: Danielle Cohen Higgins, René Garcia and Oliver Gilbert, chairman of the board.
READ MORE: ‘Back to the drawing board.’ Miami-Dade mayor suspends expensive building purchase in December
Commissioner Anthony Rodriguez, the sponsor of the legislation to purchase the property at 9250 W. Flagler St., noted that some saw the deal as “spending a lot of money.”
“I’ll just use the word ‘investing,’” he said. “Investing in the future of our residents.”
According to a county estimate, paying off debt for the $182 million purchase, and another $74 million, much of it for planned upgrades, is expected to cost about $16.6 million a year over the next three decades.
Is that a good use of taxpayer money?
Here are five factors that will help answer that question.
The price could have been higher, but was still well above Miami-Dade’s assessed values
Two appraisal firms hired by Miami-Dade said last year that the 60,000-square-foot building, with roughly 80% of the office space empty, was worth about $110 million to potential investors.
Those valuations didn’t dampen enthusiasm for the deal last year, when Mayor Daniella Levine Cava asked the commission in December for expedited approval of a $205 million purchase price, without going through the board’s usual committee hearing. That plan fell apart after an article in the Miami Herald questioned the proposed price.
Levine Cava withdrew the deal and said she would seek a lower price from owner Bushburg Properties, a New York real estate investor. The final contract approved Tuesday on a 10-0 vote was 11% lower than the deal submitted six months ago.
The county’s real estate department justified both the proposed $205 million price in December and the new $182 million price approved Tuesday with “hypothetical appraisals” generated by the same companies that calculated market prices.
The hypothetical values averaged approximately $191 million, based on what a commercial buyer would offer if the office building were occupied entirely by a single tenant, as will be the case once Miami-Dade moves into the property. In reality, the old FPL center had about 20% of its office space leased when the appraisals were done last year.
While the proposal presented to commissioners in December included both sets of assessments, the proposal approved Tuesday listed only the higher values. The government also said the lower purchase price made the deal competitive on a square meter basis with other recent commercial transactions.
“It went through the committee process and the deal got better,” Commissioner Kevin Cabrera said. “We have gotten significant concessions from the people who are selling this to us.”
Affordable on-campus housing could provide cheaper options for county employees
The 26-acre complex has ample parking and vacant land around the office building for residential development, and the approval of the purchase included a requirement that Levine Cava explore building affordable housing there. That could include a program where county employees could rent some of the units first.
“They would be on site so they could actually walk to work, wwhich I think would be transformative” said Commissioner Raquel Regalado. “It would help us with retention.”
The Solid Waste Department, which is strapped for cash, will pay more after the move
Ahead of a scheduled December vote on the deal, the interim director of the Solid Waste Management Department privately fought against government efforts to move the agency to the new center. “The cost is too high and we can’t afford it,” Olga Espinosa-Anderson, then head of Solid Waste under Levine Cava, wrote in an Oct. 16 email to Alex Muñoz, director of Internal Services, the real estate division of the province.
READ MORE: ‘We can’t afford it’: Miami-Dade’s waste director opposed mayor’s $269 million office deal
Solid Waste is paying about $1.3 million a year for its current space in the county’s Martin Luther King Office Plaza near the MLK Metrorail Station in Liberty City, according to internal emails. According to a May 13 forecast of expected costs for the nine county offices that would move to the West Dade center, the new Solid Waste space would cost $1.8 million annually.
That’s far less than the $2.8 million annual cost originally estimated for Solid Waste last fall, when Espinosa-Anderson, now Solid Waste deputy director, objected to the measure. That was weeks after the agency received a 7.5% rate increase from the commissioners, an increase that still wasn’t enough to cover the cost of the county’s trash collection.
The full cost for Solid Waste’s new space in the West Dade center won’t be known until Miami-Dade settles on an interest rate on the money borrowed for the purchase and renovation. The province’s finance department plans to introduce legislation to that effect later this month, with final approval expected in July.
The building will fulfill Miami-Dade’s goal of moving licensing offices to a central location
The purchase of the West Dade site ends Miami-Dade’s long-standing plan to spend $85 million to build a licensing center to replace leased office space in a Tamiami shopping center five miles away.
With a larger footprint, Gov. Levine Cava said the West Dade center will allow more agencies involved in residential and building permits — including the clerk of court and Water and Sewer — to operate in the same space.
“I wholeheartedly believe this is going to be a giant step forward,” Lourdes Gomez, director of Regulatory and Economic Resources, which oversees the permits, told commissioners. “I’m excited.”
There’s a chance a Metromover station will be built there
After years of pushing for a modernized bus system along Flagler Street, Miami-Dade changed its policy in January to study building a Metromover route across the 10 miles between Miami International Airport’s Metrorail station and Florida International University.
While the idea is just a concept at this point, the West Dade center would give Miami-Dade additional county-owned land for a station should the plan become a reality in the coming decades.
“The most expensive part of implementing the Flagler Street project is the priority purchases,” said Commissioner Eileen Higgins, using a technical term for purchasing land for transportation projects. “If we own the property, we can give it to ourselves for free.”
