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Economic Development in Miami

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Gregg Fields: Miami megaplan a megamess

http://www.miamiherald.com/business_monday/story/421268.html

2-15-08

 

In trying to decipher the economics of Miami's proposed ''megaplan'' project to rebuild downtown, it helps to think of it like this:

Taxpayers, empty your wallets.

 

Developers, line up alphabetically.

 

Perusing the listed projects designed to transform Miami, apparently, into Chicago, it's impossible not to be swept away by the scope of the ambitions.

 

A new $900 million tunnel to the port? Check.

A sparkling $520 million stadium for the Marlins? Check.

How about a $200 million streetcar system? Check.

How to pay? Check -- from you and me.

Let's start first with the price tag. The city and county say it could be brought in for a cool $3 billion.

 

 

As the late Sen. Everett Dirksen once said, ``A billion here and a billion there, and pretty soon you're talking real money.''

If only we were also talking real numbers.

 

Think of the megaplan's edifices as a subdivision of McMansions. We're proposing to buy them with a big subprime mortgage.

 

 

ADJUSTABLE

 

And make no doubt about it: This loan is adjustable -- upward.

 

Start with the estimates. Does anybody remember the estimates on the newly named Adrienne Arsht Performing Arts Center? Clearly, they were a case of artistic license -- appropriate, perhaps, given the nature of the building.

 

The overrun on construction ran to the tens of millions of dollars. The promised trust fund that would be privately raised, and pay operating expenses, ran way short.

Tax coffers got double-dipped.

 

And dippy numbers are a crucial part of the megaplan.

 

Indeed, the pattern with local government is to announce a dazzling project, provide a ridiculously low-ball price, then sock it to us later because the original figure was fiction.

It isn't just Miami. Municipal bait-and-switch is a time-tested form of American governance. Consider the Big Dig in Boston. It was originally estimated to run $2.6 billion. The final tab: $14.6 billion.

 

Supporters note that inflation caused much of the increase. That's true enough, but it wouldn't have been a factor except the tunnel opened five years late. And incidentally, it leaks. And part of the roof fell in and killed a woman.

 

Other than that, it's an engineering marvel to rival the Sphinx -- which incidentally was cheaper to build, even after inflation, although the ancient Egyptians had the benefit of cheap labor.

 

It's hard to fathom our tunnel faring better than Boston's. Frankly, considering our area's history with corruption, the $900 million in tunnel construction money seems a shoo-in for an eventual U.S. Attorney investigation. We could call it the Big Rig.

 

That's not to mention the mess. It'd be less disruptive to traffic if we moved the seaport next to I-95.

 

Next, let's consider a home for the Marlins. First, a fundamental question: What have the Marlins done for us lately? True, they look good next to the Dolphins. But so do the Heat.

 

The $520 million stadium financing package is, to coin a conundrum, clearly muddy. The Marlins say they'll pitch in $155 million and cover construction cost overruns.

 

Right. A team that can't field a competitive squad is going to cough up $155 million. Maybe the construction crews can build a starting pitcher.

 

What if the cash-strapped Marlins fall a little short? Well, it wouldn't be the first time the team was in error. In fact, it led the league in them last season.

 

In the case of the stadium, however, it would mean taxpayers batting cleanup -- similar in a fiscal sense to those guys who walk behind the elephants at the circus.

 

What is most curious about the megaplan is that its funding includes property taxes from Community Redevelopment Agency districts. These monies are supposed to help residents of impoverished urban neighborhoods.

 

STREETCAR

Apparently, in that spirit, the city and county believe what poor people want most is a ride on a streetcar. The plan proposes a $200 million system.

 

But is it streetcars we desire? The mass transit message is decidedly mixed. One day earlier this month, Tri-Rail celebrated ridership hitting a whopping 15,000. There are Burger Kings with more traffic at their drive-thru windows -- and they serve food.

 

To sum it up: The megaplan offers projects we don't need, things we won't use, based on projections we can't trust.

 

What a megamess.

 

 

Gregg Fields, a former Miami Herald business writer, is coordinator of the master's in business journalism program at Florida International University. He can be reached at fields@fiu.edu

 

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