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The $619.9 million renovation of the Miami Beach Convention Center was thrown off schedule by a torrential deluge in August and Hurricane Irma in September, forcing officials to scramble to prepare four exhibition halls for Art Basel last week.
Playing catch up isn’t cheap. The price tag to get the job back on track? $6.9 million, pushing the whole project’s budget up to $626.8 million.
After a heavy thunderstorm on Aug. 1 — nicknamed a “rain bomb” by the city — workers had to cut out and replace drywall, deal with mold and install new ceiling tiles and light fixtures.
Then a month later, as Hurricane Irma lurched toward South Florida, crews had to shut down work and secure the construction site. Irma storm blew off insulation, damaged fireproofing and forced workers to reinforce steel structures that will support the parking structure above the center.
And as Basel approached, the city had to go into overdrive to ensure the facility could host high-priced art installations and the well-heeled fairgoers who might buy them. Crews had to finish a ballroom, install a firewall and roofing, a fire sprinkler and provide a host of temporary accommodations, such as power generators, to make up for unfinished construction work.
So to pay for all this, city officials are turning to money generated in a taxing district that encompasses the convention center and Lincoln Road — funds that will be freed after some negotiating with Miami-Dade County to redirect millions back into each government’s general fund.
On Wednesday, Beach commissioners will consider approving a renegotiated deal with the county that determines the fate of millions in property tax revenue for the “City Center RDA” taxing district, which was originally set up in 1993 to revitalize a blighted pocket of South Beach stretching from Lincoln Road to the oceanfront on 16th Street.
If approved, it will be the fourth time the deal has been amended. That last change, in 2014, extended the life of the agreement to 2044 to generate hundreds of millions to pay for the convention center’s upgrade.
On Tuesday, Assistant City Manager Kathie Brooks said the city wants to tap these dollars because of increasing property values that have generated unexpectedly high tax revenue.
“Due to strong growth in property values in the City Center RDA, the surplus revenues being generated by the RDA annually are significantly greater than projected when the city and county entered into the third amendment to the interlocal agreement,” she said on Tuesday. “This led to the discussions that a share of these excess revenues should be returned to the city and the county.”
The city had to renegotiate a longstanding deal with Miami-Dade County that diverts property tax revenue collected around the Lincoln Road area into paying for local police, parks and the renovation of the convention center. In order to dip into this pot, the Beach had to cut a deal with the county whereby both governments would get a percentage of current and future surplus tax dollars returned to their respective general funds.
The Beach would get the $6.9 million upfront and an estimated $13.5 million by the end of March 2018, with an extra $5.9 million anticipated annually through rest of the agreement, which ends in 2044. The Beach commission’s finance subcommittee would determine where to direct the money.
The county would see $11 million returned to its coffers next year, and an estimated $6 million annually from 2019 on.
In a memo to commissioners, City Manager Jimmy Morales said some of the extra convention center costs may be covered by the project’s insurance or FEMA. But not all.
“There are costs related to the delays caused by Hurricane Irma that are unlikely to be reimbursed,” he wrote.
Now that Art Basel is over, the convention center construction will ramp up again. The facility is expected to be substantially complete in August 2018. Tourism boosters have long pushed for upgrades to the facility, built in 1957 and renovated once in the late 1980s, in order to attract industry meetings and conventions.
Herald staff writer Douglas Hanks contributed to his report.