As the developers behind the American Dream Miami mega-mall try to revive the stalled $4 billion project , Miami-Dade County might use property taxes to cover some costs.
Legislation set for a final vote Tuesday by the County Commission would water down a subsidy ban imposed on the retail theme park six years ago.
The looser rules would allow Miami-Dade to divert property taxes to cover about $60 million in local road construction and other infrastructure costs that otherwise would be the developers’ responsibility. The legislation wouldn’t authorize any subsidies for the project, but lifts restrictions on spending county dollars to help get it built.
READ MORE: America’s largest mall has been stalled for years. Could Miami-Dade help revive it?
Approved by a committee of the County Commission in July, the proposal revives a fight over public dollars for what would be the largest mall in America, built on vacant land where Interstate 75 meets the Florida Turnpike north of Hialeah.
“Why should the county fund a private developer’s infrastructure obligations?” Jeffrey Bercow, a lawyer and lobbyist for a group of existing South Florida malls, asked commissioners at the July 8 hearing where the subsidy legislation won preliminary support.
The company behind Minnesota’s Mall of America, developer Triple Five, won county approval to build the six-million-square-foot complex in 2018. That included a provision making public infrastructure needed for the project, including an estimated $60 million in new county roads, the responsibility of the developer.
Triple Five wants to lift 2018 ban on Miami-Dade subsidies for mega-mall
Also in 2018, the rival malls that Bercow represents successfully lobbied commissioners to impose a ban on using county dollars to subsidize the project. The South Florida Taxpayers Alliance, a group backed by the owners behind the Dolphin Mall, Bayside Marketplace and other shopping hubs, claimed Triple Five was bound to seek property-tax subsidies to make the ambitious project profitable, citing government financial support in Minnesota and in a similar and slightly smaller American Dream mall already open in New Jersey.
No commissioner in office during Miami-Dade’s 2018 approval remains on the board, and Triple Five hopes the new commission will rollback those subsidy restrictions and consider the use of county dollars to boost the creation of a shopping destination like no other in Florida. Plans for American Dream Miami include an indoor ski slope, an artificial lake deep enough to allow submarine rides and tons of sand to create a beach inside the 175-acre complex.
Keon Hardemon, a Miami-Dade commissioner elected in 2020 and reelected in August, said it didn’t make sense to have a past commission decree that future commissioners couldn’t consider subsidies for only one project in the county.
“We at least deserve to have the conversation,” Hardemon said at the July 8 committee meeting, noting the commission could ultimately decide to reject any subsidy request for American Dream. “I’ve never appreciated somebody trying to keep me safe from myself.”
Under Triple Five’s plan, public dollars wouldn’t go to the company but to public roads that, in 2018, the developer agreed to get built before it could start construction.
With the current ban on the use of any county dollars to pay for those roads, Triple Five would be left to pay what it estimates as a $60 million local roads tab if it can’t secure state infrastructure dollars or persuade Miami-Dade to change the rules.
“Let’s be really clear here,” Triple Five lobbyist and lawyer Miguel Díaz de la Portilla told the Policy committee on July 8. This “item is not asking for any subsidies of any private entity.”
Because the public dollars would go to public roads, Commissioner Juan Carlos Bermudez said it’s wrong to consider the legislation he’s sponsoring as putting Miami-Dade on track to subsidize American Dream.
“This is not about any subsidies for anybody,” Bermudez, whose district includes the American Dream site, said at the July 8 meeting. “I’m not asking at all for that.”
Will the county help build roads around the American Dream Miami project site?
At the center of the fight sit four roads that for now exist only on blueprints, which would connect the American Dream site to major highways on either side of the site. That includes a potential six-lane road linking Northwest 102nd Avenue with Northwest 170th Street and another connecting 170th with Florida’s Turnpike.
For Bermudez, the roads could help ease congestion around the site even if American Dream never materializes. “What really matters to me is getting these roads built,” he said.
Even if the subsidy legislation passes a final commission vote, Triple Five would still need to come back to the commission for an actual request for public dollars.
By now, the project is years behind schedule. In 2015, Triple Five agreed to have the mall open and employing at least 5,000 people by 2025, but the developer hasn’t yet begun the permitting process to start construction.
Carladenise Edwards, chief administrative officer under Miami-Dade Mayor Daniella Levine Cava, told commissioners at the July 8 meeting that the administration wanted Triple Five to lay out how the project is going to get built before opening up the subsidy discussion.
“One of the things we would like to do is ensure we understand what the path forward is, what the trajectory is,” Edwards told the committee members. “So that we actually know what transportation needs are there … and how much of that we should subsidize.”
In a statement Friday, Triple Five said the county subsidy ban is holding up talks with Florida transportation administrators on state funding for roads the project needs.
“To our understanding, the County cannot currently take advantage of possible state interest in building significant freeway infrastructure that alleviates traffic congestion in the northwest part of the county without a lifting of current restrictions,” the statement said. “Should the restrictions stay in place, the unintended consequence would be a missed opportunity for Miami-Dade County to take advantage of apparent state interest in new infrastructure to relieve traffic congestion.”
A spokesperson for Florida’s Department of Transportation was not immediately available for comment on the statement.
At the July 8 meeting, Edwards said she wasn’t aware of the 2018 legislation preventing Triple Five from negotiating with Florida or Miami-Dade for funding that would help the project.
“This does not preclude us from having conversations,” Edwards said of the 2018 restrictions on county funding. “And it does not preclude them from asking for what is needed from the state or the feds or others related to transportation.”
The Bermudez legislation would remove the 2018 restrictions and make it possible to use county property taxes to subsidize the American Dream project, as well as make it easier for Triple Five to pay for road costs with development fees required by the county.
Those are known as impact fees , and they can approach $100 million for a project as large as American Dream. Impact fees are cash payments that are separate from property taxes and are paid only once by developers. Builders of new developments pay impact fees to fund new government expenses that come with growth in the area, including new road maintenance costs, transit expansion, extra police patrols and other costs.
The Bermudez legislation loosens the rules on how Triple Five could use the impact fees to pay for its road obligations – a financial arrangement that’s more common for local developments. A spokesperson for Triple Five said the language would move the road projects into a category allowing for the project’s impact fees to be used for those infrastructure costs.
On the table: property-tax subsidies for a stalled mega-mall project
Additionally, the proposed legislation would allow Triple Five to access tax increment financing, a term for when a portion of future property taxes is used to pay for expenses associated with a project or improving an area. The idea is the extra investment will spur more construction in the area, generating enough extra tax dollars to make it worth losing the initial diverted tax money.
Charles Marohn Jr. is the president of Strong Towns, a Minnesota-based advocacy group that focuses on local governments’ financial and planning policies. He said tax increment financing often gets put in place when local governments fear losing out on a development project without considering whether it makes more sense financially just to say no and see if the developer will build it anyway or sell the property to someone eager to develop the land without subsidies.
“What would happen if they didn’t develop the land? Would it go vacant?” Marohn said. “The reality is if somebody comes along and builds it to 80% of what they were going to do, [but] with no subsidies, then the county is going to make a lot more money.”
At the July 8 meeting, Commissioner Raquel Regalado won approval of language that changed Bermudez’s legislation from completely lifting the 2018 subsidy ban to only eliminating some restrictions. If adopted Tuesday, the revised legislation would allow Miami-Dade to use both impact fees and tax-increment financing to fund the roads that American Dream is responsible for getting built.
Regalado said Miami-Dade should at least consider using property taxes that would be generated from the future mall’s construction to create new roads around the site.
“It really is a conversation about infrastructure,” Regalado said in an interview after the July 8 hearing. “Everyone in that area is going to benefit from this route infrastructure.”
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