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Miami-Dade mayor won’t recommend monorail plan. He says too many details still unknown

Miami-Dade Mayor Carlos Gimenez said Tuesday he can’t yet recommend his administration’s proposal for a $14 million preliminary agreement for a monorail system between Miami and Miami Beach — a contract up for a vote Tuesday before the County Commission.

“There are many more details to see before I would recommend anything,” Gimenez said Tuesday morning by text. “And we don’t have the time required to get those details.”

With weeks left in office, the Gimenez administration has pushed for a quick vote to spend up to $14 million as an advance payment on a monorail system that could eventually cost the government about $60 million a year.

Described as “rushed” in a recent county report, the dash to approve a preliminary design contract with Genting and partners is avoiding the usual timetable of committee hearings and regular appearances before the oversight board for the transportation tax that would fund it.

Last Wednesday, Miami Beach passed a resolution urging a delay to Tuesday’s planned county vote, with City Commissioner David Richardson saying, “This smells like it’s being pushed through before an election.”

Audrey Edmonson, the outgoing chairwoman of the Miami-Dade County Commission, on Oct. 8 asked Gimenez to bring a monorail item in front of the board before she leaves office. Edmonson’s Miami district includes the former Miami Herald property that Genting purchased in 2011 and plans to use as the mainland monorail station for the four miles of elevated track that would run next to the MacArthur Causeway to South Beach.

“I would like to at least leave from this dais with something being done,” said Edmonson, the county’s District 3 commissioner. “We either vote it up or we vote it down.”

A rendering of the Miami Beach Monorail that’s been proposed by Genting and partners to connect Miami with Miami Beach. The privately run and built project, a descried in a 2020 proposal, would cost taxpayers about $60 million a year.
A rendering of the Miami Beach Monorail that’s been proposed by Genting and partners to connect Miami with Miami Beach. The privately run and built project, a descried in a 2020 proposal, would cost taxpayers about $60 million a year.

Two key commissioners divided on monorail vote

Gimenez said the proposed contract, negotiated by his administration, was sent to commissioners at Edmonson’s request. The agenda item includes an Gimenez memo with the heading “Recommendation,” that states the proposed contract “has been submitted for approval.” Gimenez said the language reflects his neutral position on the proposal as he prepares to leave office on Nov. 17.

I am “just bringing up the item as requested” by Edmonson, Gimenez said.

Edmonson’s request puts her at odds with the county commissioner representing the Miami Beach end of the tracks, where Genting would build a depot at Fifth Street. As the District 5 commissioner, Eileen Higgins represents that part of Miami Beach and wants a delay in Tuesday’s vote instead of “rushing this through.”

“This could be a wonderful deal for the taxpayers,” she said Thursday night at an emergency meeting of the county’s Citizens Independent Transportation Trust, which has oversight authority over Miami-Dade’s half-percent transportation tax. “Love the idea. Want to support it. But I want time to evaluate it.”

The issue dividing Edmonson and Higgins is an 18-month interim county agreement with Genting and partners to pursue the tax-funded, privately run monorail. Miami-Dade would pay up to $14 million to cover preliminary design work for the project, ahead of a potential final vote in 12 to 18 months on whether to pay Genting and partners upward of $2 billion to build and operate the monorail system. Miami-Dade also would secure the land needed to build the system.

“We would not be locked into anything,” said Alice Bravo, Miami-Dade’s transportation director. “We’re just taking a baby step.”

Bravo noted the original solicitation for transit proposals for the Beach route included a provision for an interim agreement, which would have Miami-Dade pay the would-be developer to produce $8 million worth of design schematics and site plans that could be used even if the monorail project falls through. Miami-Dade would keep the work, and also pay up to $6 million to compensate the developer if commissioners later decide not to sign a final deal.

The final payment plan would be negotiated ahead of that agreement as well. The Gimenez memo on the interim agreement does not address how Miami-Dade could afford the submitted proposal, or how the costs would affect the ability to build other transit systems.

Proposed as a $770 million project, paid for with tax dollars

Under the terms laid out in the proposal made public in May, the for-profit partnership would put up the $770 million needed to build the rubber-wheel train system over Biscayne Bay, along with stations at Genting’s waterfront property in downtown Miami and the one in South Beach.

While the private companies would provide the development dollars up front through borrowed dollars and equity contributions, the proposal shows Miami-Dade paying it all back, plus interest and profit. The county would also cover operating costs over 30 years, according to the proposal.

That’s the standard model for projects built under the “public-private partnership” model — often known as a “P3,” where a company covers expenses up front in exchange for government payments to reimburse the costs and provide a profit. That’s how Miami-Dade is building its new downtown Miami courthouse, and how Florida and Miami-Dade got the PortMiami tunnel built.

A rendering of an elevated monorail running along the MacArthur Causeway, as depicted in a county study of transit options for the long-sought “Baylink” route.
A rendering of an elevated monorail running along the MacArthur Causeway, as depicted in a county study of transit options for the long-sought “Baylink” route.

First transit project across Biscayne Bay since streetcars

The county revenue for the monorail project would come in payments starting at $60 million a year — 75% of those “availability payments” cover development costs, and 25% percent cover operating expenses.

The Gimenez memo said the interim agreement caps costs at $586,500, but that doesn’t appear to include all of the expenses the Miami Beach Monorail Consortium lists in the deal up for a vote Tuesday. The debt on the project would be $713 million, to be paid back at 3.3% interest. The equity investment the consortium would put up is valued at $79 million. That comes with a much higher return, at 11.5% a year. That adds up to $792 million.

The same budget in the interim agreement has the county paying a slightly higher availability payment than what was first proposed for the first year: $61 million. Bravo said the availability payment is bound to be far lower once a final deal comes to the commission. “The real number won’t be anywhere near that,” she said.

Voting for the agreement won’t commit Miami-Dade to the full deal, but it would move the county far closer to a mass-transit line over Biscayne Bay that at any time since streetcars ran from the barrier island in the 1930s. That’s not for lack of trying. Long known as “Baylink,” the MacArthur had its first transit study in 1988. But county and city leaders have never agreed on how to run more than buses over the bridge to link Miami-Dade’s largest office district with its most popular tourist destination.

“I’m tired of the studies,” said Oscar Braynon, a retired county administrator and member of the transportation-tax board, which voted to endorse the interim monorail agreement on Thursday. “I’m ready to move forward.“

A county-funded study in 2019 found extending Metromover over the MacArthur would attract 22% more riders than a monorail, since passengers could ride from the Government Center Metrorail station to South Beach in a single train. While the analysis had development costs about the same for the two transit options, a monorail would be far cheaper to run and maintain: 36% less costly than Metromover, according to the $10 million study by the Parsons consulting firm.

Miami-Dade’s transit finances were strained even before the 2020 coronavirus pandemic sent sales taxes plunging and sparked worries that a commercial pullback will depress property-tax revenues in 2021. Both fund the transit system.

Monorail partner caught up in Maryland’s Purple Line P3 fiasco

The monorail partners have their own strains.

Genting, the Malaysian gambling company which has hoped to build a casino resort on the former Miami Herald property it purchased in 2011, saw its stock drop in August when a Hong Kong subsidiary running its cruise ships paused payments to creditors and began talks to restructure its debts.

Meridiam, the development company behind the PortMiami tunnel project, is providing the funding for the monorail proposal and is considered the main partner because it holds the largest stake in the venture.

The Paris-based developer and another firm in the monorail proposal, Fluor Enterprises, are part of a consortium that won a Maryland contract to build the $5 billion Purple Line light-rail project under the P3 model. The Purple Line group sued to drop the job over cost overruns, and in September a judge cleared the way for Maryland to take over in a switch the state said could mean years of delays.

Transit’s Bravo said the interim agreement would help shield Miami-Dade from the same kind of debacle by taking the time to research and develop the engineering plans that can lead to unexpected costs as well as finger-pointing over who is responsible.

“That’s how we, as an agency, mitigate risk,” said Bravo, a former engineer for Florida’s Transportation Department. “That was not the structure followed on the [Purple Line] project.”

Chris Hodgkins, the Meridiam executive who was the public face of the PortMiami tunnel project, said in a statement: ”Our goal remains to deliver a reliable and low-cost transportation project that will be a solution for residents who continue to demand greater access to public transit, while also generating thousands of jobs at a time when our economy needs them the most. We are looking forward to this collaborative partnership with the county as we develop this much-needed public transit option. ”

Three leaders of Miami-Dade Mayor Carlos Gimenez’s 2016 reelection campaign share a light moment before the swearing in of Miami Gardens Mayor Oliver Gilbert as the new chairman of the Transportation Planning Organization on Feb. 21, 2019. From left to right are Ralph Garcia-Toledo, who was Gimenez’s volunteer finance chairman; Brian Goldmeier, the hired fund-raiser for the 2016 race; and Jesse Manzano-Plaza, the campaign manager. Garcia-Toledo and Manzano-Plaza are part of a proposal by Genting to build and operate a county monorail system. Garica-Toledo and Manzano-Plaza are part of the group pursuing a monorail project in Miami-Dade.

Only one bidder for the Beach transit project

The monorail group was the only bidder in the county competition for a transit system over the MacArthur, a bidding contest that started early at the request of Genting and its partners. The Parsons study was still underway when the monorail sent its proposal to the Gimenez administration in spring 2019. Commissioners accepted Gimenez’s recommendation to open up bidding for competing proposals, but none were submitted by the March deadline.

In an Oct. 15 report, the county’s Inspector General urged commissioners to scrutinize the monorail plan, since there are no competing proposals for comparison. The report noted a county screening committee only gave the monorail plan a score of “Good” on most criteria, short of the “Excellent” rating that represents the ideal evaluation.

Among the questions raised in the report are whether the monorail would appeal to bus riders who already can ride across Biscayne Bay from Metrorail stations in Miami downtown, and what impact the required transfer to monorail would have on ridership.

“Many more questions need to be asked that can only be answered with more information,” the report read.

Last week, staff of the transportation-tax board, the Citizens Independent Transportation Trust, published a list of questions it said needed answering before the Board of County Commissioners votes. “The rushed process by which this agreement is being considered by the CITT and BCC does not allow for thoughtful and thorough analysis,” the report stated, “and may further erode the public’s trust...”

Edmonson is using authority granted her during the COVID emergency to waive the usual commission rules that would allow Higgins or another commissioner to defer votes on last-minute legislation to the next meeting. Such a delay would push the monorail item to the first agenda for newly elected board members and Gimenez’s replacement as the next mayor.

While county term limits require Edmonson to leave the commission Nov. 16, Higgins won her seat in 2018 and is up for reelection in November. A partner in the monorail effort, lobbyist and contractor Ralph Garcia-Toledo, gave $3,000 in July to the campaign of her challenger, former school board member Renier Diaz de la Portilla.

Higgins had been supportive of the project, but then called for a new bidding process in May when the Ethics Commission released a report detailing how Edmonson and Mayor Gimenez met privately in Hong Kong with Genting on the Beach project a year before inviting bids on the corridor. Diaz de la Portilla called the monorail project a “boondoggle” then and on Sunday said “unlike Higgins, my position has not changed.“

Garcia-Toledo and fellow monorail partner Jesse Manzano-Plaza both have political ties to Gimenez. Garcia-Toledo was finance chairman for Gimenez’s 2016 reelection campaign and Mazano-Plaza serves as the paid campaign manager.

They’re both supporting Commissioner Esteban “Steve” Bovo Jr. in the fall runoff election to replace Gimenez, who is running for Congress. Combined, they gave $10,000 to Bovo’s election effort in 2020. Garcia-Toledo last gave to Bovo’s opponent, Commissioner Daniella Levine Cava, in 2019, with a $1,000 donation.

During an Oct. 5 WLRN debate sponsored by the Greater Miami Chamber of Commerce, Levine Cava said: “Very sadly, this Genting proposal was tainted with the ethics concerns, the trip to China. ... I would be in favor of making sure that we have some other options on the table. “

Bovo said he knows a one-seat ride is better for the Miami Beach corridor but that he doesn’t want delays to pursue more expensive options that may never come to pass.

“Thirty years we’ve been talking about this,” he said. “We’d all love to able to achieve a one-seat ride ... but we have to take into account that could be very expensive.”