On The 1% Resort Tax Hike
The latest chapter in the saga to modernize the Miami Beach Convention Center will now be written by the voters this coming Tuesday in the August 14 primaries.
Miami Beach residents will be asked whether they will allow the commission to raise the resort tax by up to one percent for the benefit of the aging convention center.
The so-called “bed tax” is generally seen as a tax on tourists, and anyone who stays at a hotel room or short-term rental at the beach.
The question states that this tax will only be used to “expand, enlarge, renovate, and/or improve the Convention Center,” and will not be reallocated to another project.
The tax will start to be collected when a redesign of the center is finally selected and construction begins. After all debt is paid, the revenue stream will be used to keep up with the needs of running a functional center by establishing a Capital Renewal and Replacement Fund.
Of all the development that has occurred on the island municipality, upgrading the MBCC has long been an elusive goal.
The latest plan has the MBCC as the center piece of a 52-acre redevelopment of city-owned land. The process of bidding out this master plan has been covered in controversy since the start.
Procurement Director Gus Lopez, the man heading the bidding process, was forced to resign when staff found suspicious emails between him and Developer Walter Garcia. In the emails the two men seemed to be constructing a team to make a bid. There were also contracts exchanged in the communications that would have made Garcia, and whatever subcontractor he hired, a pretty penny. His firing led to the process being delayed.
Eventually firms made their pitch on what direction they envisioned for the massive project. Portman-CMC, a partnership between respected firms, received the highest grade from the evaluation committee. It was then found that Garcia had once been hired by Portman-CMC as a consultant and received $25,000 as payment. This renewed a call to start the process over. Some wanted to wait until the investigation into Lopez and Garcia was completed before moving forward.
Commissioner Jerry Libbin told the SunPost in late June that “until the investigation is concluded, I can’t make an informed decision.”
There is the crux of the matter with the question. No plan or design as been approved by the city. The voters are not voting on whether to add a new ballroom or hotel to the convention center, both needed, but on the abstract notion of whether they support funding unknown upgrades with a resort tax.
David Kelsey, who hosts the civic-minded Tuesday Morning Breakfast Club every week, is opposed to this blind taxing.
“You’re putting the cart before the horse,” he told the MB Commission when they considered the question.
“It is irresponsible to raise taxes on tourism without having to define the use of it,” he said.
The tourism industry supports the tax, even if it is blind at the moment. When in front of the commission, the President of the Greater Miami Convention and Visitor’s Bureau William Talbert called it a very “simple issue,” and one that could send a message.
“It’s a signal to the community, to the world, to the convention community that this community is serious about expanding and enhancing the Miami Beach Convention Center,” he said.
The GMCVB has taken the lead in the tourism and business industry’s campaigning for a yes vote; they purchased the domain site: www.voteyeson502.com. The site is washed in baby blue and has a large “vote yes” in a thought bubble anchoring it. The bubble has become a familiar sight in South Beach for the discerning eye that picks it out in print or bus shelter billboards.
Not at all hiding, the advertisement is clearly supported by the Greater Miami & The Beaches Hotel Association, the Miami Beach Gay & Lesbian Chamber of Commerce, Miami Beach Visitor and Convention Authority, and the Miami Beach Chamber Of Commerce.
The MB Chamber’s own free publication, Miami Beach News, has been printing pro-resort tax articles like the June 21 piece Visitor Tax to Boost the Value of Miami Beach. In it it praised the city, and told their readers the resort tax would help keep intact the area’s glory.
Having the tourism and business industry come together to support a tax hike is not unprecedented. Likewise the industry lead the charge the other time there was a referendum for a resort tax.
In 1992 a similar one percent hike was passed. That was meant to help build a much needed hotel near the MBCC, in the convention circuit it was standard to have a hotel built into the center. The 1992 question broke the one cent tax in half; 50% going towards a hotel, 50% going towards promoting the beach.
Stu Blumberg, Chair of the Miami Beach Convention Center Advisory Boad and a sitting North Bay Village Commissioner, has spoken fondly of the times the hotel industry has taken the lead in selling this tax. He called for the industry, which he was a part of until his retirement, earlier this year to do it and they came through.
The MBCC Advisory Board has a different kind of stake in this resort tax. They were the first to call for this tax, and have at times opposed the master plan for the 52 acre district from proceeding as is. Some have expressed that the grand project makes the Convention Center come second. If the referendum passes, that revenue source would act as a safety net in case the controversial and ambitious redevelopment falls through. The MBCC would still have a source of funding.
That line of reasoning is not championed by everyone. Former City Manager Jorge Gonzalez opposed putting the tax hike on the ballot because negotiations with a developer have yet to occur. He saw coming to a negotiation with a passed referendum as giving away the money. He said he wanted to limit the public contribution to the project, and did not want to go into a negotiation handing over the one percent from the get go. Commissioner Edward Tobin recently took up that flag and asked that the question be amended to say the voters would allow the commission to raise the tax, if necessary.
Could it be conceivably the tax hike could alter the plans of the eventual developer’s intended scope? No way to know since no design plans were officially entered during the city’s evaluation process of the potential developers only half fleshed out visions of the area. Also the front running Portman-CMC stated that no public money would go into the private section of the district, as well as no private money towards the convention center.
The lack of definable vision doesn’t seem to have swayed potential voters that were polled by Floridians for Jobs and Prosperity. The pro-development think tank started by former Miami-Dade County Mayor Alex Penelas, and former Legislator Rudy Garcia found that 56% were for the tax hike, while 22% opposed it, and 22% were undecided.
The Miami Herald recently endorsed the tax stating it could bring in a possible $100 million.
During the hearing on the resort tax, Commissioner Jonah Wolfson wanted to have a sunset to the tax, and stop it when it accomplished what it needed.
“Don’t leave the faucet on, and let future government’s authority spend it,” he said.
Libbin retorted that it was important to have a way to sustain what was being built, and that it would have gone a long way had they done that in the past.
“Today we have hard time attracting a convention of any size because we are so antiquated,” he said. “If we had a renewal fund then we wouldn’t be chasing our tails now.”