After Pushback, Miami-Dade To Pay $23M Less For New Government Center
Miami-Dade County is making a second attempt to buy a 625K SF office building, slashing its bid by $23M after its first offer faced scrutiny.
County Commissioners are scheduled to vote June 4 to approve the $182M purchase of the office building at 9250 W. Flagler St., where Miami-Dade Mayor Daniella Levine Cava hopes to consolidate several government offices. The commission had previously deferred a December vote to pay $205M for the property after the price was met with skepticism inside and out of City Hall.
The initial purchase price faced questions because two independent appraisals conducted as part of due diligence had valued the property at $188M and $194M as a single-tenant office or as little as $104M and $116M as a building with multiple businesses.
The new price tag offered by the mayor's office comes in under those appraisals, and the mayor is also seeking $1M to pay closing costs and up to $73M to renovate the property and build a vertical parking garage.
“This acquisition represents an excellent value proposition and offers a unique opportunity to acquire property in an extremely competitive real estate market,” Carladenise Edwards, the county's chief administrative officer, wrote in a memo recommending that the commission approve the purchase.
The memo said the county had engaged in extensive negotiations to secure “the best possible value” for the property. It highlights that the $291 per SF purchase price is 11% below the list price and 77% below replacement cost.
The seller is Hoffman Flagler LLC, managed by Jacob Hoffman. He tapped Cushman & Wakefield to lease the property, which had at one time been the headquarters for Florida Power & Light. A Cushman & Wakefield representative said the company is no longer involved with the property, and Hoffman couldn't immediately be reached for comment.
In the initial push to acquire the property, the Levine Cava administration said the above-appraisal purchase price was supportable because the colocation of government services would generate around $140M in cost savings.
The memo attached to the June 4 agenda item says cost savings over 30 years would total $862M, including equity appreciation.
The county is also eyeing excess land at the 26-acre property and the existing surface parking lot as a potential affordable housing development site that would be built by leveraging the state’s Live Local Act.
“It’s extremely challenging to identify an asset of this size and competitive market value in South Florida’s fast-growing real estate market, let alone one that is centrally located and in good condition,” Edwards wrote of the property in Fontainebleau, south of Doral.
The administration plans to rename the property West Dade Government Center and use it to house some operations of the Department of Regulatory and Economic Resources, property appraiser’s office, clerk of courts, Water and Sewer Department, Solid Waste Management, Department of Health and Miami-Dade Fire Rescue.
The memo outlines why each of those offices would benefit from a relocation, but at least one county official had tried to fight the move before reversing course.
Olga Espinosa-Andersen, the then-interim director of Solid Waste Management, pushed back against the plan, telling Levine Cava’s administration in an October email that “the cost is too high, and we cannot afford it,” the Miami Herald reported earlier this month.
Espinosa-Andersen tried to keep her department from being included but ultimately provided supportive language for the move that the mayor’s office had requested from each affected office, per the Herald.
Aneisha Daniel was appointed to be the new director of Solid Waste Management on April 26, and Espinosa-Andersen returned to her previous position as deputy director.
In a letter announcing the staffing change, Levine Cava thanked Espinosa-Andersen for her “outstanding service” as interim director.
