Support the Crespogram

WHEN POLITICIANS WON'T REVEAL THE FINANCIAL NUMBERS OF A DEAL THAT INVOLVES THEIR PALS, YOU HAVE TO ASSUME THAT THAT DEAL HAS BEEN COOKED.  THIS IS ONE OF THOSE TIMES, AND I NOW HAVE A COPY OF THE TERM SHEET TO BACK UP THOSE ASSUMPTIONS

NUMBER 65 - JULY 15, 2018

It's hard not to have a bit of sympathy for David Beckham. I talked with someone who has spent some quiet time with him and who said that behind all the hoopla and craziness that comes with his fame he's a pretty decent, down-to-earth guy who loves and appreciates all that his gift of kicking a soccer ball has brought him.

The problem is that Beckham isn't a business guy. He's the guy on the cereal box, and not one of the changing group of guys who are trying to make money from selling the cereal in the box,

In a lot of places that would not be a problem, but unfortunately for Beckham, Miami is not like a lot of other cities.  It's a lot like the mythical Casablanca, and if what is happening now was a movie, there would have to be a character named Rick Blaine, who utters the words:

       "Of all the gin joints in all the towns in all the world, he walks into mine."

Miami is more than just a city. It's an illusion, it's a piece of land that will sooner rather than later disappear back under water.  It's a city where people come to be someone else, and it's a city where 2 generations of Cuban exiles grew roots and in some cases gained fabulous wealth preying on the dreams of others who grieved for lives lost in another country.

It's a city where dead men vote, young men sell cocaine by the ton, and where politicians are greedy, crazy, conniving sons-a-bitches who lie and cheat not because they have to, but because they've grown up in a culture that honors scammers and schemers, and it's a city where drug dealers, crooked bankers, murdering cult leaders and crooked politicians get streets named after them.

In short, Miami probably seemed just the place for a kid from the Eastside of London with no business knowledge or experience to believe that because of the fame and wealth that he acquired as a result of his skill kicking a ball that that would be enough to dazzle the locals and bullshit the politicians into giving him and his mates a sweetheart deal worth at least a billion dollars.

The only problem is over the years a growing number of people in Miami have tired of being hustled, and aren't going to go down on this deal without a fight.

WHAT THE TERM SHEET TELLS US

Yes, I got a copy of the Term Sheet - I am always thankful to the dedicated city employees who provide me with documents when the going gets tough - and even though the City Manager and the City Attorney thought they could be cute and keep this document away from me until it was too late, they couldn't.

The very first thing to point out is that this document was time stamped at 4:50 PM, on June 27th.  That means that it was in the possession of the City Manager a full 14 days before the day of the City Commission meeting, and not only does it not seem that he instructed anyone to review and analysis this documents, but it's a document that was not provided to all of the commissioners prior to the meeting.

I cannot say whether any individual commissioner received a copy, but I have been able to confirm that at least one commissioner's office was not provided the document until Thursday night when the document became part of the discussion.

The second thing to understand is that even though the purpose of the Commission meeting was to have the commission approve a referendum question that asked the voters to permit them to wave the competitive bidding requirement in the City Charter, they did not ask Section 18-119 of the Code that deals with Unsolicited Proposals to be waived..

The process as described in the Code is that when an unsolicited bid is received by the city it has to be reviewed by the city manager, and if it is discovered to "involve long term financing where the city would incur a debt obligation, the city manager's award recommendation shall be reviewed and approved by the finance committee of the city before being submitted for consideration by the city commission."

Here's that portion of the code.

Section 18-119 is important because it requires that ANY unsolicited bid that is chosen has to undergo such a financial review if it is determined that the city will be liable for any long term debt.

The fact that the city chose to seek a wavier to the competitive bidding requirement  requiring other bidders to submit proposals for what they might do with the Mel Reese property means that the city arbitrarily selected the Beckham Group's proposal as the unsolicited bid they wanted to go with, without considering other proposals, and that by seeking a referendum vote they are asking the citizens to approve that decision.

That is why the Term Sheet becomes so important, and why it appears that there was a concerted effort to keep its existence a secret.

The Mayor, the City Manager, the City Attorney, and even Jorge Mas have all gone out of their way in arguing that the city will not incur any debt obligation, but that is patently false, even if one accepts their claim that the only public debt that the city will incur are the tax-exempt bonds the they will have to issue in order to finance the construction of the park portion of the Beckham Group's plan.  

Debt is debt, and because the obligation for issuing these bonds is being put on the shoulders of the city, that alone constitutes a justifiable reason for this being vetted by the city's finance committee before being submitted to the voters.

But there's more. In fact there is a lot more long term debt lurking in the Term Sheet, and you can find it on page 2 in the section titled, Park Infrastructure Fund.

When dealing with these kinds of deals the rule is always follow the money, but in this case, in order to follow the money you first have to understand the language. Here, in larger type is the language in the middle column above.  Please, please take the time to read this list of the expected improvements SLOWLY!

          "The Park Infrastructure Improvements shall include only those

          improvements available to, and that are expected to be used by,

          the general public without exclusive or special use incurring to

          MFP, (Miami Freedom Partners), which may include the following

          infrastructure improvements: (i) site development work for the Park;

          (ii) storm water management/drainage systems; (iii)grading and

          paving; (iv) environmental mediation; (v) water distribution and

          sanitary sewer systems; (v) electrical distribution and tele-

          communications systems; (v) off-site roadway improvements; and

          (vi) other additional infrastructure as may be necessary for the

          proposed development of the Park and the project (the "Park

          Infrastructure Improvements")

There is not a competent city manager, who if presented with a list like this would not immediately request and require that his/her city's chief financial officer, city attorney and director of capital improvements to review, analysis and prepare a worksheet to cost out every one of these detailed improvements.

If Miami City Manager Emilio Gonzalez did instruct any of his staff to prepare such a worksheet during the 14 days he had this document in his possession, he has not admitted to having done so, nor has he made that document available to the members of the city commission, the news media or the public.

But as alarming as this is, the language in the Term Sheet also reveals that the  the city and it's officials are excluded from having a direct say in many of the decisions that will be funded through the $20 million bond issue.

The Term Sheet says on page 3, top, 3rd column:

          "MFP would assume the cost of designing the Park. Costs related

          to the site development work necessary for the development of the

          Park and the project would be paid through the Park Infrastructure

          Fund."

and page 3, middle, 3rd column:

          MFP will undertake the park Infrastructure Improvements in

          consideration of payments to cover such costs received through

          Park Infrastructure Fund. MFP will select the contractor undertaking

          the Park Infrastructure Improvements through a competitive selection

          process in accordance with the provision of section 255.20 Florida

          Statute."

In short, although the Beckham Group is trying to get this property through a process that evades "competitive bidding," they are saying that when it comes to selecting the contractor they will follow the requirements of state law requiring a competitive selection process, and we are all to believe that the end result will not be a continuation of this hustle resulting in the Mas brothers making sure that one of their favored Latin Builder Association pals gets to handle all the construction work.

But enough of my snarky attitude. Let's get to the money issues.

THE POWER POINT PRESENTATION SAYS ONE THING, THE TERM SHEET SAYS SOMETHING ELSE, AND THE REFERENDUM LANGUAGE SAYS SOMETHING ELSE AGAIN - WHY IT'S IMPORTANT TO READ EVERYTHING

The powerpoint presentation that was shown at the city commission meeting contained this slide.

Under the 23 acres where the soccer fields are going to be, is where the underground parking garages that will accomodate 3750 cars are supposed to to be built.  

Because the parking garages clearly have to be constructed before the soccer fields are laid out, it is reasonable to assume that the construction of those garages would be considered as part of the site development.  

How much do you think it would cost to build underground parking garages to accomodate 3750 cars, and be able to support soccer fields on it's roof.

I'm not a parking expert, so I went to Google and asked: Per car costs to build a parking garage.  There were a number of sites that provided information, although none of them specific to building an underground 3750 car garage that would accomodate soccer fields on it's roof, but there was one on how to estimate the cost of a precast concrete parking structure.

It wasn't perfect, but it did provide a ball park figure of $7000 to $8000 per car for an above ground  600 car garage of the kind we see and use in Miami.

Applying that cost, and acknowledging that there will be different costs for an underground garage, let's go with the $7000 per car cost. That would come to 3750 X $7000 = $26,250,000.

To further appreciate what the costs could be, if you are a developer in Miami and want to build a new building and do not want to build parking for that building you have to pay into the Parking Infrastructure Fund, and that cost is $40,000 per space.

$26 million for the parking garage blows the $20 million bond issue right out of the water, and we haven't even begun to get to all the above ground costs  

IMPROVEMENT NUMBER 2: STORM WATER

According to the information in the powerpoint presentation, storm water is one of the costs that is supposed to be covered by the $60 million in private investment.  But, does this mean that the entire cost of constructing and maintaining the storm water costs for the entire 183 acres is going to be covered, or just the 73 acres that includes the stadium and the other buildings?

When you look at the renderings, and the other information that;s been provided there are no references as to where the "project" part of this deal - the stadium the office buildings, or any of the other building within the 73 acres that shows where there a capture area.  

From all appearances, it appears that the capture area for the entire site will be the new artificial lake that I will discuss further down.

If this is true, and the city is responsible for all 183 acres, how much many millions will that cost?  

IMPROVEMENT NUMBER 3: GRADING AND PAVING

The same questions apply to this improvement. Who's paying for what? The agreement supposedly calls for the city to pay for all the road construction in the "common areas," and that that would definitely cost at least several million dollars. Again, what are those costs, and why wasn't the Commission provided them before last Thursday's meeting?

IMPROVEMENT NUMBER 4: REMEDIATION OF CONTIMINATION

It's impossible to come up with an exact, or even an approximate cost to clean up this property without a serious study being conducted, but given that the property was previously used as the site for an incinerator, and the contours and shape of golf course was done by using this same contaminated ash, and that the lakes in on this property are at a minimum 15 foot deep, and in some places 30 - 35 foot deep, and perhaps there are several places where they might be even deeper, it is safe to assume that the costs could be prohibitive.

Jorge Mas committed his group to cover the costs of the cleanup to a point, but no one, including Jorge Mas either knows or has been willing to articulate what that point is.

Without a lot more information on what the actual depth of the lakes on the golf course are, as well as the kinds and degree of the actual contamination - facts that cannot be expected to be obtained before Wednesday's meeting - this issue alone is one that Commissioner Russell has said will not allow him to vote YES on until it is resolved.

One approximate cost can be offered, based on the $10 million that was spent on the environmental remediation cleanup of Museum Park, a cost that Commissioner Russell has to be familiar with since he is the Chairman of the OMNI CRA which is challenging the provisions of the global agreement that committed the OMNI CRA to pay $2 million a year to cover the original costs of $68 million for the construction of Museum Park, which the OMNI CRA contends did not occur.

If we use the $10 million that was spent on Museum Park as a base number and divide that by the size of Museum Park which is 32 acres, we come up with $312,000 per acre.

If we then apply the $312,000 per acre cost to the 183 acres of the property that comprises the land mass that the Beckham Group wants to get, the cost to clean up that property comes to $57,096,000.

Understand however, that the remediation of Museum Park was nowhere close to the kind of remediation that will need to be done at Mel Reese. Because the ash at Mel Reese is considered hazardous it cannot be disposed off within the State of Florida,  That ash has to be hauled out of state to specially designated hazard destruction sites to be burned. and the costs of hauling all this ash out could be well above the $57,096,000 I've cited above.

In the end however, the costs of remediation are moot, because even if the Beckham Group were to agree to $57,096,000, or any close to that or above, it still does not affect any of the other costs that have to be covered by the $20 million tax-exempt bond issue.

IMPROVEMENT NUMBER 5: WATER DISTRIBUTION/SANITARY SEWER

This issue is complicated by the fact that currently in Miami-dade County there are some areas where new development have not been allowed because the capacity of the pumping stations has already reached maximum capacity.

How much capacity will be needed to accomodate 28,000 people at a soccer game, or the thousands of people who will be working in the 1 million square feet of office space or in all of the others buildings?

How much does a new pumping station cost?  Or rather how many millions does one cost, and then what about all the ancillary pipes, sewers, and infrastructure?

IMPROVEMENT NUMBER 6: ELECTRICAL AND TELECOMMUNICATIONS

This improvement item is interesting because Mastec, the company that Jose Mas is the CEO of, is one of the largest multinational engineering and construction companies in the world, and the second largest hispanic company in the US.

If there is a company that knows the costs to wire a stadium and all of the other buildings, they are the one.  Which raises the question of why is the cost for electrical and telecommunications this included as one of the Site Improvement items that will be paid for by the $20 million in bonds?

IMPROVEMENT NUMBER 7: OFF-SITE ROADWAY IMPROVEMENTS

If none of the other Improvement Items could break the bank, this one definitely can.  All of these costs will be covered by the $20 million bond issue, and none of them come cheap.

For starters, there is the construction of a walkway crossing over NW 21st Street and the branch of Miami River that borders the northside of the property and the MIA Intermodal Center.  How many millions will that cost?

Some sort of capacity improvements will have to be done to the 836/37th Avenue interchange. How many millions will that cost?

There will probably also have to be some capacity improvements for NW 17th street from 27th to 37th Avenue.

NW 37th Avenue, which as been identified as one of the 4 principal thoroughfares will also requires some capacity improvements.

And here is the kick in the ass part. Neither the city nor the county has the final authority on making any of these changes.  Look at this slide from the powerpoint presentation:

This slide in turn, is in conflict with the language in the referendum that describes the amount of land that the city is asking the voters to approve being given to the Beckham Group.

There is almost always a backroom motive when the public is subjected to this kind of rope-a-dope language manipulation in documents, and this time is no different.

The 73 acres is the size of the land that the soccer stadium and the office buildings, hotel and restaurants/entertainment buildings will sit on, and that's what the Beckham Group will legally responsible for purposes of construction and control.

All the other land - identified as park land - actually remains the property of the city, and consequently, they are responsible for all of those construction and improvement costs.

What this means is that when the Term Sheet states that, "The Park Infrastructure Improvements shall include only those improvements available to, and that are expected to be used by, the general public without exclusive or special use incurring to MFP, (Miami Freedom Partners), which may include the following infrastructure improvements:," it is talking about all the construction and improvements that are expected to be paid for through the $20 million tax-exempt bond issue, a bond issue that the Beckham Group graciously states they will underwrite through a 30 year annual payment of $667,666.00.

The questions that all of this raises, and the questions that the Mayor, the City Manager, the City Attorney and Jorge Mas didn't want anyone to think about or ask by not making the Term Sheet public is, what are the real costs of these improvements, and if they exceed the $20 million raised through the bond issue, who's going to pay for them.

SITE IMPROVEMENT NUMBER 1: THE PARK

In the power point presentation shown at the commission meeting, the total size of the park was put at 110 acres including 23 acres for the soccer fields. Again. that information is in this slide.

It's hard to read, but the content underneath the header, Private Investment $1 BILLION says:

     "There will be an $1 billion investment in developing the project

     on the approximately 60 acres of city land from private funds,

     with $60 million estimated for environmental restoration and

     sustainability (including water, sewer, electrical, paving, grading).

The "project" has at different times been identified as the portion of the project where the soccer stadium will be built, and at other times as the entire piece of property, as shown in another slide that was part of the powerpoint presentation.

IMPROVEMENT NUMBER 8: OTHER UNKNOWN IMPROVEMENTS

Take your best shot.  Landing pads for flying cars? An extension of the Metrorail?  Who knows? But one thing is for sure, each and every improvement costs money, and if that improvement occurs outside of the 73 acres that the Beckham Group will control, then the taxpayers will be on the hook for it, and they'll also be on the hook for all of the maintenance as well.

OTHER EXPENSES FOR WHICH THERE ARE NO COST ESTIMATES, MUCH LESS  PLANS ON HOW TO PROCEED

Among the other concerns that were only tangentially touched upon at last week's commission meeting is the NO-NET-LOSS POLICY FOR PARK LAND.

The transfer of the 73 acres to the Beckham Group would mean a loss of 73 acres of park land in the city.

Jorge Mas made a big todo about not letting that happen, and even went so far as pledging $5 million to cover the shortfall in the budgets to complete the Baywalk and Riverwalk, which I raised in my previous story as perhaps being a less than naked effort to bribe Commissioner Russell to vote for the referendum issue.

Putting that to the side, and being generous, let's say that completing the Bay and Riverwalk would reduces the number 73 to 63.  Where do you find 63 acres of land in the city of Miami that can be converted to park land, and at what cost?

Complicating that question is whether the city could even use impact fees to purchase any of this property because impact fees are designated for creating "new capacity," not replacing existing capacity.

Also, I cannot go further without responding to Mayor Francis Suarez's comments at the meeting about his success at buying houses in his district when he was a commissioner and then having the houses torn down and the property turned into pocket parks.

I looked into one of those deals that was going to happen in Coral Gate, where he lives, and not only were the neighbors not happy about the deal, but I seriously considered going to the FDLE over the deal, because it had the smell of Suarez doing a favor for a real estate agent who couldn't sell the property.

So that's not only NOT a solution to actually acquiring real park land, but just another bullshit example of hoodwinking the public by Suarez.

IN CONCLUSION

I do not pretend to be an expert in anything, but I do take the responsibility of being a critic of the behavior of public officials seriously, and while I admit to not being able to provide financial numbers for some of the items I discuss above, I have made a real effort to read all the documents, look at the powerpoint, watch the video of the meeting more than once, and then try to gather as much factual information as I could to provide as many answers to the questions that I've raised.

I have tried, given the time constraints, to be as thorough and accurate as possible, and I believe that my calculations will hold up under any scrutiny.

The Term Sheet speaks for itself, and the fact that the City Manager refused to provide me with a copy I believe speaks volumes about his lack of integrity and honesty by first failing to act as responsible administrator, secondly by withholding these documents from the city commission and the public, and lastly by exhibiting through these actions a contempt for the people who pay his $265,000 a year salary.

This deal was cooked from the beginning, and there is no way that any city commissioner - other than Joe Carollo who has made it very clear that he gives less than a fuck about the 1st Tee program, the kids who will be affected, or any thing other than waging a personal vendetta against Charley DeLucca for some past grievance - who can honestly claim that they can support this project on the basis that these numbers make it a good deal for the citizens.

It's not only a bad deal, it's the absolutely worst deal that I've personally witnessed in the 9 plus years I've been doing this, and it's a deal that I think not only deserves to be rejected, but it's a deal that Francis Suarez, whose the one most responsible for this getting it to this point deserves to pay a political price for trying to foist on his city.

Here's what I think, the costs for complying with all of these Site Improvement Costs will be:

   $150 million to as much $225 million dollars

Could those numbers be lower? Could they be higher? Sure. How much higher or lower, who knows, but the one thing that these numbers can't can't do is disappear.  

The taxpayers of Miami are going to be liable for a sizable chunk of money that cannot be covered by the measly $667,666.00 annual "gift" from the Beckham Group, no matter how many lies they tell you!

To add insult to injury, although the Beckham Group while agreeing to give the city the $667,660.00 to cover the principle for the bond issue,they are not giving them any money to cover the service charges, which over a 30 year period could almost double the actual costs of the bonds.

CALL AND EMAIL YOUR COMMISSIONER AND TELL THEM WHAT YOU THINK, AND THEN PLAN TO SHOW UP ON WEDNESDAY FOR THE SPECIAL COMMISISON MEETING

Willie Gort                     305.250.5430            wgort@miamigov.com

Ken Russell                   305,250.5333           krussell@miamigov.com

Joe Carollo                    305.250.5380           jcarollo@miamigov.com

Manolo Reyes               305.250.5420           mreyes@miamigov.com

Keon Hardemon            305.250.5390           khardemon@miamigov.com

Some of those colored lines don't represent roads already in place, but roads that will have to be built.

How many separate agencies do you think will have to sign off on any changes to the roads that are highlighted. How about FDOT and MDX for starters. We're talking about the same FDOT that has had West Flagler Street in a clusterfuck for the last 3-4 years.

How many tens of millions do you think this could wind up costing?

When you add these costs to the garage costs, and to the other park construction costs,  including the construction of the a new lake with a beach in the middle of the property that is shown, but not identified in any of the other the powerpoint slides.

This beach and lake represent a sizable project in and of themselves, and when add it, to all of these other road costs you've got to be looking at an amount of at least $50 - $75 or perhaps $100 million dollars, excluding the remediation of the contamination.

IN SPITE OF THEIR EFFORTS TO DENY ME ACCESS TO THE TERM SHEET THAT THE BECKHAM GROUP GAVE THE CITY, I GOT A COPY OF IT AND IT'S BAD NEWS FOR THE TAXPAYERS OF MIAMI

EVEN MORE SO THAN YESTERDAY'S STORIES I ASK YOU THAT IF YOU READ THIS AND AGREE WITH WHAT I'VE WRITTEN, PLEASE FORWARD A LINK TO EVERYONE THAT YOU KNOW WHO LIVE IN THE CITY OF MIAMI

THANK YOU

HAS FRANCIS SUAREZ'S CAMPAIGN FOR STRONG MAYOR HIT A BRICK WALL?

NUMBER 66 - JULY 16, 2018

The Crespogram has been told by a very reliable source that Francis Suarez will announce on Wednesday that his campaign to become the Strong Mayor of Miami has failed in their effort to garner enough petition signatures to put him on the ballot.  I must also issue a warning that the information I received might have been an elaborate effort to try and discredit me. There are games within games going on now, but I feel confidant enough about my source to go with this.

Suarez has been lusting to become the Strong Mayor of Miami almost from the moment he arrived at City Hall, and has failed in several previous attempts to get his fellow commissioners to go along with his desire, even when he was the Chairman of the city's Charter Revision Committee.

Suarez, who has reported raising $773, 383.00 this year, along with at least another $70,000.00 that the Crespogram reported he has raised since July 1st, has spent $365,000.00 with JEF ASSOCIATES, a Massachusetts company to collect petition signatures.

Saurez could still get on the ballot but he would have gto get the city commission to go along with this by approving the ballot language needed to change the City Charter.

The most vocal opponent to Suarez's efforts to become a Strong Mayor originally came from Commissioner Joe Carollo, who made that issue one of his first lines in the sand after being sworn in as the District 3 Commissioner.

Suarez's role in the current fight over David Beckham's efforts to obtain the Mel Reese Golf Course for his soccer stadium has managed in a very short time to turn many of his previous supporters into opponents as more and more information is revealed about just how bad the deal is for the citizens of Miami.

On top of thousands of Miami residents who have signed an online petition, and hundred more who have signed petition taken door to door, Suarez is now having to contend with letters such as this one from a from a young man who only months ago wanted to grow up to be like him.

The Crespogram has never been shy about claiming that while he might be a nice guy to his wife and children, Suarez was at his core a risk-averse, lightweight politician who had reached the top of his competence level as a city commissioner.

His behavior, and his decision in putting people like City Manager Emilio Gonzalez, and Police Chief Jorge Colina in high positions in his administration were bound to end badly, and after only 7 months as mayor, he is proving once again that when Crespodamas speaks, EF Hutton listens.