1 1 CITY OF CORAL GABLES 2 405 Biltmore Way 3 Coral Gables, Florida 33134 4 5 6 7 8 City Hall, Commission Chambers 9 10 11 12 City Commission 13 Mayor Jim Cason 14 Vice Mayor William H. Kerdyk, Jr. 15 Commissioner Patricia Keon 16 Commissioner Vice Lago 17 Commissioner Frank C. Quesada 18 Carmen Olazabal, Interim City Manager 19 Craig E. Leen, City Attorney 20 Walter j. Foeman, City Clerk 21 22 Tuesday, August 26, 2014 23 11:00 a.m.- 6:00 p.m. 24 25 2 1 (The following proceedings were had:) 2 COMMISSIONER KEON: We're ready to move on and 3 continue with our session. We'll be discussing now 4 items E-11 and E-12. We'll start this off with the 5 city attorney who will make some remarks. The way 6 this is going to work is we're going to have -- 7 the attorney is going to make some remarks about 8 what we're looking at today and what we're going to 9 be deciding. 10 Then we're going to have the city make a 11 presentation. And I'm going to ask the chamber to 12 make a presentation, then the BID. Then the outside 13 attorney for 10 Aragon and then the -- for the 14 Colonnade, and then we're going to take a lunch 15 break. We'll do a maximum of 25 minutes for each of 16 those outside counsel, less if you can, and 17 incorporate the views of your residents, if it's -- 18 if it's a residential so that we can move on because 19 we have a ton of other items and the city manager 20 has to leave. And I have to catch a plane in the 21 evening, so hopefully we'll be able to get to this. 22 CITY ATTORNEY LEEN: So, Mr. Mayor, I'd like to 23 read into the record the first two items on the 24 record, E-11, E-12 which are being considered 25 together today. 3 1 The first is a resolution of the City 2 Commission of the City of Coral Gables, Florida 3 relating to the provision of the Miracle Mile 4 improvement project; providing authority and 5 definitions; approving the final assessment rolls, 6 amending the initial assessment resolution, 7 providing for the imposition of the assessments to 8 fund the Miracle Mile improvement project, providing 9 for collection of the assessments pursuant to the 10 Uniform Assessment Collection Act, providing for the 11 effect of this resolution, providing severability 12 and an effective date. 13 And a resolution of the City Commission of the 14 City of Coral Gables, Florida relating to the 15 provision of the Giralda Avenue improvement project; 16 providing authority and definitions, approving the 17 final assessment rolls; amending the initial 18 assessment resolution; providing for the imposition 19 of the assessments to fund the Giralda Avenue 20 improvement project; providing for collection of the 21 assessments pursuant to the Uniform Assessment 22 Collection Act; providing for the effect of this 23 resolution; providing severability and an effective 24 date. 25 Now, these items are related and they will be 4 1 considered together; however, they will be voted on 2 separately and the fact that one may be passed, 3 doesn't mean that the other will be. They will have 4 separate votes. 5 So today, the purpose of this proceeding is to 6 approve the final assessment resolution and to 7 consider arguments and positions made by attorneys 8 for the different parties, and also for the 9 residents and to hear what you think about this 10 matter too. 11 The commission has previously passed a 12 preliminary assessment resolution unanimously a 13 couple of months ago. And notices were given to the 14 affected parties so that they could be here today. 15 The primary purpose of this hearing -- there's two 16 primary purposes: One is the, you know, purely 17 legislative decision, you know, as to the assessment 18 itself, considering the expert testimony of Hank 19 Fishkind and the other experts that are presented 20 today, the Commission will determine whether there 21 is competent, substantial evidence supporting the 22 assessment, and then they'll make a determination 23 whether to approve it or not approval it. 24 One thing everyone should know is that the 25 assessments that were approved in the preliminary 5 1 rate resolution, those are the maximum assessments 2 that can be given for each property. There's some 3 minor exceptions where there's a mistake, a clear 4 mistake, but generally that is the maximum 5 assessment that can be provided for each property. 6 Each individual property owner has the right today 7 to ask the Commission to consider whether it should 8 be reduced for their individual property, if there 9 was some issue with the calculation or the 10 assessment or the square footage. And those issues 11 will be heard by the Commission as part of the 12 hearing today. 13 It's my understanding that several of the -- 14 several of the entities here today, several of -- a 15 number of our residents are here being represented 16 by counsel or someone speaking for them. 17 So as the Mayor said, the first thing that will 18 occur is the city for approximately 20 minutes will 19 present the streetscape project. Hank Fishkind, who 20 is the expert for the city will speak. 21 Also, Heather Encinosa who's our outside 22 attorney on special assessment matters will speak as 23 well and provide some background relating to the 24 law. At that point, the Chamber of Commerce will 25 speak for five minutes. Mark Trowbridge is here, 6 1 the president of the chamber. 2 Then the BID will be given 25 minutes. It's my 3 understanding that there's a number of members here 4 from the BID. We've asked them to make their case 5 within those 25 minutes. And they will be -- they 6 will have a representative speaking for them and my 7 understanding, two or three members of the BID will 8 also speak. Pardon me, I got that confused with 10 9 Aragon. The BID -- forgive me. Mistake. BID is 10 being represented by Perry Adair. He's going to 11 come up and speak for 25 minutes. 12 Mr. Adair, do you have anyone who is going to 13 be speaking along with you? 14 MR. ADAIR: Executive director for very short. 15 CITY ATTORNEY LEEN: After that, then 10 Aragon 16 will speak for 25 minutes. 10 Aragon has a number 17 of residents here. You're going to have a 18 representative speak, but also my understanding is 19 that several members may speak as well, three 20 members. That will be for 25 minutes as well. 21 Finally, Jeff Mandler is here representing 22 several properties. He also will speak on your 23 behalf. And my understanding is they have someone, 24 an expert who is going to provide testimony as well 25 and they will be given 25 minutes to do that. 7 1 So that's how this matter is going to proceed. 2 And so I'll turn it back over to the Mayor. 3 MAYOR CASON: All right. At this time, I'll 4 ask the interim city manager to make the 5 presentation. I'll have the representative make the 6 presentation on the projects. 7 MS. OLAZABAL: Cindy Birdsill will be making 8 that presentation. 9 CITY ATTORNEY LEEN: Mr. Mayor, before 10 Ms. Birdsill, I should say one other thing. If 11 you're a member of the public and not represented by 12 one of those groups, you will be given an 13 opportunity to speak. You have a right to speak, 14 but it will be done -- but it will be done -- we're 15 going to have public comment, particularly if 16 there's a lot, after the lunch. If there's one 17 person, it's up to the Mayor, maybe we'll take it 18 before, but the idea is then there will be public 19 comment and then there will be discussion among the 20 Commission. That will be after a discussion among 21 the Commission. 22 MS. BIRDSILL: Good afternoon, Mayor and 23 Commissioners. I'll go through this fairly quickly. 24 You've seen a lot of this presentation before, but 25 we may have members in the audience or our viewing 8 1 audience that have not. 2 This will be kind of the overview of the city's 3 presentation. We're going to go through our 4 approach. We're going to talk about the history and 5 the timeline. 6 Then Hank Fishkind will come up and talk about 7 our financial plan. I'm going to come back up after 8 he's explained the methodology and go over some 9 numbers with you all. 10 And then Heather Encinosa will come up and -- 11 to talk about the legal process. 12 First the approach. As you know, we've been 13 working on this with the chamber and the BID for a 14 very long time. We're very sensitive to the needs 15 of the merchants. One of our big concerns is going 16 to be how we stage the construction. We definitely 17 want to make it the least pain possible for the 18 businesses while we undertake the project. We are 19 committed that businesses will not need to close 20 during construction during their normal operating 21 hours. We are able to do the construction without 22 impacting operating hours for the businesses. 23 We've also started looking at a temporary 24 wayfinding plan. Our goal is to be very 25 communicative with the customers and the public 9 1 about where they can park, how they can get to where 2 they need to go. We've been working with the BID on 3 a parking awareness campaign that we're rolling out 4 just -- for example, the Palace Garage is very 5 underutilized right now. We do have parking 6 downtown where we can send people to park so that we 7 don't deter people from coming downtown. 8 And then we've also made a commitment that 9 we're going to celebrate milestones and promote 10 awareness and excitement when we hit major points in 11 the construction. So we always want there to be a 12 positive message about the downtown. We always 13 want, you know, the public and the customers to know 14 that we're moving forward and that it's exciting and 15 that they should want to be a part of it. 16 One of the reasons we are bringing this to you 17 at this time is that we have a window of opportunity 18 to do the streetscape. We believe that we will be 19 able to get it designed and completed before or 20 right around the same time that the garage one site 21 would be taken down. We want to be able to get this 22 done before we lose part of the parking while we 23 renovate the garage -- or redevelop the garages. 24 In addition to the two garages that we want to 25 redevelop, the public sites across from garage four 10 1 is moving forward with the process of their 2 redevelopment. 3 We also have the developer for Old Spanish 4 Village moving their project through the system and 5 Alfot Hotels. So we have a lot happening. We have 6 an opportunity that with this particular project to 7 get it done quickly and ahead of the curve on 8 everything else, which I also think will help the 9 Mile competitively. 10 This is a timeline of how we've gotten to where 11 we are. Before 2009, the BID created a streetscape 12 design committee. It included Jaime Correa & 13 Associates and Dr. Charles Bohl of U.M. They did a 14 lot of the heavy lifting and getting everybody to 15 focus on the need to do the streetscape. 16 After extensive meetings with the BID and their 17 design committee, they asked the City to move 18 forward and the City ended up hiring C3 TS, which is 19 now Scan Tech to put together some preliminary 20 conceptual plans and cost estimates. 21 Then in 2010, the city and the BID jointly paid 22 to hire Richard Heeps of Street Works. He's an 23 expert in repositioning underperforming main street 24 districts to review conceptual plans and help us 25 with recommendations in how to get the best return 11 1 possible on our investments. 2 In 2011, Street Works presented a visioning 3 workshop and the commission unanimously approved 4 having staff proceed with the design cost estimates 5 and financing for the streetscape initiative. The 6 chamber and BID strongly supported this initiative 7 at that time and have gone forward doing a lot of 8 work to bring this to you today. 9 In 2013, in order to get prepared for being 10 with this financing plan, Scan Tech worked very 11 diligently to come up with some cost estimates 12 reflecting the latest vision of what we want to do 13 based on Street Works' presentation. And I've made 14 this clear in other workshops, but we have not 15 designed the project yet. We're not talking about 16 the design right now. 17 What Scan Tech did was they made an estimate 18 reasonably based on what we want to do and this is, 19 as Craig mentioned, the maximum that we would be 20 assessing anybody for the project. But it is an 21 estimate. It's not designed. We may be able to 22 value engineer. Certainly, as will be discussed 23 later, if we spend more than what we are budgeting, 24 the city is going to have to pick that up. 25 This is what we've accomplished this year in 12 1 2014. On February 25th, we held a public workshop 2 to go over the financing plan. Dr. Hank Fishkind 3 was there. He presented his methodology and 4 approach to how we would bring the financing forward 5 and at that time, we were told to keep going. 6 So on June 10th, we came back with the initial 7 resolution for the financing plan. At that time, 8 Hank presented more refined numbers to you. It was 9 -- the Commission at that time actually passed a 10 resolution accepting the methodology and authorized 11 staff to go ahead and have workshops so that we 12 educate everybody as to where we are in the process, 13 and also notify property owners of what they're 14 assessment would be so that they could be 15 participate in the conversation and if they had 16 evidence of an improper assessment or an error in 17 what we had done, they had the opportunity to 18 appeal. 19 And you will notice in your packets there are 20 three those of property owners that provided us with 21 evidence and we are recommending that if you pass 22 the resolution today, that you would modify what 23 we've presented in accordance with those three 24 adjustments. 25 So we had workshops with the chamber June 20th 13 1 at their annual meeting. We had one at the Actor's 2 Playhouse for the BID members July 15th. We had a 3 workshop with this whole Commission and the 4 community July 22nd. And that brings us to today. 5 The assessment has not been imposed at this 6 point. It's still being discussed. Today is the 7 final hearing and the final vote. So at this 8 moment, there still is not an imposed assessment. 9 One of the reasons this is such an important 10 project is our downtown has been in need of 11 investment for a very long time. We want the 12 downtown to be improved in esthetic that is 13 consistent with the city beautiful and we need to be 14 competitive with other neighboring markets. Leonard 15 Roberts in my department put these comparisons 16 together from Coast Star. I have two different 17 slides and there's some overlap in the projects, but 18 Coast Star only allows you to do three comparative 19 projects at a time. But this shows you the vacancy 20 rates for Miracle Mile are higher than Sunset Place, 21 Mary Brickell Village and higher than Lincoln Road. 22 This shows that we are not being competitive right 23 now. 24 I'd like to turn this over to Hank Fishkind who 25 will talk about his methodology and the special 14 1 assessment program. 2 COMMISSIONER QUESADA: On the chart that you 3 have up right now, on 2014 -- I'm sorry. 2014, does 4 that mean that Mary Brickell Village has zero 5 vacancy rate? 6 MS. BIRDSILL: Yes, it does. They have zero 7 vacancy rate right now. 8 COMMISSIONER QUESADA: Wow. 9 MR. FISHKIND: Commissioners, I'm Hank 10 Fishkind, for the record. I want to briefly discuss 11 the special assessment methodology. We've discussed 12 this a few times. I don't want to belabor the 13 issue. As you know, this creates special benefits 14 and general benefits. General benefits occur to the 15 public at large. Special benefits are specific to 16 certain properties, in this case, the studies and 17 analysis that I've done indicate that they are 18 specific to the fronting properties and to those 19 properties listed in the same block and that they 20 receive benefits that we measure in terms of 21 increased or preserved market value, increased use 22 and enjoyment, lower insurance rates. The studies 23 and analysis that I presented to you that we 24 discussed, I think provide strong support for the 25 notion that there is special benefit to the 15 1 properties that -- that we propose for being 2 assessed and that special assessment is measured in 3 terms of the likelihood of increased market value 4 and an increase in use and enjoyment. 5 And there is clearly a logical relationship 6 between the services of that -- that this 7 improvement project would create and the benefits 8 and assessments that would be used to pay for that. 9 And I think that is not only logical, but clearly 10 demonstrated by the studies and the literature. 11 Private property owners are asked to pay 12 50 percent of the costs. The city is going to bear 13 the other 50 percent. As Cindy will tell you, the 14 cost the city will bear is higher than that. So the 15 city by taking 50 percent share is taking care of 16 all of its property that is within the benefit areas 17 and we did an analysis of what it would be like if 18 you didn't contribute 50 percent and instead 19 assessed your properties, it will cause the 20 assessment to go up significantly. So the city's 21 share is greater than the city's proportionate 22 assessment load would otherwise have been. 23 The methodology starts a little small, but you 24 have the streetscape project. 50 percent is paid 25 for by the city. 50 percent is paid for by the 16 1 private entities. Then we split between the 2 fronting properties that pay 35 percent of the 3 project and the nonfronting 15. That was based on 4 the regression and statistical analysis I did that 5 looked at the value of the frontage compared to just 6 off the frontage and it's a very steep -- that is 7 important why we had a narrow band for the 8 assessments just being the block that is affected. 9 Then on the fronting side, we divide that 10 assessment in three parts based on frontage, square 11 feet and value. The reason we articulated it that 12 way is very specific. As we discussed, there is 13 tremendous amount of variations in a built-up place. 14 It's not like the special assessments I do in Port 15 St. Lucie where, you know, on my project I've got a 16 big orange grove. This is a very articulated urban 17 landscape. And I think it important in order to get 18 the most equitable allocation to reflect the 19 realities that we find on ground. Obviously, for 20 the nonfronting, we use a two-part formula based on 21 building size and value to again, to reflect that 22 differentiation. 23 There was a lot of discussion and there has 24 been subsequent to the workshop about other 25 streetscape projects and how do they work. I 17 1 believe the most comparable in terms of the city's 2 contribution was probably Worth Avenue where is it 3 not in the CRA or in a blighted area. The 4 government portion is zero. The private portion is 5 a hundred percent. 6 Flagler, Lincoln, South Point, Fort Myers, all 7 are in CRA or blighted areas. In a CRA or a 8 blighted area, I think it's inappropriate the 9 government pick up a largest share of the 10 assessment. So the whole point is to make a public 11 investment to be able to get a return on that 12 investment by raising the values. But I think it's 13 different. St. Augustine is not a depressed place. 14 Worth Avenue is not a depressed place. So I think 15 there's real reasons to distinguish from the 16 structure that we have here and the appropriateness 17 as you weigh the appropriateness of the assessments. 18 And with that, I will turn it back to Cindy. 19 VICE MAYOR KERDYK: Hank, before you leave, 20 just two questions for clarification. I've been 21 approached as the other commissioners have, about 22 expanding it to the whole CBD. The reason for not 23 doing that? 24 MR. FISHKIND: I think that you would be -- I 25 think it will confuse a general benefit with a 18 1 special benefit. And I think that given the very 2 steep slope of the rent radiance, that it will be 3 hard to justify moving that special assessment to be 4 as wide as the whole BID. 5 MAYOR CASON: Okay. You could also be able to 6 make the argument that the farther away you get, 7 there could be a negative benefit because an 8 attractive downtown could draw business away from 9 people six, seven blocks away. 10 MR. FISHKIND: Yeah, somebody could make that 11 argument, Mr. Mayor. I don't think that will be 12 true, but somebody could legitimately make the 13 argument, but clearly given the very steep slope of 14 the trajectories that we find empirically, it will 15 be difficult to sustain the notion that there is a 16 special benefit over that broader area for that type 17 of improvement. 18 VICE MAYOR KERDYK: Okay. And then the other 19 comments I'd like you to talk to me about, 20 specifically with the special benefit, is the 21 condominiums on Miracle Mile. Do they get a special 22 benefit? 23 MR. FISHKIND: I certainly believe that they 24 do. I believe that the literature supports the 25 notion that those properties that are so close to 19 1 the improvements will have an increase in rent or in 2 market value, and I think clearly there is a logical 3 relationship between the improvements and increased 4 use and enjoyment for those condominiums in 10 5 Aragon, which is what we're talking about. I mean, 6 some of them will literally see the improvements, 7 others will be able to come down their elevator, 8 walk in a climate-controlled protected area and be 9 right at the improvements. The immediacy of the 10 improvements, I think distinguishes their situation 11 from a condominium that might be a few blocks away. 12 VICE MAYOR KERDYK: Have you looked at any data 13 that confirms that from other projects where the 14 condominiums have had a special benefit from being 15 right on the street? 16 MR. FISHKIND: Yes. I mean, typically as I 17 said, when we first discussed streetscape in 18 particular, there aren't a whole lot of streetscape 19 projects in the world, but for every other 20 assessment that I've done, and I've done more than 21 200 special assessments, we've included condominiums 22 in residential property every single time because I 23 do believe that they get a special benefit. They -- 24 in this case, I believe and the standard is whether 25 there is, first of all, a logical relationship 20 1 between the improvements and improved use and 2 enjoyment. I think with 10 Aragon -- I mean, 3 they're right there. I mean, the building is just 4 set back and the rest of the condominium is all but 5 on the frontage. They clearly see it. They clearly 6 have the most immediate benefit. I think on that 7 basis alone, you could find it. 8 In terms of increased market value, you know, 9 when I think about things as a valuation expert or 10 if you think back about how appraisers make values, 11 they talked a lot about neighborhood. Those 12 adjacencies in that specific neighborhood has a very 13 important impact on value. And those can be very 14 immediate. That's partly why a Miracle Mile address 15 is worth more than another address. It's partly why 16 being so close is so valued. So I think you see 17 that in the real marketplace. So, therefore, 18 improving that local neighborhood, I think can be 19 reasonably expected to increase the values, 20 especially given the extensive public literature on 21 just those issues. 22 MAYOR CASON: There may have been some 23 confusion about 10 Aragon. It's not in the BID, but 24 that has nothing to do with the special -- I mean, I 25 read -- I read where somebody said, well, this was a 21 1 BID project, we're not in there, therefore, we 2 should be excluded, but I don't think that's the 3 case. 4 MR. FISHKIND: It is not the case, Mr. Mayor. 5 With respect to BIDS, and the issue about BIDS, 6 Business Improvement Districts are set up to promote 7 the nonresidential commercial businesses. They're 8 authorizing language, including the one here in 9 Coral Gables, specifically speaks to promoting, 10 managing the promotion, that kind of thing. It does 11 not speak generally to providing streetscape or 12 major capital improvements. None of the BIDS that I 13 have reviewed or that have been submitted for review 14 conduct significant capital improvements. It is not 15 really what they're designed to do. And I think 16 they're completely distinguishable. 17 Cindy. 18 MS. BIRDSILL: And before I start with the next 19 slide, you may also want to talk about the legality 20 of the residential component with Heather Encinosa. 21 There was a memo in your package from her on that 22 issue. 23 I just wanted to quickly talk about the program 24 costs and some of the features that I think are 25 important to note. The first is that we already do 22 1 have a GOB grant from the county that is being 2 applied to the project that is coming off the top of 3 the project. So that portion is obviously not being 4 financed. We have that funding. 5 We were asked to look at various alternatives 6 to the 50/50 split. One of the concerns was raised, 7 well, why doesn't the city pay a hundred percent of 8 the infrastructure instead. And so we have done an 9 analysis, and if the city were to pay a hundred 10 percent of the infrastructure, they would be paying 11 42 percent of the total project for Miracle Mile and 12 27 percent for Giralda. So the proffered 50 percent 13 is significantly more than the city just paying for 14 the infrastructure. 15 MAYOR CASON: Let me ask you on that: Is the 16 infrastructure include sidewalks on your analysis 17 there? 18 MS. BIRDSILL: Yes, but again our public works 19 director did the breakdown. 20 MAYOR CASON: Because I think -- there's a 21 legal element of that as well, which is that -- 22 maybe Craig, you can talk to this, in the ordinance, 23 the sidewalks or the repairs are the responsibility 24 of the adjoining house, building, business, 25 whatever; is that correct? So we are under no 23 1 obligation to fix anybody's sidewalks under current 2 ordinance? 3 MR. FISHKIND: That -- that is correct. 4 Notwithstanding that, in fairness we've included 5 sidewalks in this project because they've been left 6 out for a number of years. It was a fair way to 7 compare. 8 CITY ATTORNEY LEEN: Our ordinance presently 9 places on the adjoining property owner by ordinance 10 the duty to maintain the sidewalk. 11 The city does have a nondelegable duty, but 12 it's -- by ordinance we've placed that on the 13 residents or the property owners. 14 And in commercial areas, my understanding, 15 particularly when a certain amount of work is done 16 or a permit it pulled, we do require the adjoining 17 property owner to fix up the sidewalk. I think it's 18 over $15,000. 19 MR. FISHKIND: Yeah, that's true in commercial 20 and residential. 21 MS. OLAZABAL: Right. And just to clarify, the 22 estimates did include a four -- four-inch collar 23 concrete sidewalk, so we did include it as part of 24 the percentage that you're seeing of the 25 infrastructure cost. 24 1 MR. FISHKIND: The major difference in cost is 2 we went back to what we would normally do to 3 maintain our infrastructure, and we didn't include 4 the enhanced materials that would be better proposed 5 in the concept for Miracle Mile. 6 MS. OLAZABAL: It is -- the infrastructure 7 costs are part of the packet, if you need it for 8 reference. 9 CITY ATTORNEY LEEN: In case anyone is 10 interested, the chapter is 58 of our city code. It 11 discusses repair or construction of streets and 12 sidewalks, 58-80 through 58-90. So I mean, this is 13 just -- this is in our code. That is what the 14 current state of the code is. 15 MS. BIRDSILL: And then the second scenario 16 that we were asked to look at was, what if the city 17 were to pay a hundred percent of the infrastructure, 18 plus its pro rata share for the city-owned 19 properties. 20 And when we ran those numbers, if we were to do 21 this as opposed to 50/50, the city would pay 22 47 percent of Miracle Mile and 30 percent of 23 Giralda. 24 We've presented this before, and as Hank 25 alluded to, it's really not 50/50 as a starting 25 1 point because the city has agreed to pay the first 2 two years' of interest payments, in addition to 3 capping off the project by doing the improvements on 4 Biltmore Way that really, really sets off the whole 5 streetscape project and was originally part of the 6 project. We had removed that because construction 7 costs had gotten so expensive, we didn't want to 8 pass that on the specially benefited properties, but 9 we are now proposing that the city will pay a 10 hundred percent of that portion of the project. 11 When you add all of that information in, the 12 city is really paying 63 percent of the total 13 project cost and the specially benefited properties 14 are paying 37. 15 MAYOR CASON: And to make clear, I think in the 16 last session we approved unanimously that 17 four-and-a-half million dollars for that project. 18 So that's already done. 19 MS. BIRDSILL: That is correct, Mayor. So when 20 you look at our total proposal, this is equivalent 21 to the City paying all of the infrastructure costs, 22 all of its pro rata share of city-owned properties, 23 plus 10 percent. 24 Also, I would like to point out that the City 25 is covering cost overruns. Any expedited 26 1 construction costs over the budget will be 2 responsible for ongoing maintenance. We're 3 estimating that the increased maintenance cost for 4 the enhanced improvements once they're done will be 5 an additional $550,000 a year. That is not being 6 split with the BID. A number of the other projects 7 that Dr. Fishkind looked at did have the specially 8 benefited property owners participating in ongoing 9 maintenance costs and we're not doing that here. 10 So now I would like to turn this over to 11 Heather Encinosa to talk you through the legal 12 process and obviously she's available to answer any 13 of your legal questions. 14 Thank you. 15 MS. ENCINOSA: Good afternoon. As far as the 16 legal processes, since we were last here at your 17 workshop in July, on August 5th, the city sent out 18 all of the first-class mail notices to the affected 19 property owners. That was about 360 for your 20 Miracle Mile project and about 36 for -- and about 21 36 for the Giralda Avenue project. 22 Today you're here to have your public hearing 23 and to consider adoption of the final assessment 24 resolutions. If you adopt the final assessment 25 resolutions today, this is what it accomplishes. 27 1 One, it confirms the initial assessment 2 resolution that you adopted back in June. That 3 includes the total project cost. As the city 4 attorney said, you can always come down in the cost, 5 but you cannot go up unless the city is going to 6 pick up the remainder. The finding of benefit in 7 the apportionment methodology were set forth in that 8 initial resolution and the methodology is also 9 provided in the Fishkind reports that have been 10 provided to you. 11 So if you approve the final assessment 12 resolutions today, it confirms all of those things, 13 however, you do have the latitude to make some of 14 these -- some modifications and there's some in your 15 agenda packet that are recommended to correct the 16 number of assessment units on the three pieces of 17 property. 18 The final assessment resolution also approves 19 the boundaries of what the assessments are. I'd 20 like to point out for the Miracle Mile resolution 21 only, there are 12 additional properties that were 22 noticed and were added in after the initial 23 assessment resolution. It imposes the assessment. 24 It approves the assessment roll for both projects 25 and directs that those rolls be certified for 28 1 collection on the 2016 tax roll. So we have a 2 two-year delay in collection. 3 It imposes a lien for the full amount of the 4 assessment on each parcel of property. However, 5 once these assessments are on the tax roll, that tax 6 lien will take over and you'll just have a lien for 7 that year's payment that's due as opposed to the 8 whole amount. 9 And finally, the final assessment resolutions 10 provide for a prepayment opportunity and direct that 11 these prepayment notices go out. That will be about 12 a 60-day window when property owners can come in, 13 they can prepay a discounted amount that does not 14 include all of the financing costs before the city 15 goes to the market and borrows the money. 16 After that, in about what is scheduled right 17 now about December of this year, the city would 18 issue its bond. The city has agreed as been 19 previously noted to make the first two years' of 20 interest-only payments on this debt while the 21 construction progress is going on. 22 I'd also like to note that the property owners 23 even after this initial prepayment period still have 24 the option to prepay at any time. It's just they 25 would also have to pay a proportionate share of 29 1 financing costs and current year interest cost 2 through the day -- trough the date really you can 3 pay down your debt. Then annually thereafter, if 4 these projects go forward, what the city will do is 5 annually recertify your assessment roll for the 6 upcoming year. 7 At that time, I'd like to point out if you -- 8 say you get another grant or you get some other 9 additional revenue sources that you want to apply to 10 this project in future years, you can always apply 11 those and decrease these annual assessments when 12 you're certifying your roll each year. You can 13 apply them and just have it be a shorter payment 14 term, instead of the expected 20 years. It may be 15 19 years, it may be 18 years. So you have an 16 opportunity to apply additional revenues going 17 forward as well. 18 MAYOR CASON: The -- the amount the property 19 owner will pay remains, unless we do that, remains 20 constant throughout? 21 MS. ENCINOSA: That is correct. 22 MAYOR CASON: In other words, a lot of those 23 are averaging around $40 a month for a number of 24 those small businesses. 25 So in other words, inflation is going to eat 30 1 away at that. I mean, the value in ten years is 2 going to be, in today's dollar, maybe 20 and then in 3 15 years, it could be $5. So I mean, it's -- 4 there's -- inflation is going to make the actual 5 impact less. 6 MS. ENCINOSA: That is correct, Mr. Mayor. 7 Any other questions? We are here and hopefully 8 can help provide answers. 9 MAYOR CASON: Thank you very much. 10 COMMISSIONER QUESADA: Let me just jump in for 11 a second. We received some letters at the beginning 12 at about 12:30 from Rennert, Vogel, Mandler & 13 Rodriguez. 14 Did you guys provide copies of those letters to 15 our staff? 16 MR. MANDLER: They were filed with the clerk's 17 office. 18 COMMISSIONER QUESADA: When? 19 MR. MANDLER: Yesterday. 20 COMMISSIONER QUESADA: Yesterday. Dr. 21 Fishkind, I don't know where you went. 22 Have you seen these letters? 23 MR. FISHKIND: No, sir. 24 COMMISSIONER QUESADA: Could someone get him a 25 copy of the letters. Because I have questions for 31 1 you related to the notes that they have in this 2 letter. I mean, we'll continue with the 3 presentation, but I just want you to be aware, so 4 I'm going to ask you some questions related to 5 several points that they've raised. If you have a 6 chance to review the letters and then we'll discuss 7 it. 8 MAYOR CASON: Cindy, you want to continue? 9 COMMISSIONER QUESADA: It doesn't have to be 10 right at this moment. We can continue with the 11 presentation. 12 MAYOR CASON: Cindy, do you want to continue 13 with the presentation and then Dr. Fishkind can look 14 at those? 15 MS. OLAZABAL: Cindy, that was the end of the 16 presentation; right? 17 MS. BIRDSILL: Yes. 18 MS. OLAZABAL: That's it. 19 MAYOR CASON: Thank you very much. Any other 20 questions of Cindy, if not, we'll ask the chamber to 21 make a presentation. 22 Mr. Trowbridge, welcome. 23 MR. TROWBRIDGE: Good afternoon. I'm Mark 24 Trowbridge. I'm the president of our Chamber of 25 Commerce here in Coral Gables. We're located at 224 32 1 Catalonia Avenue in the city beautiful. 2 Good afternoon, leaders. Thank you again for 3 the invitation to share our chamber's thoughts on 4 the Miracle Mile and Giralda streetscape project as 5 we near the end of this journey. 6 Once again, we're pleased to stand before you 7 today and honored to share our thoughts on behalf of 8 our members. For several decades now, our city 9 beautiful's main street has been in need of 10 collective attention. It's currently a hodgepodge 11 of varying styles and unremarkable character that is 12 not befitting of our Coral Gables and its endless 13 charm. 14 In its current form, it is not the premier 15 destination that we so intently market to the 16 outside world and thus it is our duty to fix that 17 starting with your affirmative vote today. 18 Since we last convened several weeks ago, our 19 chamber has had ongoing conversations with each of 20 you on the BIDS, city leadership and staff, property 21 owners, community stakeholders, county officials, 22 leaders in the BID and, of course, our members. 23 There was great interest and enthusiasm from all, 24 mostly centered around the fact that we were nearing 25 the end of our long journey and that this project 33 1 is, indeed, going to happen. It is on the horizon. 2 It is closer than ever. 3 During the summer, as you-all recall, we saw 4 photos of current conditions along Miracle Mile and 5 Giralda with patrons and consumers waiting to their 6 cars after a brief summer shower. Cracked and 7 uneven sidewalks of all different styles in 8 disrepair and a tree canopy that leaves much to be 9 desired. 10 We then saw a brighter future and ideas of what 11 can be and what will be when the Miracle returns to 12 the Mile, a colorful, energized and magnificent 13 boulevard, a destination that is a beacon for 14 business. A main street that rivals any other. Yet 15 there remains concerns about the financing, and I'm 16 sure you will hear more about this later today. We 17 are very sensitive to that as our community's 18 Chamber of Commerce, with nearly a hundred members 19 in the mentioned and affected district. 20 And since we last met, we have offered many 21 ideas and opportunities that go far beyond, raising 22 parking fees by twenty-five cents, and other ideas. 23 But some of what you may hear today seems on its 24 face value to be revisionist history. Dating back 25 to 2008, our chamber board unanimously passed a 34 1 resolution in support of the streetscape project 2 and for our partners joint effort in the city and 3 BID to determine a favorable repayment plan for any 4 assessments to be imposed. 5 This was reiterated again in 2011 when our 6 Chairman John Rooke and I stood shoulder to should 7 with the executive director that day before this 8 very body when she stated that a 50/50 split between 9 the city and the benefiting properties had been 10 endorsed by her board, along with support for 11 parallel parking. That was always the plan right 12 down the midline. I even reviewed those minutes and 13 the video of that meeting yesterday to be absolutely 14 certain of this. And I am at peace having done this 15 exercise once more that you all have honored this in 16 your planning. 17 Now, can we do more to mitigate the burden? 18 Always. Have we offered those ideas to all parties? 19 Definitely. And do we continue to support this 20 project? Absolutely. We reiterated this to our 21 chamber leadership as late as Friday morning of this 22 past week and to our BID representative as late as 23 last week as well. 24 Now is the time to move forward without delay. 25 The window of opportunity is closing on this 35 1 project. Our focus should now be on what is next. 2 I want to know how do we manage the construction 3 phase and make downtown Coral Gables attractive 4 during the construction. We should be working on 5 this now, and since you are listening, I suggest 6 limiting the parking fees in the affected areas 7 during the construction and reduced rates for valet 8 with direct validations from merchants who benefit 9 from shoppers. 10 I'm glad to work with each of you to help come 11 up with a plan that is the best practice and will be 12 emulated by other communities nationwide. 13 We all know that Miracle Mile is inextricably 14 linked to our past and some of the most significant 15 people in our communities past, names like Friedman, 16 Fay, McBride. They had the earliest visions. It is 17 our main street, our business epicenter, a gathering 18 place where businesses should flourish. The time is 19 now to ensure our downtown's long-term 20 competitiveness. 21 As I shared with you all several weeks ago, the 22 re-imagination of Miracle Mile and Giralda will be a 23 legacy project for each of you too, and a gift that 24 you are bestowing upon future generations of Coral 25 Gables citizens and visitors. Now there may always 36 1 be skeptics and real anxiety when it comes to 2 change, but we all must listen to and assay these 3 concerns. There must be no interruption in our 4 business operations and no idea is too small or too 5 high a hurdle to address. Most of our businesses 6 are just beginning to catch their collective breath 7 and renew their optimism as consumer confidence 8 returns. And this project must not hinder that 9 process. It must further catalyze it. 10 As you know, this has been a longstanding 11 priority of our chamber dating back many years. We 12 know that great downtowns are built around a strong 13 business community that is invested in making what 14 is already good extraordinarily great. Today is one 15 of these days where we can add to that investment. 16 Now, certainly you are going to hear from our 17 chairman, but in a different role today, that of 18 retained counsel by our partners at the BID. While 19 there may be some perceived awkwardness in the 20 staff, I assure you there is none. But I do ask 21 that you recognize that he is in a different role 22 today and that as our president, I'm standing before 23 you to speak on behalf of our chamber, its leaders 24 and members. 25 Now, in closing, you all need no reminder that 37 1 many of us have been investing in this plan for a 2 long time. For me, more than eight years. It is 3 exciting to see us moving forward and planing for 4 the next days. In truth, the streetscape project is 5 more than new sidewalks, beautiful lighting and 6 place making. It is an investment, an opportunity 7 for civic renewal and your legacy. 8 Thank you. 9 MAYOR CASON: Mark, to reiterate, the chamber 10 as late as yesterday, what is the position on the 11 50/50 split? 12 MR. TROWBRIDGE: We've never taken a formal 13 vote on it, Mr. Mayor, but we have always understood 14 and every time we come here and testify that is what 15 we were supporting, the BID and that's why I 16 referenced that 2011 meeting. 17 MAYOR CASON: Okay. Thank you. Any questions? 18 MR. TROWBRIDGE: All right. Thank you very 19 much. 20 Craig. 21 CITY ATTORNEY LEEN: Yes. At this point, we 22 would now open the discussion up to the three groups 23 that have counsel present or that are having someone 24 speak on their behalf. 25 The first is the BID. Mr. Perry Adair will be 38 1 speaking and he's given 25 minutes, if it's okay, 2 Mr. Mayor. Are you okay with him beginning? 3 MAYOR CASON: That's right. Okay. Each of the 4 outside counsel would be speaking for a group of 5 people who are interested. You can give as much 6 time as you want to any individuals that -- that 7 you're speaking for, if they would like to do it. 8 MR. ADAIR: Good afternoon, Mr. Mayor, Mr. City 9 Manager, Mr. City attorney. 10 So I'm going to digress just a moment from 11 where I had started to -- planned to start from, to 12 address one of Mr. Trowbridge's remarks about his 13 revisionist of history. Revision of history is a 14 diplomatic way of saying somebody is trying to 15 change the story. And some of that I'll talk about 16 in my formal remarks about some of the animosity, 17 adversity that's perceived in the situation, which 18 really is a function of lack of communication, not 19 of somebody doing something inappropriate. 20 So I'm chair of the chamber. I'm in that role 21 for five more days. And today when I get to my 22 formal presentation, I'm here solely as counsel for 23 the BID, and not as chamber. But as chair of the 24 chamber, I will tell you this: Positions of the 25 chamber are not taken by Mr. Trowbridge. Positions 39 1 of the chamber are taken by the board. And at the 2 close and in response to your question, Mr. Mayor 3 Cason, you said what was -- what was the chamber's 4 position and Mr. Trowbridge said to you the board 5 never took a formal vote on the 50/50. 6 So one of the things I want to talk about was 7 just that. The chamber is 100 percent supportive of 8 the project, as is -- as is the BID, a hundred 9 percent. But I want to be clear about what people 10 have taken positions on and what they haven't. So 11 with that being said, we are supportive and the 12 board never voted on the financing of the project 13 when John Rooke was here, was the chair, John Rooke, 14 nice guy -- Montica Jewelry, they're having a big 15 sale -- they didn't have the numbers yet. Okay. 16 So with that, I remove my hat as the chair and 17 let's continue on with the BID. 18 So let me start by saying this, that when I was 19 engaged, I was bombarded with communications 20 indicating that to some, and not an insignificant 21 number of people, the relationship between the city 22 and the BID on this matter was adversarial, was 23 somehow us against -- "us" being the BID against the 24 city. Nothing could be further from the truth. 25 Nothing. The BID -- the origin of this with the BID 40 1 -- I do want to say that before I give the BID all 2 the credit -- certainly a lot of people were talking 3 about improving the Mile and Giralda before 2009 4 when the BID first came to you with: Here is the 5 design, I think you ought to look at it, but the 6 real first concrete step, no punt, was about, here's 7 the design, let's have a look at it, let's price 8 this out. And the -- and the BID actually put some 9 funding into that along with the city. So it's very 10 important about -- it was very important to the BID 11 to partner up with the city, not just for the 12 streetscape, but from the very beginning. 13 So the first piece of advice I gave to the BID 14 was, you will be the city's partner today, during 15 the hearing tomorrow and going forward for the 16 foreseeable future. Nothing about that will change. 17 Nothing. And it's no different now. 18 So how did we get to a place where we are now 19 with people not hearing each other clearly about 20 what they're saying? It's nobody's real fault, but 21 it's a product of miscommunication and not -- 22 everybody not having all the data they need, so 23 let's just walk through what happened. 24 It was really in about January or February that 25 we started talking in earnest about here is the 41 1 formula and here's the numbers and most importantly, 2 and I can't overemphasize this, this is the area 3 that's going to be assessed. 4 Now, I saw in your package that you had some 5 testimony from the prior executive director of the 6 BID talking about, here are the people who are going 7 to pay for it. And I think she said 120. I don't 8 know how many members are in the BID exactly. I 9 think it's 140-ish. But the position of the BID has 10 always been or when Mari was addressing you, was 11 that the CBD would pay for it. The expenses will be 12 borne across that entire area. Now, she didn't know 13 because nobody told her. I'm not sticking anybody. 14 But nobody responded listen, we can't do that. We 15 can only specially assess when there's a special 16 benefit. We can't go over the entire CBD. In fact, 17 we're not even specially assessing the entire BID. 18 So whatever miscommunication there was, right, 19 because in Mari's mind, 50 percent is the entire 20 CBD. But now it's a different area. So when we 21 say -- some say and I'm not -- I'm not attributing 22 this to anybody, some say you're changing the deal 23 because you're talking about 50/50 now. That's 24 really not the case because that's not what occurred 25 because the 50 was tied inextricably and maybe on -- 42 1 maybe that's on Mari, or maybe that's on the BID to 2 the fact it would be spread across a bigger area and 3 now it's in a very much smaller area and so we are 4 looking to alleviate some of that concentrated 5 burden with some of the things I'm going to talk 6 about. 7 Now with that being said, let me ask Burton and 8 Mari to come up and say a few words and then I'll 9 get to the substantive part of my presentation. 10 VICE MAYOR KERDYK: Perry, let me just -- 11 because I sat up here -- I do not remember ever 12 hearing that it was to be spread throughout the 13 BID -- I mean, throughout the CBD. Never. And I 14 can quite categorically say that, and if I would 15 have heard it, I probably would have said, hey, you 16 need to reassess that idea. So I cannot remember 17 ever hearing that said. 18 MR. ADAIR: And, Commissioner Kerdyk, I think 19 you're making my point exactly. It was certainly. 20 I'm the first to say as I read the transcript, it 21 was not articulated as it needed to be. I'm trying 22 to express to you that when it was said that was -- 23 because it was not stated -- it was -- in Mari's 24 mind it was something different than was conveyed. 25 As I read the transcript, to me, it's unmistakable 43 1 that what she articulated would be spread across the 2 BID. 3 VICE MAYOR KERDYK: The transcript is one 4 thing. Meeting on separate occasions with her is 5 another and I never had that as one of our talking 6 points when we were speaking. 7 MAYOR CASON: Do you have anything in writing 8 that ever showed that? I mean, how could the BID 9 speak for the whole Commercial Business District? 10 Were they ever invited to your meetings on -- on 11 this? 12 MR. ADAIR: Are you asking me? I don't 13 think -- I don't think the BID has any authority. I 14 don't think they have authority to bind any owner on 15 that. But exactly -- but see, that is my point as 16 well, Mayor. That is my exact point as well, is 17 that the concept that -- that apparently was not 18 articulated in any of these meetings, Commissioner, 19 if that's what you're saying, and because I 20 certainly wasn't there, is that's what people were 21 thinking. 22 But here's why I don't think at the end of the 23 day it matters too much because at a minimum, we 24 were talking about the BID was going to pay it and 25 now we're not even assessing the entire BID. And 44 1 I'll get to the merits of that in a moment, but it 2 really doesn't matter because I think what we can 3 all agree on is that nobody ever discussed it will 4 be this small limited area that was being assessed. 5 Whether it was in somebody's mind or not -- but the 6 point of all of this is not -- 7 COMMISSIONER LAGO: Perry, you know what, I 8 think we can all agree on, let's get to the 9 presentation. How about we all agree on that? And 10 let's stop going back and forth and she said, and in 11 her mind. I mean, I wasn't in her mind. I don't 12 know. Let's get to the presentation. The BID is 13 here, the chamber is here. All respective parties 14 are here. We have a vested interest in making the 15 city great. Let's get to the point. 16 MR. ADAIR: Thank you. 17 COMMISSIONER LAGO: Thank you, sir. 18 MR. HERSH: My name is Burton Hersh, offices at 19 130 Miracle Mile, Suite 200. I am the current 20 president of the Coral Gables Business Improvement 21 District. 22 In January of 2009, the BID first presented its 23 conceptual design for the streetscape improvements 24 to both Miracle Mile and Giralda. Certainly, the 25 idea of streetscape improvements had been discussed 45 1 before 2009. But in 2009, presentations by the BID 2 set forth a motion, a process which with a lot of 3 hard work from a lot of people in this room, and 4 some not in this room, brings us to where we're at 5 today. 6 The design and improvements set forth in it 7 depicted what with BID -- what the BID has and 8 remains as its number one priority. The streetscape 9 project in its entirety has the BID's unwavering 10 support. There is no -- it cannot be said any more 11 clearly. We support this project beyond, without 12 any reservations. 13 The cost of not implementing these improvements 14 far outweighs the cost of making the improvements. 15 At stake is the city's viability as a business 16 district. And as Cindy Birdsill pointed out to you, 17 we'll see where we're going. 18 The benefits of the changes are many and the 19 benefits and the financial benefits to the city as a 20 whole will dwarf the benefits to the small area 21 where the improvements are focused. The environment 22 created by the improvements will beckon visitors, 23 attract new office, residential and hotel 24 development throughout the entire central business 25 district. The positive impact of the project will 46 1 be felt citywide. The project will provide 2 financial security to the city as a whole producing 3 significant revenue which will help this commission 4 continue its practice of lowering millage rates 5 citywide. It is a sustainable plan fueled by an 6 economic engine that the downtown is and is anchored 7 by the area to be improved. 8 The improvements to Giralda, a shared street 9 will become the talk of the county. And will 10 create -- and will create an environment unsurpassed 11 in South Florida. It will be a place where people 12 will want to gather and meet and enjoy because it 13 will be medicinal. If you've looked at the 14 renderings -- if you've looked at the renderings 15 you'll understand that. It will prove to be a 16 fantastic investment. 17 In January of 2011 when Richard Heeps of Street 18 Works made his presentation in a more detailed 19 vision, Commissioner Anderson, then Commissioner 20 Anderson remarked that "Today is a day of dreams." 21 This day is a day of implementation of those dreams 22 and the BID reaffirms its resolute support and helps 23 with financial adjustments that the BID will present 24 today will enact a resolution to move the project 25 forward. 47 1 In closing, in respect to the zero occupancy 2 note at Mary Brickell, which is quite interesting, 3 that fact is largely due to the -- that is largely 4 due to the fact that the area has a critical mass of 5 people. Please keep that in mind when you 6 inevitably approve the garage developments. A 7 ten-story garage with no people will not serve this 8 city in a good manner. 9 And a slight clarification. The -- the 10 Biltmore Way project was never a part of the 11 streetscape project until several weeks ago. We 12 have no objection to it, and -- but it would be -- 13 but it would not be fair to say it was a part of the 14 streetscape project, but we do believe it is a great 15 enhancement and we support it a hundred percent. 16 Thank you for your time. 17 MAYOR CASON: Just one question. You continue 18 to look at both Miracle Mile and Giralda together 19 as -- you support both? 20 MR. HERSH: We support both. We think both are 21 needed. 22 MAYOR CASON: Thank you. 23 MS. FOGLIA: Good morning or good afternoon, 24 Mayor, Commissioners, City Manager and City 25 Attorney. Thank you. I'm sorry, I'm very nervous 48 1 after everything that's gone on. Thank you for the 2 opportunity to speak this morning. Thank you. 3 My name is Marina Foglia. I am the new 4 executive director of the Business Improvement 5 District, 220 Miracle Mile. I just want to make 6 clear the mission of the BID of Coral Gables is not 7 only to do advertising, promotion, marketing for the 8 downtown Coral Gables, but also to be an advocate 9 for its members. Currently we have close to 150 10 property owners, 350 merchants, this including our 11 restaurants in the downtown Coral Gables area. 12 As you know, the City of Coral Gables and the 13 Business Improvement District have been partners for 14 many, many years since the BID's inception and it is 15 important that -- that it is stated here today that 16 we continue to be partners, that it is very 17 important to me, to my board that you understand 18 that we not only work on one issue together, yes, 19 you know, the issue may be the financing on 20 streetscape and we may disagree on that. But as you 21 know, we work hand in hand with the city on a daily 22 basis. 23 We're not only working on streetscape, but 24 after streetscape, you know, we have overlay. 25 Currently we're working with the parking awareness 49 1 campaign, with wayfinding signs, you know, for 2 street lighting, holiday decorations. We're 3 starting with Giralda Under the Stars, central 4 lights for the parking. We're going to be expanding 5 and enhancing and the list goes on and on. 6 We're creating a retail renaissance program to 7 make sure we have the right retail coming into 8 downtown Coral Gables. We have a new program we're 9 going to be starting, Smile on the Mile, about 10 customer service and empowering our employees to be 11 our ambassadors so when visitors come, they can 12 represent Coral Gables at the optimal level as this 13 city so deserves. 14 As you know, we have shared this top priority 15 for many years and we're in this together, you know, 16 the city and the BID in terms of the streetscape. 17 For the city, downtown Coral Gables is a key 18 economic barometer, engine and financial 19 contributor. For the BID and its members downtown 20 represents, you know, it's livelihood and longtime 21 vitality of hundreds of property owners, merchants, 22 small businesses and especially their families. So 23 I'd really like for to you take that into 24 consideration today when it is time for -- for your 25 votes. 50 1 There are many different stakeholders present 2 here today, but one thing that we have all in 3 common, you know, they may be representing many 4 industry sectors, you know, may be located on 5 different streets, but we all have an unwavering 6 commitment to make sure that this project goes 7 through. You know, we're very grateful for all your 8 leadership and your hard work. The fact that the 9 BID may not agree with all of the financial 10 conclusions should not be taken as a lack of 11 acknowledgment and appreciation for all the city has 12 done to move this project forward. Today is a great 13 day for the City of Coral Gables. 14 As the BID and others make the presentations 15 today, and we discuss the key issues before you, we 16 respectfully ask that you consider all of the 17 partners and stakeholders that will be affected and 18 examine the issues raised from their perspective as 19 well as the city's. 20 Again, we thank the city for its leadership, 21 continued commitment to streetscape and to downtown 22 Coral Gables. We need to work together to build 23 consensus and move forward and restore the downtown 24 Coral Gables to its former glory. 25 Thank you so much. 51 1 MAYOR CASON: Thank you. 2 MR. ADAIR: Are you keeping time? 3 CITY ATTORNEY LEEN: Ten minutes. 4 MR. ADAIR: So one of the things I want to put 5 on the record is a petition that has over a thousand 6 signatures that is in favor of the increased parking 7 fees as an offset to the assessment. I'm going to 8 hand this to the clerk. It may be more relevant to 9 the item coming up on the raising of the fees, but 10 you have -- we sort of see them together so I'm 11 going to hand this to the clerk and ask that it be 12 made part of the record. These -- the count is on 13 the top here of the totals. 14 COMMISSIONER QUESADA: And those signatures are 15 BID members or other individuals in the area 16 generally? 17 MR. ADAIR: Generally -- 18 MS. FOGLIA: Generally merchants, retailers, 19 patrons, people who visit downtown residents. 20 COMMISSIONER QUESADA: Thank you. 21 MR. ADAIR: To answer your specific question, I 22 don't know whether they're all Gables residents. 23 Okay. 24 COMMISSIONER LAGO: We have to remember a key 25 component. You could be a retailer, you could be 52 1 a -- but the key issue is whether you're a resident. 2 Don't forget those -- that tax revenue, that -- that 3 parking revenue belongs to the residents of the City 4 of Coral Gables. So I just want -- I know it's a 5 great idea in concept, but we need to make sure that 6 we keep that in mind. 7 MR. ADAIR: So let's talk for a moment about 8 the methodology and assessment. And if any of this 9 sounds like I'm picking on Mr. Fishkind, I can 10 assure you, I am not. Because I'll be the first to 11 tell you that I've had trials where I've lost. Any 12 lawyer that is honest will tell you, yes, he's had 13 hearings that he's lost. And Mr. Fishkind will be 14 the first to tell you that he's had an opinion 15 rejected on something that -- a special benefit that 16 the court rejected, so just because someone says it, 17 doesn't make it so. 18 But I do want to talk about how this -- how 19 this study was done against this backdrop of 20 Donnelly versus Morgan case, but it's important, 21 because one of the quotes in the case is, it is 22 difficult to envision how the competent provision of 23 any municipal service by -- by the county -- 24 MS. OLAZABAL: Perry, could you speak more 25 directly? 53 1 MR. ADAIR: Yes, I can. So it is difficult to 2 envision how the competent provision of any 3 municipal service by the county -- in that case it 4 involved a county -- would have any effect, other 5 than to enhance to some degree property value. So 6 hopefully all of the services that the city 7 provides, not all of the things the city does, adds 8 to value. So it's not just as simple as that. 9 So here are the things I want to talk about in 10 the methodology. The -- in the report there is an 11 attribution, it's on Page 11 of mine. I don't know 12 if they're all paginated the same, but in Mr. 13 Fishkind's report on the Mile, he attributes four 14 million dollars of added value by the trees. So I 15 want to talk about the authorities that were cited 16 for that. 17 First up, the report doesn't make note of the 18 fact there's already trees in Miracle Mile. There's 19 street trees all the way up and down Miracle Mile. 20 The value of those trees is cooked into the property 21 values. If you take the trees out and put new ones 22 in, that's -- that's fine, but the street trees are 23 already there. You're going to add the same value 24 back. That is -- that's not a special benefit. But 25 the value, the number that is based on those 54 1 studies, and if you haven't read them, you should 2 and I have copies. The two studies of Oregon, they 3 are on the study of value of street trees on the 4 resale value of homes, single-family residential 5 homes. There is not a single commercial property in 6 the study. Same thing for rent of single family 7 homes, not a single commercial property in the 8 study, but the study does observe that -- that the 9 trees are already there and the value is already 10 added. 11 Now, I think we're going to add some additional 12 trees. And we're going to add some different kinds 13 of trees, but make no mistake, you can't say today 14 those street trees there have no value. But my 15 trees, the streetscape trees are going to add value. 16 Sure you can say this. It's your decision to make, 17 but it doesn't seem to hold water when -- because 18 you discount the value that is there. 19 The other study is about the study by Drennan. 20 That study had a lot of talk about the improvement 21 about what -- what is added when you do these sorts 22 of projects, but the focus of that study was an 23 interview of 26 merchants and what they were asked 24 about is, has the bike lanes we've added, have they 25 made business better. We don't have any bike lanes 55 1 in our project. 2 So the authorities that are relied upon really 3 don't have a great deal to do with the reality we're 4 facing. The present situation is not really 5 addressed in the report in so far as the street 6 trees are concerned. The number of that attribute 7 is four million dollars, four million. 8 The Biltmore Way issue, it really wasn't a part 9 of the project. I understand the figures that -- 10 that are attributable to that and it certainly is a 11 beautiful project, but the addition of that is to 12 change the numbers in the PowerPoint slide to show 13 what the city is paying and I want -- I want to talk 14 about some of the numbers that were in that slide. 15 And I don't know if we can re-access the slide show, 16 if we can, if not, I've got the slide numbers you 17 can refer to it. But the slide I'd like to look at 18 is slide 14. 19 So if we went to slide 14 we find -- this is 20 the program called Scenario A. The city pays 21 100 percent of the infrastructure. So let's talk 22 about the infrastructure for a minute. This 23 infrastructure issue, whether it's the drainage or 24 the -- because there's different parts of it, right. 25 You can, in essence, go curb to curb and denote a 56 1 number of items that are infrastructure. One of 2 them happens to be drain that was talked about. So 3 the policy decision -- let me be clear, there is 4 nothing wrong with the city special assessing for 5 infrastructure. The law clearly allows for that. 6 But here is the policy decision. I happen not to 7 live in the Gables. I live in unincorporated Dade 8 County. So if Mayor Jimenez called me up and said, 9 "Perry, great news, I'm lowing the millage. You are 10 going to save $500." 11 I'm going to say, "Mayor, you're the man." 12 But if the Mayor calls me and says, "Listen, 13 Perry, I'm lowering the millage, you're going to 14 save $500, but you know that drainage and that 15 street work I did for you, I can't absorb that cost, 16 I'm going to have to assess you $10,000." 17 At that point I say, "Who are you? Who you 18 calling?" 19 And I hang up. And I say, I might as well move 20 to the Gables. What do I mean by that? It's a 21 policy choice how we handle special assessments and 22 what we specially assess for. 23 So if the city is at peace with the notion that 24 streets flood up to the sidewalk, and that is 25 something that the owner there should pay, I think 57 1 the law probably allows for that, but that is a 2 policy choice. But take that same issue and move it 3 into the residential area and what happens? Your 4 street floods, your street's falling apart. I'm 5 sorry, that is not with the price of admission for 6 taxes. We're going to have to assess you for that. 7 And again, as Commissioner Leen and I have discussed 8 what the law is on the matter, and there is no 9 dispute about you have the right to assess. No 10 doubt about it, but we're going to make policy. How 11 are we going to deal with our residents? How are we 12 going to deal with our commercial owners? And what 13 has been said today. But what I don't think anybody 14 will dispute is, the CBD probably anchored by the 15 area that is going to be assessed is a contributor, 16 right? Throws all tax revenue that helps this 17 commission to do what it's done for several years. 18 It's admirable, you've lowered the millage and 19 that's great. But that happens because of the CBD, 20 that happens -- not always because of the CBD. It 21 happens because of this area that is being assessed. 22 So what are the solutions? There is no need to come 23 and say, here are all the problems. What are the 24 solutions? 25 Here's what we think: The 50 -- the 50/50 58 1 split, we won't belabor. You got the message when I 2 first explained how that came to be and how the -- 3 it's perceived in one way, be it a change in the 4 story, but now it's not. That assessment area was 5 defined really after Mari made that comment the 6 first time. It may have been already established by 7 the time she made the comment the second time. What 8 are we going to do to solve it. 9 So the infrastructure. The city's got to make 10 a policy decision. Who is picking up the cost? Is 11 that on the city? Is that -- is that disastrous 12 flood every time it rains -- 13 COMMISSIONER KEON: Can I ask you a question? 14 MR. ADAIR: Yes, absolutely. 15 COMMISSIONER KEON: Is your assumption that the 16 reason the sidewalk floods is because of the storm 17 water drains? Is that what you're -- 18 MR. ADAIR: I think -- the explanation I've 19 heard of it and I want to say this is Scan Tech. I 20 don't want to attribute it to somebody I don't know 21 for sure, is that maybe the street trees that are 22 there have intruded on -- on the drainage. So why 23 it floods? It floods because it cannot handle 24 the -- 25 COMMISSIONER KEON: Wait. But you seem to be 59 1 attributing it to the storm water drainage system. 2 That's what it seems. That's what I'm hearing you 3 say. So I'm asking you to clarify for me, is the 4 street flood because of the storm water system which 5 is the infrastructure? 6 MR. ADAIR: It is. I mean, it is the system. 7 The system is incapable of moving the amount of 8 water that we get in the summer rains. 9 COMMISSIONER KEON: We can have Public Works 10 address that later. I just want to make sure what 11 the assumptions are that you are basing your 12 argument on. 13 MR. ADAIR: Okay. 14 COMMISSIONER KEON: Thank you. 15 MR. ADAIR: So one of the things we can -- we 16 can talk about the infrastructure -- oh, here is the 17 slide I want to talk about. 18 So this is 14, this slide? So -- 19 And, Commissioner Keon, I thought you were the 20 one who posed the question, and I could be wrong 21 about this, the last hearing about let's take a look 22 at the infrastructure, what would it -- 23 COMMISSIONER KEON: I wanted a breakdown on all 24 of the costs. 25 MR. ADAIR: Maybe I thought you wanted to know 60 1 if we took out the costs and then split the rest 2 50/50, where it would leave us and maybe that wasn't 3 the question. You certainly got the infrastructure 4 costs, although I'm not sure all the things that are 5 in the infrastructure. I know the sidewalk is and 6 the sidewalk is not really what I was talking about. 7 So if you do the math on there, you find 8 that -- that if the city paid the infrastructure on 9 Miracle Mile, and then split the rest 50/50, the 10 owners and city will pay 4,444,197 on the -- on the 11 enhancements. 12 On Giralda, if the city picked up the 13 infrastructure and enhancements were split half and 14 half, each will pay $1,275,347. So that's the 15 slide. I don't dispute the math of the slide, but 16 the slide did not accomplish the analysis I thought 17 was asked for and I could be wrong. I thought it 18 would take up the infrastructure and pick up the 19 50/50. 20 MAYOR CASON: I'll give you five more minutes. 21 MR. ADAIR: I appreciate that, Mayor. 22 The other -- the other solution is the parking. 23 So we'll hear when that item comes up in the 24 resolution. I should have said, I've alerted the 25 city attorney to this, that there is a whereas 61 1 clause in the resolution that says the BID supports 2 the increase. As you'll see from the petitions, the 3 BID supports the increase with some portion of that 4 being allocated to the reduction of the assessment 5 the assessed people are going to pay. 6 So for instance -- and I accept the math in Tim 7 Hodge's report at face value. I have a draft report 8 dated July 14, 2014. There might be something later 9 than that, but this is the latest that I have. So, 10 for instance, on an annual basis, if you took 11 just -- just the parking lot in the CBD, so, 12 right -- so you took that, raise it a quarter -- 13 well, let me do the whole analysis. He said if you 14 had raised it in 2013, instead of making X, you 15 would have made Y. So if that -- if that quarter 16 based on 2013 had been -- had been for those parking 17 lots 1A -- these are his definitions, round 18 numbers -- 1A, 3B, 5A and 5B, those are the ones I 19 think are in the CBD. That would be an additional 20 revenue of $675,107 for the parking lot just in the 21 CBD, that we think some portion of -- for instance, 22 if it's all, then the owners pay next to nothing. 23 That's not right. They're certainly getting some 24 benefit, so that's not right. But that's the 25 number. 62 1 If we took just the one in -- I think it's 3B, 2 the only one that's in the area being assessed, then 3 the annual uptake is $214,183 from the parking lot 4 that's right there in the area being assessed. And 5 we think at a minimum, that should be allocated to 6 reduce the assessment costs. Because it's right 7 there in the area that's paying the freight. Now, I 8 don't want to -- 9 COMMISSIONER LAGO: Let me explain to you why I 10 have a little bit of an issue with that. I think I 11 have to -- you know, be at the front of this because 12 if you are going to use those monies to lower the 13 assessment cost, you know, I don't think that money 14 belongs to -- to the merchants. I think that money 15 belongs to the city as a whole. You can't just say, 16 I'm going to use that parking money, you know, to 17 lower the assessment for individuals who own 18 property there on the Mile or the outlets. Just to 19 me, I don't think that is equitable. 20 MR. ADAIR: Can I? 21 COMMISSIONER LAGO: Of course. Of course. I'm 22 giving you -- I'm giving you my -- my stand. I 23 don't know how the Commission stands on this, but I 24 think what you're asking for is for something which 25 the residents are not going to look on that 63 1 favorably. They're going to say, you know what, 2 those parking -- that parking money, if you're going 3 to increase or that revenue, it should be used to 4 fix sidewalks throughout the neighborhood, should be 5 used to fix fountains, pave streets, fix parks. 6 MR. ADAIR: So here's what I'd say about that, 7 Commissioner Lago. I think that the parking revenue 8 which goes into your general fund, as I understand 9 it, it gets spent where you say it gets spent. 10 It's invested where the city says it's invested. So 11 if the owner -- if an owner said, well, that's not 12 right to invest that money in the -- in that area 13 being assessed or in those -- that two-block area or 14 the entire BID for that matter, the answer ought to 15 be, well, you need to understand the tax revenues 16 that area generates. And that they help every day 17 with you holding the line on -- on the millage and 18 on taxes. Of course -- that's why I'm saying, when 19 you consider that ordinance, when you consider that 20 ordinance, is that a good policy decision? You're 21 now going to help these folks who are 22 contributors -- 23 COMMISSIONER LAGO: I am the first one to be 24 vocal about how much the CBD contributes in 25 reference to revenue in regards to our overall 64 1 pension -- budget, excuse me. I just think when 2 we're getting in there, it's a slippery slope. I 3 understand exactly what you said in reference to it 4 being a policy decision. I'm not sure if I'm ready 5 to make a decision. 6 MAYOR CASON: What other ideas do you have 7 because we're way over our allotted time? 8 MR. ADAIR: Those are the points I wanted to 9 make. I'm going to put the -- the Oregon 10 residential trees that are worth four million 11 dollars into the record. And the fact of the matter 12 is that -- that if the city is not arbitrary, 13 there's nothing anybody can do about the decision. 14 VICE MAYOR KERDYK: Let me just say one more 15 thing about what the Commissioner said. You know, 16 we're talking about expediting the process, so this 17 is not such a long process, and then one thing that 18 we've forgotten about that is very, very important, 19 after the fact is the maintenance of the facility. 20 I mean, that is what has hurt us beforehand. We 21 could take some of those funds and make sure that 22 this Miracle Mile and Giralda is maintained the way 23 we need it to be maintained in the future. 24 MR. ADAIR: And I understand that. But I think 25 the number -- the number here -- the number your 65 1 consultant gave you -- and this is all forward 2 thinking about how much revenue it would be, is 3 almost a million-four of the additional revenue for 4 McCourt; Right? It's a-million-four. What we're 5 talking about the limited addition on the parking 6 lot is two hundred and change. It doesn't change 7 the policy argument Commissioner Lago raised, but 8 that's the math of it. And so it is very much a 9 policy choice. You are going to change forever the 10 look and feel of that area. It will be contributing 11 more than it does now. So it's a question of how 12 much -- how much you are going to invest in that. 13 Thank you, Mayor. 14 COMMISSIONER LAGO: Thank you, sir. 15 MAYOR CASON: Craig. 16 CITY ATTORNEY LEEN: Yes. So, Mr. Mayor, the 17 next group that will be going is 10 Aragon. I 18 believe that they have a representative and then 19 several people who would like to speak. You have 20 25 minutes. 21 MR. DIXON: Thank you. 22 My name is Tom Dixon. I'm a real estate 23 broker. I've been a broker for about 45 years in 24 Miami. I was a 2004 president of the Realtors 25 Association. For 15 years I was a member of the 66 1 appraisal Institute, MIA appraisal. And I have my 2 own real estate commercial office now. 3 At the request of 10 Aragon, they asked me to 4 try to convince you the residential units be 5 excluded from the streetscape improvement 6 assessments. 7 And the reasons are that they are being placed 8 under the special assessments because A, it's going 9 to increase their market value. 10 B, lower insurance costs. 11 And C, increase the use and enjoyment of their 12 property. This is according to studies by Mr. 13 Fishkind which you've heard. Increased market 14 value, because now there's more traffic underneath 15 their apartments, because it's more difficult for 16 people to come visit them, because it costs more for 17 visitors to park. Maybe not. 18 Lower insurance cost? I don't know why the 19 streetscape improvements would lower insurance cost. 20 Increased use and enjoyment? Yes, the 21 streetscape improvements will add trees as you've 22 heard. But it will also raise the price of 23 restaurants because the restaurants are going to 24 have to pay for the additional costs. It's going to 25 raise the price of goods that are sold in the 67 1 stores. So will it increase the use and enjoyment? 2 Maybe. 3 What's happened in other cities? There are two 4 types of improvement districts. One is called a 5 DID, which is a Downtown Improvement District. And 6 the other is a B-I-D, Business Improvement District. 7 You have in Coral Gables a Business Improvement 8 District, and it excludes residential properties 9 from under their assessment. But in other cities, 10 Worth Avenue, for example, in the town of Palm 11 Beach, they've excluded residential properties from 12 the special assessments for streetscape 13 improvements. 14 In Wynwood in the City of Miami, they excluded 15 residential properties. Sarasota's Downtown 16 Improvement District, again they're improving the 17 infrastructure, excluded residential. And the Boca 18 Raton Downtown Special Assessment District, also 19 excluded residential properties. 20 It's interesting that there was a case between 21 the City of Boca Raton and the State of Florida on 22 the issue of approval for the special bonding to do 23 the improvements. And in that case, Robert Hammen, 24 the city special urban economic consultant stated, 25 "The small number of residential properties in the 68 1 downtown area, as well as churches had been excluded 2 from the assessment because they would receive much 3 less benefit from the project than business 4 properties." 5 Each of you have received copies of resolutions 6 from the BIDS and DIDS that I discussed and I think 7 you will see that residential units are not going to 8 benefit from the special assessment that you're now 9 imposing. 10 So I'm requesting on behalf of the residents of 11 10 Aragon that you insert into the resolution under 12 the section called "Excluded parcels, and 13 residential units." 14 I'd now like to ask Jorge Besu to come forward. 15 Jorge is the president of the 10 Aragon condominium 16 association. 17 MR. BESU: Honorable Commission, Mr. Mayor, Mr. 18 Vice Mayor, thank you for listening to us. 19 I'd like to make a few comments regarding our 20 condominium. First of all, I've listened all day to 21 statistician and economists talk about, you know, 22 the different factors and I listened to the 23 commercial owners and to the organizations. If you 24 pay attention to this, you're going to realize that 25 there are no residential owners involved in these -- 69 1 in the streetscape project. That there is no 2 opposition from the community or any large 3 organizations. That's because the residential 4 owners were omitted from all of this. Okay? 5 As far as some of the arguments that Mr. 6 Fishkind says regarding special benefits, I've been 7 a broker in this town for more than 30 years. Okay? 8 My parents had a jewelry store in Miracle Mile next 9 to Mr. Bolado there that he can attest to for more 10 than 30 years. I know Miracle Mile well. I love 11 Miracle Mile. I love Coral Gables. But there is 12 something wrong in this special assessment with 13 regards to the -- to the residential owners. 14 I've been through a lot of stages of Coral 15 Gables. I've seen where the old retirees were taxed 16 out of the community a long time ago. And I've seen 17 how Coral Gables, the ups and downs of the 18 economies, and for the first time with the 19 experience that I have in the building and the 20 participation that I have, the affordability of the 21 buildings have -- of the building has come down and 22 you for the first time see in Miracle Mile and Coral 23 Gables, the young couples, you know, being able to 24 appear on the scene. It used to be when we were 25 only old couples, you know, in the Coral Gables 70 1 scene. Now we get a lot of young people. For the 2 first time we get them buying condominiums in Coral 3 Gables. You see them with their wives and their 4 kids strolling around. We can't overburden the 5 residents with taxation. Okay? This taxation is 6 not equitable for the residential owners in 10 7 Aragon. Okay? They are already paying the -- the 8 stress of the economic crisis, and in our particular 9 case, like most buildings in Coral Gables or in 10 Brickell, whatever, we've come out of the economic 11 problem. We have our own stress, construction 12 issues. We were under litigation, construction 13 litigation for six years. We have had to take care 14 of our own, you know, internal maintenance. 15 Also, we've had to maintain our parking lot. 16 The city doesn't maintain the parking lot. We 17 maintain our parking lot. We maintain it clean. 18 Our parking lot is the one most used in Miracle 19 Mile. We've got the Ale House in the front. We've 20 got Tarpon Bend. We have the -- the other one, and 21 we pay for that. For us to be taxed on top of that 22 is very unfair. 23 We ask, like Mr. Dixon said, that you take us 24 out of the special benefit because we're really not, 25 okay. I have -- I bring a formal petition by the 71 1 owners for you to exclude us because it looks 2 unfair, it feels unfair, and it is unfair. 3 I'm very familiar with everything that went on 4 in Miracle Mile for ages. I know we need 5 improvement and we're not against it. Okay. And 6 we're willing to put up with the extra burden that 7 we're going to get with the parking situation. 8 The Coral Gables scene for those of you who 9 don't go out at night, it works out in specific 10 times. And from 8 o'clock when the happy hour 11 starts till about 3:00 in the morning, it's mayhap. 12 Then afterwards then you have parking availability. 13 During those stress hours, we had to add extra 14 security, we've had to -- you know, extra cleaning 15 people. It is an extra burden to our building. 16 Please do not tax our residents out of Coral Gables. 17 I beg you. 18 I am a resident. I've been a businessowner in 19 Coral Gables. If you have any questions that you 20 want to direct to me, I'll be happy. 21 I see the -- the real estate analysis that Mr. 22 Fishkind is saying does not apply to our building. 23 We have no other special benefit than Segovia Towers 24 or the Greens or any other building that is around 25 Miracle Mile or the surrounding areas. We have no 72 1 other special benefit that any other residential 2 house close -- close to Miracle Mile is going to 3 get. No other special benefit. And if there's a 4 broker that tells me we have a special benefit, tell 5 me the reason why. 6 I thank you again for the candor and the time 7 that you have dedicated to us because we have sent 8 you a lot of information, but, you know, I'm -- 9 I'm -- when I see -- I'm a sucker for unfair causes 10 and this is very unfair and it happens to be that 11 I'm the interim president of the building right now 12 and it caught me at a moment where we were just 13 getting above water with -- with all of the 14 situations that we had in the building. And 15 probably we don't have a thousand more residents 16 here because they have not been stepped on. 17 And, Mayor, when you start, you know, when -- 18 when decisions start to be made on a specific matter 19 without including the general residents, when it 20 belongs to the residents -- we have no problem if it 21 included all of the residents or if it included all 22 of the condominiums, but when it gets too specific, 23 it's a little bit discriminating. 24 So I plead and I beg you to please consider our 25 petition. We have it signed here by a lot. It's a 73 1 big burden on the residential building. We're not a 2 conglomerate. We're not a, you know, a chain of 3 restaurants. They're common residents. A lot of 4 young people in the building that are going to be 5 hurt by this. Thank you very much. 6 Valerie, if you want to talk, I have some 7 residents, a lot of them had to leave, but we still 8 have some. 9 Thank you. 10 MS. QUESADA: Good afternoon. My name is 11 Valerie QUESADA. And although many of you may 12 already know me in a different capacity, I'm here 13 today speaking in front of you today as a 10 Aragon 14 resident and many of the residents that were not 15 able to come forward and speak to you. 16 Essentially, I'm really here just to reiterate 17 the main point that Jorge has just discussed with 18 you is the financial burden that it's creating for 19 many of its residents. We were just able, as he 20 said, to get our head above water with the -- with 21 the lawsuit that we had for construction, our 22 construction defect lawsuit. And now finally that 23 we feel we've got a solid board and we have a chance 24 to get our head above that water, we got or we 25 received this in the mail as much of a surprise. 74 1 So to keep it brief and to not sound 2 repetitive, we are looking to seek your help and 3 your consideration into supporting us and removing 4 us from the project or the assessment. 5 So thank you for your time. 6 MAYOR CASON: Thank you. Any other speaker? 7 I have a question of Mr. Dixon. I looked at 8 the breakdown of the assessments for your 9 noncommercial apartments. 10 MR. DIXON: Yes, sir. 11 MAYOR CASON: 85 percent of the people would be 12 paying between 20 and $40 a month. That's -- that's 13 the burden that you're saying you -- you can't bear? 14 MR. DIXON: No, I didn't say that. 15 MAYOR CASON: Well, a number of the residents, 16 you know -- you've just gotten out of whatever this 17 lawsuit is and that's a burden and you say you are 18 not going to get any benefit whatsoever. I -- I 19 cannot -- I can't understand that. 20 Why you would think property values would not 21 go up when you just walk out your door and you're on 22 Miracle Mile? People have -- honestly, I want to 23 live there because I want to be near Miracle Mile. 24 I just have a hard time -- 25 MR. DIXON: What is the purpose of the 75 1 streetscape improvement? The purpose is to attract 2 more people, to liven up the street, to keep it 3 alive at night. 4 MAYOR CASON: I would think your residents 5 would be happy about that. 6 MR. DIXON: They would love to hear at 7 3 o'clock in the morning the noise that comes from 8 more activity. No. 9 See, you have to look -- when you look at the 10 special benefits, that's a specific benefit. If you 11 have a single-family house that is on an unpaved 12 road and the city paves the road, that's a distinct 13 special benefit. But will there be a special 14 benefit to the residents on the tenth floor at 10 15 Aragon? 16 Well, are they going to enjoy their apartment 17 more? 18 Are they going to have lower insurance costs? 19 Is it going to enhance their safety and ingress and 20 egress? No. 21 So the measurement of special benefits is not 22 there. They may -- they may, in fact, find that 23 there are benefits to it, but they don't meet the 24 requirement of a special benefit that's been 25 outlined by Dr. Fishkind. 76 1 VICE MAYOR KERDYK: We'll ask Dr. Fishkind 2 later to address that. 3 What percentage of the people in the building 4 are renters? 5 MR. DIXON: I have no idea. 6 Jorge. 7 MR. BESU: Approximately 50 percent of the 8 people in the building are renters. Yes. And 9 the -- and the stress -- the -- the different 10 compensations of value come when -- let's say, at -- 11 at the hour where -- where most of the people come 12 to park, if a -- if a resident owner comes at that 13 time, you can -- you probably have to wait five, ten 14 minutes in line to get into your parking because 15 there is a problem with everybody coming in at the 16 same time. 17 Sometimes you walk down and like you say, you 18 walk down and sometimes you got, you know, people 19 that are drunk from the -- from the bars that are 20 walking around at night. Not everything is -- is a 21 benefit. 22 There are compensating factors for you living 23 in -- close and in Miracle Mile and there are 24 negative factors. There's compensating factors for 25 you living in the Greens and there are negative 77 1 factors, okay? But everything creates a balance. 2 The market value of the unit is there. The market 3 value of the Greens is there. 4 So if the market value goes up, in general they 5 go up uniformly, not because streetscape is approved 6 we're going to get a special benefit out of it. 7 There are -- there are no special benefits. It's 8 not going to generate any income to us. Okay? It's 9 not going to create any special benefit to us as 10 a -- as a residential owner. 11 MR. DIXON: And I point out that Worth Avenue 12 is probably a real good example. On Worth Avenue in 13 the town of Palm Beach, they excluded residential 14 properties. 15 Sarasota downtown improvement, they excluded 16 residential and in Boca Raton, the special downtown 17 improvements, they excluded residential. So they 18 must have been -- in their wisdom decided that there 19 were not special benefits for the improvements that 20 were made. 21 MAYOR CASON: Okay. Thank you. Any questions? 22 MR. BESU: Any questions? 23 MAYOR CASON: Thank you very much. We will -- 24 we're going to be -- we're going to be taking 25 individuals after lunch. We'll be taking now the 78 1 other lawyer for the third. 2 CITY ATTORNEY LEEN: You have 25 minutes. 3 MS. WEISS: We just wanted to give you the 4 benefit since you were being generous. I thought 5 you wanted to break for lunch. 6 MAYOR CASON: As soon as you're finished, we're 7 going to break for lunch. 8 MS. WEISS: Okay. Very good. 9 COMMISSIONER QUESADA: Just to clarify before 10 you begin, I had given you a copy of some questions 11 that I had -- that I'm going to have for your side, 12 as well as Dr. Fishkind. So that document that was 13 handed to you by our secretary, you don't have to 14 address them now, but I just want to let you know 15 since it was provided to Dr. Fishkind, I wanted to 16 provide to you guys as well. 17 MS. WEISS: We appreciate the questions. 18 Perhaps you wouldn't mind if we can review them at 19 lunchtime and address them after. Thank you. 20 Good afternoon at this point. My name is 21 Sabrina Weiss. I'm from Rennert, Vogel, Mandler & 22 Rodriguez. I am here with my partner Jeffrey 23 Mandler. And I'm also here with an expert we 24 brought with us Lee Waronker from Waronker & Rosen, 25 an appraiser who I hope can answer some of your 79 1 questions based upon our presentation as well. 2 We represent three clients: Two clients on the 3 Miracle Mile project and one on the Giralda project. 4 As to the Miracle Mile, we represent the commercial 5 unit 10 Aragon and we represent the Colonnade Hotel. 6 On the Giralda project, we represent Alhambra 7 International Center. 8 So we have a little bit of different issues so 9 if you'll give me a little bit of indulgence, I will 10 address those issues separately, but I'll try to 11 speak to the points that matter to all of them at 12 one time. 13 Before I begin our presentation, I just would 14 like to take a moment to point out a small point of 15 contention. We had done a request for production of 16 documents after your last hearing on, I believe it 17 was July 22nd. I was here. Some issues were 18 raised. I thought very valid issues if that, and to 19 best be prepared to represent our clients, we wanted 20 to see the information that came from those 21 questions raised. We did a document request on 22 August 1st. 23 On August 18th we received a limited response 24 to that request. And really the response we got, 25 the documents that were provided were documents that 80 1 had already been in existence, documents that were 2 available at the hearing in July or that I have 3 could have downloaded readily from the city's 4 website. 5 The main documents I was interested in seeing 6 were in response to Commissioner Quesada's request 7 from Dr. Fishkind to discuss the other streetscape 8 assessments, local ones. 9 And the response to the Commissioner Keon's 10 request to discuss the difference in value between 11 enhanced infrastructure and infrastructure in place 12 just as a general commercial grade, I did not 13 receive those responses until the eleventh hour on 14 Friday, late, late in the afternoon despite several 15 further requests. And my partner Jeff Mandler was 16 actually here in the building that week as well. 17 So that being said, I've given a cursory review 18 to those documents, but I do think those documents 19 contain vital information. I think we're discussing 20 an issue that's of great importance here, an issue 21 that is going to have a resolution that is going to 22 have long lasting effects and benefit. So in all 23 fairness to everybody, I appreciate that we're 24 hearing this hearing. And I appreciate hearing 25 everybody's commentary, but I would like to just 81 1 bring up the point that I believe it may be 2 necessary and I would ask that you consider rolling 3 over your vote until the next commission meeting so 4 that we could all have an opportunity to thoroughly 5 review this information, digest it and then come 6 back with our comments to you. 7 COMMISSIONER LAGO: Can I ask you a quick 8 question? 9 MS. WEISS: Sure. 10 COMMISSIONER LAGO: What are the documents that 11 are pending and -- 12 MS. WEISS: Well, the documents that we 13 received Friday afternoon, or actually we didn't 14 quite receive them, we were told where to find them 15 Friday afternoon on your website, was Dr. Fishkind's 16 response, which I would point out to you was dated 17 August 8th and we were not made aware of it until 18 Friday afternoon. 19 And then also, the -- Heather Encinosa's 20 response, she had prepared a memo. I believe it was 21 dated August 11th. We did not receive that until 22 Friday afternoon and then a document that I believe 23 responded to Commissioner Keon's request that was 24 also not made available. That was the cost 25 development of infrastructures in place as the city 82 1 would do it versus an enhanced version pursuant to 2 the streetscape. 3 COMMISSIONER LAGO: So you received those 4 documents when? 5 MS. WEISS: Friday afternoon. I believe it was 6 about 4:30 that -- I don't want to butcher the 7 woman's name, Janeris Riveroa, I believe she 8 responded to our office and said now they were 9 uploaded to your city's website and we can download 10 them from there. 11 With that being said, I would just ask that you 12 consider when you've heard everybody's comments, 13 that perhaps -- I believe the information to be 14 vital and in my cursory review, it did look like 15 very important information. I know I would like the 16 opportunity on behalf of my clients to review it 17 thoroughly, analyze it and come back to you with 18 some intelligent form of commentary. 19 CITY ATTORNEY LEEN: Mr. Mayor, I just want to 20 note, and I'll look into it, but I do believe a 21 number of those documents were provided earlier, I 22 just spoke with Ms. Birdsill, including Hank's memo, 23 Heather's memo. 24 MS. BIRDSILL: I do know that the memo from 25 Heather and the memo from Hank were provided for the 83 1 request for production. So I don't know why you 2 didn't receive them. 3 MS. WEISS: With all due respect, I do have all 4 of the documents here. I have the e-mail responses 5 to my request that I'm happy to share with you. So 6 if you want, when we break for lunch I'll -- 7 MAYOR CASON: Why don't you move forward with 8 your argument. We'll look into it. Why don't you 9 go ahead. 10 MS. WEISS: Excuse me? First I'd like to 11 address the commercial units at 10 Aragon. First, 12 we do not believe that the special assessment meets 13 the two requirements necessary to impose this valid 14 special assessment as it relates to 10 Aragon's 15 commercial units. And I'm only speaking as to the 16 commercial units. 17 It is our position that 10 Aragon commercial is 18 not deriving a special benefit from the services 19 provided by the project. It is clear that the 20 streetscape is focused on the retail sector. All of 21 the literature that I've read, including the Gables 22 Magazine, Gables Streetscape which actually 23 discusses this streetscape project -- that word is a 24 killer word -- in written detail, it sets clearly 25 forth the benefits of this proposed project. And 84 1 what it -- what it devotes really is a lot of energy 2 to improving the performance of the retailers on the 3 Mile. 4 The widened sidewalks that would promote retail 5 foot traffic, the cafe restaurant seating is geared 6 specifically to those retail businesses that sit on 7 Miracle Mile. 8 The addition of valet parking also provides no 9 additional benefit to 10 Aragon commercial as it has 10 its own parking component within the building. If 11 there is any benefit, it might be a trickle-down 12 benefit. It's really de minimis to these commercial 13 property holders. 14 Second, a substantial portion of the project as 15 been discussed is really to enhance or alleviate, I 16 should say, deferred maintenance issues. There is 17 an incredible amount of deferred maintenance on the 18 Mile. It's evident on the presentation in the 19 PowerPoint. It's evident if you walk the Mile. I 20 believe that a meeting that was held at the Actor's 21 Playhouse there was a rain that day. It was not a 22 torrential downpour. It was just a typical Miami 23 rainy day. The water was coming over the curb. 24 These are areas of improvement that need to be done 25 and I'm speaking to different residents here, there 85 1 are areas that have been in a state of disrepair for 2 an extensive period of time. 3 As I mentioned, Commissioner Keon had requested 4 an analysis of maintenance issues, or I should say, 5 infrastructure issues compared to the enhanced 6 version. I didn't get to read through it thoroughly 7 as I would like, but just a cursory review shows 8 that just an estimated $6.6 million of that would 9 just go for general infrastructure repairs. We 10 would like the city to consider paying for that 11 before any division of the rest of the pie for the 12 special assessment. Tax payers feel, particularly 13 our clients feel, that they pay a hefty amount of 14 taxes each year for their real estate. And they 15 would like to think that their city infrastructure 16 is being maintained with those funds. 17 As you've heard before, after the 18 infrastructure component is removed, we then would 19 like you to consider sharing with the tax payers 20 50/50. There are a number of other projects locally 21 in Miami-Dade County that we've referenced before, 22 including Lincoln Road, Coconut Grove and Flagler, 23 to name a few, that have had similar streetscape 24 projects. The tax payers allocated share in those 25 local projects range from a low of 7 percent in the 86 1 Flagler project and the reason being, I'm sure has 2 to do with they had a substantial amount of county 3 funds to complete their project on the Flagler to 33 4 1/2 percent to Coconut Grove. 5 Within the document that was presented today, 6 the Miracle Mile improvement document, there is a 7 page, it looks to be Page 12, that references other 8 streetscape projects. Overwhelmingly, with the 9 exception of Worth Avenue, the government's share is 10 ranging between 77 percent to a hundred percent. 11 Worth Avenue, from the research I have done, 12 seems to be just a different animal. If you look at 13 Worth Avenue itself, there really was not an issue 14 of extensive deferred maintenance there. They were 15 looking to make their street really stand out in a 16 special way with the highest end of initiative. I 17 think the report I read said it was 5,000 a linear 18 foot for their improvements. They have a seashell 19 sidewalk. They have a $600,000 clock tower. This 20 streetscape was pushed by the retailers that are on 21 Worth Avenue, which include the highest-end 22 retailers in the country: Hermes, Armani, Neiman, 23 Saks, Cartier. These were the retailers pushing it 24 and agreeing to pay for it because it's benefiting 25 the bottom line, the retailers. 87 1 The other streetscape assessments mentioned in 2 this document on Page 12, show Flagler at 3 92 percent, the government paying. Lincoln Road, 4 the 1994 project, which was the original streetscape 5 project before Lincoln Road really took off, was a 6 $17.8 million project with 73 percent being 7 attributable to the city. And that 73 percent is -- 8 what they did is they took the infrastructure and 9 paid for it completely and then shared 50/50 with 10 the taxpayer. 11 There's a second Lincoln Road project, a 2010 12 project. And I don't know who to attribute this 13 document to, but it's an area that says CRA/ 14 blighted district. And it says, yes, to the 2010 15 project, which I'm finding a little shocking because 16 there are no higher retail values than on Lincoln 17 Road right now. Their sales are in the thousands of 18 dollars per square foot for real estate on Lincoln 19 Road and I would be hard pressed to say it's a 20 blighted area. 21 South Point, $23 million project, a hundred 22 percent funded by the government from 2006 to 23 ongoing. Again, they say, yes, to CRA or blighted 24 area. Again, I do not understand that reference. 25 Since long prior to 2006, there are multimillion- 88 1 dollar condos on the tip of South Point. I really 2 find it hard to believe it's considered blighted. 3 Then you have Fort Myers, a hundred percent in 4 2010 where the government paid and St. Augustine, 5 which along with Worth Avenue is the only one 6 notated on here which is not a CRA or blighted 7 district with 77 percent being paid by the 8 government. 9 That being said, we'd like to reiterate, we 10 would like to see Coral Gables paying for the long 11 deferred maintenance infrastructure and then sharing 12 the difference with the city based on some fair 13 proportionate share. 14 As to 10 Aragon, we also don't believe that the 15 proposed assessment is proportionate to the benefits 16 received by the office component. 10 Aragon 17 commercial is located on three floors. The second 18 and third floors are offices. The benefits such as 19 widened sidewalks, the cafe restaurant seating apply 20 to the retail sector on the Mile, but not to 21 offices. 22 Additionally, the proposed parking as I 23 mentioned, 10 Aragon has its own parking. It's not 24 adding any value. 25 Now if you can turn to Mr. Fishkind's initial 89 1 report, he makes the conclusory statement that the 2 special benefit will increase the value of 3 properties within the district. But his report 4 includes no evidence or data that an office or a 5 nonretail property will have the same benefit as 6 retail properties. 7 As Mr. Dixon mentioned earlier, the first two 8 studies cited by -- by Mr. Fishkind or -- excuse me, 9 I think it's Dr. Fishkind are for single-family 10 homes. The remaining studies emphasize increase in 11 retail sales with no backup or data reflecting a 12 similar impact on a vertical structure such as an 13 office building. 14 With that in mind, what we did, we sought to 15 have some expert witness help to ensure that we were 16 understanding this properly. So we hired Waronker & 17 Rosen, and specifically Lee Waronker who we have 18 here, to analyze whether there would be a benefit in 19 a proportionate way to the upper floors of our 20 vertical sector that apply to the retail sector. If 21 I could have Mr. Waronker speak to that, that will 22 be great. 23 MR. WARONKER: Good afternoon. I'll be brief. 24 I'm sure that will be appreciated. The firm is 25 Waronker & Rosen. We've done numerous appraisals 90 1 for the City of Coral Gables and consulted with you 2 all over the years and we are we happy to have done 3 so and had very good experiences. 4 This assignment was very succinct on our behalf 5 as to -- the scope was to see whether or not it was 6 our belief or the data would be indicated that 7 taxing or assessing upper floors, the upper floors 8 would have the same value as the retail floors. 9 Much as Sabrina just spoke about, in reviewing the 10 data on the Internet, there was no indication on any 11 of the data that I saw. Everything was geared 12 toward discussion of retail and restaurant space. 13 Nothing regarding how it would affect office space 14 and how it would improve office space. 15 I went back into the archives, thanks to being 16 able to scan things nowadays and looked back at 17 reports you had prepared on Lincoln Road, Circa 18 90 -- mid-'90s to the very early 2001, 2002 time 19 frame. I put a report. I think you-all may have 20 some copies of it. Very succinctly, we looked at 21 rent of office space back in that time frame, 20 or 22 $25 a square feet creeping up a little bit and then 23 later on in 2011, '12 up to about $30 a square foot. 24 The increased compound is roughly 2 percent. One 25 and a half to 3 1/2 percent. I don't have to tell 91 1 you what has happed to retail space as Sabrina 2 talked about it. Back in that time frame, our rent 3 rolls we had privy to were in the 40 to $50 range. 4 And now I believe it's 150 to 250 range with a 5 compounded increase of 10 to 13 1/2 percent. By 6 that data alone, you can look and see that the main 7 focal point has been, obviously as you would expect, 8 the retail restaurant space on Lincoln Road which 9 has been driving the higher values that she alluded 10 to. 11 Secondly, tangentially, our offices are in 12 South Miami. We've been there about 15, 17 years 13 now. And they did something similar with the 14 streetscape. They widened the streets. They put in 15 some landscaping, they have outdoor seating. And 16 there's been pretty much a success. I can tell it's 17 been a success to that project because if I leave 18 the office and come back late Friday evening, there 19 are no parking spaces in my own personal lot. I 20 will tell you that our rent has gone down over that 21 period of time, our office rent that I pay as a 22 tenant. 23 COMMISSIONER QUESADA: Is there a question? I 24 was going to ask you, but I was going to let you 25 finish. 92 1 MR. Waronker: In that time frame, our office's 2 actually gone down in that period and retail rents 3 have gone up. That is something I just witnessed 4 firsthand. 5 Yes, sir. 6 COMMISSIONER QUESADA: First, pleasure to meet 7 you in person. I've actually hired you before to do 8 appraisals for -- for deals that we've done. We've 9 only spoken over the phone, so nice to meet you in 10 person. 11 I'm looking at the letter that you prepared 12 that we -- we got today and you have on the second 13 page, the second half, the bottom of the page 14 historical rents, Lincoln Road. And you just 15 summarized it right now. So you're telling me -- 16 I'm not familiar with the office rental market in 17 Lincoln Road. Are you telling me that even though 18 the ground floor retail rental rates are 3, $4 a 19 foot, whatever -- here you put 150 to 250 in 2011. 20 Can you tell me the office rental rates -- they 21 really haven't gone up much? 22 MR. WARONKER: That is correct. And you can 23 look towards -- Cushman & Wakefield does a survey on 24 -- 25 COMMISSIONER QUESADA: You were looking at 93 1 surveys from Cushman & Wakefield? 2 MR. WARONKER: Rent rolls that we had and 3 market rents that we placed on properties as of 4 Circa late '90s, some had rents that were there that 5 the leases started mid-'90s. Our report on that 6 particular property on Lincoln Road was in the late 7 '90s, '97, '98 and then looked at the same building 8 and evaluation we did and the rental we had on the 9 same exact buildings, specifically one with -- one 10 or two across the street buildings in 2011, '12. So 11 that's the nature I did rather than rely on 12 comparable data. 13 MS. WEISS: If you don't mind, if I can chime 14 in as well. 15 COMMISSIONER QUESADA: Microphone. 16 MS. WEISS: I usually don't get accused of 17 needing a microphone. 18 COMMISSIONER QUESADA: So people at home can 19 hear as well. 20 MS. WEISS: If I can chime in as well. I think 21 when I presented myself the last time, I explained 22 at that hearing we represent numerous property 23 owners on Lincoln Road. 24 I can also attest firsthand that the retail 25 rates are off the charts right now for ground floor 94 1 retail on Lincoln Road. However, the upper floor 2 office rates, 28 to $30 a square foot full service. 3 Downstairs, triple net. So there's been no real 4 principle difference from the mid-'90s to 2014 and 5 office space related to the streetscape or 6 otherwise. 7 MR. Waronker: Going back in time, your retail 8 rents on Lincoln Road weren't always triple. You 9 had the tenants paying the soft expenses. Now with 10 the advent of being a great market, they're paying 11 triple net, paying all of the expenses. 12 Lastly, just -- as a side, I've looked at 13 Coconut Grove with the similar situation. Their 14 office -- 15 COMMISSIONER QUESADA: Let me stop you for a 16 second because as I'm thinking about this for first 17 time. Obviously this is new information to me. But 18 I would imagine -- and I'm being the devil's 19 advocate here, the property values for those 20 properties still go up for those office buildings. 21 MR. WARONKER: Property values are always, if 22 it's commercial property is based on -- 23 COMMISSIONER QUESADA: Retail values for those 24 office buildings are being impacted obviously by the 25 improved retail market as far as the value of the 95 1 building itself. Now, we're just talking about 2 leasing right now. But what -- what about purchase 3 and sales? 4 MR. WARONKER: Your income is going to be the 5 director or the driver of what you pay. So if 6 you're not seeing a big spike in the income, the 7 only other thing would be a lower capitalization 8 rate, meaning it was a little more secure because -- 9 COMMISSIONER QUESADA: I guess I'm also 10 assuming and I'm not as familiar with Lincoln Road 11 as I am with Coral Gables or downtown Miami, or 12 South Miami, do the office buildings that you looked 13 at, do they also have a retail component or are they 14 100 percent office? 15 MR. WARONKER: The ones that I looked had a 16 component of -- actually, Washington and Lincoln 17 office -- and office space, upper floor office 18 space. 19 MS. WEISS: And I can tell you that other 20 offices that are directly on Lincoln as well, the 21 majority of them, I think, actually all of them have 22 a ground floor retail component. And it's what 23 drives the income and you'd be correct in stating 24 that a purchaser is going to look to invest on their 25 property based on income model. 96 1 MR. WARONKER: If I can go back in time, this 2 might not be specific, a long time ago downtown 3 Miami, we were appraising office retail buildings, 4 buildings in downtown, three, four, five levels, 5 buyers were telling us we're just buying it just 6 based on the retail. We're not putting any value to 7 the upper floors. I'm not saying that's the case 8 here. But that just gives you an instance how 9 driving the retail is versus the office space. 10 The next question would be what benefit does 11 the office space get? Right now you can walk 12 downtown, you probably could go to a hundred 13 restaurants within a few blocks. That's not going 14 to change. Now you can eat outside in some of those 15 restaurants, but as far as a specific benefit in 16 attracting tenants as a result of that, other than 17 just the place looks nice, I just -- we don't see it 18 nor does the rents justify it. 19 MAYOR CASON: Anything else? 20 MS. WEISS: I'd like to make it clear, because 21 I don't know that I made it clear before, we believe 22 that the first floor of retail component in 10 23 Aragon should be assessed using the methodology of 24 Dr. Fishkind. It's just that we believe that second 25 and third floor should have a discounted assessment 97 1 associated with it based upon the fact as 2 Mr. Waronker just presented, that there's a real 3 dichotomy between income and benefits between office 4 and retail, and also because of the specifics that I 5 mentioned to you, that they're not really gaining 6 any of those benefits that those retailers are on 7 the Mile. 8 MAYOR CASON: But does the office -- say a 9 second floor office, is that owned by the business 10 that is there or owned by the building owner? 11 MS. WEISS: It's owned by an owner. 12 MAYOR CASON: Okay. So they're going to lease 13 it. But the value goes to the business owner? 14 MS. WEISS: The office -- the office component 15 on the first floor retail is owned by an owner of 16 the building, yes. It's not individual condominiums 17 like the upper floors. 18 CITY ATTORNEY LEEN: Mr. Mayor, just in case 19 any commissioner needs to see it, the report of 20 their expert is in this packet towards the end. It 21 was collated differently so -- but it is in the 22 packet. 23 MAYOR CASON: I think two more minutes. Can yo 24 do it? 25 MS. WEISS: Well, I'd like to move on to the 98 1 Colonnade, if I can. I'll -- I will try not to 2 repeat everything I said earlier. 3 So as to the Colonnade, obviously the Colonnade 4 is a hotel. It has a very small retail component, 5 Sushisamba which does not sit on the Mile. The 6 hotel does not sit on the Mile. 7 We believe again that the requirements 8 necessary for the imposition of a valid special 9 assessment have not been established as to the 10 hotel. We do not believe the hotel is deriving the 11 special benefits from those services. The benefits 12 such as the widened sidewalks and cafe restaurant 13 seating apply to the retail sector as I mentioned 14 earlier. 15 COMMISSIONER LAGO: Could I interrupt just for 16 one second just for my own clarification? Maybe the 17 individual who just stood up, the real estate 18 expert, could you stand up also. 19 In your past experience, have you seen a hotel 20 not gain any benefit from fronting an active street, 21 let's say, like Miracle Mile where -- for example, 22 it's just been renovated, new shops are coming in, 23 restaurants are opening up, you don't see a benefit 24 in that? 25 MR. WARONKER: You could say there would be 99 1 benefits. Hard pressed to say there is benefit any 2 time -- 3 COMMISSIONER QUESADA: Speak up. 4 MR. WARONKER: There's always a benefit, but 5 you have, for example, a Hyatt two blocks away. I 6 don't think the benefit would be any different to 7 the Hyatt. 8 COMMISSIONER LAGO: They're fronting -- they're 9 literally a stone's throw away from the Mile. To 10 me, that's what I'm caught up on. I mean, I 11 understand obviously you're representing your 12 client. You're doing a good job by the way, but to 13 me, it's a concern when you start saying there is no 14 benefit. 15 MR. WARONKER: I don't think there is no 16 benefit. But I believe -- 17 COMMISSIONER LAGO: I cannot -- you can't 18 compare the Hyatt two blocks away from someone -- 19 let's say, for example, my wife and I, if we go to 20 New Orleans, you know, if we go to New York, we look 21 for the best streets to stay on. What's the active 22 street? If I have to go for a business conference, 23 where am I going to stay? I kind of look for 24 somewhere that is activated. 25 MR. WARONKER: You do, but -- 100 1 COMMISSIONER LAGO: So I'm saying -- 2 MS. WEISS: I want to be clear, you raise a 3 great point, but the hotels are -- rates are driven 4 by a comparable set of other hotels and in this 5 sense -- 6 COMMISSIONER LAGO: I've got to disagree on 7 that fact, also because as you get closer to 5th 8 Avenue, rates get expensive. The rates are -- rates 9 get more expensive and that is due to the fact you 10 have influx of individuals calling to stay at those 11 hotels. So what they do is they raise the rates to 12 see what is the appetite in reference to -- to the 13 rates for the community. 14 MAYOR CASON: They can raise the rates the next 15 day after the thing is done. You are going to have 16 more people on the street, they're going to have 17 their relatives there to look at this enhanced 18 downtown. Someone may say, hey, I'd like to stay in 19 this hotel next to all of these restaurants. But to 20 say -- I mean, these are the ones that get the most 21 benefits. They can raise instantaneously the rates 22 and if you look at the number of rooms in that 23 hotel, they're all paying $35,000 a year. It's like 24 a couple of dollars per hotel room. They are going 25 to raise those rates right away. 101 1 MR. WARONKER: But you can raise -- you can 2 raise the rates. The next part of the equation is 3 associated with the daily rate, but you are also 4 going to have to look what the occupancy vacancy 5 level is going to be. I spent a lot of time in 6 downtown Chicago teaching class. The Magnificent 7 Mile, there's some great places there, but those 8 same hotels that are a block or two off, get the 9 same benefits of being two blocks away. 10 COMMISSIONER LAGO: I just -- I mean, I stayed 11 on La Rambla, Spain and, you know, we didn't look to 12 stay two blocks south, we looked to stay on La 13 Rambla and we paid a premium to stay on La Rambla. 14 MR. WARONKER: There is no question there is a 15 value, but you are not looking at the same value you 16 have for the retail space. 17 COMMISSIONER LAGO: I mean, I'm not here to 18 argue. What I'm saying, there is a value. There is 19 a value to being able to open your front door, step 20 out and see a magnificent Mile which is activated. 21 MR. WARONKER: No question. I didn't see -- 22 see anything in Dr. Fishkind's report that indicated 23 how he went about attributing that value to hotel 24 space. 25 MS. WEISS: I would just say the value is not 102 1 the same as the value attributable to the ground 2 floor retail on the Mile. I think that's the main 3 point we're making. 4 Also when you look at it from another 5 perspective, hotel -- the structure of hotel, the 6 expenses of a hotel run generally around 80 percent. 7 So any trickle-down value you're going to get from 8 bumping up your -- your average daily rate 9 incrementally, it's nominal onces it trickles down 10 because of the expenses associated with it. 11 VICE MAYOR KERDYK: I'm sorry, I just wanted to 12 ask you, did the -- did the Colonnade just trade 13 recently? 14 Did you guys sell recently? 15 When is the last time it sold? 16 MS. WEISS: Years ago. I think it's at least 17 six years ago because I've represented them in their 18 interests now for years. I think more than six 19 years actually. 20 MAYOR CASON: Any other arguments you want to 21 make before -- we have three people that didn't 22 speak, residents from the previous group. I can 23 give them one minute each. 24 MR. MANDLER: If I may just address that. I am 25 here also to speak to the third owner, which is the 103 1 Alhambra Center, which is the Giralda special 2 assessment. We think impact to the office is 3 nominal and we're not asking that on 10 Aragon it be 4 zero. We're just saying it shouldn't be the same as 5 the ground floor streetscape. Please understand 6 that. 7 And the proposal that we did is that you 8 would -- they would pay exactly the same on the 9 ground floor, but you'd have a different rate for 10 the second and third floors. And we've recommended 11 10 percent, obviously this is your decision, sir, 12 and the commission's decision as to how you apply 13 it. 14 And the same thing with the hotel. We're not 15 saying the hotel should be zero. We're saying the 16 hotel should be something less than the streetscape 17 ground floor retail. The retail is on -- I could 18 give you the price per square foot -- it would be 19 what we proposed in ours, it would be about 20 50 percent once you get off the ground floor. 21 In other words, apply the same rate to the 22 ground floor and then 50 percent above. We 23 recommended it because we thought it was simple easy 24 math for the hotel that you do it per room basis. 25 By the way, on Lincoln Road there were no 104 1 hotels that were affected by this, but they did 2 recognize it. Everyone does recognize that. Once 3 you get off the ground floor, Commissioner, we're 4 not trying to say it's zero. We're just saying it 5 diminishes and it diminishes significantly, and it's 6 less for office than it is for retail. And it's 7 maybe not at less, but it's also less. And we're 8 only talking about the benefits that are given equal 9 to the value that's created. 10 So we're asking that you adjust it for these 11 two tax payers based on that and finally because I 12 know we're short of time and everyone is tired, 13 I'm also here on Giralda. I have two quick 14 points on this. Number one is, we think that this 15 building -- this is Alhambra Center which is owned 16 by Carlos Lopez-Cantera and his family, seems to be 17 out of this district altogether. The district 18 perhaps should be dropped by this commission. It 19 does not have the same push behind it as Miracle 20 Mile does. Or if you decide to go with this, that 21 you limit it and you limit it in the same way. Just 22 for one second you've got to remember where Alhambra 23 sits and where that building sits. There is no 24 passageway through to Giralda. There is no direct 25 access into Giralda. The ground floor, which is 105 1 retail is a bank. And even if it was an alternate 2 use restaurant and office buildings have 3 traditionally failed in this city, and you can think 4 of all of the different restaurants because they 5 generally need to be on the street. And so 6 restaurants on Alhambra, we go across the street to 7 the Allen Morris building. And we know that's 8 turned over and turned over. So it has again, a de 9 minimis effect and again, we would ask that you 10 treat this building different. Either number one, 11 you take it out of the special assessment altogether 12 or number two, if you prefer to drop the special 13 assessment for Giralda, because there doesn't seem 14 to be the big push that I see the community for the 15 restaurant row and if you choose to leave it in, you 16 use the formula which we propose. It's a very 17 simple formula. We've stated exactly with Dr. 18 Fishkind's analysis, ground floor, 11,000 feet at 19 the rate he does, other ground floor tenants off the 20 Mile. And you can check our math. You can always 21 defer it and be established by him. You can order 22 he prepare it with your direction and the upper 23 floors at 10 percent of that ground floor. Remember 24 this one too, the upper floors don't even start 25 until the seventh floor because there's a pedestal 106 1 parking lot garage there. And so we think that for 2 these properties there is a very -- there's -- 3 there's no testimony in this record that shows upper 4 floors get the same benefits as streetscape. 5 We've just submitted to you expert testimony 6 that upper floors do not have the same benefit on 7 the most successful street in Miami-Dade County 8 which is Lincoln Road. And we've given backup data 9 to support that for you to make an intelligent 10 decision to treat these properties differently when 11 you approve this because again, Miracle Mile we're 12 in favor of this project, but to treat these 13 differently. 14 VICE MAYOR KERDYK: You know, I respectfully 15 sort of disagree with that because I think Lincoln 16 Road office markets a little bit different than 17 Coral Gables office markets. Lincoln Road is more 18 of a retail center. Coral Gables is more of an 19 office center, but I want to go back to the sale of 20 the Colonnade. It did sell about a year ago for $81 21 million for the sale of the site. No? I don't know 22 what I'm talking about? 23 MS. WEISS: Hotel component. 24 VICE MAYOR KERDYK: I asked you for the 25 Colonnade. 107 1 MS. WEISS: I don't represent the office. I 2 apologize. I thought you were speaking to the 3 hotel. 4 VICE MAYOR KERDYK: We're talking about the 5 office and the retail here. Weren't you making 6 argument -- 7 MS. WEISS: We do not represent the offices. 8 That is why I started off by stating we're 9 representing the hotel. I apologize for any 10 confusion. We represent only the hotel component -- 11 MR. MANDLER: Sir, we're only here -- 12 MAYOR CASON: I got it. Thank you very much. 13 Who are the three people that wanted to speak for 14 one minute for 10 Aragon and I think -- 15 CITY ATTORNEY LEEN: Mr. Mayor, I was told it's 16 going to be one person. 17 MR. MENDIETA: They have allotted their time to 18 me. My name is Alejandro Mendieta. And I'm a 19 resident of Coral Gables. I grew up in this area, 20 my family lives in Coral Gables, our friends live in 21 Coral Gables. I work three blocks away from where I 22 live. 23 We have waited here four hours to have our 24 three minutes of time, so I appreciate you giving me 25 your undivided attention today. 108 1 Commissioners, Mr. Mayor, the fact is very 2 simple here. We have two sides. Both sides are 3 going to tell you that they're right. They're going 4 to tell you it benefits, it doesn't benefit. Now 5 what we as residents, right, the residents that in 6 our building, we are very passionate. We get 7 involved in the community. We are very active and 8 none of us can understand how it's possible that if 9 you walk ten steps to the right, ten steps to the 10 left, other buildings are not being assessed. So 11 we, which are in Aragon, our address is not Miracle 12 Mile, our address is Aragon are being given this 13 burden that many of us speak about which for the 14 commission 30, 40, $50 a month is not a lot of 15 money. Now if you do that on a yearly basis or you 16 do that throughout the lifespan, that is $10,000. 17 That is a portion of my child's education of which I 18 am going to be funding. That is a portion of maybe 19 someone whose worked very hard throughout their 20 whole life that was planning for that special 21 vacation. Not all of us are fortunate enough to 22 say, hey, 40, $50, that's not a big deal. No, a lot 23 of us, 40, $50 at the end of day at this economic 24 time, you know what, it does make a difference. 25 And on top of not just making a difference, you 109 1 have to understand one thing, the principle, the 2 principle is that no other residents are going to be 3 assessed this, and I guarantee you speaking to my 4 family and friends that live in Coral Gables, 5 they're going to benefit from this just as much as 6 any of us will. They're going to come, and eat in 7 in Miracle Mile because in Coral Gables there is no 8 other place to eat. So you have the area of Coral 9 Gables. So it's not reasonable, it's not just. 10 And keep in mind we entrusted you, the 11 commissioners, Mr. Mayor, which I have all of the 12 utmost respect, some of you I've gotten to know on a 13 personal basis. We've entrusted you to represent us 14 and represent the best community which I'm so 15 positive you're going to do, but this is not 16 correct. It's not reasonable, it's not right. And 17 it is a form of us being discriminated as residents 18 of 10 Aragon whereas everybody else has a free ride 19 and that's not correct. 20 So I plead to you today, not as an expert, not 21 as an attorney, not as one side or the other side, 22 but as a resident, as a person who's involved in the 23 community, a person who supported you time after 24 time, to really reconsider this and consider the 25 fact on the grand scheme of things. Ten thousand 110 1 dollars per unit owner is an astronomical amount of 2 money when we are going to benefit just as much as 3 any other resident or any other person in this 4 community. 5 And a remark, the walking distance, to put some 6 humor into this whole day, which I'm sure all of you 7 are very hungry, I'm famished after being here four 8 hours, I will say this, have my wife walk in heels 9 three blocks from 10 Aragon. She won't do it. 10 She's actually going to get a car. She's going to 11 make me valet or park because it's Miami. It's 100- 12 degree weather. I'm sure everybody in this audience 13 can agree we're not walking three blocks in 100 14 degrees in Miami. I say that, but I beg all of you, 15 Mr. Mayor, Mr. Lago, Commissioner Quesada, all of 16 you, really reconsider this. It's not correct to 17 discriminate us and put us apart as residents of 18 Coral Gables when we have already invested a lot of 19 money, a lot of effort to get where we're at today, 20 myself being a young professional to afford to live 21 in 10 Aragon. Forty, $50 a month is a lot of money 22 because at the end of the day, if you save that 23 correctly, and you, Mr. Mayor, talked about 24 inflation, you invest that money correctly for an 25 education plan, you invest that, that money 111 1 correctly and it can grow and eventually can make 2 something happen. 3 So I beg all of you to really consider this. 4 Thank you. 5 I hope that my four hours waiting here to speak 6 for my three minutes and telling you about my wife 7 walking three buildings in 100-degree weather will 8 change your mind. Do no discriminate 10 Aragon. Do 9 not discriminate your residents who live in Coral 10 Gables, who are Coral Gables and who represent Coral 11 Gables. 12 Thank you. 13 MAYOR CASON: All right. We're going to take a 14 lunch break now. You want to be back at 3:15? 15 COMMISSIONER QUESADA: Yeah. 16 MAYOR CASON: We'll be back at 3:15. 17 (A recess was taken, after which the following 18 proceedings were had:) 19 MAYOR CASON: I think we have -- we're all 20 back. I would like Mr. Fishkind to come back up and 21 then I want to open it up to any individuals who are 22 here who didn't speak earlier and then close the 23 input. 24 MR. FISHKIND: Mr. Mayor, Commissoners, thank 25 you for letting me come back to address some 112 1 interesting and legitimate questions that 2 were asked. 3 Let me start out with the office issues. I 4 kind of grouped them into issues. The report that 5 Mr. W provided, I think was very revealing and 6 important, contrary to what has been stated what 7 that report actually does is it proves that offices 8 at Lincoln Road did receive a special benefit from 9 those streetscape improvements. 10 Mr. W report indicates that rent rolls for 11 offices, by 1 1/2 to 3 1/2 percent per year. 2011, 12 2011, during that time period rental rates on office 13 on an average in downtown Miami went down by 7 to 10 14 percent a year based on Loop Net and Cushman & 15 Wakefield. 16 COMMISSIONER LAGO: Mr. Fishkind, I just want 17 to make sure I understand correctly. So basically 18 there was a 10 percent swing in reference to -- to 19 the rental increase? 20 MR. FISHKIND: That's correct, right. 10 21 percent premium conferred by the streetscape special 22 assessment. 23 COMMISSIONER LAGO: So across the board we 24 saw -- and again, I'd like to see the Vice Mayor's 25 input on this because this is something you have a 113 1 lot of expertise on this. When you look at 2 something where there's a 7 percent decrease in 3 regards to commercial rent rates -- office space, 4 yeah, that's pretty significant based on the 5 downturn in the economy. But when you saw an 6 increase of 1 to 3 percent, I mean that speaks for 7 itself. 8 MR. FISHKIND: I think that is significant. 9 The other issue that was raised concerning the 10 office is that the -- the rate of appreciation of 11 retail values in Lincoln Road was higher than 12 office. That's correct. But -- and then they 13 wanted -- their argument was well, therefore we 14 should have articulated between use types, property 15 use types between office and retail. There's a 16 couple of reasons we didn't do that. We thought 17 about that, but there were some reasons we didn't do 18 that. 19 First of all, land uses are not amenable so 20 take the commercial at 10 Aragon that is in dispute. 21 Some of that commercial could turn to retail or 22 could be service office. So the issue is whether or 23 not there is a special benefit based on, not just 24 its current use, but it's highest and end use and 25 because those uses change over time, we thought it 114 1 might not be the best to have differentiation by 2 uses. It was something we did consider. It is a 3 reasonable idea. I just didn't think it would be of 4 the best idea in this particular situation for 5 application. 6 And remember too, the subsidy that the city 7 provides completely dilutes any differential between 8 the use types, between the land use types if they 9 were paying a hundred percent of the cost. I would 10 be much more concerned if they were paying a hundred 11 percent when they're paying 50 percent or less of 12 the cost than the differentials. It may well exist, 13 are going to be moderate, smaller, I would think. 14 Relative to the hotel. Some questions were 15 raised whether the hotel gets any benefit. Just to 16 read off the website, the Weston Colonnade Hotel 17 combines *yesterday and today located in the heart 18 of Miracle Mile, blah, blah, blah. Pretty clear 19 that they themselves believe that that adjacency is 20 important. And I think -- I think it is important. 21 Relative to the argument that 80 percent of 22 revenue at a hotel is subsumed by the operating 23 costs, that's true on average. But that's not true 24 on the margin. Compared to retail, most of the 25 expenses of an office are completed fixed. So every 115 1 dollars' worth of additional top-line revenue 2 generates more incremental marginal profit for hotel 3 than for retail where cost of goods sold is 4 typically 50 percent of the cost and it's all 5 variable. So I think it was an interesting argument 6 I'm just not persuaded that in this case that would 7 be true and that therefore it will cause such a 8 distortion. 9 The attorney for the Business Improvement 10 District made a claim about my credentials. Let me 11 just address that quickly. I've been cited and 12 found by courts in Florida as an expert for special 13 assessments on more than 200 cases. Only one time 14 in all of the special assessment litigation I've 15 ever participated in did a judge disagree with my 16 opinion, which is the one case in Marion Oaks. He 17 didn't reject my opinion, he just disagreed with me. 18 So I feel confident in representing to you that I do 19 understand special assessments. 20 There was a question raised by the attorney for 21 the BID about the trees and the analogy. First of 22 all, I think if residential values increase because 23 of streetscape, then reasonably probably other 24 values are going to increase as well because there's 25 going to be higher activity. 116 1 Relative to the substitution of new trees, fall 2 trees, yes, there are some arguments to be made in 3 that regard, but clearly the landscape does need to 4 be replaced. We replace landscape on our commercial 5 properties every seven to ten years regularly 6 because of the need to renew and create that special 7 sense of place. But remember, too, I didn't rely 8 only on the study of streetscape trees. I also 9 relied upon the logical relationship argument which 10 I think is very important and powerful, whether 11 there's a logical relationship between the services 12 and the benefit. 13 And secondly the CRA studies. There's been 14 seven studies of CRAs recently in Broward County 15 that demonstrate a tremendous increases in property 16 values from those projects since 2008. So I think 17 there's a number of bases to believe that there 18 would be an increase in market value as well as use 19 and enjoyment flowing from these projects. 20 Relative to 10 Aragon of -- the broker for 10 21 Aragon made the point about Lake Worth or Worth 22 Avenue. I think Worth Avenue is very good analog. 23 But worth Avenue in the County of Palm Beach, they 24 did include the residential, but there's only a 25 handful of residential. There's just very few. 117 1 There argument about excluding them was that those 2 residential properties could not be converted to 3 commercial properties so they didn't get a special 4 benefit. That was their decision. That is not my 5 opinion. I think that there is a direct benefit as 6 we discussed this morning to residential to the 10 7 Aragon. I won't repeat all of those discussions. 8 Relative to the different and I'll sum up and 9 be done here, relative to the different communities 10 that we made the analogies to. Lincoln Road. 11 Lincoln Road started out as a blighted area in the 12 '90s as did South Point. That's why they were put 13 into a CRA. Over time that CRA doesn't go away 14 until it runs out of runway. So as property values 15 increased, the amount of money in the CRA trust fund 16 builds up dramatically. If it's above the dense 17 service, the money is sitting there. A hundred of 18 percent of the money is used for new projects. 19 That's why today, those aren't blighted areas. The 20 government contributed a hundred percent. Well, of 21 course they did, because the CRA was still there. 22 So I'm not persuaded by those arguments -- or I'll 23 say it differently. I'm very comfortable with the 24 argument I made to you that your 50 percent 25 contribution in light of all of the reasonable facts 118 1 is, in fact, generous and I believe it is 2 appropriate given the general benefit and the city 3 property that we've discussed. So -- 4 COMMISSIONER LAGO: Quick question. 5 MR. FISHKIND: As many as you wish. 6 COMMISSIONER LAGO: In reference to Lincoln 7 Road I mean, you're educating me in regards to the 8 CRA and the fact that obviously as we're familiar 9 with the CRAs in both downtown Miami and they have 10 two CRAs in the City of Miami, from what I remember. 11 The Omni CRA and the downtown Miami, if I'm correct. 12 I was never aware that obviously the City of Miami 13 Beach had a CRA. When you say the coffers were 14 filled with monies, that money was obtained 15 obviously through a tax mechanism of some sort? 16 MR. FISHKIND: This is how it works. Yes, at 17 the date of the institution of the CRA, in the case 18 of Miami Beach, it actually was an argument that 19 was -- but that is immaterial -- the tax base is 20 frozen and an increase in tax revenues goes into the 21 CRA trust fund for the sole purpose of depleting the 22 plan of redevelopment. So a step backwards, the 23 community needs to declare the area blighted and 24 needs to have a plan to cure the blight by 25 redevelopment and that's where the money in the 119 1 trust funds can be used for. 2 COMMISSIONER LAGO: So those monies there was 3 threshold that continue to go into the coffers of 4 the general fund and remaining monies that were on 5 top of that went into the CRA; correct? 6 MR. FISHKIND: Yes. 7 COMMISSIONER LAGO: Thank you. 8 COMMISSIONER KEON: The issue here is that in 9 order to create a CRA, you have to meet certain, you 10 know, requirements to declare the area blighted. We 11 don't -- we would never meet those requirements. 12 And so I think -- the mile, what's going to be done 13 to a CRA is sort of duplicitous. I don't think 14 there's any comparison. We're looking at an area 15 that is a blighted area under the regulations and 16 requirements of CRA. There is no place in the City 17 of Coral Gables that would ever even come close to 18 qualifying for that. 19 COMMISSIONER LAGO: The reason why I asked for 20 a clarification on my end was when you see something 21 like this, and the two attorneys sitting behind Dr. 22 Fishkind were very adamant of the fact that you 23 know, stating this is not a CRA. This is not a 24 blighted area when -- actually when it was. 25 And Number two, I need to find out -- I need to 120 1 find out -- because it's very simple to say a 2 hundred percent was paid by the government. How was 3 it paid? 4 MR. FISHKIND: It's paid out of CRA trust fund, 5 which is the only thing -- 6 COMMISSIONER LAGO: That clarification 7 justifies -- 8 COMMISSIONER KEON: That's a different story. 9 COMMISSIONER LAGO: -- a lot of things with 10 regard to the argument Dr. Fishkind has made. 11 Thank you, sir. 12 MAYOR CASON: Any other questions? 13 COMMISSIONER QUESADA: Yeah, I do. And I 14 apologize. I'm going to have to ask you to repeat 15 the first item that you addressed related to the 16 office portion. I'll tell you, I was organizing my 17 notes as you got up and running. So I apologize for 18 not being able to keep up with your efficiency. 19 MR. FISHKIND: Mr. War neck key, who is a 20 person I know and I respect. Mr. W study says that 21 the office rents in Lincoln Road between 2011, 2012 22 went up between 1.5 percent and 3.5 percent per 23 year. So I went and made a comparison of that to 24 other office rents in downtown Miami and in 25 Miami-Dade County. And the comparison to downtown, 121 1 I think is the most -- is the best. In downtown 2 Miami, according to Cushman & Wakefield, over that 3 same period office rents in downtown Miami went down 4 by 7 percent per year and during that same period 5 according to Loop Net office rents went down by 10 6 percent per year. So it is clear that Lincoln Road 7 out performed office rents in a reasonable 8 comparable, which I think would demonstrate or give 9 you comfort that there is reason to believe that 10 there will be a special benefit to office. 11 COMMISSIONER KEON: Do we know? Frank, when 12 you look at those rates for office rents across 13 Miami or the other places that you're talking about 14 in comparing them to Lincoln Road, are we looking at 15 the same class of office space? Are we looking at 16 the same type of office space? Are we looking at 17 them comparable type rates? Are we looking at rates 18 in a comparable community? Are we looking at rates 19 in a comparable area? 20 MR. FISHKIND: I couldn't speak to whether they 21 are comparable in terms of class or office or 22 whether they're triple net. I want to be clear. 23 COMMISSIONER KEON: I find that -- that 24 comparison of rates between what was on Lincoln Road 25 and what was in, you know, downtown Miami, when you 122 1 look at the spectrum of office space in downtown 2 Miami, can be very eschewed. And I think that's 3 such a large place and Lincoln Road is a very small 4 area you're talking about. So I don't think they 5 are comparable either. I mean, I would like to know 6 what the office rates are from year to year, you 7 know, compared to the retail rates or whatever on 8 Lincoln Road to tell me, you know, is there some 9 value related to the office rates that we see, you 10 know, exponential. So I mean, I would have more 11 interest in looking at that. 12 MR. FISHKIND: That's very fair. I'm only 13 suggesting that -- that, hey, without that study I 14 would testify to you, I believe there is a special 15 benefit to office. I believe also that the office 16 use is not set and it can change to other uses. 17 But more importantly, I think generally 18 speaking, office rents in the United States and in 19 South Florida were declining between 2011 and 2012. 20 That, I could tell you with certainty, every class 21 of office. The fact that Lincoln Road went up I 22 think is interesting. I think that it gives some 23 comfort that there would be a special benefit, but 24 it's certainly not dispositive. 25 VICE MAYOR KERDYK: : If I can drill down 123 1 farther into the Coral Gables market. In those 2 years office rates did go down. Occupancy went down 3 and it was a much softer market. Things have 4 improved substantially over the last year or so, but 5 at that point, things did soften up quite a bit. 6 MAYOR CASON: Any questions? 7 COMMISSIONER QUESADA: Yeah. I was going to 8 ask Leonard if you can jump on Coast Star, pull 9 those numbers for us from Coast Star which I think 10 is generally accepted in the industry to give us a 11 better idea. 12 I know this might take a bit and -- but in the 13 meantime, a few other questions. The letter that I 14 had -- I had Linnet bring over to you, I marked off 15 some questions, some thoughts that I had. I'm 16 looking at the letter from Jeff Mandler with 17 yesterday's date related to the Colonnade Hotel. 18 You know, they state that -- they discuss a number 19 of items that we've already addressed that we don't 20 have to go through all of these points that I've 21 highlighted. It talks about no additional benefits 22 and they talk about the fact that a significant 23 portion of the streetscape project budget is 24 allocated to roadway and drainage repairs and 25 electrical lighting. And the implication is before 124 1 deferred maintenance issues. I know -- actually, I 2 know we haven't really addressed the deferred 3 maintenance items today. 4 MR. FISHKIND: Actually, we did. I believe 5 that the analysis that staff did, that Cindy 6 presented to you, if all of the maintenance went on 7 the city side and if the enhancement went on the 8 city side, it's still -- the 50/50 will still be 9 even better. And as Heather told you last time this 10 issue came up, you could specially assess for those 11 maintenance issues even if they were maintenance 12 issues. Now the staff disputes that, whether they 13 were deferred maintenance, but that argument doesn't 14 compromise your assessment of the building. 15 MAYOR CASON: Let me ask one thing. Some of 16 the questions, like drainage, logically you wouldn't 17 do it if you were getting ready -- hopefully getting 18 the funds in what we're doing today to be able to 19 start the streetscape where you have to do it all 20 again. The reason for -- if you want to call it 21 deferred maintenance, a lot of it is because we 22 didn't have the funds and we didn't have the 23 consensus to move forward on it. So I don't buy the 24 deferred maintenance argument. 25 COMMISSIONER QUESADA: Another point right now, 125 1 on the second page, the last full paragraph, and you 2 don't have to go to the page, I'll just tell you 3 what it is. Two studies that were cited by you when 4 discussing the benefits as retail properties on the 5 Mile, the studies that you said were for single 6 families homes. 7 MR. FISHKIND: Yes. Relative to trees only. I 8 cited three sources of authority. One was the study 9 relative to the trees. My opinion is if there's 10 significant special benefit conferred on 11 residential, it would be the same kind of special 12 benefit conferred on commercial. It's not logical 13 to believe that only residential would benefit from 14 landscape. If that was the case, then we would 15 never landscape our commercial project, but we 16 lushly landscape our commercial projects. 17 But that aside I also cited the CRA study which 18 was a compendium of seven studies of CRAS in Broward 19 County. So I think it's pretty close geographically 20 that demonstrate tremendous special benefits of 21 increased market value flowing from these kinds of 22 projects. 23 And the third piece of evidence is the logical 24 relationship when is -- which is really the only 25 threshold you have to meet, even if there is a 126 1 logical relationship between the streetscape project 2 and improved market values. Well, and use and 3 enjoyment. I think that's a fairly low hurdle for 4 you to be able to jump over. 5 COMMISSIONER QUESADA: I'm sorry, just one 6 moment. 7 THE WITNESS: When I'm done with your questions 8 I do have to leave. I have another command 9 performance in Naples today so... 10 COMMISSIONER LAGO: Perfect. 11 CITY MANAGER OLAZABAL: One more question. The 12 other thing that I wanted to ask is when you go to 13 the second, third floor of either office or 14 residential is the frontage component included in 15 the assessment or? 16 MR. FISHKIND: Well, for 10 Aragon, those 17 residential units are not on the frontage so there 18 is no frontage include. 19 For the ones that are on the office, yes. When 20 you go up, there's no differential between heights 21 in terms of the amount of the assessment we've 22 allocated. And I do not believe there's any 23 reduction in the benefit as you go up the floors. 24 MAYOR CASON: Maybe I'm missing something, but 25 an office building is usually owned by one person or 127 1 a company; right? Your office is on the third floor 2 is not owned by you so you can't say, well, you know 3 I'm -- I mean, the owner of the building is the 4 person that is going to get the improvements from -- 5 from the totality of the improvements and so that's 6 a special benefit for the whole building no matter 7 what floor. 8 MR. FISHKIND: In this case, that's absolutely 9 true, true, Mr. Mayor, because they're not 10 condominiumized offices. 11 CITY ATTORNEY LEEN: Mr. Mayor if I could -- 12 ultimately my office obviously takes no position on 13 policy matters, but I do need to make sure that this 14 is legal, everything that happens. So I now that 15 you've heard everything, could you just in your 16 professional judgment give your opinion as to the 17 assessment districts and whether you continue to 18 believe that they are not arbitrary and can you talk 19 about that a little bit? 20 MR. FISHKIND: Yeah. Just very briefly to sum 21 up. It is my opinion as one that develops real 22 estate and is recognized as an expert in special 23 assessments, these streetscape projects can 24 reasonably create special benefits to the properties 25 being assessed in excess of the costs, especially in 128 1 light of the subsidy the city is providing. 2 And secondly, that the methodology that we have 3 suggested to you apportions the benefits in a 4 reasonably equitable fashion. 5 MAYOR CASON: All right. 6 COMMISSIONER KEON: I'm sorry. If we were to 7 remove -- let's say you were to remove the 8 residential component or if there's another 9 component that would be removed. What happens to -- 10 to our assessment with regards -- 11 MR. FISHKIND: I think you would be 12 compromising the basis for your assessments at this 13 stage in the process. 14 We discussed the special benefits when you made 15 the initial finding of special benefit. So you 16 would be overturning your prior decision relative to 17 that issue. 18 But that aside, I can certainly see it's your 19 prerogative to do so. I think, to me, the issue 20 with respect to 10 Aragon, which is -- to make it 21 concrete, I would be troubled by removing them. I 22 understand their concerns, but I do believe they do 23 get a special benefit. I think there's a logical 24 relationship between that streetscape project and 25 the articulation and location of those condominium 129 1 units. 2 COMMISSIONER KEON: I'm having trouble seeing 3 it. So I'm -- that's why I'm asking you. I don't 4 see that they have any more -- when they front on 5 Aragon any more than the building that is catty 6 corner to them or any of the residential buildings. 7 You know, if they side on any normal street, you 8 know, in the city, you know, would have a five-foot 9 sidewalk with some -- the reason that we are doing 10 the design that is being done and the change to the 11 parking and the change to the widths of the 12 sidewalks, and the change to the lighting and the 13 change to the landscape is really driven by and for 14 the benefit primarily of the retail market. That's 15 who it's for. It's for the retail market. That's 16 who it was -- it came. It germinated from there. 17 The city joined them in that and I, myself, have 18 always looked at it as a particular benefit to the 19 retail market, because that for the life of the 20 city, that street has been identified as our main 21 street and a retail center. And, you know, so the 22 reason for doing this is to improve the -- to 23 improve the retail market and their, you know, 24 ability to -- Merrick Park and the retail that's 25 coming with the new Urban Village so that they can 130 1 remain competitive and invests in new stores and 2 maybe they will attract, you know, maybe attract 3 different stores. I know that -- I've heard many 4 people talk about wanting an Apple store, you know, 5 downtown, wanting an Apple store on the Mile. You'd 6 have to have a lot of pedestrian traffic to do that. 7 So I can understand that from a retail perspective. 8 I even think that the hotel, you know, will 9 benefit from being -- from it's proximity to Miracle 10 Mile instead of abutting properties it doesn't cost, 11 you know, the footage that the -- that a property on 12 the Mile would have. But so much and the cost of 13 what is being done is being done for the retail 14 market. It's to allow for our city. It increases 15 the foot traffic on the Mile which, you know, it's 16 the retailers. I mean, for the people that live on 17 10 Aragon whether you have, you know, a ten-foot 18 sidewalk or a six-foot sidewalk, where you live on 19 Aragon I don't see the benefit. I really don't -- 20 you know, they don't have the ability to enjoy that 21 benefit on a regular basis or ongoing. Where they 22 enjoy the benefit is when they sell their property. 23 So, you know, you continue to pay into an assessment 24 that you don't get the benefit of until you sell 25 your property. 131 1 Whereas, a retailer does. A retailer can raise 2 the rent. They can change the product, particularly 3 restaurants, can have more outdoor seating. 4 There's -- so I see all of those things for everyone 5 else. I just don't see it for the residential 6 community. 7 MAYOR CASON: I would say -- 8 MR. FISHKIND: Would you like me to respond? 9 COMMISSIONER KEON: Yes. 10 MAYOR CASON: Go ahead. 11 MR. FISHKIND: I will just simply say for you 12 to consider a few things. Grant the argument that 13 the original moving force in this streetscape was to 14 improve the retail. The retail's paying the vast 15 majority of the assessment cost. You do, I believe, 16 have -- if you want to call it that, an unintended 17 benefit, an unintended cost and that does reflect on 18 the residential. And you and I can reasonably 19 disagree about that, but I think if you wanted to 20 make a finding that the residential gets a special 21 benefit, I think there is reasonable basis to do so. 22 COMMISSIONER KEON: Is there a reasonable basis 23 to find that they don't? 24 MR. FISHKIND: I do not believe so in the 25 current -- just given the current location, the 132 1 configuration. If they weren't looking directly 2 down at the project, if they weren't connected to 3 the project -- 4 COMMISSIONER KEON: Does every apartment in 5 that building look on Miracle Mile? 6 MR. FISHKIND no, certainly not. But the other 7 point is they're connected with a breezeway right to 8 the improvements and other properties, so I think 9 there is -- 10 COMMISSIONER KEON: It's not a private 11 breezeway. It's a public breezeway. Anybody can 12 walk through it. 13 MR. FISHKIND: Correct. But they can walk to 14 it and other buildings cannot. So I think there is 15 a reasonable distinction, if you wish to find that. 16 COMMISSIONER KEON: Does all of the -- the 17 building along Merrick Way that can walk through. 18 Also, I really think for this one for the Mile, I do 19 have a problem with the residential component. 20 MR. FISHKIND: That's why you have to make the 21 decision. I can only give you my best information. 22 MAYOR CASON: Commissioner, the only point I 23 want to make, 50 percent of those apartments, those 24 condos are rented. The owners are going to be 25 able -- this is a business -- be able to raise the 133 1 rent. They're going to special benefit to the 2 extent -- I can't just see how you could say being 3 that close to Miracle Mile and what we plan to do 4 are really making this spectacular downtown in one 5 way or another will not increase the value of your 6 property. 7 Now, some people may not see that until they 8 sell, but 50 percent of those are rented and 9 what they're going to be doing is raising the rent 10 and they're going to see it right away. 11 CITY ATTORNEY LEEN: Mr. Mayor, just in 12 response to Commissioner Keon, the one piece of 13 legal advice I would give here is we have a cohesive 14 proposal the city and for it to be upheld to -- 15 ultimately if it's challenged, to see if whether 16 it's arbitrary or not. So Hank Fishkind, he's the 17 expert. He's provided his testimony. You do not 18 have to accept it. You also have another expert. 19 If you do not want to -- however, what I would say 20 is if you are only going to accept part of it or a 21 piece of it, it's probably better to get a new study 22 ultimately in order to have this be upheld. 23 Now, one other thing you can do instead -- 24 COMMISSIONER LAGO: Well, what are we talking 25 about? What's the time frame? 134 1 CITY ATTORNEY LEEN: Hear me out. The thing 2 you can do instead is you could accept the study. 3 You have the legal option to accept and you can 4 determine whether to pay down the special benefit. 5 So, for example, 10 Aragon he's made a finding 6 has a special benefit. The city can elect to pay 7 part of that and I would do it that way. I wouldn't 8 say the owner has less of a special benefit. But 9 then you have to make a finding that that serves a 10 public purpose. Perhaps the public purpose would be 11 the fact that individuals live there. It's their 12 homestead and maybe it effects them in a different 13 way because they live there and that -- can't 14 necessarily move right away. I don't know. There's 15 different ways. 16 COMMISSIONER LAGO: Do you have the total 17 amount in regards to what 10 Aragon is responsible 18 for in regards to the financing? What is their 19 portion? 20 CITY ATTORNEY LEEN: I know -- I looked at the 21 homestead. 22 MR. FISHKIND: We can get you the number. It's 23 a modest amount. 24 CITY ATTORNEY LEEN: One other thing I wanted 25 to mention, though, the other thing you can do and 135 1 one thing we've talked with staff and I know 2 Heather's is put together thinking we might get 3 these questions. We could do instead of doing that 4 we could put together a hardship-type program, 5 particularly for residents, although you can apply 6 this broadly or as narrowly as you want. Whereby -- 7 if someone, for example, has a homestead property 8 and they meet -- that would only test or maybe a 9 means test. 10 MAYOR CASON: How many homesteaded properties? 11 CITY MANAGER OLAZABAL: 39 from my 12 understanding. 13 COMMISSIONER LAGO: Total units? 14 MR. FISHKIND: 189. 15 CITY ATTORNEY LEEN: However you want -- there 16 is the possibility -- or the original ordinance that 17 creates the special assessments which Heather helped 18 draft, they contemplate a hardship type provision 19 and I know Heather's put one together for us that 20 could be used. 21 All I'm saying is you don't have to did any of 22 those things. You do have a cohesive study 23 presented to that, in my opinion, is legal. 24 Heather's opinion is legal. You don't have to do 25 any of that, but if you choose to do something, what 136 1 I would not do, I do not recommend it is to say, 2 well, we're going to find less of a special benefit 3 and we're going to proceed. So we're going to 4 change the study in some way where you don't have 5 another study supporting that because ultimately 6 that would subject the whole thing to challenge. 7 Instead you should -- my recommendation would be, if 8 you're comfortable, to accept the study, but then 9 taking either the one paydown part of the special 10 benefit by finding a public purpose and you can 11 determine how much. 12 Or two, do some hardship provision, have us 13 come back, but approve this today. Those are the 14 two types of -- 15 COMMISSIONER KEON: I think there is a public 16 benefit to having residential that close to the 17 Mile. I mean that -- it is only as a result of the 18 increased in the residential community downtown that 19 has -- and we are very working hard to increase that 20 residential community downtown if we want our city 21 or downtown to be vibrant. 22 So I mean, I do believe that there is -- there 23 is a benefit to having that downtown. 24 MR. FISHKIND: Certainly you can. As your 25 attorney has said, proceed in one or both of those 137 1 ways. I'd agree. 2 COMMISSIONER LAGO: If we don't accept -- if 3 we dont accept -- 4 COMMISSIONER KEON: What is the total 5 contribution of 10 Aragon to be from the 6 residential -- 7 MAYOR CARSON: Isn't it 107 -- 8 CITY MANAGER OLAZABAL: Total of the -- 9 COMMISSIONER KEON: Including residential. 10 CITY MANAGER OLAZABAL: Including residential 11 it's 788,000. 12 COMMISSIONER LAGO: Yearly? 13 CITY MANAGER OLAZABAL: $69,000. 14 MAYOR CASON: Seems to me what the attorney was 15 suggesting was -- nobody is going to be charged 16 anything for two years. I'd like to see us move 17 forward with this and look if there's some 18 hardship -- I mean, for homesteaded properties if 19 there's hardship, we could find ways to deal with 20 that, either from grants from the outside or maybe 21 some other sources of income maybe we're discussing 22 later on. But I don't want to see us defer this. I 23 think we need to move forward but I think we can 24 handle any special cases, hardship in a different 25 way. 138 1 COMMISSIONER LAGO: I agree with you. 2 MR. FISHKIND: There's one other issue that Mr. 3 Keen asked me to summarize quickly for you. As you 4 know we're very open to appeals and we did receive 5 three appeals we as staff support each of those. 6 Mr. Sands complained concerning the square 7 footage of his building relative to the square 8 footage of his lot. It's a small -- small amount, 9 but he's correct and we will support that. 10 We had -- I'm trying to remember the property 11 with the big parking garage which we analyzed very 12 carefully. We appreciated the information the 13 attorney provided. We agree we are treating it 14 differently than the other buildings that didn't 15 have parking garages embedded in their square 16 footage. So when that was brought to our attention 17 we would also agree that needs to be modified. 18 And there's a third property that had the same 19 kind of issues with the square footage. So in each 20 of those cases we agree and would support those 21 modifications for your consideration. 22 MAYOR CASON: Let's -- there's a number of 23 people that haven't spoken. Please, if you can try 24 to keep it as to one minute and particularly to 25 something we've haven't heard. We've heard the main 139 1 arguments. Let me run -- 2 MR. MANDLER: May we have an opportunity to 3 respond to that at some point? 4 MAYOR CASON: Let's see. He's leaving now so 5 if we're going back and forth. 6 MR. MANDLER: Well, he made some comments that 7 we'd like to address. 8 MAYOR CASON: Let's address the individuals. 9 Bob Gallagher. 10 COMMISSIONER QUESADA: Hold on a second. If 11 Dr. Fishkind can stick around a little longer, it 12 might make more sense. 13 CITY MANAGER OLAZABAL: Let me ask him. 14 MAYOR CASON: You better get him. 15 COMMISSIONER QUESADA: Because if he can stay, 16 it will be helpful for all of us than to go back and 17 forth. 18 MAYOR CASON: Go ahead. 19 COMMISSIONER QUESADA: I hate to push back the 20 speakers, because of the timing consideration. 21 COMMISSIONER KEON: Can he speak? 22 Mr. Gallagher, you can go ahead and speak. 23 MR. GALLAGHER: Mr. Mayor, Mr. Vice Mayor, 24 commissioners, my name is Robert E. Gallagher, Jr. 25 I live at 1137 Campusano Avenue, Coral Gables. I 140 1 have family that owns the property at 245, 247 2 Miracle Mile. 3 Today we've heard a lot of discussion about 4 properties that will receive general and special 5 benefits. This is a blowup of the map that was 6 published for the notice of this meeting today. 7 In my quick reading of this, I believe there's 8 three properties that clearly received special 9 benefits that are excluded. One is Pollo Tropical, 10 is highlighted in yellow, also adjacent, yellow 55 11 Merrick way, and then in orange is the consulate. 12 While the consulate is exempt from ad valorem taxes 13 it is certainly not exempt ad valorem. ** I would 14 urge you to review those and include those in the 15 old district. 16 The second which has not been discussed by the 17 city is the tax roll that is going to be utilized 18 for establishing the assessment. It's my 19 understanding presently it is the 2013 tax roll. 20 This is being discussed now towards the end of 2014. 21 There's been improvements to properties since 2013. 22 And I think the 2014 tax roll is the appropriate 23 valuation that should be used for purposes of this 24 assessment. 25 I'd also like to comment on what I believe is 141 1 lack of adequate notice. There's been discussion 2 today about notice having been given to the property 3 owners. If something is happening at the University 4 of Miami, where we live very close to, we get a get 5 a first-class letter from the city. If something is 6 happening within a prescribed business of our 7 property on Miracle Mile, we get a first-class 8 letter from the city advising us where the plans can 9 be located to come in. It was not until this 10 meeting was published that we had any notice from 11 the city. 12 Prior to that, I have attended the workshop at 13 the Miracle Theatre and also the workshop in this 14 commission in July. We never had any advanced 15 notice. So I really question whether or not the 16 owners received adequate notice. 17 There's also been discussion as to the 18 assessments. We've used other locations. It's been 19 debated, Coconut Grove, 33 percent, Flagler Street 20 7.6 percent. But one thing that's been clear 21 throughout this is not only the proposed assessment 22 here is higher, but also that as a result of this 23 streetscape improvement, property values are going 24 to go up. And what happens when property values go 25 up? Real estate taxes go up. So that means 142 1 ourselves ad property owners, our tenants are 2 potentially going to pay, not only increased 3 property taxes, but also the cost of this 4 assessment. I urge you to consider those four 5 points as you deliberate this and thank you for your 6 time. 7 MAYOR CASON: Okay. Robert Shapiro. 8 COMMISSIONER QUESADA: Sir, if we do this 9 and -- Mr. Mayor, indulge Dr. Fishkind up her and 10 Mr. Mandler, Ms. Robinson, either one of you or 11 both. 12 MR. MANDLER: First of all -- 13 COMMISSIONER QUESADA: Actually, Dr. Fishkind, 14 just to be clear, about what time do you have to get 15 out of here? 16 MR. FISHKIND: Now. 17 COMMISSIONER QUESADA: I will ask Mr. Mandler, 18 I will ask you to direct any immediate points. 19 MR. MANDLER: I want to deal with one thing. 20 The statute, Florida Statute does allow us as the 21 board it specifically states, the local governing 22 board may adjust the assessment or the application 23 of the assessment to any affected property based on 24 the benefit which the board will provide or has 25 provided to the property with the revenue generated 143 1 by the assessment. You may act today as a board to 2 address specific properties. It will not invalidate 3 your entire board. That is your authority under 4 Florida law and that is not only your authority, but 5 that's your obligation today. 6 CITY ATTORNEY LEEN: So I don't want agree. I 7 just want that stated for the record. What you can 8 do on individual properties, you can certainly 9 adjust them if you believe it's warranted, but to do 10 a wholesale adjustment of the entire theory behind 11 the assessment, when case law is extremely clear -- 12 and there was a recent case from the Florida Supreme 13 Court saying it has to be supported by competent 14 substantial evidence. It cannot be arbitrary. So I 15 mean, you cannot do that without redoing -- 16 MR. MANDLER: I want to make this clear. What 17 we're asking is not that the entire study be redone. 18 We're saying that certain properties receive less 19 benefits. I don't speak for the residential, 20 whether it's the residential, but I do speak for 21 these office components including Mr. 22 Lopez-Cantera's building and their benefits received 23 are not equal to the tax that's a paid. You as the 24 board may deal with those two or three specific 25 cases and that's within your discretion today. I 144 1 didn't think it was clear and I thought this board 2 when I was sitting here watching your faces was 3 under the impression that you cannot then make 4 adjustments to individual properties whether it's 5 the residents or whether it's the offices. It's 6 your discretion, sir. 7 CITY ATTORNEY LEEN: You may -- 8 COMMISSIONER LAGO: Trust me, I'm far from 9 confused, but you know, when my legal counsel sits 10 to the right of me tells me that I need to be very 11 careful regards to a decision that's been waiting in 12 the wings for 12 years, I'm going to be very prudent 13 when I make a decision. The last thing I want to do 14 is validate something and have to sit back another 15 six month based on having to redo a study. So I 16 think that's most of the commission's concern here. 17 CITY ATTORNEY LEEN: Commissioner, just to add 18 that to that, yes, on an individual property that's 19 what you're tasked. You can adjust it, but it 20 should be for a rational basis there should be a 21 reason based on a study. For some reason the study 22 didn't address that one property because of some 23 condition that exists that's been put in the record, 24 then it still -- then it's not arbitrary. What 25 you're doing is based on reason. 145 1 The concern I have, if you take a lot of 2 properties out and you say we don't agree with the 3 rational of the study, if that was your 4 determination at that point basically -- because 5 there is one other expert testimony that is here, 6 but that was somewhat limited to a specific issue. 7 If you are going to change the formula, then really 8 you need a new study. We have to -- we have to 9 start over and do that again. And we've already 10 given opinions that we believe that the study is 11 cohesive and would survive that sort of test. 12 So what my recommendation to you would be to 13 look at individual studies. If you want to do 14 something broader, again, look at the issue if 15 there's a public purpose, reducing the -- maybe 16 paying part of the special benefit as the city if 17 there is a public protest or doing a hardship 18 program. Those sort of things would, in my opinion, 19 survive judicial scrutiny. 20 MAYOR CASON: Any other issues? 21 MR. MANDLER: Yes. We'd like to address the 22 Lincoln Road issue, sir. And I'd like Mr. Waronker 23 to please respond. 24 MR. WARONKER: Just so we're clear, that was 25 not in our report, my report. It was not 2000 to 146 1 2012 difference. It was an analysis and let me 2 repeat myself, of the rent rolls we had back in the 3 mid '90s to the late '90s. Actually, beginning 2000 4 of the same building, 13, 14, 15 years earlier. So 5 the 2 percent is a compounded rate over that period 6 of time versus the 10.3 to 13 percent is a 7 compounded rate over time for 13 years. The point 8 being is if -- if the Lincoln Road office is good, 9 bad or different, what you're seeing is an increase 10 of office rent of 2 percent a year and increase in 11 retail. That's a 10 to 13 percent. Principle of 72 12 divided by 13 into 72 is doubled every six years 13 roughly, where you're not having that in the office. 14 The second quick point is, if you have office 15 space renting for $30 a square foot and your 16 expenses are 10, you're netting 20. If you have 17 retail space renting for a hundred bucks a square 18 foot, it's triple net. It's a hundred bucks. Your 19 value cannot possibly be the same for upper floor 20 space the same as retail space. If anybody wants to 21 make that trade for me, please let me know. It's a 22 complete difference. 23 So what I'm arguing is you cannot put an 24 assessment of the same price per square foot for 25 retail versus upper floor space because they're two 147 1 different things. If your rent return is 20 versus 2 a hundred, that's a big difference. So as long as 3 we're clear on that. 4 MR. FISHKIND: Yes, as I said earlier, I'm not 5 disputing that the rental rate for retail is 6 different than office. 7 What I'm suggesting, though, is that the 8 ability to have increased market value is 9 appropriate. And given your 50 percent subsidy, and 10 the very small amount of allocated assessment, I'm 11 not concerned about those small differences in the 12 equity of the allocations across the uses. And 13 remember, also that the uses are not fixed forever, 14 that the uses can change. So for all of those 15 reasons. 16 We did look at the utility of making those 17 kinds of differentiations by upper real estate and 18 by upper and lower floors. In our fact situation 19 that was not appropriate or necessary. 20 MAYOR CASON: Other points? 21 MR. MANDLER: Let me just say, sir. Mr. 22 Lopez-Cantera's building, even with the change he 23 made is paying almost 23 percent of the tax. So to 24 say you're not shifting it to the office building 25 sector is not true. You are having one taxpayer who 148 1 is the office component, pay 20-something percent. 2 I'll get the exact numbers because I know it was 27, 3 but it only dropped down by a few dollars by the 4 change in the square feet. So that is not a correct 5 statement. Most of the burden in the Giralda 6 special assessment is being borne by one taxpayer. 7 And the testimony we presented today is that they 8 receive a less of a benefit. 9 Mr. Kerdyk, I agree with you. Coral Gables is 10 different than Miami Beach, but all we're trying to 11 measure is the effect of the special improvement 12 district on the rental rates. And so it's a 13 constant. You're just dealing with the constant 14 whether it's the same. It only went up X percent 15 whereas retail went up, you know, a far significant 16 number. 17 So what we're suggesting is there would be a 18 significant difference. I believe you wanted to 19 make another point. 20 MR. WARONKER: As we've all been saying, I 21 think Commissioner Keon said the same thing. This 22 is oriented to retail. It is clear that is the 23 driving force, in my opinion. That being said, they 24 should have the burden of the amount. We're not 25 saying there should be nothing for the upper floors. 149 1 There should be a difference attributable to the 2 value that the owner would have for the upper floors 3 versus the retail space. It's simply stated like 4 that. 5 COMMISSIONER KERDYK: Could you explain exactly 6 or tell me the numbers for the 150 Alhambra Circle 7 building where -- 8 MR. FISHKIND: It's about 40 cents a square 9 foot. Yes, it is the largest taxpayer because it's 10 the biggest building. If we're going to allocate 11 special benefit based on the square -- it's a 12 nonfronting building -- based on the square footage 13 and the value, it just happens to be the biggest 14 building with the most value. So of course, it pays 15 the most, but that, I don't think is the appropriate 16 metric. The metric is whether there's a special 17 benefit and whether it is equitably proportioned. 18 And i believe both of those things could be true 19 despite the clear other facts that these gentlemen 20 have correctly presented. I think in the overall 21 context what we're dealing with in light of the 22 50 percent subsidy, these differences that exist are 23 not so great, in my opinion, as to make this 24 confiscatory or arbitrary. It's none of those 25 things. Reasonable people can and will disagree 150 1 about how assessments should be made. 2 MAYOR CASON: Anybody else have a question? Do 3 you have any other questions or we can be going back 4 and forth for days. 5 MR. MANDLER: I don't want to go back and 6 forth. But other districts have treated office 7 differently, you know. 8 And let me just say one last point on this 9 because I know Mr. Fishkind has to leave. The 10 studies that he cited from the CRAs are all on 11 retail studies. Take the time, Commissioners, to 12 read them. I did. They're all about retail and it 13 does increase the value of retail and no one here is 14 denying that fact, but we're dealing with are the 15 nonretail uses and you as a legislative body have 16 the ability and obligation -- 17 COMMISSIONER LAGO: But didn't we discuss this, 18 the fact there's been an increase of value in 19 regards to -- to commercial? Weren't we discussing 20 that before? 21 In regards to Lincoln Road? We talked to Dr. 22 Fishkind about that. You're harping about retail 23 and retail and retail. I mean, we just discussed 24 maybe 20 minutes ago in reference to the fact in 25 Lincoln Road there's been an increase in reference 151 1 to office space so... 2 COMMISSIONER KEON: I think what he said was 3 that the increase in the rate for the number he used 4 was a 13, 14-year compounding rate. So it was at a 5 2 percent a year comparing it to what the retail is 6 and that people -- the other issue that was raised 7 is that in a lot of properties that were purchased 8 or sale of properties on Lincoln Road were driven by 9 the retail component and not the office component. 10 I mean, what is the biggest building on Lincoln 11 Road? How high are they? 12 MR. MANDLER: There are very big buildings, 13 ma'am. There is the 1111 Lincoln Road which is a 14 hundred percent office. They actually got rid of 15 the ground floor. 16 There is also the 407 building, which is high- 17 rise 15-story and then there's also across the 18 street a very large office building. I don't 19 remember owned by Mr. Cehas, 420 Lincoln Road. So 20 they anchored both ends of the Lincoln Road. And by 21 the way, the city treated them different. And it's 22 funny to me -- not ha ha funny, but curious funny, 23 that the same studies he's citing are the CRAs, the 24 CRA, the CRA. They find a growth in retail values 25 and then he's pooping Mr. Fishkind that Lincoln Road 152 1 was a CRA. 2 Now, it maybe a CRA because historically and -- 3 excuse me -- it was a blighted zone. There is no 4 blighted on Lincoln Road in 1994. There certainly 5 wasn't any in 2010. I would find that hard to 6 believe. It's a historic designation that was 7 applied to that property. 8 MAYOR CASON: Anything else you want to say on 9 that? 10 MR. MANDLER: No, sir. 11 Thank you, sir. 12 VICE MAYOR KERDYK: : All right. Robert 13 Shapiro, is he here? Please try to keep it short. 14 Something we haven't. 15 MR. SHAPIRO: Gentleman, thank you. I think my 16 problem has been taken care of. There was an error 17 by the taxes -- can you hear me? 18 Is that better? 19 My name is Robert Shapiro. I'm one of the 20 managing trustee of the properties owned by Trust 21 under the will of Mildred Brown, LLC. We had 22 appealed through the finance director's office 23 because the taxes assess data on one of our 24 buildings, the 300 Miracle Mile, was in error. We 25 had been trying to get the tax assessor to correct 153 1 it. I prepared surveys and except of our will, my 2 letter and proposed drawing by CPK that removed the 3 second floor. Mr. Fishkind has proposed that that 4 has -- the property has been physically examined by 5 the finance department and they agreed in the 6 reduction. I didn't know after that what I should 7 do unless -- 8 CITY ATTORNEY LEEN: Mr. Shapiro, the committee 9 has agreed with your opinion. 10 MR. SHAPIRO: I was advised you had to approve 11 it. I just found out. 12 COMMISSIONER LAGO: Thank you. 13 MAYOR CASON: Dorothy Diaz. 14 They're not here, both of those people. 15 James Hinrichsen. 16 I was going to give you Dorothy Diaz. 17 Barbara, let me see. Gus -- he's not here? 18 Thomas Dixon has already spoken. 19 MR. DIXON: I make a comment that would help 20 you out hopefully? 21 In the Worth Avenue improvement district, they 22 initial -- it included residential and they had a 23 provision that said Section 3 ever the initial 24 assessment resolution is hereby amended as follows: 25 To add a new paragraph concerning exemptions. No 154 1 assessment shall be imposed upon a partial of the 2 residential property, the municipal property or 3 club. Any shortfall in the expected assessment 4 proceeds due to any reduction or exemption from 5 payment of the assessment required by law or 6 authorized by the town and council shall be 7 supplemented by any legally available funds or 8 combination of such funds and shall not be paid for 9 the proceeds or funds derived from the assessment. 10 This is important now, Mr. Attorney. In the event a 11 court of competent jurisdiction determines any 12 exemption or reduction by the town council is 13 improper or otherwise adversely effected the 14 validity of the assessment imposed for this fiscal 15 year, the sole and exclusive remedy shall be the 16 imposition of an assessment upon each affected tax 17 parcel in the amount of the assessment that would 18 have been otherwise imposed, say for such reduction 19 or exemption afforded to such tax parcel by the town 20 council. I believe with that provision they can 21 say, we are going to exempt residential properties 22 and if a court of competent jurisdiction says we 23 should impose it, they can reimpose it. Thank you. 24 MAYOR CASON: Thank you. James. 25 CITY ATTORNEY LEEN: Mr. Mayor, my own -- my 155 1 own view of that is that we should always endeavor 2 to try to do what we think what a court of competent 3 jurisdiction would decide. That sort of provision 4 is sort, like, the severability provision and when I 5 give you my legal opinion, I'm still going to give 6 you my best opinion. You know, we can still include 7 that, but I do think a court will view as suspect 8 the entire assessment if we start out carving out 9 portions of it without a good rational reason based 10 on Hank's recommendation. He's your expert. He's 11 provide -- provided the recommendation. If you want 12 to deviate from his opinion, unless there's another 13 expert opinion you're basing it on, I would go out 14 and get another expert opinion. That's ultimately 15 my recommendation. I'm not recommending that here. 16 But I'm saying, if you were going to reject his 17 recommendation, I would not proceed. 18 If instead, you're going to accept his 19 recommendation, I would do, again the two options 20 that I presented to you which I think are the better 21 way to proceed which is paying down the special 22 benefit, but finding a public purpose to do so in 23 whichever way you would like because you have a lot 24 of discretion there. 25 Or number two, doing a hardship resolution 156 1 asking us to bring it back and setting up a program 2 so people could ask for the city to bear their part 3 based on the hardship. 4 MS. FOGLIA: Thank you. I just want to clarify 5 one thing. I'm not disputing that language is in 6 there. I actually wrote that language because I did 7 the Worth Avenue project for the town of Palm Beach 8 as well. But the change that was made there was -- 9 these limited club properties. Residential was 10 always intended to be out. Worth Avenue is a very 11 different area. It's not a mixed area so much like 12 Miracle Mile is. It is a predominantly retail area 13 with just a tiny amount of residential. So 14 residential was always intended to be out by the 15 city. The mandatory language was only to add the 16 club. 17 MAYOR CASON: Thank you All right. Mr. James. 18 MR. HINRICHSEN: My name is James Hinrichsen. 19 My office is at 101 Mayorca. I must confess, it 20 isn't often that I actually feel sorry for elected 21 officials. Today is an exception. Watching you 22 struggle trying to make things right here, I feel 23 your pain. 24 I think that what you're dealing with at this 25 moment, what you're struggling with is actually the 157 1 tail end of a process that went seriously off the 2 rails, not in June when you delayed in acting till 3 today, not this year, but five years ago. And I 4 want to talk to you about how the fact is, I think 5 your viewed and others are victims of that process 6 going all of the rails. 7 The first thing by example that I want to you 8 give. This projects is pretty much Burton Hersh' 9 baby. We've been friends. We've had serious 10 discussions about this whole thing and I'm going to 11 start out by correcting the father of the baby. He 12 told me you that the first time this project was 13 presented to the city commission was in January of 14 2009. It's close, but not quite right. The first 15 time it was presented to the commission was on 16 November 18th of 2008, and that was less than two 17 weeks after David Ground resigned. We had an 18 interim city manager at that points ironically as 19 well. The commission did not approve, or in any way 20 endorse their proposal, other than to say it sounds 21 good to us. They had stuff study the matter, bring 22 it back with recommendations how best to proceed. 23 That happened the end of January two months later in 24 2009. 25 Now, Mr. Kerdyk probably remembers. He was on 158 1 the commission then. There was great urgency to 2 move this forward for two reasons: One is, even 3 though we didn't have a plan that had been accepted, 4 there was a slide they ought to put this on a list 5 for stimulus money. 6 The other thing was somehow people came to 7 believe that the $1.4 million the city already had 8 from the GOB money from the county was going to be 9 lost if they didn't spend it. Does that ring a 10 bell? Okay. So there was pressure to act. So even 11 though we had no plan, even though we hadn't 12 accepted any proposal, put it on the list for the 13 stimulus money. Why not? Well, in order to do 14 that, the commission ultimately voted $200,000 15 for -- it's now Scan Tech, to prepare the original 16 drawings and cost estimates. And that was done 17 primarily to support the application of the project 18 to pretend it was sort of ready as it was heading to 19 Washington to get them to pay for it. So when the 20 stimulus didn't come through, the project 21 disappeared. It went away. New management, new 22 manager was hired and we didn't hear anything about 23 it for two year. During that two years, I don't 24 remember that anything was done to involve or to 25 educate the public or anybody else in terms of this 159 1 project. 2 Now, in 2011 Richard Heeps gave a very 3 important presentation on this project, and he -- he 4 put forward a number of -- some important things 5 happened in that meeting. First, he strongly 6 endorsed the BID's project. He liked it. 7 The other thing that happened was -- this was 8 alluded to earlier -- the executive director of the 9 BID stated that the BID's board of directors had 10 passed a resolution that unqualified support, 11 unqualified support of the 50/50 split of the 12 project's cost between the city and the properties 13 that would receive a special benefit. Not that long 14 ago when I reminded Burton Hersh of this, he told me 15 he had no memory of it. He told me I must have been 16 mistaken. 17 So I took this recording of the meeting over to 18 his office and played it for him. I believe Cindy 19 has it in the package and transcript in the 20 materials that you were given for this meeting. So 21 that was an important development. 22 The third thing was that both Mayor Schelnick 23 and the city manager emphasized repeatedly that this 24 was just the beginning of a long process, the first 25 step in a long journey that would be many meetings, 160 1 many discussions with city boards and think tanks, 2 and during the next year, there would be 10 or 12 3 discussions on votes and design and finance and so 4 on by the city commission. 5 By the way, I have all of these things time 6 stamped, if you want to check them out, the quotes. 7 So what happened then? Project disappeared. 8 Disappeared. Went away for three years. Nothing 9 happened. For the past five and half years, the 10 city has done nothing to educate or otherwise 11 involve the public with regard to this project and 12 what it involves. Nothing. 13 Now, the BID has done some things and maybe 14 some of you have individually have done some things 15 that I don't know about, but the city has done 16 nothing. Now, it's one thing for the city not to 17 provide any information, it's another thing for the 18 city to put out bad information, incorrect 19 information, misleading information. That's exactly 20 what the city has done for nine years with respect 21 with the amount of parking that's going to be lost 22 on Miracle Mile. 23 MAYOR CASON: But that issue was for another -- 24 another time. We haven't discussed the project. 25 That is all to be decided. 161 1 I want you to focus on the financing. That's 2 what we're here for today, please. 3 MR. HINRICHSEN: Focus on the? I'm going to 4 get to that. 5 MAYOR CASON: Couple of more minutes, please. 6 MR. HINRICHSEN: All right. That's fine. This 7 commission among others, the city has repeatedly 8 reinforced this myth that 71 parking spaces were 9 going to be lost. Not true. The administration 10 been in possession of documents for five years that 11 shows half the parking on the Mile is going to be 12 lost. 13 Now, let's talk about the financing and what 14 this means. The city's parking department, your 15 parking department tells me that the value of a 16 parking space on the Mile is $70,000. If you're 17 going to eliminate 116 of them, be aware that you're 18 eliminating the value of parking -- parking spaces 19 at that are valued $8,120,000. That's the value. 20 For loss of half of those spaces translate into loss 21 net loss to the city for about $400,000 a year net 22 revenue. 23 In addition to that, to provide substitute, 24 because you can't provide replacement substitute 25 placement in a garage is going to cost you $28,000 a 162 1 piece. Those are your numbers. For 116 spaces, 2 that's $3.25 million. So the financing is something 3 that deserves -- the whole project, I think is fit 4 for financing, I think is something that deserves 5 much more debate, much more examination than what 6 it's getting here. I mean, /THRAOEU /-G guys come 7 up and do the right thing, the fair thing is painful 8 to watch. You shouldn't be in this position. This 9 project, financing, every bit of it went seriously 10 off the rails five years ago and you shouldn't have 11 to clean up the mess today. 12 Thank you. 13 MAYOR CASON: Thank you very much. 14 Is Abe Ng here? Abe Ng not here? 15 Michael Steffens. 16 MR. STEFFENS: Commissioners and Mayor, we've 17 heard a lot today from lot of lawyers and special 18 interests, but I came to speak to you as a longtime 19 resident of Coral Gables. As a resident of Coral 20 Gables, I'm very much in favor of the improvements 21 to Miracle Mile because the improvements to Miracle 22 Mile help subsidize my taxes and your taxes. So 23 anything that makes Miracle Mile perform better, 24 helps reduce my taxes in the long run. 25 And I think the city has enough mechanisms in 163 1 its hands to be able to completely fund this project 2 without going to anybody to have additional funds. 3 And the taxes that are produced by Miracle Mile will 4 offset the residential taxes as they have 5 traditionally, but the better it performs, the more 6 it will reduce my taxes. 7 So I just wanted to offer you an alternative 8 that would make all of the lawyers and all of the 9 special interests in the room happy and all of the 10 residents in Coral Gables, because their taxes will 11 be reduced. 12 Thank you. 13 MAYOR CASON: Thank you. 14 Enrique Lopez. 15 MR. LOPEZ: Good afternoon. Enrique Lopez here 16 in representation of ** 98 Miracle Mile. First of 17 all, I want to thank you. Good afternoon, Mayor, 18 Commissioners, City Manager City Attorney city 19 clerk. There's some good news in the fact that 20 everybody concurs that both Miracle Mile we 21 referenced it as the early Mile sometimes because of 22 its appearance and Giralda restaurant row definitely 23 needs some sprucing up. I concur with the gentleman 24 who basically says this has laid very quiet, and not 25 under your watch. I mean, it was just the process 164 1 itself. I think we are seeing that we have some 2 very well-meaning people in the organization trying 3 to make the project happen, but I think we need to 4 ensure that we do it responsibly and that is the one 5 area I believe we have not, I say "we" as a whole. 6 Yes, the project has been going on for ten years. A 7 50/50 split is very simple, very simplistic, minimum 8 effort. It actually binds business as seen it's not 9 that equitable. I think you've heard a lot of the 10 reasons why. We have not looked at impact fees. 11 Part of our group is a gentleman who used to be the 12 formal Public Works director, Mr. Delgado, and I 13 have to say in discussion with him and review of the 14 project, he was very surprised because one of the 15 pride and joys of our city when he was director. 16 And he said that Mr. Hephardt is not capable of 17 doing it, that it starts at the top, was basically 18 out to seek out impact fees, transportation taxes, 19 grants, et cetera. I'm pleased to hear we do have a 20 4 percent of the whole project as a grant. I think 21 the stature of this great city because we do have 22 stature. I think we can actually do more and it 23 warrants more. I don't think we've gone deep 24 enough. Yes, we have deferred maintenance. For 25 years I've been a walker. Right now there's 28 165 1 empty spaces in Miracle Mile. I don't do real 2 estate, but I'm a resident and sometimes ashamed of 3 seeing the 28 empty spaces crumbling in some areas. 4 Thank you for the fountain. Thanks to you the 5 fountain is now working. The bible that was dry 6 there sat there for a good nine to 12 months. I 7 eman, it was a bible. I have no idea what 8 denomination. So this commission committed several 9 years ago to prioritize this project and the time 10 has come, but I think we're rushing on very 11 specifics. 12 Some of the information we staff we sent it to 13 you unknown to them. For example, the public 14 project is no longer part of the project, of the 15 mix. For those of you, and you can validate that 16 with Publix in Lakeland as well as the management of 17 Publix. They decided to postpone even presentation 18 or anything to the city until at least two to three 19 years from now. They are basically redoing Store 20 84. So these are factors and I can sit here and the 21 exclusion of residential, the trees valuation. The 22 definition of blighted area sometimes, you know, 23 Miracle Mile does look certain areas like a blighted 24 area. We're not Worth Avenue. I don't think we 25 have the affluence of Worth Avenue, maybe some 166 1 residents to, but to basically use that as that's 2 the only comparison, it not does not do justice. 3 I'm a believer. We must move on with this project. 4 But a few weeks, that window of opportunity, 5 June 15th when we went construction to start. Yes, 6 we do have to have bonds, et cetera, a few weeks of 7 times in the deployment will not impact the 8 deployment of the project, will not delay it for 9 three to five years as I have been told by members 10 of the staff, will not be a detriment to our city 11 and will definitely improve something that is very 12 important that I think is lacking and not because of 13 you individually, some members of the appointed 14 official. But the trust by and between and good 15 will, there's a lot that goes -- people in the 16 business community of the BID and charge for 17 something and get zero benefit from. I get a lot of 18 cheerleading from and some activities from, but I 19 think all of you, and you have shown that through 20 that your leadership, want to give those residents 21 more bang for their bucks. It will rekindle the 22 trust that now that must exist between the city and 23 the business community. They are many moving parts. 24 We saw it today. Many unknowns, many unanswered 25 questions. 167 1 The timeline, the project timing. We talked 2 about bussing, mitigation of impact. What else does 3 it translate? Yes, we can open for business, but if 4 people can't access it during construction, what 5 good is it? We've seen it on 57th Avenue. Ask 6 Duffy's. Ask Duffy's, a construction project that 7 nearly brought Duffy's down to its knees. Ask him. 8 I mean, this is just -- it's going to happen at a 9 point in time, but I think we need to measure and 10 calibrate it with it. 11 The long-term impact of the project. I think 12 it's important that we have evaluated every 13 possibility. I think outside counsel today bought 14 some ideas. They were delays in the information. 15 It happens. Fact of life, but I think we owe them 16 the ability to basically -- and owe you-all, as a 17 matter of fact, the ability to read that. Anything 18 short of that I really believe we're not serving us 19 well. You all have shown through thick and thin 20 many challenges recent and past leadership. All I 21 ask is you continue that leadership. Because is 22 about a major step we're going to take in city, a 23 long-standing one and I'm confident that I can trust 24 that you've looked at every venue and every option 25 before making a policy decision. 168 1 Thank you. 2 COMMISSIONER QUESADA: Thank you, sir. 3 COMMISSIONER KERDYK: As far as impact fees, 4 have we looked into impact fees for Miracle Mile? 5 CITY MANAGER OLAZABAL: Diana, can you come? I 6 guess we -- is it four different categories of 7 impact fees? 8 THE WITNESS: Yes. It's four -- I believe four 9 different categories and off of my memory, it's 10 parks, general government, public safety. 11 CITY MANAGER OLAZABAL: Police. 12 UNIDENTIFIED SPEAKER: Police and fire. 13 CITY MANAGER OLAZABAL: General government. 14 UNIDENTIFIED SPEAKER: Police, fire, parks. 15 CITY MANAGER OLAZABAL: We don't have a road 16 improvement, which is -- typically the county has a 17 road improvement impact fee. Do we get any money 18 from the road impact fees from the county? 19 UNIDENTIFIED SPEAKER: We get out roadway money 20 each year and I don't have that budget number in 21 front of me, but we do get roadway money each year 22 from which we -- included it in our normal budget 23 each year to be spent on normal roadway. There is 24 some surplus in the roadway fund. 25 CITY MANAGER OLAZABAL: Was that a portion that 169 1 was used for the streetscape, the general 2 streetscape, the resurfacing? 3 UNIDENTIFIED SPEAKER: Yes. Obviously that was 4 used for those projects and that is going to be used 5 on the sidewalk repairs coming forth. 6 COMMISSIONER KERDYK: Actually, let me help you 7 with that. I mean, the impact fees that I think 8 Enrique is talking about are the ones used for road 9 improvements similar to what we're doing on the 10 Ponce median. We've taken impact fees. 11 Actually, Commissioner Keon, help me with that. 12 Several years ago when she was working with Jimmy 13 Morales' office and we used them for the beginning 14 of the Ponce roadway improvement which is the median 15 and all the way. We're going to use them again to 16 bring all the way to 8th Street here. So that's why 17 I was thinking is there any more money or could you 18 check on that for us? 19 MR. HINRICHSEN: In 2008, the city asked they 20 be allowed to waive impact fees and it was denied. 21 It should be in your files, if not I'll send it. 22 COMMISSIONER KEON: Right. Because impact 23 fees -- the way impact fees are paid by the 24 developer at the time of -- well, supposed to be at 25 the time of the permitting, the road impact fees. 170 1 They're paid to the county. The county tracts them 2 and we should track, I hope we track, all of the 3 road impact fees that are charged to developments 4 within our city because you should be able at any 5 given time to sit with the county and balance what 6 those what -- those accounts are. We should know 7 what our road impact fees are all of the time and if 8 we don't, we need to do that now. 9 CITY MANAGER OLAZABAL: There's some 10 restrictions. 11 COMMISSIONER KEON: Impact fees are used for 12 traffic, traffic circulations. The reason that we 13 were able to when we worked with Bill -- when I 14 worked with Jimmy Morales, we worked with the Public 15 Works Department to show that it was a creation of 16 turning lanes and -- turning lanes and some of the 17 movements along that street is what allowed us to be 18 able to have the city, you know -- those funds 19 released that were the city's released to the city 20 because they -- they then were done in accordance 21 with the impact fee ordinances. We don't pay park 22 impact fees. I don't think the City of Coral Gables 23 we pays park impact fees. We pay road impact fees. 24 CITY MANAGER OLAZABAL: I think one of the 25 restrictions is to use the funds you're actually 171 1 increasing capacity for improving traffic. 2 COMMISSIONER KEON: Improving traffic 3 circulation. That's why when we used it in the city 4 on Ponce, you created left turn lanes. There was 5 signalization changes. There were changes that 6 increased traffic circulation along the Ponce 7 corridor. It cannot be used to improve sidewalks. 8 UNIDENTIFIED SPEAKER: That is correct. And if 9 I could just add to that, because the county roadway 10 impact fee is programmed each year and we look to 11 future years when work with the county to adjust the 12 projects. They will work with us if we have a 13 viable project. And move it from one project to the 14 other. 15 We are currently in the process of finalizing 16 the JPA through the county for the third and final 17 phase of Ponce. 18 And then another project is Biltmore Way that 19 we're looking at is a future project to use county 20 impact fees on it. I can't speak to the history of 21 when Miracle Mile was requested for impact feels, 22 but I can't imagine you'd have a hard time showing 23 the capacity and traffic improvements with the 24 project that we have, so... 25 COMMISSIONER KERDYK: I will -- Laura Russo 172 1 just pointed out to me and it's correct. Alan 2 Morris used some of those impact fees to improve 3 Alhambra Circle when he did that yeah. 4 So really the question comes down to exactly 5 what Commissioner Keon said, do we have any 6 additional funds? We've already allocated some of 7 those funds to the final extension of the Ponce de 8 Leon median. We need to find out if there's any 9 other funds and if they are applicable to this 10 project or could they be used in this project. 11 That's basically the question. 12 MR. HERSH: Yeah. We will scan through our 13 staff the entire, the entire realm of possibility of 14 transportation related streetscape type of finding 15 that is out there. 16 COMMISSIONER KERDYK: We also have the right to 17 make those changes at a later day too. I mean, we 18 can lower the assessment for anybody at a later 19 date. 20 MAYOR CASON: We've got two years before it 21 goes into effect. 22 COMMISSIONER KEON: My question with regard to 23 the assessments on the property owner and the dollar 24 value that we have out there is that they are -- 25 they're based on an conceptual plan that we really 173 1 haven't seen and don't know. I don't know what that 2 looks likes. If only half of it or 6.8 million is 3 infrastructure and the whole thing is 15. You know, 4 that's another 9 or $8 million for a sidewalk. It's 5 strikes me as a lot of money for a sidewalk. I 6 don't know what the finishes are. I don't know what 7 else is planned. I don't know. I don't know 8 anything about it. 9 So I spent a long time with Carmen and Glen 10 Hephardt yesterday. They're talking about, you 11 know, a project delivering methodology, Public 12 Works, we call it, you know, and that's something 13 that I think we need to schedule for our first 14 meeting in September. I would like to see us have 15 that discussion as to how we're going to do this. 16 But I mean, I would think at that time once we do 17 have a design a plan and their valued engineer and 18 then the estimates are determined or the costs are 19 determined based on those plans, can that -- is that 20 assessment roll, will that assessment roll be -- it 21 will never be more than the 15, but it could be 22 less. Is that right? 23 MAYOR CASON: Yeah. 24 COMMISSIONER KEON: So what we're talking about 25 and what we have here today, I just want to make 174 1 sure that what we're talking about is a funding 2 mechanism, not to exceed $15 million, which was for 3 Miracle Mile which was based on the conceptual plans 4 and the information provided to us by -- is that 5 right? 6 CITY ATTORNEY LEEN: It's Miracle Mile and 7 Giralda. 8 COMMISSIONER KEON: Fifteen million is the 9 Mile. 10 CITY ATTORNEY LEEN: You'll be approving the 11 final assessment roll. My understanding is the city 12 intends to proceed with bonds relatively shortly 13 thereafter. You know, the city can decide to bare 14 some of the costs. We can come back with a 15 resolution related to a hardship or some sort of 16 plan for the city to bar it, if the commission 17 decides. But then we still go forward with the 18 bond, but would have to commit basically non-ad 19 valorem dollars. 20 COMMISSIONER KEON: When you go out to bond 21 this project, you go out on -- how do you go about 22 it? 23 CITY ATTORNEY LEEN: Heather, would you come up 24 and answer. 25 MS. ENCINOSA: What was your question about the 175 1 bond? 2 COMMISSIONER KEON: We are looking at or 3 thinking we have $15 million project here. How -- 4 tell me the process to bond that money to acquire 5 those dollars. 6 MR. GLOVER: Jay Glover from Public Financial 7 Management, the city's financial advisor. Anything 8 related to bond finance you would have to come back 9 before the city for another approval. So we'd come 10 back before you with another bond resolution to 11 approve not to exceed the same amount of debt. 12 Typically given that this is going to spent 13 over a fairly short period of time, I think a year, 14 maybe a little more, we would do one series of bonds 15 for each area. So Miracle Mile would be done with a 16 series A transaction, per se. And Giralda would be 17 done with a series B transaction. But all of the 18 funding would be gotten up front for that, for that 19 project. 20 COMMISSIONER KEON: When -- when would that 21 likely take place? I thought I saw December a 14th 22 date. Is that right? 23 MR. GLOVER: One of the slides did say 24 December. It's going to driven by really two 25 things. One is going to be when is the money 176 1 actually needed and there's also a discussion and 2 I'm not an attorney, I'm a financial advisor, about 3 validating the issue of your bonds given the nature 4 of the assessments being the security for a portion 5 of the bonds. 6 So if we actually go out and validate the bonds 7 which the city attorney maybe can comment on, that 8 could actually extend the period of time before the 9 bonds will be issued by a couple of two or three 10 months, I think, but... 11 CITY ATTORNEY LEEN: We've asked Heather to do 12 that. 13 MS. ENCINOSA: Yes. There is a section in 14 Chapter 75 in Florida Statute that allows you when 15 you are going out to issue debt to ask VICE MAYOR 16 KERDYK: To basically bless the debt, for lack of a 17 better word, before you go out and borrow on certain 18 spending so that you have financial certainty. 19 There's an expedited review process in the 20 event that somebody intervenes and it's appealed, it 21 goes directly to the Florida Supreme Court rather 22 than through your traditional appellate process. As 23 Jay said, that can add on, you know, best case a 24 couple of months, up to perhaps, if it's appealed, 25 up to perhaps six months before you would finally 177 1 any issue your debt. But that once you get a 2 validation, it's good forever. Your bonds cannot be 3 challenged after that and the validation includes 4 validating the underlying voting resources so it 5 would be validating the assessment program -- if the 6 city -- 7 MAYOR CASON: And if you don't end up 8 spending -- if it's less than 15 million, you can 9 repay the bonds. 10 MR. GLOVER: It's going to include the special 11 assessment transactions given the nature of the 12 property owner's ability to repay at any time, 13 either before the assessment or during the life of 14 the assessments. The bonds are typically subject to 15 prepayment as well. So for instance, if a property 16 owner comes in five years and wants to prepay the 17 remaining assessment we'd have to also prepay the 18 amount of the outstanding bond. These bonds 19 typically have ultimate prepayment flexibility. 20 MAYOR CASON: But if I understand it, we need 21 the bonds in order to hire the firm to do the final 22 designs to validate -- I mean, right now we have the 23 best estimate by all parties as to what it would 24 cost basically and what -- the elements that we've 25 seen. Presumably, it's not going to vary too much, 178 1 but at any rate, you need the bond money in order to 2 go ahead and be able to hire the company to do 3 the -- 4 COMMISSIONER KEON: When we borrow, we can only 5 use the money for that particular purpose. So we 6 need to be careful that what we're borrowing, that 7 it is to cover our costs and it's not to really 8 exceed by a significant amount on our costs. We can 9 charge bond money, so I'm -- I wish we had better 10 numbers to work with and that is why I'm asking how 11 do we do it. Do we go out and borrow, you know, 12 five million with the bonds, five million with the 13 bond, five million with the bonds and we do 15 14 million worth of bonds. 15 MR. GLOVER: Typically when the money is going 16 to spent over say a year, a little over a year, you 17 are going to go out once to get the money up front 18 because there is cost associated with doing a 19 transaction. So if you went out on five million, 20 you are going to be paying the professionals t put 21 those financials together three times to do that. 22 MAYOR CASON: The interest rates may be going 23 up. 24 COMMISSIONER KEON: If we know we are, you 25 know, a year away from beginning that work? 179 1 MR. GLOVER: And another point I'd like to 2 bring up which the Mayor just mentioned is, we are 3 also at a point of historically low interest rates 4 right now. So obviously, all else equal, expediting 5 the financing is the most prudent thing to do. 6 Because if you do wait, you know, a year or two 7 years, they might go up. They will only increase 8 the amount that the property owners ends up paying. 9 COMMISSIONER KEON: Is it -- I mean, if we're a 10 year away, is this the appropriate time to go out 11 and get money? 12 MR. GLOVER: You typically would not want to 13 borrow a year in advance of needing the money. 14 There's also rules that tax counsel requires you to 15 have an expectation to spend the money in an 16 appropriate amount of time. So typically you're 17 going to want to go out, you know, when the money is 18 going to be starting to be spent. So if that is 19 really is, you know, six months from now, you know, 20 you might defer the financing until, you know -- 21 MAYOR CASON: It's my understanding -- isn't 22 that part of that money going to used to do the plan 23 which will be next stage to forward move. Is 24 that -- 25 CITY MANAGER OLAZABAL: Part of the idea is 180 1 that we have this money to start spending on the 2 soft costs of the project, which includes design 3 and, you know, all of the presentations that we're 4 going have to be working. 5 COMMISSIONER KEON: Can we use bond dollars for 6 the soft costs or does it only have to be hard 7 costs? 8 MR. GLOVER: No, you can use the bond proceeds 9 for soft costs as well. 10 COMMISSIONER KEON: We have the county GOB 11 dollars; right? 12 MR. GLOVER: We cannot use the GOB. 13 CITY ATTORNEY LEEN: Mr. Mayor? 14 MAYOR CASON: Yes. 15 CITY ATTORNEY LEEN: If I may, what I would 16 impose is that you have several things you have to 17 do in resolving this. First, you have some 18 individual property appeals, some of which the city 19 has agreed to. I would resolve those. 20 Second, then you have to determine whether 21 you're going to accept Hank Fishkind's study 22 basically the way it's been presented. You might be 23 able to make some minor modifications, but 24 generally if you want this to be supported, 25 basically defensible in court, you need to have some 181 1 substantial competent evidence. That's the study 2 that's been presented to you. You do have one other 3 study from one of the individuals who came up and 4 spoke, Mr. Mandler. You can determine what to do 5 based on those studies. 6 Three, you should determine you whether -- 7 let's assume hypothetically you accepted the study 8 and you approve the two assessments. You then could 9 determine whether you wanted to grant some type of 10 relief and to who. 11 MAYOR CASON: And we don't have to because of 12 him we've got two years before anybody is going to 13 get taxes. So we have time to look at mechanisms of 14 which there might be many to ameliorate hardships or 15 anything. 16 CITY ATTORNEY LEEN: But the final assessment 17 roll would be approved and then you would be asking 18 us to come back and propose relief which would be 19 basically be the city paying for a portion of that 20 based on either hardship or some other mechanism 21 that you've decided today and those are the ways I 22 would approach it. 23 COMMISSIONER KEON: Okay. I think this project 24 hasn't been spoken about since just 2008. This 25 project hasn't been spoken about for the last 182 1 20 years. They have talked about redoing the Mile. 2 I know Mr. -- how long have people been talking 3 about redoing the Mile? 4 UNIDENTIFIED SPEAKER: Probably since 52. 5 COMMISSIONER KEON: He's not kidding. I mean, 6 this conversation has been in this city for a very, 7 very long time. And the reason that it never has 8 advanced beyond the discussion stage is because 9 there never was a funding mechanism for this. We 10 never came to an agreement on how we would pay for 11 this. 12 So, you know, this is major progress in getting 13 to at least start this project that -- I mean, I 14 think everyone has here seems to agree that -- in 15 the city -- I mean, not the city, officials, and 16 other merchants. I don't know that we've surveyed 17 the residential community. But, you know, what we 18 hear is we would like to see this done. We know it 19 would improve our downtown. We know it would 20 improve our property values. We know that it would 21 our retail sector more competitive. We know it 22 would be a good thing for our city. The way is to 23 fund it. 24 So what we are going to do then is vote on this 25 funding mechanism, but before we vote just -- I 183 1 would also like to have a discussion about Giralda 2 because I think that will affect our vote. 3 MAYOR CASON: We've got three more speakers. 4 Everybody, please be short. The city manager has to 5 leave too. George Volski. 6 MR. VOLSKI: I would like to speak for less 7 than one minute. We have been talking about 50/50. 8 BID voted 50/50. Chamber of Commerce didn't have 9 courage to vote even though they say. I represent 10 the 50. Actually, I heard today from Cindy, which 11 is actually not 50. It's 53 plus other commitments 12 which we have for the process. Could be 60/40. I 13 hear a lot of people say we don't have to pay. 14 Whatever they don't pay, we pay more. And this I 15 don't know whether Ms. Keon wants to get off the 16 residential area by getting a vote, but I will have 17 to pay more. I wonder if you will listen to people 18 like myself that own property have to pay the 50, 19 whatever 60, but I have to pay and the only one 20 today who brought this up. And I wonder whether -- 21 what -- what residents or county or city taxpayer 22 think of this percentage. We have not been heard. 23 I didn't mean to speak, but I thought that we ought 24 to be heard, people who have only -- if you might 25 say, physical pleasure in seeing Miracle Mile 184 1 improve. But we don't have actual benefit. These 2 people that are there, they are there to make money. 3 I don't make any money for Miracle Mile, but I'm 4 paying for that. 5 Thank you. 6 MAYOR CASON: Barbara Tria. 7 MS. TRIA: Good afternoon, Mayor, 8 Commissioners. My name is Barbara Tria. I am a 9 commercial real estate agent and have been 10 practicing in the City of Coral Gables for over 11 20 years. My license is with Kerdyk Real Estate. 12 I am dedicated to consistently improving what 13 we can offer to the residents in the retail capacity 14 as well as enhancing our commercial area. I love 15 this project. It's been needed for quite some time. 16 We have good inputs from experts in various areas as 17 to how to proceed. I feel it is a wonderful thing 18 we are all here having a dialogue exclusively about 19 the financial way to pay it and as Commissioner Keon 20 pointed out, we finally have a methodology to come 21 with a methodology that' perfect the first time out 22 when there's so many variables involved is next to 23 impossible. I think we've gotten close. 24 We've heard from some of the property owners 25 that have an issue with the methodology, and I think 185 1 their comments are well founded. I echo what Mr. -- 2 the property owner has commented on, as well as what 3 Mark Trowbridge said earlier. 4 I want to follow up on what Attorney Leen said 5 as far as identifying additional sources and tie 6 that into the impact fees that can be attributed to 7 street improvements. We have before us a brand-new 8 project, the Palace and I don't know if there were 9 impact fees that are -- we can attribute from that 10 development and bring that to the Miracle Mile. 11 According to Dr. Fishkind's methodology, that 12 project is part of the -- I forget the two different 13 terminologies he used, but certainly they will get 14 assessed on the streetscape improvement. 15 The others that were about to go out to the 16 public with an RFP towards the two city garages and 17 I don't know if the impact fees for the streetscape 18 improvement can be assessed or incorporated in that 19 type of a document as well. And I just urge you to 20 consider the points that were raised today. There 21 are other projects that maybe still have impact 22 fees: 55 Merrick Way, 55 Miracle Mile. 23 One of the points that I want to close with is 24 the concept of the date certain that the property 25 assessments, and I believe they're using market 186 1 value, not assessed values for in coming up with the 2 methodology. In 2013, were some properties that are 3 in this special area that traded hands and so I 4 concur that we should consider using the 2014 market 5 value which may provide some relief for assisting in 6 the -- reducing the payments or distributing them in 7 more equitable manner. 8 Thank you very much. 9 MAYOR CASON: The final speaker before we start 10 our own discussion, Burton Hersh wanted to have a 11 final say on Giralda. 12 Is he here. 13 MR. HERSH: Thank you for giving me another 14 moment. It seems that nobody likes to pay for 15 assessments. 16 MAYOR CASON: We heard that. 17 MR. HERSH: That may be. That certainly seems 18 to be the case and a lot of people have a lot of 19 good reasons. But the bottom line is that if we do 20 not do these improvements, we will be -- we will 21 fall further and further behind and no longer be 22 viable as a business district. That viability 23 effects the overall financial security of the entire 24 city. Every year you like to lower the millage 25 rate. Well, that can happen, but it's not going to 187 1 happen if we don't do these improvements. 2 We've given a list of 10 or 11 possibilities 3 and maybe it could be done, maybe you have some 4 thoughts. But we need these improvements sorely 5 because the map, or the chart that Cindy Birdsill 6 showed you is headed down and it's headed down 7 quickly. 8 Thank you for the moment. 9 MAYOR CASON: All right. Let's -- time for 10 discussion among ourselves. 11 Craig, you made some suggestions early on which 12 I thought were -- were quite useful as a way to move 13 forward. It seems to me that I would like to move 14 forward, have a vote on this, and then look for ways 15 in the next -- we have two years before anybody is 16 going to be assessed. By that time we should be 17 finished with the construction. We'll know what the 18 cost was. We can always -- if we got too many bonds 19 we can prepay them. There's another option that 20 was supported by impact fees, some things on 21 hardship. I think we can explore all of those 22 things, but I'd like to see us move forward, work on 23 methodology that we've agreed on July 22nd, what was 24 the zone that we wanted -- as the area that's going 25 to get the special benefit. 188 1 COMMISSIONER QUESADA: A few thoughts. Our 2 legal counsel, I just have one other question for 3 you. 4 Mr. Gallagher mentioned that the consulate is 5 outside -- is not being assessed even though it's in 6 the assessment area. And he made reference to that 7 his ad valorem taxes aren't application, however, 8 special tax is applicable. Is that the case? 9 MS. ENCINOSA: On the consulate property? 10 COMMISSIONER QUESADA: Yeah. He gave us -- if 11 you recall, he gave us this document in orange. 12 MS. ENCINOSA: Yeah. They were removed. 13 They're basically a sovereign nation. So you really 14 couldn't -- you may be able to put an assessment on 15 there they wouldn't pay. You'd have a very 16 difficult time pursuing it so that is going to have 17 to come off the city's portion. 18 MAYOR CASON: That's come up. I've been a 19 diplomat for 14 years and we had many occasions 20 obviously where prepare people try to tax us one 21 kind of tax. We have sovereign immunity. You 22 can't. 23 COMMISSIONER QUESADA: Okay. That was the only 24 question I had for you. Thank you. 25 Leonard Roberts, if you recall, I called him up 189 1 here to take a look at Coast Star. Leonard Roberts 2 is acting director for economic stainability 3 department. Is that his current title? I just 4 wanted to make sure. 5 So they're essentially our real estate market 6 experts internally here at the city. I asked him to 7 look at the Coast Star numbers for the property 8 between 2000, 2014, even though Lee Waronker 9 clarified that he was basing off of rent rolls for a 10 few properties that, I guess, he was handling or 11 representing in those couple of years. But I just 12 think it's still interesting as well and I don't 13 know if I should off in seeing the numbers until 14 Bill gets here. I guess I will pass on my notes 15 until he sees it. 16 I asked him for Coconut Grove, downtown Miami, 17 Lincoln Road and Coral Gables for the commercial 18 office rental rates in 2000 and present day 2014 19 according to Coast Star. A couple of ground -- in 20 2000 it was $26 a square foot. 2014, currently is 21 $31 a square foot. This is all the same class. 22 COMMISSIONER KEON: What was it? 23 COMMISSIONER QUESADA: This Coconut Grove in 24 2000 was 26, 2014, 31. They're all Class A, all 25 same type of building, all office buildings. So 190 1 that's an increase of 19 percent from those 2 14 years. 3 City of Miami in 2000 -- the numbers I'm 4 reading off are Coast Star numbers I asked Leonard 5 for and this is all Class A. 2000, downtown Miami 6 it's at $24 a square foot office building. In 2014, 7 it's at 34. That's an increase of 41 percent. 8 Lincoln Road in 2000 was $19. Currently today 9 in 2014, it's at $33, an increase of 73 percent. 10 And then Coral Gables it's $29 in 2000, and $32 in 11 2014, which is an increase in 10 percent. 12 So I guess just to summarize, Coconut Grove in 13 those 14 years, up 19 percent, Downtown Miami 41 14 percent, Lincoln Road 73, Coral Gables 10. I 15 thought it was important to see what the results 16 were. 17 MAYOR CASON: Base again? 18 COMMISSIONER QUESADA: 2000 and 2014. I'm 19 sorry. And that's an average of Class A and B, 20 office building. 21 COMMISSIONER KERDYK: I think when I responded, 22 I thought the time frame was a little bit different 23 than that. I thought it was 2010. I thought it was 24 2010 to 2013 we were talking about. 25 COMMISSIONER QUESADA: Well, the numbers -- I 191 1 was trying to go off Lee Waronker's letter. If you 2 look at the second half of Page 2 of his letter, he 3 says in the '90s and earlier 2000s. So I just put 4 it at 2000 to 2014 to get a general idea. It may 5 not be the most representative. I think the Lincoln 6 Road project, I think it was in '94, but I just 7 wanted to give everyone general ideas since we spend 8 so much time discussing. If you look at the 9 numbers, Lincoln Road is the highest increase, City 10 of Miami is second, Coconut Grove is third. I don't 11 think we can make anything of it or not. 12 CITY MANAGER OLAZABAL: Just to clarify, on 13 Lincoln Road there was two investments: One in 1994 14 and another one in 2010 for 6.2 million. 15 COMMISSIONER QUESADA: Okay. 16 CITY MANAGER OLAZABAL: It is -- does seem like 17 a significant difference between the Lincoln Road 18 market and the other markets that you mentioned. 19 COMMISSIONER KEON: Did you have something 20 else? 21 COMMISSIONER QUESADA: I just wanted to let you 22 know those thoughts. 23 COMMISSIONER KEON: I wanted to talk about the 24 Giralda project before we vote on this financing 25 because I would like -- I'm not sure that -- that -- 192 1 or I have trouble seeing the value of the project -- 2 the 3 -- whatever million dollars we're spending on 3 Giralda. I don't know how such a singular space can 4 benefit anybody else. All you're doing you're 5 changing the esthetics of one street, not a long 6 block either, one block where probably ten years ago 7 it was restaurant row. It's no longer -- I mean, 8 you may call it restaurant row, but it no longer 9 functions as restaurant row. There are more 10 restaurants that have along on Ponce. There's more 11 restaurants in that Andalusia area than there are on 12 restaurant row. We got -- I know we received a 13 letter from somebody who's an accountant. Now there 14 is an architect. I think there's a dry cleaner 15 along there, a dress shop. I mean, it's not -- it 16 isn't restaurant row and I don't -- I think that 17 there is enough viability for restaurants in our 18 city because of our downtown population and our 19 residential population that we don't have to do 20 those things in order to have restaurants come to 21 our city. And they're going to go where they 22 believe they are viable. It's where they believe 23 they can afford, it's what their demographic is. I 24 don't see there is really purpose for us. 25 Now, the issue is that it gives us an event 193 1 space, but, you know, we have an event space on the 2 plaza of the museum now. We have event places on 3 the plaza for the parking garage. As we build our 4 parking garage, we can have event space. If we 5 do -- 6 COMMISSIONER LAGO: The park in front of the 7 City Hall. 8 COMMISSIONER KEON: We have an event space. 9 The largest property owner along Giralda is, I think 10 the Church of Scientology. That church 11 has established an assessment on it. That property 12 can be sold and could be upzoned and -- if you are 13 assessing it. The use is going to change. I don't 14 think another church is buying that property. So 15 you know, how high can you build it? 16 What is the -- what can you build there? 17 COMMISSIONER KERDYK: If you had 200 feet of 18 frontage you can build and eight-story -- 19 six-stories, two-story, Mediterranean, but they 20 don't have 200 feet. I think they have 150 feet -- 21 COMMISSIONER KEON: They can build a six-story. 22 COMMISSIONER KERDYK: Three, four-story. 23 COMMISSIONER KEON: So, you know, now we're 24 going actually tax something that is under contract. 25 You know, that street is going to change as the -- 194 1 as the city builds. You know, as that particular -- 2 that property is for sale. It's going to be built- 3 out. The use of that street is going to change. 4 It's going to change as the whole North Gables 5 develops. And I think to -- I don't think there's 6 one -- there's one no synergy between the Giralda 7 project and Miracle Mile project. So I don't know 8 other than they happen to be in the BID. I don't 9 understand what the connection with these two 10 projects are. 11 I also think that the project on the Mile is a 12 very, very, very big project. And I think that -- 13 we're actually going to undertake this project and 14 as we decide, to determine or advise on the 15 methodology for doing this, I think that is a 16 project that we should focus on. I think it's the 17 project that we should do and I think we should 18 allow Giralda to develop as Giralda will develop as 19 the properties sell. Now, the one thing we have is 20 a small surface parking lot. If we wanted to do 21 something, we could create a pocket park in the 22 downtown, which we badly need, is green space. And 23 there isn't any green space. So I mean, if you 24 wanted to -- the city or the partnership to buy -- 25 you know, to build-out, you know, a pocket park, a 195 1 downtown park, I think that would be a perfect thing 2 if you wanted to do something in that area. 3 Other than that, I don't -- I'd like you to 4 talk to me about why you think it's important that 5 we do Giralda. 6 COMMISSIONER KERDYK: Well, let me say 7 something. First of all, this is the first time 8 I've heard of anybody talking about extracting 9 Giralda out of the mix. We've talked about this 10 before and it's okay. I mean, you know, everybody 11 can have their good idea at some point. So I'm not 12 saying that that's a good idea, whatsoever. 13 Certainly the jewel is Miracle Mile and I'm going to 14 vote on Miracle Mile today. So if you want -- if 15 the sentiment is to fragment that Giralda off and 16 come back and readdress that when we have more time, 17 not where the point we've sat here for, like, ten 18 hours and discussed something -- I mean -- 19 COMMISSIONER KEON: I don't want to vote on the 20 whole package. I want to vote on it separately. 21 MAYOR CASON: We have to because it's two 22 different motions. 23 COMMISSIONER KERDYK: The bigger issue for me 24 is to go ahead and pass that Miracle Mile, you know, 25 and get that done so that we can process it. 196 1 The one issue that is a problem, and I'm sure 2 the bond people will tell you, of course, you know, 3 that would -- you could -- you probably could not go 4 out together to get the bond if you delay the 5 decision on the Giralda space too long. I mean -- 6 COMMISSIONER KEON: But I'm asking you, do you 7 see the value? Do you see that value? Do you 8 assess the value for -- 9 COMMISSIONER KERDYK: Again, I think it's a 10 longer discussion than speaking 15 minutes on it. I 11 will tell you, the architect, the laundry have been 12 there for many, many years. It's not been a change 13 over. Certainly the dynamics have moved a little 14 bit on Giralda as far as the restaurants go. It has 15 changed significantly. So the dynamics are 16 different. 17 So I mean, I have no problems discussing that 18 at a later date and reserving my opinion on whether 19 I'd like to proceed forward or not. Again, I'm 20 ready to move on the -- 21 COMMISSIONER QUESADA: I don't want to get too 22 into it. Respectfully, I completely disagree. Just 23 because Giralda is struggling now doesn't mean we 24 should abandon ship on that street. We have a great 25 history on Giralda. We have a lot of things 197 1 happening on Giralda with the cinema and with the 2 museum and actually -- 3 COMMISSIONER KEON: But we're not doing that 4 area. 5 COMMISSIONER QUESADA: It's still part of 6 Giralda. It's part of the entire street. With the 7 BIDS -- we've been taking the farmers market there 8 off season time to help liven that area. I don't 9 think it's that far off from Miracle Mile. It's 10 really -- it's a block and half off, but I think it 11 really has been a core of what downtown does for 12 such a long time. With the event of Giralda Under 13 the Stars happened, it's incredibly successful. 14 People still enjoy going there and because it's 15 struggling doesn't mean we should abandon it. I 16 mean, there's great little straights, great 17 neighborhoods and towns that, you know, obviously 18 they go through some difficult periods, you know, 19 the municipalities help vitalize it a little bit and 20 it picks up again. 21 I mean, with the design, especially the 22 conceptual design the BID put together in the last 23 few years, I think it's absolutely spectacular. The 24 area that Burt mentioned at the beginning of the 25 meeting today, you know, that street is going to be 198 1 the envy of Miami-Dade County. When you think of 2 Espanola Way, I think it's going to be a so much 3 better version in the Coral Gables character and 4 personality once that is completed. But I do agree 5 to have conversations for another day. 6 COMMISSIONER KEON: I don't see where the 7 benefit -- I think the benefit benefits the city. I 8 don't see where it benefits the other property 9 owners. 10 MAYOR CASON: I've never got an e-mail from 11 anybody on Giralda saying, we want to be taken out 12 of this. 13 The question I asked early on, this pairing has 14 come from maybe a decade ago. Has anybody on 15 Giralda come to you in the BID and said, we no 16 longer want to have our street brought up to the 17 standards and that we think we -- 18 MR. HERSH: They all want it, but -- 19 COMMISSIONER KEON: The owners of La Giralda 20 want it? 21 COMMISSIONER LAGO: No, they don't want it. 22 MR. HERSH: They don't want Giralda Under the 23 Stars -- just for one moment. 24 The concept, the design concepts is an overall 25 vision. It's tied together. In order to make 199 1 whoever pays for it, the Central Business District a 2 special place to be, the design of Giralda which is 3 incredible. You've seen some of the renderings is 4 going to be a great public space. It can be a 5 farmers market one day. It could be Giralda Under 6 the Stars another day. It could be ten different 7 things, but the synergistic power of both of the 8 these elements together will create great value. 9 COMMISSIONER KEON: I missed that one, Mr. 10 Hersh. 11 MAYOR CASON: And the restaurants may come back 12 because it's not particularly attractive. There's 13 no trees. 14 MS. WEISS: I do want to reiterate, you do have 15 a client. You do have somebody from Giralda who is 16 not interested in having the project go forward, 17 Alhambra International Center. 18 COMMISSIONER KEON: And I really can't tell 19 you -- I don't see what value that is to Alhambra. 20 MAYOR CASON: We have to vote on two different 21 rounds at least. 22 CITY ATTORNEY LEEN: Mr. Mayor, before you 23 proceed we have the appeals. I was wondering if you 24 wanted -- how do you want to do it? 25 MAYOR CASON: Let's do the appeals first. 200 1 COMMISSIONER QUESADA: Before we get to the 2 appeals, there is an item I had discussed with the 3 city manager. I want to bring commission which is 4 related if there any subsidy for the project whether 5 it's -- 6 COMMISSIONER LAGO: You're talking about 7 parking? 8 COMMISSIONER KEON: To offset the costs? 9 COMMISSIONER QUESADA: Correct. 10 COMMISSIONER LAGO: Do you have a refined 11 revenue source? 12 COMMISSIONER QUESADA: I will turn that over to 13 the city manager. 14 MAYOR CASON: Revenue source? I think the 15 question is that we've been discussing, there may be 16 a way that we could find other sources of revenue 17 over the coming months or years before anybody has 18 to pay anything. We can find with further 19 discussion and further presentation from staff, we 20 might be able to make some mitigation in certain 21 areas. 22 COMMISSIONER QUESADA: Okay. I would like to 23 hear the ones that staff has prepared or has primary 24 analyzed at this point. 25 CITY MANAGER OLAZABAL: This was an idea that 201 1 we received from the vice mayor where we could be 2 looking at different subsidies for -- we looked at 3 the studies for 300 or 500 and a 600 subsidy. Let 4 me get my spreadsheet because I have a lot of 5 papers. 6 She -- basically, if we were going to do a 300 7 subsidy, it covers an -- it's basically an annual 8 subsidy of $113,00; takes care -- 70 residential 9 properties will now be paying, will be covered. 10 COMMISSIONER QUESADA: Assuming -- 11 CITY MANAGER OLAZABAL: Of 300. Forty-four 12 commercial properties would not be paying. And then 13 I guess one in Giralda and one commercial -- and one 14 in Giralda that also is under that 300 cap. It is 15 $115,000 annually and $1.28 million total. 16 You don't have the percentages? 17 COMMISSIONER QUESADA: What's the source of 18 those funds? 19 MS. WEISS: It's really difficult to hear you. 20 Sorry. 21 COMMISSIONER KEON: Do you have a slide on that 22 that we can put up? 23 CITY MANAGER OLAZABAL: Maybe if I present it 24 over there. I'm going to do it here because -- 25 look, the fan is little bit close and it's a little 202 1 bit less clear. I'm short. Okay. 2 Got it. 3 So there's -- we were presented -- we were 4 asked to look at different options and that's what 5 we did. 6 So one of the options we looked at is a $300 7 subsidy. What that means is that we're covering not 8 a particular use, not a residential, not a 9 commercial, but everybody that has -- it's less than 10 -- it's basically covering every single tax folio by 11 $300, up to $300 a year. 12 It covers a lot of the residential units and 13 approved by relief. For example, we ran that 14 particular scenario, that would mean that 70 -- we 15 have 183 units, residential in 10 Aragon. 16 Seventy units will be covered. It also affects 17 44 units. Everybody is affected, but 44 units -- 44 18 commercial properties in Miracle Mile are under 300, 19 so they don't pay. 20 MAYOR CASON: In other words, 44 will pay 21 nothing? 22 CITY MANAGER OLAZABAL: Will pay nothing. And 23 then on Giralda, there is one property that doesn't 24 pay. 25 We also ran a 500 subsidy scenario, and in that 203 1 scenario we had -- we ran the numbers and we got 2 161 units that are residential in the Miracle Mile 3 assessment that do not pay anything. 4 On the commercial side, 59 units do not pay 5 anything. 6 And on Giralda, it covers three commercial 7 properties. What that does is the city will be 8 subsidizing 160,000 of the annual assessment -- with 9 if there's a 50/50, it's 447 on the owner side and 10 747,000 on the city side for the annual debt 11 service. So this will cover 160,000 on the -- on 12 the -- right -- 13 This will cover -- what the owners are paying, 14 what the assessed owners are paying, 160,000 a year. 15 Total cost is 1.8 million for the total project. 16 And then if we did a 600 subsidy, then that 17 would cover 171 of the 183 residential units. It 18 covers 64 units on Miracle Mile, and it covers seven 19 commercial properties on Giralda. The total annual 20 amount of that is $177,000 and the total amount is 21 $2 million. This was a way where you're not 22 specifically taking out a particular use, but you're 23 actually providing a subsidy to everybody who's 24 being assessed. And that's the only way that, you 25 know, it's consistent with the economic study. 204 1 MAYOR CASON: This is one of many possibilities 2 we can discuss because there's that, there's impact 3 fees. 4 COMMISSIONER LAGO: I think we need to have an 5 executive session or we can have Sunshine meeting, 6 whatever you want to have with regard to this issue, 7 but let's -- in regards to the parking, you know, 8 raising the parking rates, which again I'm against, 9 but I'll still have a discussion, maybe someone can 10 convince me. Subsidies, thank you for the 11 information. You know, I appreciate. Any other 12 that -- paying for the residential components of 10 13 Aragon, we can discuss that, a multitude of issues 14 which I think are extremely important that we need 15 to discuss soon, within the next month, two months, 16 three months, so we can really define this process. 17 But we need to do right now is we need to so 18 something which hasn't happened in 20 years. We 19 need to vote on this financing, so I'm ready to make 20 a motion. 21 MAYOR CASON: Make a motion. 22 COMMISSIONER KEON: We're making the motion on 23 the Miracle Mile? 24 COMMISSIONER LAGO: By the way, another thing I 25 want to discuss, with all due respect to 205 1 Commissioner Keon, because I'm interesting to 2 finding more about Giralda. That is something -- 3 VICE MAYOR KERDYK: : Like you said, Miracle 4 Mile first deal with it, and discuss Giralda and how 5 we deal with that. 6 CITY ATTORNEY LEEN: What I would suggest is, 7 Mr. Mayor, if there's unanimous consent we can deal 8 with the three. There's several appeals where the 9 city's agreed and I just need to state them on the 10 record. Hank Fishkind mentioned them. 11 The first one relates to the California Pizza 12 Kitchen located at 300 Miracle Mile. The assessment 13 is being reduced from 51,156 to the adjusted amount 14 of 49,472. 15 The second appeal that's been agreed to by the 16 city is for 215 Miracle Mile. The assessment is 17 being reduced from 4969 to an adjusted amount of 18 49246. 19 The third, and this is not completely agreed 20 and this is the for the property on Alhambra, which 21 is Alhambra International Center, 150 Alhambra 22 Circle, the proposed amount is $304,247, is being 23 adjusted to an amount $233,687. I understand that 24 they don't completely agree with that. I'm sure 25 they are happy to take that over the higher one, but 206 1 their view is that they should not be included at 2 all; am I correct? 3 MR. MANDLER: Correct. We should be excluded 4 and so we also have other appeals that have been 5 filed. 6 CITY ATTORNEY LEEN: The additional appeals we 7 received which the city is not recommending any 8 adjustment is the Weston, 10 Aragon commercial, and 9 10 Aragon residential, although I want to be clear 10 we're talking about as a matter of the special 11 benefit, not whether you should provide a subsidy or 12 not. That's a separate questions. 13 COMMISSIONER LAGO: We'll discuss that policy 14 on another day. 15 COMMISSIONER KEON: We can go ahead and vote on 16 what is proposed and we could come back and look at 17 the residential piece of 10 Aragon at another time. 18 COMMISSIONER LAGO: Come back and lot at 19 Giralda and look at different parking options. 20 MAYOR CASON: To be clear, in terms of those 21 three specific appeals that you mentioned, do we 22 need to vote on those? 23 CITY ATTORNEY LEEN: No. If there is unanimous 24 consent you just include it in the final resolution 25 or the final vote. 207 1 COMMISSIONER QUESADA: Before the resolution, 2 you know, we've spent all day. We've spent five 3 hours discussing this item today. We've been 4 discussing the finance aspect. A lot of evidence 5 that's been heard. I really doubt that we will come 6 back and address those points. Maybe I'm wrong, 7 maybe we'll address them -- you know, I want -- I 8 really want to address the subsidy. I feel no one 9 wants to go through with it. I haven't really had 10 feedback if you're interested or not. 11 COMMISSIONER LAGO: I'm going to address your 12 concern -- my concern with regard to this issue. 13 I'm a little nervous about providing a subsidy when 14 it's such a bread stroke when it goes into the 15 retail component on Miracle Mile. 16 I have an issue with assisting the residents in 17 10 Aragon. I think my heart of hearts after 18 listening to them -- I attended a meeting close to 19 about, what 70 or 80 residents that were there. 20 After listening to them today, I think that 21 something needs to be done in regard to that issue 22 and I don't think we can meet here enough today to 23 really address the issue. It's not that I'm running 24 away from a problem. If you want to schedule time 25 right now and if you tell me I want to discuss it, 208 1 in three weeks, give me three weeks, two weeks, I'm 2 more than willing to discuss that issue along with 3 Giralda. I just think there is not enough time in 4 the day today to really go through it all to come 5 some consensus. 6 MAYOR CASON: I agree to the extent you do 7 that, you're going to be taking a lot of the small 8 businesses on Miracle Mile out of the equation, 9 which means that the bigger ones are going to be 10 paying more and the city contribution is going to go 11 up. 12 COMMISSIONER QUESADA: That is not necessarily 13 the case. 14 MAYOR CASON: I think there's a lot of 15 possibilities. 16 COMMISSIONER QUESADA: I'm talking about the 17 example that our city manager just read to the 18 record, which would add a bigger piece what it 19 actually would do -- if you listened to what our 20 city attorney told us at the beginning of the 21 meeting he actually clarified, if we start picking 22 out pieces, then we run into potential problems with 23 the legality of our, I guess our discretion, for a 24 lack of a better term, but it is across the board 25 that way and we don't have the start the process 209 1 from scratch. 2 COMMISSIONER KEON: We don't have to do it now. 3 That was the issue. And I think we can also, when 4 we get real estimates based on plans and we know 5 what the amount is, you know, I think we can -- 6 COMMISSIONER QUESADA: We had an estimate based 7 on plans. You're saying other than the Scan Tech 8 estimates we have? 9 COMMISSIONER KEON: Yes. That's a conceptual 10 design. Do you know the materials? What are the 11 materials? 12 COMMISSIONER LAGO: I wrote down what the city 13 manager stated, the 600 subsidy is $177,000 a year 14 and it equals $2 million over the life of the 20- 15 year of the bond. 16 Now, I got that. But if you look at the 17 numbers she said, it only covers about 170 out of 18 180 apartments. So we're not addressing the entire 19 issue in regards to the residents of 10 Aragon. So 20 we still have a problem in our hands. We've got to 21 bump that subsidy to what, 650 to 700 to meet that 22 need? I think what Commissioner Quesada saying it 23 makes sense, that it's a lot cleaner the process 24 because you're putting the subsidy across. We're 25 leaving out, I think it was, like, 10 or 12 units. 210 1 MAYOR CASON: One or -- 2 COMMISSIONER KERDYK: It was not that many. 3 CITY MANAGER OLAZABAL: Yes. If you are at 600 4 you are at 171. So you're leaving out 12 units. If 5 you go up to 650, you get 182. And there's one unit 6 that is my understanding, that it's a combined unit 7 so that one is at 900. So it's a little bit of 8 outlier in that sense. 9 CITY ATTORNEY LEEN: I do agree with what 10 Commissioner Quesada said from a legal perspective. 11 I do believe you could carve out the residential 12 ones and provide them their own subsidy. And you 13 could make a clarification. So you might want to 14 have two programs to address this. 15 However, I do think you need to address 16 commercial. I do agree with the commissioner that 17 are you should do it across the board. You don't 18 want to be picking and choosing. There's going to 19 be what is the public purpose and we're going to 20 have to put together -- 21 COMMISSIONER LAGO: If you go to with a 650 22 subsidy, you puts yourself in a position you are 23 only providing 70 of the commercial or retail units 24 or the commercial units. 25 CITY MANAGER OLAZABAL: Not exactly. You're 211 1 providing a subsidy to all of them, but seventy -- 2 CITY ATTORNEY LEEN: All of them are getting 3 the subsidy is my understanding, but in order to 4 make it the residential don't pay it all, you would 5 have to go to a certain amount. 6 MAYOR CASON: We can discuss this at the next 7 meeting and have more information. 8 CITY MANAGER OLAZABAL: Yeah. But of the 177, 9 64 receive a full subsidy. Everybody gets the same 10 amount. 11 COMMISSIONER KERDYK: Carmen, you and I talked 12 about subsidies yesterday. We were talking about 13 it. So further we want to talk about the 14 legalities. We'll probably discuss that. The 15 probability when you start making decisions you 16 start making bad decisions. So I'll like to proceed 17 along and take the first resolution and make a 18 motion. 19 MAYOR CARSON: What's your motion? 20 COMMISSIONER KERDYK: A motion to move forward 21 on the E-11, a resolution of the city commission 22 directed to the provisions of the Miracle Mile 23 improvement project. 24 MAYOR CASON: We have a second? 25 COMMISSIONER LAGO: I'll second the motion. 212 1 MAYOR CASON: Commissioner Kerdyk made the 2 motion. 3 Commissioner Lago seconded it. City clerk. 4 THE CLERK: Mr. Lago. 5 COMMISSIONER LAGO: Yes. 6 CITY CLERK: Commissioner Keon. 7 COMMISSIONER KEON: Yes. 8 CITY CLERK: Commissioner Kerdyk. 9 VICE MAYOR KERDYK: : Yes. 10 CITY CLERK: Commissioner Cason? 11 MAYOR CASON: Yes. 12 COMMISSIONER KEON: Now, does it need to be 13 included in your motions that we will come back and 14 revisit or is that a separate -- 15 MAYOR CASON: We've all agreed to do it. 16 MR. COMMISSIONER QUESADA: Let me clarify it. 17 So for the separate motion, I will make a motion 18 asking staff to move forward looking at additional 19 funding sources, different options that we have 20 addressing all of the concerns that we've heard 21 today from the residential hotel aspect. I feel 22 like we're going to be discussing this again, if 23 they can drill down the specific issues that we've 24 heard to see what other options could potentially be 25 out there. And I know -- I feel I'm asking the same 213 1 thing we've been discussing for the last six months. 2 But in any other out of the box ideas until we 3 actually proceed with starting to pay the 4 construction and moving forward. 5 COMMISSIONER KEON: When is the first 6 assessment? 7 MAYOR CASON: Two years from now. 8 COMMISSIONER KEON: I know. There is no 9 interest -- but assessment or no assessment nobody 10 for two years. 11 COMMISSIONER LAGO: City is paying the 12 interest. 13 UNIDENTIFIED SPEAKER: What about those -- 14 COMMISSIONER LAGO: Would you like to stand up? 15 COMMISSIONER KERDYK: Two years when we take 16 out the financing. If we take out the financing -- 17 UNIDENTIFIED SPEAKER: If you want to prepay 18 to avoid the financing the two years of interest, 19 and the initial financing fees to create the bond, 20 it has to be a number that each of the property 21 owners is going to receive, I would ask you to 22 give -- when you give a credit to them, that you 23 would then include the two years' of interest that 24 the city would be saving and share that with the 25 property owners, if they decide to prepay? 214 1 MS. BIRDSILL: The way that it's scheduled to 2 work, if we were to pass everything today and move 3 forward today, we would start moving forward issuing 4 the bonds and putting BIDS for the resolution and 5 all of that. The prepayment period would start in 6 the next week or so. We would send out notices 7 based on what was passed today. They can prepay and 8 avoid all financing and interest costs. 9 Now, since the commission wants to talk more 10 about possibility of reducing things, we may have to 11 wait as to when that prepayment period can begin. 12 And also is going to wait as to when we're going to 13 issue the bonds because we don't know -- have to 14 wait until after the prepayment period to know how 15 much we're going to take out. So it really depends 16 when we come back to a final number of what we're 17 going to assess. But the assessment as the schedule 18 stands as of now, the first assessment will be 19 November 2016. 20 COMMISSIONER LAGO: State your name for the 21 record. 22 MR. SAND: My name is Charles Sand. I'm the 23 owner of several properties on Miracle Mile. But 24 you haven't -- as an administrative item in the 25 sense of the 50/50 sharing, you haven't dealt with 215 1 the issues any property owner wants to prepay. 2 45 percent of this whole deal is financing and 3 interest and other things like that, almost close to 4 50 percent. So if the property owner wants to 5 prepay, in the interest of the 50/50 sharing, that 6 you ought to share with the property owner the 7 interest that you wouldn't have to be paying on the 8 bond. I'd like a hundred percent of that sharing to 9 go. But if we're -- you're already laughing. One 10 for one. 11 MS. BIRDSILL: The prepayment amount 12 doesn't include interest or financing costs. 50 13 percent of their share in the prepayment amount so 14 -- 15 MR. SAND: But the budget is 50 percent. Your 16 budget right now is, like, two million dollars for 17 the -- you've budgeted two million dollars to pay 18 for interest; is that correct, for the two years? 19 MS. BIRDSILL: If everybody -- we were to it 20 assess -- 21 MR. SAND: The budget presently is at two 22 million -- 23 COMMISSIONER LAGO: But that still is influx. 24 You have to understand. 25 MR. SAND: It can be calculated in what you're 216 1 going to do, whatever that amount is, you are going 2 to share that with the guy that is paying upfront? 3 COMMISSIONER LAGO: I promise we're going to be 4 as transparent as possible when it comes to this 5 issue. I promise. 6 MR. SAND: I'd take the money. Okay? 7 COMMISSIONER LAGO: You're batting a thousand 8 today. I got you right here with your documents. 9 MAYOR CASON: We have a motion by Commissioner 10 Quesada. Do we have a second. 11 COMMISSIONER KEON: I'll second it. 12 MAYOR CASON: Ms. Keon seconds it. City clerk. 13 THE CLERK: Commissioner Quesada. 14 COMMISSIONER QUESADA: Yes. 15 THE CLERK: Commissioner Keon. 16 COMMISSIONER KEON: Yes. 17 THE CLERK: Vice Mayor Kerdyk. 18 COMMISSIONER KERDYK: Yes. 19 THE CLERK: Commissioner Lago. 20 COMMISSIONER LAGO: Yes. 21 MAYOR CASON: Yes. 22 VICE MAYOR KERDYK: : What do you want to do on 23 E-12? 24 COMMISSIONER KEON: I'd like to make a motion 25 to defer Giralda so we can meet and discuss it 217 1 further as soon as possible. 2 And if you look at the effect that one street 3 has on that building on Alhambra -- how much is it 4 on Alhambra? What is the assessment? 5 CITY ATTORNEY LEEN: Well, adjusted is now 6 $233,687 a year. No. That's -- Diana, is that per 7 year or is that the total? 233,687. I believe that 8 is the total. The annual assessment is 17,610 9 adjusted for the Alhambra one. 10 MS. WEISS: I think it's about 21 percent or so 11 of the overall assessment. 12 COMMISSIONER KERDYK: So the motion is to 13 defer? 14 COMMISSIONER KEON: I'd like to make a motion 15 to defer to further discuss. 16 COMMISSIONER QUESADA: I mean, I absolutely 17 disagree with deferring the Giralda project. This 18 is something that we have been discussing since the 19 inception of this project. To move to defer, I 20 think timely it's something I think we should have 21 discussed months ago about deferring. I think it's 22 necessary for Giralda to be a part of this plan. 23 Again, Giralda historically has been a great city 24 within downtown Coral Gables. There's a lot of 25 great events, a lot of great restaurants, just 218 1 because the market has changed somewhat, you know, 2 to the detriment of Giralda, I don't think we should 3 abandon it at this time. 4 If you look at a lot of great cities throughout 5 the country. If you look at the Boston, some of the 6 areas, the inner harbor in Boston was revitalized 7 and is spectacular nowadays. There are areas of New 8 York City, there are areas of Philadelphia where a 9 lot of great cities in the world that have certain 10 parts of their downtown gone through some change and 11 when the city invests in it, it has thrived. I 12 think that's the situation. That what we're seeing 13 with Giralda. And I think that we absolutely should 14 stay on board and continue pushing through with 15 Giralda. 16 COMMISSIONER KEON: You are changing the use of 17 Giralda. What you're looking to do is creating 18 Giralda as a public space. You're changing its use 19 for the benefit -- maybe as the city as a whole or 20 restaurants. I don't think that restaurants will go 21 where restaurants have either the facility wherever 22 to go. And you're looking -- you have an assessment 23 on the Church of Scientology that is under contract. 24 And you know what, they can build a three, 25 four-story building so there... 219 1 COMMISSIONER QUESADA: And -- 2 COMMISSIONER KEON: Maybe whatever the building 3 they build there with the plaza, with whatever, will 4 change the whole context of that street. 5 Developments change the street. 6 MAYOR CASON: Do you want -- let me ask the 7 BID. Do you want us to delay going forward? 8 Hold on. 9 I would like Mr. Hersh -- you're the one saying 10 this has been the BID's project for decades. Do you 11 want us to delay it? 12 MR. HERSH: We do not. We think it's part of 13 the overall vision that will support the community 14 in general. 15 MAYOR CASON: Have any of your members, other 16 than what we've heard come to you and said we have 17 second thoughts about including Giralda? 18 MR. HERSH: Not one. 19 MAYOR CASON: Anybody here received an e-mail? 20 COMMISSIONER QUESADA: I've spoken to all of 21 those owners, other than the ones who are 22 represented here today. 23 COMMISSIONER KERDYK: There was a motion to 24 make a vote. 25 CITY ATTORNEY LEEN: Before you vote -- 220 1 I know it should be continuous and not defer on 2 all. 3 COMMISSIONER KEON: Make a motion to continue. 4 MR. HERSH: Alhambra is not on the BID. 5 UNIDENTIFIED SPEAKER: So you have the BID 6 supporting a street that is not part of -- 7 MR. HERSH: The BID absolutely wants Giralda 8 and one of the reasons is that Giralda voted in the 9 selection was to take a part of these improvements. 10 COMMISSIONER KEON: Are you a property owner in 11 any of those parcels? 12 MR. HERSH: I am not. 13 COMMISSIONER KEON: Do you operate a business 14 on any of these? 15 MR. HERSH: I operate a business on Miracle 16 Mile for 30 years. 17 COMMISSIONER KEON: So you're a retailer? 18 MR. HERSH: I'm a professional. I'm an 19 architect. 20 COMMISSIONER KEON: Fine. 21 MAYOR CASON: We have a motion. 22 CITY ATTORNEY LEEN: Mr. Mayor, I know that you 23 are going to decide whether to grant this motion, 24 but it needs to be legally it needs to be continuous 25 with time certain at the next commission meeting 221 1 which I recommend be 10:00 a.m. or soon thereafter. 2 COMMISSIONER KEON: You are a property owner on 3 Giralda? 4 MAYOR CASON: Next meeting. 5 COMMISSIONER KEON: Second. 6 MAYOR CASON: City clerk. 7 THE CLERK: Commissioner Keon. 8 COMMISSIONER KEON: Yes. 9 THE CLERK: Commissioner Kerdyk. 10 COMMISSIONER KERDYK: Yes. 11 THE CLERK: Mr. Lago. 12 COMMISSIONER LAGO: No. 13 THE CLERK: Commissioner Quesada. 14 COMMISSIONER QUESADA: No. 15 MAYOR CASON: No. 16 Let's have a motion on E-12. Anybody make a 17 motion? 18 COMMISSIONER KEON: What is E-12? 19 MAYOR CASON: This is -- 20 COMMISSIONER QUESADA: I'll make a motion on 21 E-12. 22 MAYOR CASON: Commissioner Quesada makes a 23 motion. 24 Do we have a second? 25 COMMISSIONER LAGO: I'll second the motion. 222 1 MAYOR CASON: Commissioner Lago seconds it. 2 City clerk. 3 THE CLERK: Commissioner Kerdyk. 4 COMMISSIONER KERDYK: Yes, I'm going to vote 5 for it. 6 THE CLERK: Commissioner Lago. 7 COMMISSIONER LAGO: Yes. 8 THE CLERK: Commissioner Quesada. 9 COMMISSIONER QUESADA: Yes. 10 THE CLERK: Commissioner Keon. 11 COMMISSIONER KEON: No. 12 THE CLERK: Mayor Cason. 13 MAYOR CASON: Yes. 14 COMMISSIONER QUESADA: Mr. Mayor, one thing to 15 be clear, I think maybe what is necessary -- and I 16 don't know if Commissioner Keon or Commissioner Lago 17 have had the benefit of speaking with Richard Heeps. 18 When you and I were first elected, I know that I an 19 independent meeting with Richard Heeps who put the 20 conceptual plan together for the Giralda and Miracle 21 Mile project. It might be beneficial for Mr. Heeps 22 to come back. 23 MAYOR CASON: Good idea. 24 COMMISSIONER QUESADA: Or meet with 25 Commissioner Keon to discuss what that plan was. I 223 1 don't think you use guys ever saw it. 2 COMMISSIONER KEON: It isn't -- it's -- on way 3 or the other, what I don't care if I've seen some 4 plans or whatever. What it is, is they're all 5 conceptual plans. 6 In order to really to develop this project and 7 to move this project forward we have to go out for 8 an RFQ process on design and to do that I know that 9 on Miami Beach in looking at the process they use 10 for Lincoln Road, they assembled -- they put out an 11 RFQ for design. They established a citizens handle 12 or a group of stakeholders which would be, you know, 13 retailers, property owners, use -- you know, a 14 variety of people throughout the city, residents to 15 go through and that the RFQs. And I think they 16 recommend to and the city manager will choose the 17 best two to make a recommendation to the commission. 18 So you know, I think there is a very significant 19 process that now begins. The only piece we've done 20 is to talk where we get the money. We need an RFQ 21 for design. You need to establish how you're going 22 to review those designs. You know, I think this is 23 the opportunity where you have to involve 24 stakeholders in the design review talking with the 25 firms that will come forward and eventually select 224 1 to actually do the design. 2 You know, once those that design is done, then 3 you can get some hard numbers that tell us what this 4 is going to cost. In the meantime, in speaking with 5 Public Works, they are in the process and will 6 provide for us the -- all of the infrastructure 7 assessments as to, you know drainage, lighting, 8 alleys, power, everything else. 9 In speaking with Mr. Hephardt, our director of 10 Public Works, he had said that he could -- they 11 could develop or the city could develop this -- a 12 project delivery methodology and have it back to us, 13 I think, the September 11th meeting or when do you 14 think -- which meeting could you come back to us? 15 CITY MANAGER OLAZABAL: We're going to have on 16 September 11th, so it's in two weeks but we will aim 17 to prioritize this and aim on that meeting, be 18 prepared to talk about project delivery method which 19 will include potential options how we move forward 20 with the project regarding RFQ and a public process. 21 We'll try to summarize how we will go about that 22 portion of the project. 23 In addition, we will come back and start 24 talking about funding sources, including back fees 25 and other grants that may be available. 225 1 We need to make a decision in short order as 2 to -- if we're going to do some relief because we 3 can't go out and get the bonds until we decide what 4 amount we're going to go up. And until we have the 5 bonds, we -- you know, we can't really start 6 investing on the soft costs -- are going to be 7 somewhat of an investment for this project. So we 8 would like to have financing in place before moving 9 forward, but we'll have another meeting to kind of 10 iron out a lot of those details that are obviously 11 of concern. 12 COMMISSIONER KEON: I mean, I think that those 13 are essentials details. I have never -- I couldn't 14 imagine in the private sector somebody embarking on 15 a $15 million project without knowing the costs. 16 MAYOR CASON: You'll develop -- 17 COMMISSIONER KEON: I'm not comfortable with 18 the dollar amount. But I mean, we've agreed to not 19 exceed it and I certainly hope we wouldn't. But, 20 you know, we need to look at it and make some 21 decisions with regards to infrastructure and with 22 regard to drainage. 23 You know, we had a long discussion yesterday 24 about the rising sea level, you know, providing 25 storm relief for the city, to be able to change the 226 1 capacity. All of that really effects the drainage 2 that we put in the street and what's necessary. We 3 really need Public Works to tell us as long as 4 they're going to tear this road up, this isn't a 5 25-year project. We hope we're never going to tear 6 this road up again for any reason for 25 years. 7 We're not going have to go back and do drainage, 8 we're not -- lay down conduits so that you can 9 eventually put fiberoptics so you have wi-fi sitting 10 on the Mile at the cafe or whatever else. There are 11 a lot of decisions that need to be made as to how 12 you move forward with this project so that it 13 delivers to the community the value of its costs. 14 MAYOR CASON: You've got your marching orders. 15 You know what we want? 16 CITY MANAGER OLAZABAL: Yes. 17 CITY ATTORNEY LEEN: Mr. Mayor, i'm just going 18 to place on the record the responses to the public 19 records request that we received here. I don't want 20 to get into a debate as to whether we were 21 responsive or not. I looked at it. I thought we 22 were. There were some issues with the uploading. 23 It was a very large request. 24 MS. WEISS: I beg to differ. 25 CITY ATTORNEY LEEN: What I'm going to do is 227 1 put it on the record and anyone can judge. 2 (This portion of the hearing was concluded.) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 CERTIFICATE 22 23 STATE OF FLORIDA) 24 ) SS. 25 COUNTY OF DADE) 228 1 2 I, Marlene Marban, FPR, a Notary Public in and 3 for the State of Florida at Large, certify that I was 4 authorized and did stenographically report the foregoing 5 proceedings and that this transcript is a true record of 6 the proceedings before the Commission. 7 8 I further certify that I am not a relative, 9 employee, attorney, or counsel for any of the parties 10 nor am I a relative of employee of any of the parties; 11 attorney of counsel connected with the action, nor am I 12 financially interested in the action. 13 14 Dated this 6th day of October, 2014. 15 16 _______________________________ 17 Marlene Marban, FPR 18 19 20 21 22 23 24 25