In an unexpected move that could throw into disarray the City of Miami Beach’s long-in-the-making plans for a $1 billion renovation of the Miami Beach Convention Center, a state appeals court ruled the City must offer voters more information before seeking ballot approval for a long-term lease of portions of the public property involved in the project.

The ruling effectively canceled a vote previously scheduled for the November ballot, which would have asked voters to approve a 99-year lease with South Beach ACE, the development group headed by New York developer Tishman, selected by the city commission as master developer of the site. The land in question is a component of the plan, which calls for an improved convention center, a ballroom and a convention center hotel among other programs.

“The Court ruled that the LOI (Letter of Intent) was not sufficient to inform voters about the proposed convention center project,” explained City Attorney Jose Smith. “Instead, the Court construed Charter Section 1.03 (b) (2) as requiring that the material terms of the lease with the proposed developer be included in the ballot question. The Court reasoned that ‘without such information, the voters are not in a position to intelligently cast their ballots to approve or disapprove the lease.’”

Smith indicated that based on previous experiences, the City had every reason to believe it was proceeding with adequate ballot language.

“Prior to this ruling, the City construed this Charter Section, adopted in 2004 while I was on the city commission, as requiring voter approval ‘to lease’  or dispose of one of the affected properties prior to entering into a formal lease or development agreement,” Smith said. “Indeed, without any challenge, the voters also in 2004 approved the sale of waterfront property in Normandy Shores before an auction and before there was a purchase and sale contract.

“In our legal briefs and at oral argument we cited numerous case authorities in support of our interpretation of the Charter provision,” continued Smith. “While I am disappointed by the ruling, I respect the Court’s ruling and expect no further legal challenges.”

The official ruling offered a differing view: “To approve a lease under the Charter Provision, the voters must be given notice of the material terms of the lease they are being asked to approve. Because the lease approval question fails to give voters this necessary information, by including such information or referring voters to records providing such information, it does not qualify as a proper ballot question to obtain voter approval of a lease. Because its true effect is different from its apparent effect, the lease approval question is confusing and violates the requirement of ballot clarity and accuracy established by section 101.161.”

Language is now being prepared for the November ballot without the convention center item. Smith told the Miami Herald that negotiations with the developer could be completed by spring and thus there may end up being a special election related to the item – or that it might appear on the ballot on Election Day 2014.

Previously, the City had won a court decision following a challenge from a Political Action Committee (PAC) headed by Miami Beach Commissioner Jonah Wolfson. The PAC, Let Miami Beach Decide, appealed, and late last week the Third District Court of Appeals reversed the lower court results.

“It was the right ruling,” Wolfson said. “The city’s referendum was misleading. Mayor Bower rushed the question on the ballot before there was a lease. Without material terms of a lease, how can the public make an educated decision on how to vote — if they are unaware of what the rent, size of the rented property, or price is? It is a safe conclusion that Bower didn’t care whether or not the public had the information that they needed. Bower, [Commissioner Michael] Gongora, and [Commissioner Jorge] Exposito, all who voted to put the item on the ballot without important information the public would need to make an educated decision, will hopefully be held accountable this November. These politicians were poised to give a few developers a blank check. Thank God the 3rd DCA stopped them.”

Still, Wolfson was slightly surprised by the decision. “It was the correct ruling,” he said. “But you simply never know what could happen in court. So I was pleasantly surprised.”

Wolfson wasn’t the only one pleased with the 3rd DCA decision.

Commissioner Michael Gongora, mayoral candidate this year, said he was “relieved” by the decision. “The issue has become far too politicized and my opponent has focused a disinformation campaign on this issue instead of focusing on the other challenges our community faces,” he said.

Gongora, also an attorney, was not surprised by the ruling. “What I find surprising is how the special interests will use the Court system to advance their individual causes,” he said.

I believe the court made the correct ruling,” said Philip Levine, entrepreneur and mayoral candidate. “Proponents of the plan, including my main opponent who made the motion to approve – against the city manager’s recommendation – the more expensive SOBE ACE plan based on the “iconic” design, claim that voters are being given the opportunity to approve the deal. The truth – confirmed by the 3rd District Court of Appeal – is that the city commission was asking voters to approve the lease of the South Beach ACE plan when an actual lease did not exist. The Court was wise in the ruling because it stood on the side of the voters by ensuring they truly have an opportunity to be the final voice on the project.”

Exactly where the process will go from this point isn’t entirely clear; although indications are that the City will continue to negotiate with South Beach ACE, that a contract will eventually be negotiated and that details will be included in the language of any prospective future ballot item.

The Herald indicated that Bower had reached out to South Beach ACE to advocate quick closure. She wasn’t the only one.

“Upon hearing of the decision, I took immediate action on Friday and called the city manager and asked him to discuss this immediately with South Beach ACE,” Gongora said. “We need to move forward and finalize the lease agreement so that the voters will be able to make an informed decision regarding the convention center. I am hopeful that we will have a finalized lease on the ballot in 2014.

“I have always stated that the public and the residents of Miami Beach should be the ones that will make the ultimate decision in regards to the convention center,” Gongora added. “I know we can all agree we need a renovated convention center. Unfortunately, there have been many misguided and distorted facts regarding the convention center so I am pleased that the public will have more time to make an educated and informed decision.”

  Complicating matters for project advocates is a separate November ballot item that asks voters to increase from a simple majority to 60 percent the number of votes necessary for extended leases of the city land. Whether, if passed, it might retroactively affect a potential lease with South beach ACE is not yet known. Also, three of six current members of the commission are also up for reelection this year and other potential members may have very different visions for the convention center.

In an editorial this week, the Herald implied the City was effectively back to square one and that it needed to move swiftly. However, South Beach ACE had a considerably more epic view of development of the site until a strong opinion by new City Manager Jimmy Morales scaled back the plan’s starting point for negotiations – leaving room for considerable negotiations. With commission seats up for grabs, general opposition, and advocates for the second-place development team – actually preferred by the administration, a city consultant and advisory committees, and which presented a less costly plan – still stinging by what seemed to many to have been a politically-influenced decision, the future appears cloudy.

“As to where the project goes from here, that depends entirely on the Tishman team and the city commission,” Smith said.

Wolfson has other ideas, however.

“I will fight to use the existing public money at the City’s disposal to renovate the convention center and add a ballroom,” he said. “And I will do everything I can to end the current process of selling or leasing our land for 99 years. We can’t afford Mayor Bower’s cronies. We need to stop this nonsense of selling the public land. We need to get going and renovate the building.”

Levine offered an idea for a potential next step in the process. “The City should do now, what it should have done several months ago – conduct an independent traffic study, not rush through this process and begin deliberate lease agreement negotiations with the developers of the South Beach ACE plan,” he said. “I am not opposed to working with the South Beach ACE developer, but I am unwilling to negotiate a deal that is bad for Miami Beach residents.”

For the time being, Wolfson said he feels the public welfare has been protected.

“I do think that the public has been protected,” Wolfson said. “If this commission wishes to waste the public’s time and money, then a future vote would be legal so long as they have a lease. It would be silly because we don’t need to part with our public land in order to effectively complete this project. The project to date is a special interest giveaway.”

Levine agreed the public’s interest was protected.

“This process should have been one that provided the public with full disclosure,” he said. “Miami Beach residents would have gone to the ballot box not knowing the amount of rent to be paid by the developer to the City; the square footage and exact location of the property the City was conveying to the private developer; the height of air right being transferred; and a statement of other additional consideration being given by the parties. I do not know of anyone who enters into an agreement without knowing the terms.”

Another mayoral candidate, former athlete and entertainer Steve Berke, thinks there will be lasting effects of the appellate decision.

“Frankly, I think that this decision will kill any major development of the Miami Beach Convention Center both now and in the future,” Berke said. “I think that is a good thing, as we will now have capital freed up to give the MBCC a facelift and invest in much needed infrastructure. I propose we use the money to build an integrated transportation system featuring ‘The SkyLink,’ the world’s longest urban cable car system. My proposal is realistic, iconic, and environmentally friendly and will raise significant income for the City of Miami Beach.”

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