At this moment of peril teetering on opportunity, the City of North Miami is the town on the flying trapeze.
On the peril side, the city is scrambling to get out of big money trouble.
Yet opportunity awaits, with an unprecedented wave of development under construction, on the books or in plans this year, as big money recognizes this city’s bull’s-eye location between Miami and Ft. Lauderdale, while interest rates and construction costs rise.
Still, even if all the stars align, getting the cash-strapped, deficit-ridden city back in the chips could take three or four years with prudence, elbow grease and luck.
To borrow from the trapeze song, meeting opportunity will not come with the greatest of ease. To pay its bills, the city is launching five years of 6-9% annual water and sewer rate hikes; dunning residents and businesses for long-buried fees; holding employee COLA raises to 1%; engaging in brass knuckle negotiations with the police union; restricting parks and recreation services; and running the library with limited hours and portable air conditioners.
(Tate Enterprises)
James “Jimmy” Tate has offered the city a three-year lease-buyback for the Wildcat Center.
Amid all this, a sudden, once-in-a-lifetime opportunity presented itself to the city in October – but at an imposing price – in the form of the almost new, just-closed 38,000-square-foot signature Johnson & Wales University Wildcat Center at 1600 NE 126th St. It has two fully equipped gyms, locker rooms, basketball courts and plenty of meeting space.
In the end, the city council voted 3-2 to try to reach for the trapeze at the other end of the circus ring and grab onto the bar, deeming it an chance not to be missed.
The center may seem more a luxury than a necessity given the city’s current difficulties, but it is a singular opportunity to provide a turnkey public benefit. It comes with a $14 million price tag through a three-year lease buyback with master developer-lender-investor James “Jimmy” Tate, and a fast-approaching deadline. That’s down from a total $25 million cost in a 10-year lease buyback, and easier and cheaper than creating a big park or public meeting place from scratch.
For the City of North Miami, the opportunity could not come at a better time – or a worse one.
(Deborah Gray Mitchell Photography)
North Miami District 1 Councilman Scott Galvin pushed the Wildcat deal.
The prime mover and big champion: District 1 Councilman Scott Galvin, term-limited to close out 24 years on the council in May 2023 and eager to leave a legacy for an immediate public benefit and lure for new residents. Also pushing the idea: term-limited Mayor Philippe Bien-Aime, who just filed to run in 2022 for the District 2 Miami-Dade County Commission seat held by term-limited Jean Monestime. District 4 Councilman Alix Desulme also voted for the deal.
Dissenting were newly elected Councilwoman Kassandra Timothe and reelected Councilwoman Mary Estimé-Irvin, whose terms expire in 2025. They are wary of Tate’s terms and of getting stuck with the bill to buy the facility when the lease ends in late 2024.
Tate, a longtime North Miami resident, has together with his brother, Kenny, advanced the storied Tate family enterprise founded by their retired father, Stanley Tate, 93, now of Bal Harbour. He is also developing the 360-unit Allure luxury rental mixed-use development through a no-bid 99-year land lease on two city-owned parking lots at 1810 NE 146th St., and was a big contributor to the recent campaigns of both Bien-Aime and Estimé-Irvin, and to community causes for a generation.
Tate told the Biscayne Times that the city approached him on both the Wildcat and Allure deals rather than the other way round, and emphasized that he has never approached the city for help.
The Wildcat Center is at the center of one of the Biscayne Corridor’s most consequential real estate deals of 2021 – Property Management Group’s July purchase of the just-shuttered 25-acre JWU campus for just under $60 million. The land is zoned for public use and PMG has been selling it off in parcels since the acquisition. There is no master plan, so zoning and a coherent vision for the area remain to be seen.
Stripped to its essentials, the city would have the opportunity to acquire the center for $11 million after a three-year lease buyback from Tate at $27.50 a square foot – about $20 below market – and 9% developer-financed interest – not an unusual rate for such arrangements, according to financier-developers. Or it could pursue conventional financing from Wells Fargo or another lender at a rate of perhaps 2.5-3% if it can provide collateral. It must seal the deal by Dec. 17, a very tight window for such a commercial loan, which generally takes twice as long.
There are plenty of obvious and potential catches.
Under the terms, the city would pay roughly $1 million a year to Tate, plus $450,000 or so annually for operations, staffing, electricity and taxes during the first three years. There is no parking, but the city can use some spaces at the nearby Publix in the 127th Street mall on Biscayne Boulevard.
Above all, Tate doesn’t even own the property yet. PMG does, and it has another bidder. As of this writing, Tate said he had a contract in the works with PMG and was confident it could close in early November.
Collateral is a challenge and could involve selling the Gwen Margolis Center for about $2.8 million, raiding the $5 million allocated for long-awaited Cagni Park at 135th and NE Ninth Avenue and thereby postponing it still further, or somehow repurposing the $2 million designated by Solé Mia’s developers for a park there.
Tate told the council: “I’m here to help, not to hinder. I can’t lose money. It’s not what I do. Your time frame is not with me. It’s with PMG … I’m not loaning the money. I’m buying the building and you’re leasing it below market rate.”
Said Galvin: “If we don’t move and move now, we lose the opportunity … I can’t tell you how many opportunities the city has missed.”