In Support Of Genting's Project Because Of The Tax Revenue? Think Again.

Supporters of Genting Group’s proposed Resorts World Miami tout the tax windfall that would flow to the city once the mega project is built.
But most of its tax revenue — 95 percent — generated by the destination resort would go to the Omni Community Redevelopment Agency, whose district includes the Resorts World site.
With the city receiving only about 5 percent of Resorts World’s taxes, Miami taxpayers would be on the hook for the increased cost of providing the project with public services. That ranges from firefighting to maintaining sewers and sidewalks to upgrading infrastructure to ease traffic and parking.
The CRA’s mission is to fight blight and promote redevelopment within its area. There are no guarantees the agency would use its new-found wealth to upgrade the area’s infrastructure to support the 10 million-square-foot facility. The CRA could spend some of the new money to enhance the city-provided services to the thousands of tourists and workers expected to fill the resort. But the agency wouldn’t be obliged to do so.
“There is going to be almost an insignificant amount of revenue going to the general fund of the city,” said Frank Schnidman, director of Florida Atlantic University’s Center for Urban Redevelopment Education in Fort Lauderdale. “So the question is, how is the city going to deal with the impact of the Genting project?”
Malaysia-based Genting plans to spend $3 billion to build the resort that would include four hotels, 50 restaurants, retail space and two residential towers on a 13.9-acre site that’s now the home of the Miami Herald. Genting, one of the world’s largest gambling companies, also hopes to win legislative approval to operate a casino at the mixed-use project.
When Resorts World is completed, it would produce about $17 million in property taxes annually, some real estate experts estimate. About $16 million would go to CRA. Normally, all the taxes would go to the city. But state law dictates that 95 percent of property taxes generated by new construction within a CRA district must go to the agency.
The agency’s district is roughly bounded by Biscayne Bay, and Northwest Second Avenue and Interstate 395 and 20th Street. The district also includes Museum Park, formerly known as Bicentennial Park, south of I-395.
Genting could begin construction next year. If a casino is approved, it is to be completed in five years. Without a casino, the project would be built in phases over 10 years, a Genting representative said.
Resorts World would be a burden on the city’s budget and could pressure Miami officials to increase property taxes or cut public services across the city to pay for services in the Omni area, according to Schnidman. Schnidman teamed with Jeff Oris, Martin County’s development director; and Charles A. Adams II, a CRA consultant, to calculate Resorts World’s tax bill. They took into account the city’s 7.57 millage rate and the estimated taxable value of the resort, 75 percent of the construction cost, or about $3 billion.
Diplomat Taxes

The city of Hollywood has grappled with a situation similar to the one Miami faces.
When the Westin Diplomat Resort & Spa was built, the Hollywood Beach Community Redevelopment Agency was a big winner. Last year alone, the Diplomat produced $3.3 million in revenue for the CRA. The cash-strapped city received only about $173,000 from the property even though city service have been increased to support the 998-room resort that opened nearly 10 years ago.
The Hollywood Beach CRA has used some of the bonanza to upgrade the city’s Broadwalk  and improve a park, city spokeswoman Raelin Storey said.
Storey said the Diplomat produced some indirect benefits to the city and county revenues, including an increase in sales and tourism bed taxes. But Hollywood officials want more. They are weighing the possibility of removing the Diplomat from the CRA by redrawing the agency’s boundaries. That would allow all of its property taxes to go into the city’s general fund, Storey said.
Dissolving The CRA

Miami City Commissioner Marc Sarnoff, who chairs the Omni CRA’s board, said the agency “should not be the recipient” of the property taxes generated by the Genting project.
Sarnoff said he would agree to dissolve the Omni CRA after the Genting project is built and the agency’s bond obligations are paid off. That includes $50 million to help pay for a tunnel now under construction linking the Port of Miami to I-395.
The Omni CRA is also helping pay down debt on the Adrienne Arsht Center for the Performing Arts and is contributing money to fund the center’s capital upgrades, its endowment and its outreach programs, arts center president and CEO John Richard said.
“There is a manner and a means under which you can partially close the CRA [while] letting it fulfill its obligations for the tunnel project and the PAC,” Sarnoff said, referring to the performing arts center. “Beyond that, it doesn’t need to exist anymore.”
Miami Mayor Tomas Regalado said the city needs to come up with alternative sources of revenue tied to Resorts World. One option: Push state lawmakers to pass a casino bill that would allow Miami to collect fees tied to a casino operator’s license or profits. “We want to share the pie even if it is a little piece of the pie,” Regalado said. “We need to have a Plan B to be able to afford the basic services that we will need to provide.” A bill is to be submitted to the Legislature in the next few weeks, he said.
Regalado said another option is for Miami to issue construction permits with the stipulation that the city receive money from Genting based on gaming revenues
Former Miami Mayor Manny Diaz, who is leading an effort to write a master plan for the area surrounding the arts center and the Genting project, said the immediate focus has to be on planning infrastructure rather than deciding how to spend future revenues. “Before you start spending the money, it would be prudent to start looking at what the needs are … where that money is going to have the greatest return and the greatest impact in the area,” Diaz said.
Diaz is co-founder of the nonprofit Town Square Neighborhood Development Corp., which was formed by civic leaders to develop a master plan for the Omni area. Town Square hired architect Cesar Pelli to help identify ways to resolve the area’s parking shortage and traffic congestion before and after events at the arts venue and the future Genting project. The group is funded by a $300,000 grant obtained by the performing arts center from ArtPlace, a federal initiative supported in part by the Knight Foundation.
Any revenue that the CRA may receive from Resorts World could be used to build the infrastructure identified in Pelli’s master plan. “It is within the purview of the CRA to make that decision,” Diaz said. “I don’t know what their plans are or if they even thought what to use that money for.”
Source:  DBR
What do you think about the current tax revenue arrangement?  Leave us a comment below.

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