David Beckham's Miami Stadium Morphs Into $1B Project; Related Group CEO Called Offer 'Unconscionable'
UPDATE, July 19: The ballot measure passed at yesterday's city commission meeting and the measure will go to Miami voters. Also yesterday, a Miami man filed a lawsuit against the city alleging that it is not following the law requiring competitive bidding for private development on city land.
ORIGINAL STORY, July 18: Nearly five years after David Beckham announced he would be putting a Major League Soccer team in Miami, his investment group is back at the negotiating table trying to get a stadium built.
A new plan calls for a $1B stadium and retail complex at the current site of the Melreese Country Club, a city-owned property that is contaminated with arsenic. Miami city commissioners will vote Wednesday on the next step in the process: whether to approve a ballot measure that will ask voters if they want to change the law to allow the Beckham group to have a no-bid contract, the Miami Herald reports.
It has been a long slog for Beckham. Miami taxpayers have soured on funding sports stadiums because the Miami Marlins' baseball stadium notoriously cost them $2B. Beckham's group has vowed that soccer stadium costs would be shouldered with private money, but after several proposed sites were rejected and a major investor left the group, plans stalled.
In January, Jorge Mas, the politically connected leader of MasTec, a Forbes 500 engineering and infrastructure firm, joined Beckham's group and revived the effort.
The team led by Mas and Beckham has let go of partially executed plans to build on a controversial site in Overtown and is instead focusing on the Melreese site. A new plan calls for 400K SF of office space, a 750-room hotel, 600K SF of retail and a golf facility in addition to the 25,000-seat stadium.
Mas' team offered to privately fund stadium construction and rent the land from the city for $3.5M per year. It has offered to pay environmental cleanup costs, projected between $35M and $50M, and seek state and federal — but not local — funds if its budget is exceeded.
Mas has projected that the site, to be called Miami Freedom Park, would generate $425M in annual revenue and would pay $44M in city, county, state and school district taxes.
The commission was set to vote last week on whether to approve the ballot measure, but at a contentious public meeting, Commissioner Ken Russell asked that the vote be delayed so that some changes could be incorporated and concerns addressed.
#Miami I proudly give you a teaser @futbolmiamimls #ThisIsMiamiFreedomPark #ThisIsMiami pic.twitter.com/8dj2Jq7lbi
— Jorge Mas (@Jorge__Mas) July 8, 2018
Developer Jorge Perez, of Related Group, said that Mas was low-balling the city on the rent price and called for an outside appraisal and more community input.
“If I was developing a billion-dollar deal, the land portion would be approximately 20% or $200M," he wrote to a Miami commissioner. "At a 6% return, rent would be $12M. While I am [opposed] to giving public land away for private, for profit purposes without any social benefit, if AFTER COMMUNITY INPUT, the City desired to sell or lease public open space to private individuals, they should conduct an appraisal and determine what is fair market value. It is bad enough turning the Little open space we have left for the gain of a few wealthy individuals, but to give it away for a ridiculous sum is unconscionable.”
Perez said he was not interested in the site himself.
Transparency advocates complained about the last-minute revealing of details and questioned whether the Beckham/Mas group's financial projections are accurate and whether taxpayers will get a fair deal.
Those criticisms had an effect: According to the Miami Herald, which reported on a new term sheet released last night, the Mas/Beckham team agreed to further concessions at the eleventh hour — that it will pay fair market rent as determined by two independent appraisers, or 5% of gross rent revenue collected from tenants at the site; that the city would also receive 1% of the gross proceeds from any capital transactions; that workers will be paid a $15-an-hour minimum wage; and that the group will pay for parks and Baywalk/Riverwalk projects.
"We have to get a stadium decision on the ballot as quickly as possible because per the expansion agreement with Major League Soccer, I have to start construction by October 2019," Mas told the Herald. "If construction doesn’t start in October 2019, I’m technically in default of the expansion agreement. That puts the team at risk from coming to Miami.”
Miami Mayor Francis Suarez has voiced his support for the project, as has Commissioner Keon Hardemon, whose aunt is a lobbyist for it. C.J. Gimenez, son of Miami-Dade County Mayor Carlos Gimenez, is also a lobbyist for the project. Wednesday's measure needs three votes to pass.
The team intends to begin playing in a temporary facility in 2020 and in its new stadium in 2021. Mas has said the team name and colors will be revealed soon and that at least one high-profile player from Croatia's World Cup-finalist team wants to join.
