The Real Deal Miami

All rise: Miami-Dade commission restarts bidding process to build new courthouse

Commission will submit bids in an open forum, a method suggested by Brightline lobbyist
By Erik Bojnansky | June 06, 2018 12:30PM

Miami-Dade County’s courthouse

It’s a do-over.

The Miami-Dade County Commission will restart the bidding process for developers interested in building a new civil courthouse in downtown Miami.

Commissioners on Tuesday approved a resolution sponsored by commissioner Sally Heyman to allow a partnership led by Florida East Coast Industries to continue bidding on its proposal to build a new courthouse alongside the old circa-1928 courthouse at 48 West Flagler Street. FECI is best known as the parent company for Brightline, the high-speed passenger train that runs between the downtown areas of Miami, Fort Lauderdale, and West Palm Beach.

Brightline’s train stations in Miami and West Palm Beach are also located within mixed-use residential and commercial projects that are being developed by FECI.

Four companies that have already expressed interest in building a new courthouse will also be allowed to continue bidding or drop out. Other developers can also submit their own proposals to construct a new courthouse.

A date will be set for the bidding process to re-open and close at a June 19 meeting. The exact site for the future courthouse will also be determined. Several attorneys, the Miami Downtown Development Authority, and FECI want to build on a 25,000-square-foot site adjacent to the 48 West Flagler civic courthouse. Mayor Carlos Gimenez and county staffers prefer a 42,000-square-foot site beside the Miami Children’s Courthouse at 155 Northwest Third Street, arguing that it’s far more economical.

The rules for the new bidding will have essentially been set by FECI’s lobbyist, Eugene Stearns. Previously, the county was operating under a “two-step P3” process in which bidders negotiate privately with Mayor Gimenez and Miami-Dade’s top administrators. Under Stearns’ method, referred to as the “alternative method,” bidders will present their projects in a public forum.

In a memo to the county commission, Gimenez stated that the alternative method is potentially more costly and risky for county taxpayers than the P3 method. The mayor also feared that the new bidding process will create an unfair advantage for FECI.

But Heyman said the new process will encourage more competition while, at the same time, allowing FECI to continue participating “at a level playing field.”

FECI has expressed interest in building a new Miami-Dade civil courthouse since 2014 when it proposed constructing a 618,000-square-foot building with 51 courtrooms. That proposal fizzled after county voters rejected a $390 million bond issue that would have funded that new courthouse.

Since then, county officials have been trying to figure out ways to work with developers to construct a brand-new courthouse to replace the old facility that judges and lawyers point out is infested with mold, is an unsafe fire hazard, and has lead-contaminated drinking water. That included the county commission seeking unsolicited proposals and Mayor Gimenez formulating a two-step P3 process.

Both methods came to fruition during the month of January. On January 11, FECI teamed up with the Hunt Companies and Moss Construction Management and submitted an unsolicited bid as New Flagler Courthouse Development Partners LLC. Under its initial proposal, it would build a new courthouse in exchange for $26 million a year for the next 35 years. The company also offered to redevelop the historically designated courthouse as a hotel.

Gimenez, meanwhile, issued a request for qualifications for developers interested in building a courthouse under a P3, two-step process. By the time that process closed on May 2nd, Fengate Capital Management, the Plenary Group, Sacyr Infrastructure USA, and M-S-E Judicial Partners submitted their own proposals. The contents of all proposals are sealed under the county’s cone of silence law. FECI was invited to submit a new bid following Gimenez’s process, but the company declined.

Heyman’s resolution, approved in an 8-2 vote, sited an unauthorized data breach as the reason FECI declined to participate in Gimenez’s process. On April 9, an employee of KPMG, which was acting as the county’s consultant in the P3 process, accidentally emailed NFCDP’s sealed bid to the Plenary Group.  Following the breach, KPMG was replaced by BMO Capital Partners.

Commissioner Joe Martinez, one of the two dissenting votes, questioned how the county will pay for any new courthouse. (The other “no” vote was from Commissioner Daniella Levine Cava.) Jennifer Moon, the county’s budget director, said the money will come from the general fund, but from non-ad valorem sources like utility fees or sales tax. Deputy Mayor Edward Marquez said he also anticipated receiving funds from the sale of the old courthouse to a private developer. Marquez estimated that developers will demand $25 million to $30 million a year.

Martinez cautioned that the cost could end up being far higher. “I don’t know how many of you remember the performing arts center,” Martinez said, referring to the Adrienne Arsht Center for the Performing Arts. “They said it was going to be $255 million, max…. That it would never go above that. And it ended up being $400 million something.”