Miami blinks on Watson Island deal — kicks can, saves face, still smells fishy

Turns out City Hall didn’t have the votes tied up with a bow Thursday for that $29 million Watson Island liquidation sale after all. So instead of losing outright, the Miami Commission did what Miami politicians do best: They punted.
They punted so hard the can may have landed in Biscayne Bay.
The highly-hyped vote to hand over 3.2 acres of prime waterfront to BH3 Merrimac for what they call Watson Harbour and what critics call “a massive land giveaway” was suddenly postponed Thursday after commissioner Damian Pardo, who sponsored it, realized the math wasn’t mathing. He  needed four out of five votes to approve the sale. They did not have four. They barely had two.
So, the commission killed the engines and pretended it was about “needing more information.”
What really shook the dais? Probably the fresh appraisal that just dropped, valuing the land between $257 million and $342 million — yes, million with an “M” — depending on development restrictions. Compare that to the $29 million offer, which developers swear is generous because it “buys out the lease,” not the land. Cute. The same appraisal, delivered this week but begun in March, values the lease at $28.9 million. Turns out, it was a terrible lease to begin with.
After the state gets $4 million to lift restrictions keeping it public, that’s $25 million for a piece of land worth at least 10 times that. After you deduct the $20 million the city already paid in a settlement fee to the last lease-holder, that’s $5 million for a piece of waterfront property like no other in Miami.
Read related: Miami’s Watson Island liquidation sale to developers for lowball $25 million
Resident after resident begged commissioners not to approve what one called “the biggest sellout in city history.” And Ladra sees why: Miami voters did approve the sale in concept in a referendum last year that passed with 62% of the vote. But the ballot language said they approved a sale at fair market value, not a clearance rack special.
Specifically it said: “Shall City Charter be amended to revise existing leases at 888 MacArthur Causeway, sell 3.2 acres of leased property to tenant for fair market value of not less than $25,000,000, reduce overall development, extend term 24 years, waive bidding and authorize, at no cost to City: $9,000,000 contribution to affordable housing plus infrastructure improvements; timeshare units become condominiums; mixed-uses to include office; and expanded public waterfront and pedestrian promenade along Biscayne Bay?”
Somehow, it strikes Ladra as very strange that the price tag is the exact $25 million floor, plus the $4 million that goes to the state. That can’t be a coincidence.
Outgoing Commissioner Joe Carollo, who has exactly one meeting left before he’s termed out forever, shocked half the room by becoming the loudest voice pumping the brakes. Carollo? Defender of the public purse? Please. The man can smell leverage like a shark smells blood.
But he wasn’t wrong when he called Watson Island “the most valuable piece of property anywhere in the city limits.”
Miami finally has an appraisal that says so too.
Developer Nitin Motwani complained from the podium that Watson Island feels cursed. Every time they take “two steps forward,” they get knocked “three steps back,” he said.
Ladra’s translation: “Why won’t the city just give us this land already?”
Read related: Miami City Commission to consider two Watson Island developments
Motwani and partner Greg Freedman insist the $29 million price tag is totally fair because the existing lease “encumbers” the site. They claim they’ll have invested $150 million by the time this is approved, including more than $100 million to buy out the lease. But wait, wasn’t the lease worth $29 million? It seems to be at least worth $100M.
City Manager Art Noriega acted more like a lobbyist for the developers than a steward for the city. Of course he did — it’s his deal, too. And las malas lenguas say he’s angling for a job because he won’t be the city manager much longer after the mayoral runoff Dec. 9.
Noriega explained that the lease agreement was still in play and that the developers were limited to 105 condo units and 80 hotel rooms. But nobody explained why that lease can’t be changed. Or revised. And that is the problem.
Commissioner Miguel Gabela said the numbers felt fuzzy. And Commissioner Ralph Rosado asked for a one-page summary, aka a cheat sheet for the biggest land transaction in city history. Only Commission Chair Christine King seemed keen to push it through now, invoking the voter referendum like a shield. As if the words “fair market value” mean nothing.
Pardo — the financial guy on the dais who should know the deal stinks — knew he didn’t have the four votes needed and backed away quietly, deferring the first reading on Dec. 11, which is Carollo’s farewell performance (and possibly Noriega’s swan song) before the new mayor and a new District 3 commissioner are sworn in. That means there will be a different commissioner on the dais for the second reading — remember, it needs four votes — and the very real possibility of a fresh mayoral veto.
The next mayor might not be as friendly to Noriega or this rushed waterfront swap as outgoing Mayor Francis Suarez, who needs a new side gig, too.
The real conundrum is this: Is this deal a smart exit from a bad lease? Or is the city about to sell oceanfront gold for pawnshop prices?
This curse on the island? Maybe it’s not the island. Maybe it’s on City Hall.

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