Solar Mountain developers have big plans

The group interested in buying $190 million in debt tied to the North Miami site of the defunct Biscayne Landing project is proposing to reduce the money it would owe the city by more than $15 million.

The money is tied to a series of city agreements that dictate everything from the rent on the site’s 200-year lease to $28 million Biscayne Landing’s developer agreed to pay the city separately for the right to develop the former landfill into a community of offices, retail and 6,000 residences.

Solar Park Management Corp., which won the auction on the debt last month with a more than $30 million bid, is proposing to reduce its overall payments to the city. The company wants to build an indoor ski and tennis center on the site.

Instead of $25 million for the city’s museum, library and sports training facility, Solar Park, now called Solar Mountain, proposes to pay $7.5 million on unrestricted money.

Additionally, the site’s rent would max out at $4 million a year, instead of $4.2 million.

One feature of the economic study the group submitted to the city also references $795,000 in operating expenditures the city will make on “behalf of the residents, visitors and employees of the development.”

Solar Mountain’s proposal does not address the money the developer is currently required to pay the city for the residences and commercial space it develops in the future.

What would the city get in return? Various payments, including rent to the city during the first 15 months after execution of the new lease would be $12.5 million, which could deliver the money faster than the current payment schedule requires.

Additionally, because there would be no use restrictions on the $7.5 million, the money could be used to shore up the city’s budget, which has a shortfall into the millions.

The city would also get 25 cents from every ticket sold for the park, according to the group’s proposal to the city.

The speed of delivery and the unrestricted use would be attractive to North Miami, which, like every local municipality, is struggling to find millions to shore up its budget, said city Finance Director Carlos Perez, who noted he had not reviewed Solar Mountain’s proposal.

“Where are we going to get $795,000 when we are already [millions] in the hole?” asked Carol Keys, a North Miami resident and owner of Keys Title Co. She said she is worried the city could agree to the changes, reducing its revenue stream for a project that never gets off the ground, which would then be difficult to change again.

Former North Miami Community Redevelopment Agency head Frank Schnidman said allowing the changes without making them contingent on project approval would leave the city vulnerable to a lot of problematic unknowns. Schnidman, a senior fellow at Florida Atlantic University’s Center for Urban Environmental Solutions, said Solar Mountain could not build anything and flip the lease to another group, and the city would be out the millions of dollars that were promised as part of the project.

To buy into Solar Mountain’s vision for the former landfill where Biscayne Landing was planned would require a massive overhaul of the documents that dictate what can be done on the vacant 190-acre site. The economy and the residential real estate meltdown has made it clear that the community of residences, retail and offices once planned for the site, adjacent to Florida International University, is not viable.

Agreeing to Solar Mountain’s vision would also require a revolutionary change in the city’s philosophy. The original vision was not only a way to rehabilitate the former federal Superfund site, but taxes generated by the project were designed to bolster a city with few revenue generators and serve as fuel for North Miami’s burgeoning affordable housing program.

If the buying group can get the restrictions eliminated or reduced, and a new lease, the land’s value would increase significantly, real estate experts say.

The changes would depend on a city council that includes Mayor Andre Pierre. Pierre is the former law partner of Solar Mountain President Marc A. Douthit. Solar Mountain’s VP is Willis Howard, Pierre’s campaign manager for his successful 2009 run. The Pierre connections have prompted concern from some residents that the group is packed with insiders who will get a sweetheart deal.

Both Douthit and Howard insist they have done everything in a transparent way, and that they have put equity and their reputations into the deal, which will ensure the best outcome for the city.

The Solar Mountain project, which is projected to open in 2013, could generate 5,530 construction jobs and has a potential economic impact of $360 million in Miami-Dade County, according to Fishkind & Associates. The Orlando-based firm, which produced an economic study for the buying group, also said the park would generate 480 on-site jobs. Additionally, if there is market demand for residences, the developer could produce 727 multifamily units for a population of about 1,300.

The buying group estimated Solar Mountain's first-year attendance at 2.5 million visitors.

Source: http://southflorida.bizjournals.com/southflorida/stories/2010/05/03/daily75.html