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Overtown CRA seeks ownership stake in Worldcenter Marriott

Overtown CRA seeks ownership stake in Worldcenter Marriott
MDM Group plans a $750M hotel & convention center on the former Miami Arena site
February 04, 2016 12:45PMBy Francisco Alvarado

Renderings of the Marriott Marquis Miami Worldcenter Hotel & Expo Center

In seeking a tax rebate deal worth $100 million, the developer of the 1,800-room Marriott Marquis Miami Worldcenter Hotel & Expo is being asked by Miami’s Southeast Overtown/Park West Community Redevelopment Agency for a 5 percent equity stake in the project.
At a town hall meeting Wednesday night, Miami City Commissioner Keon Hardemon presented his proposal to a packed audience inside Trinity CME Church. “I am talking about ownership,” Hardemon said. “I am talking about the ability for us to have a stake in the project.”
Representatives for the developer, MDM Group, confirmed that Hardemon’s request is part of ongoing negotiations the company is having with the CRA. MDM is proposing a $750 million hotel and convention center with 600,000 square feet of meeting space on the former Miami Arena site in Overtown. The project is within the planned Miami Worldcenter footprint.
In September, Miami city commissioners authorized the CRA to begin working out a public benefits deal with MDM, which wants the tax rebates paid out over more than 20 years after the project is finished. While the rebates have a present-day value of $75 million, the total payout will more than $100 million due to inflation.
In order to fulfill MDM’s request, the city and Miami-Dade County would need to approve extending the life of the CRA from 2030 to 2042. The developer also wants to recoup more than 50 percent of the property taxes meant to go back to the CRA, an agency charged with removing slum and blight.
Javier Fernandez, an attorney representing MDM, updated the town hall attendees on the current status of the negotiations, outlining the public benefits for which his client has agreed. However, he did not mention the 5 percent equity issue in his presentation.
Fernandez said MDM is willing to hire 50 percent of its local skilled construction workforce and local subcontractors from Miami-Dade County. The CRA is requesting 65 percent. In addition, MDM will not screen the criminal histories of job applicants, will offer a minimum wage of $14.63 to hotel and convention center employees, and will offer internships and jobs to students from a nearby high school, Fernandez said.
MDM has also agreed to hire 20 percent of its permanent workforce from Overtown and 70 percent from Miami-Dade, Fernandez added.

Source: The Real Deal

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