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April 20, 2019

As you know, the Magic City Special Area Plan in Little Haiti has recently generated even more
controversy than usual. It's hard to escape the impression that the SAP application, which was
apparently proceeding pretty much according to standard protocol, has now been thrown off-course by a
new Development Agreement presented to the City Commission for a First Reading and vote on March
28th.

This new Development Agreement is a completely different animal from the areement that was reviewed
and approved by the City's Planning, Zoning & Appeals Board in July of 2018. In and of itself that should
be enough to give folks pause because review by PZAB is a standard requirement of the SAP application
process as it moves through the pipeline towards final approval by the City Commission. If media reports
are to be believed, the terms of the new Development Agreement were negotiated just within the past few
months, behind closed doors, by Commissioner Hardemon, the developers, and, presumably, the
members of the Little Haiti community who are pushing for it.

The agreement that PZAB approved last year (with conditions) provided for payment of "public benefits"
substantially as regulated under Miami 21. Public Benefits contributions would become payable for every
square foot to be built above 12 stories, which is the "of right" ceiling established by the underlying zoning
for the Magic City development. Given Miami's affordable housing crisis, a portion of these public
benefits were to go towards low income housing -- specifically, 7% of the residential units to be built by
the developers were to be allocated to affordable housing and 14% to be allocated to workforce housing
on an "as-you-go" basis. The low income housing didn't have to be built on-site -- the credits could be
applied to low income housing up to within 1500 feet of the project, including projects being built by other
developers. City Planning Director Francisco Garcia states that this previous agreement would have
yielded a net increase 600 new units of low income housing. He says he calculates each unit at
$200,000 "per door." So Garcia was looking at this project to yield $120 Million of affordable/workforce
housing benefits for the Little Haiti community. (N.B. Not ALL of the $120 million would come directly
from the developer's public benefits contributions -- some apparently would also come from other
sources, perhaps matching federal and other grants. But the point is, the net yield would be 600 units,
worth $120,000,000 in value to the community and the City).

The new agreement eliminates "public benefits" as they are spelled out and regulated under Miami
21. Instead, it has coined a new term called "Community Benefits," not regulated by Miami 21, all of
which are to be spent in Little Haiti exclusively. These Community Benefits take the form of a contribution
of $4.03 per square foot of building activity, starting on the ground floor, with a cap of $31 million for the
life of the project. There's also a sizeable area that has been set aside and will be exempt from
payment of any contributions. The developers say the project could take 15+ years to build -- possibly as
long as 30 years to build if the real estate market takes a dive like it did in 2007. Of this $31 million, the
developers promise to pay $6 million "up front" -- within a few months of approval of the SAP
application. They are saying that this up front payment is being made to offset the impact of inflation and
cost of living increases on the remainder of the money ($25 million) which will be paid out at an
unspecified time over the entire life of the project and will not be pegged to any index to adjust for
inflation, cost of living or market fluctuations. Affordable housing has been put on the back burner. There
is no specific provision for how the money will be used or for how much, if any, will go for affordable
housing.

So the conditions upon which the SAP was approved by PZAB have been completely tossed out
the window under this new agreement.

And Francisco Garcia himself is not happy with it. He says that with the previous agreement he had a
safe, predictable way of tracking and enforcing payments of public benefits contributions that was
consistent with the City's role as regulatory authority for the project. The amount of the contributions are
published, regulated and enforceable under Miami 21 and are ajusted every year based on the verifiable
market value of the underlying property. Garcia is concerned about the enforceability of the unregulated
"Community Benefits," concerned that there is no stipulated timeline for payments, concerned that they
are not pegged to cost-of-living increases, and he says he wants to go back to pegging these
contributions to the published amount -- currently $10.81 per square foot above the 12-story "of right"
threshold -- substantially as regulated under Miami 21.

Even the developer, at the Commission hearing on March 28, said that he would be happy to go back to
paying public benefits, starting at the 12th floor.

Seems to me Commissioner Hardemon and the community group who are pressuring to have this new
agreement approved by the City Commission have a lot to answer for, and a lot of people to answer to,
before they can or should expect to get this deal approved.

Regards
Deborah Stander