North Miami clawing its way out of the red

After six years in the red, North Miami is at last in the black.

From one end of the city to another, signs of life are visible everywhere – from Solé Mia in the northeast and downtown to uninviting stretches of NW Seventh Avenue. More than a dozen significant developments will likely alter North Miami’s landscape significantly by 2030, including long-delayed work that’s scheduled to begin in September at Cagni Park.

Still, it’s a bit early to break out the punch bowl.

The city has turned a corner but has many left to navigate, and needs another three to five years to ensure the turnaround sticks.

There is no denying progress. When City Manager Theresa Therilus, 42, took office in July 2020 two months after Mayor Philippe Bien-Aime was sworn in, North Miami posted a $14.7 million deficit. In its recently released audited report for the year ended Sept. 30, 2021, it reported a $3.9 million surplus.

The nascent reversal results from a combination of timing, skill, pain and a lot of luck through a nerve-wracking pandemic – and, for North Miami, location, location, location.

“Stunning reversal”

On May 10, term-limited Bien-Aime and 23-year Councilman Scott Galvin led the cheers after the city’s finance director, Miguel Augustin, and outside auditor Anthony Brunson presented the 2021 Annual Comprehensive Audit Report for the year ended Sept. 30, 2021, confirming North Miami’s first budget surplus in seven years.

“The city manager has done a great job getting us out of this massive deficit,” Bien-Aime stated in a release soon afterward. “We’ve been working hard to get on a path to fiscal stability, and now thanks to some difficult conversations and decisions, we are on the way there and the city can successfully move forward.”

“A stunning reversal of fortune,” Galvin said. “My hat is tipped to all of you. Here we have a $3.9 million surplus … I dare you to find someone who righted a ship that quickly.”

That said, the story isn’t so simple. For a second straight year, the city has waived its reserves for a rainy day fund, leaving it with almost zero this hurricane season. The water and sewer system is struggling with higher county rates, rising delinquencies among customers and a decaying infrastructure. Talks with the Police Benevolent Association have reached an impasse, and the city’s employees have rejected a proposed contract with graduated raises of 1-3%.

“Our greatest challenge is keeping expenses under revenues on a long-term basis,” Therilus said in an interview, using almost identical words to her measured response to Galvin’s praise on May 10. “We have rising costs at a time we are trying to keep expenses low.”

In recent years, North Miami city managers – who have a historically high burnout rate, depending on the whims and favors of the council – have had to balance the bottom line with councilmembers who want to serve constituents and get reelected, with a tendency to take credit when things go well and blame management when they don’t. For now, Therilus, whose current contract runs through June 2023, is generally enjoying the council’s support.

Miami native Therilus came to the city with a varied background as a Harvard Law School grad and a formidable, if unconventional, résumé. She’s the first Haitian American in the role for a city that’s roughly 40% Haitian American and where 26% of its households speak Spanish.

Her balancing act includes accommodating various councilmember personalities while lowering the cost of events – such as the returning Thanksgiving parade, Hispanic Heritage and Haitian festivals, Jazz at MOCA every month and quarterly business lunches – minding efficiencies in serving youth and seniors, and putting needs before wants.

Increased pressure

In some ways, fortune has smiled. North Miami taxable property values have risen 40% in the last five years and doubled over the past decade, to $4 billion. This has allowed the city to keep its tax rate at $7.50 per $1,000 assessed valuation. For the first time in decades, the city has an array of big developments – between 15 and 20 – in the pipeline.

Developers see potential in the city’s strategic location, relatively low land costs, unique and sometimes funky character, diverse vibe, organic, pedestrian-scaled downtown and relatively high ground of its western precincts.

Case in point: The city got a big boost in the last two years by selling nearly $19 million in land to Solé Mia’s developers, and realizing a $1 million gain in a land swap with the condo association at One Fifty One at Biscayne. And last year, the Biden Administration came to the rescue with $9.6 million in American Rescue Plan Act (ARPA) money, of which $5 million went into North Miami’s general fund for the last fiscal year, pushing the books into surplus territory. An equivalent tranche for the current fiscal year will likely help as well, but that money is non-recurring.

Water, sewer and sanitation customers have started feeling the pain, a consequence of artificially low rates set by the council since 2013 to secure contracts and preserve incumbencies. Garbage rates jumped last year from $254 to $393 as a result, and water and sewer rates are creeping up steadily for a second year under a five-year plan through 2026. It’s fallen on Therilus to manage the rude awakening.

But even before the present inflation spike jumped up rents and busied food banks, many residents were having trouble paying their bills. For the fiscal year ended Sept. 30, accounts receivable for water service rose $1.6 million to an $18 million-plus record.

The city, struggling to pay debt service on its water and sewer maintenance, has thrice shelved plans for a new $29 million-plus water plant and emergency center on land it acquired across from its current 1962 water treatment plant on the city’s west side. Maintenance expenses are up, too, with the aging infrastructure. The city is thus confining its work to smaller projects.

Development will add even more pressure to the aging infrastructure.

Ever-surging development

The deep-pocketed big players that have landed in North Miami include the LeFrak and Soffer real estate dynasties in Solé Mia, The Related Group throughout the city, the Finvarb Group for the transit-oriented territory just west of Biscayne and south of 151st Street, and joint developers Jimmy Tate and Sergio Rok, who funded Bien-Aime’s last mayoral campaign and are aiding him in his quest for the District 2 County Commission primary race Aug. 23.

All weathered the last recession and are relatively well positioned for the next one, as a jittery world economy, rising interest rates, inflation, and global supply chain and logistics problems pressure households, businesses and municipalities alike.

At the $4 billion 184-acre Solé Mia development just behind the 143rd Street post office, work proceeds apace at the vast 9.7-acre UHealth Center site, slated to open in 2025, and the Villa Laguna apartments opening later this year. Next up: a 30-story residential tower overlooking the seven-acre artificial Solé Mia lagoon.

Closer to downtown along 126th Street and NE 12th Avenue, Omega Investors has demolished a dozen 1950-vintage apartment buildings and assembled more land for The Gardens, which has evolved from a 385-unit, nine-story residence into a broader mixed-use project, scheduled to take its first tenants in 2024.

To the west, on NW Seventh Avenue and 123rd Street, NoMi Village has presented itself as an arts and entertainment venue on the site of the benighted and aborted Red Gardens project, which collapsed amid losses and litigation. Just to the south, the city has green-lighted a 200-unit apartment building at market rates, a vanguard of high-rise mixed-use development along the east side of the NW Seventh Avenue corridor.

This is just the tip of a very big spear. No less than 13 major projects are on display in the 2021 financial report, with half a dozen to follow.

Changing governance

Therilus faces a perhaps even bigger task in rebuilding a team at City Hall and recasting senior management.

The city has cut costs in part through terminating staff, slowing hires, instituting furloughs and holding raises to cost-of-living 1% increases. Employee head count has fallen from 422 to 391 and as many as 150 people have left the city over the last two years.

Neighboring and still flush with cash North Miami Beach has poached the IT and public information departments.

District 2 Councilwoman Kassandra Timothe won election after departing as public information officer under Therilus, but did not second an attempt by fellow councilmember and Vice Mayor Alix Desulme to oust Therilus early this year.

For a variety of reasons, senior management members at various departments have left for different pastures or retired altogether, including the library, building, and community planning and development. Last December, Rasha Cameau departed as director of the city's powerful Community Redevelopment Agency after the city council functioning as the CRA board transferred $5 million from the CRA budget and assumed control of a P3 project for City Hall. In her new job as assistant director for the county, Cameau will review North Miami's CRA at budget time come September.

The city’s popular police chief, 51-year-old Larry Juriga, has stayed on though he announced his retirement in April 2021, and has since served with a $220,000-plus annual contract that supplements his $146,000-plus retirement pension.

Therilus acknowledges that a big part of her immediate task is to rebuild institutional depth and trust to prepare for succession while balancing the books and creating a collaborative culture among her people and the community.

“I’ve been focusing on succession planning,” she said. “This has not been stressed before. This was a gap in North Miami for many years and it is something for me to take on.”

This story has been corrected from the original printed version to correct the misidentified Villa Laguna apartments, which are scheduled to open at Solé Mia later this year.