By Francisco Alvarado, FloridaBulldog.org
A local developer who owes Miami-Dade County $1.8 million in rent and accused county elected officials of showing favoritism to more politically influential tenants could soon get a sweetheart deal of his own.
A proposal backed by Miami-Dade Mayor Carlos Gimenez and County Commissioner Barbara Jordan would no longer require Ernesto Cambo’s Ave LLC to pay the county a fee of at least $6.2 million when the company sells the development rights for about 74.5 acres it leases at Miami-Opa locka Executive Airport. In addition, Ave LLC would get $10 million for infrastructure improvements from the Building Better Communities general obligation bond program should the funds become available if other approved projects are eliminated.
In exchange, Ave LLC would pay the county $1.5 million upon execution of a restructured lease that extends both the construction timeline and the term by five years, and increases Miami-Dade’s share of the entire 178-acre development’s gross revenues from 1 percent to 2 percent. That could result in the county receiving $26.5 million over the next 66 years, according to a memo from Jack Osterholt, the deputy mayor in charge of the county airports and seaport.
Significantly, Cambo would drop a two-year-old complaint filed with the Federal Aviation Administration alleging Ave LLC has been treated unfairly compared to a private jet and hangar company owned by Aventura developer Jeffrey Soffer and the non-profit foundation of former U.S. Congresswoman Carrie Meek, both of which also have development lease deals at the Opa-locka airport with the Miami-Dade Aviation Department.
The county commission is to vote on the proposed deal on July 10.
The details of Cambo’s revised lease agreement came into view during a meeting last month of the Miami-Dade County Commission tourism and ports committee meeting. Commissioner Rebeca Sosa, the committee chairwoman, said that in an effort to get rid of the FAA complaint, Miami-Dade officials would be showing favoritism to the developer who was accusing them of playing favorites. “Everybody has to abide by the same rules,” Sosa said. “We have to have a level playing field. We have to do things right.”
Jordan, who is a committee member and who noted she had met with Cambo and his representatives about his beef with the county, defended eliminating the transfer fee and adding $10 million on the general obligation bond list for Ave LLC’s infrastructure project. “This has been two years in the making and it is better than the transfer fee when you look at it over time,” Jordan said to Sosa. “With you putting your comments on the record like that, it gives the impression that something is wrong… I don’t want the public to think we have anything to hide because we don’t.”
Leland Salomon, a county executive who oversees the aviation department’s contracts and reports directly to Osterholt, said the county and Ave LLC reached a fair compromise that ensures Miami-Dade is compensated for allowing Cambo to flip the 74.5 acres. “We understood where he was coming from, but we were not ready to give up on the fact he owed us $6 million-plus [once Cambo sells the rights],” Salomon said. “We went back to him [and told him] we can do this in another method: You are going to pay us more over the term of the lease.”
The committee voted 4-0 to send the revised agreement to the full county commission for consideration, but Sosa instructed Salomon to prepare a report that shows how many other Opa-locka airport leaseholders are required to pay transfer fees and whether the aviation department has rescinded transfer fees against any of them. Cambo, who was not present at the committee meeting, did not respond to Florida Bulldog phone messages seeking comment.
Since 2016, Cambo has sought to eliminate a clause in the development agreement he signed in 2007 requiring Ave LLC to pay Miami-Dade a $10-million transfer fee or 10 percent of the sales price, whichever is greater, should the company flip its development rights to another builder or real estate investment firm. According to Osterholt’s memo, Ave LLC is seeking to sell rights to 62 percent of the 178 acres, so the company would have to pay at a minimum, a pro-rated amount of $6.2 million. Cambo has a buyer already lined up: Chicago-based industrial warehouse builder Bridge Development Partners, the memo states.
While the memo doesn’t explain the contents of Cambo’s FAA complaint, he alleged that other leaseholders like Soffer’s Fontainebleau Aviation and the Carrie Meek Foundation do not have a transfer fee penalty in their agreements, according to a 2016 Miami Herald article about the dispute.
For instance, Cambo contended that Miami-Dade did not hit the Meek foundation with a transfer fee when the non-profit transferred its Opa-locka airport lease to a partnership with a for-profit company to jumpstart a long-stalled project to build a warehouse that has since been completed and now is an Amazon distribution center.
“It is clear that what is good for a long-time elected official, politician and community leader who has done absolutely nothing with her lease for eight years is not good enough for a successful developer,” the FAA complaint states.
Cambo also complained that county commissioners approved putting the Meek project, Fontainebleau Aviation and a similar facility owned by prominent banker Leonard Abess on the general obligation bond funding list for each to receive $5 million, while Ave LLC was excluded. Under FAA rules, airport leaseholders can file administrative complaints if they believe they are being discriminated by local jurisdictions that run airports.
At the time Cambo filed his complaint, Mayor Gimenez’s then-spokesman Michael Hernandez and airport bureaucrats told the Miami Herald a transfer fee didn’t apply to the Meek Foundation because it did not relinquish control or sell any of its development rights like Cambo intends to do. They also said the transfer fees are designed to discourage Opa-locka tenants from flipping valuable leases.
Indeed, according to a Feb. 6, 2007 county commission memo when Ave LLC’s lease was originally approved, the transfer fee was included as a protection so that the 178 acres the company controlled were fully developed within the first 10 years of the 30-year contract. At the time, Ave LLC had acquired Renaissance Airpark Corp., a company that had originally contracted with the county to develop the 170-plus acres in 1999 but had not started construction and had not paid Miami-Dade any land rent.
During the June 12 committee meeting, Osterholt and Salomon did not explain why the mayor’s office changed its defensive stance from two years ago. According to Osterholt’s June 12 memo, Ave LLC has finished construction on 58 acres that includes a new distribution facility for the U.S. Postal Service, a jet repair shop, a RaceTrac gas station and dozens of warehouses and airport hangers.
However, the transfer fee provision has been a poison pill in Cambo’s efforts to develop the remaining acreage because banks wouldn’t provide him with any financing, according to Osterholt and Salomon. Cambo also claimed that he needs to sell 74.5 of the remaining 120 acres in order to bankroll the construction of a private jet terminal. Meanwhile, he hasn’t paid $1.8 million in rent for the undeveloped land during the past two years, the Osterholt memo states.
In his FAA complaint, Cambo claims the inability to sell without paying the transfer fee has kept Ave LLC from fulfilling a contract with Fort Lauderdale-based Banyan Air valued at $40 million over 20 years. In 2010, Banyan Air signed a lease to expand its operations at Ave LLC’s proposed terminal.
“He gave us correspondence from different financing parties showing [the transfer fee] was preventing him from raising capital and continuing development of the project,” Salomon said. “The only way to do it was to sell a portion of the leasehold and take that money and reinvest it.”
tamaraherrera / July 15, 2019 8:02 am
In this situation, there is no one to praise .. If they had not paid attention to this question, no changes would have been made. Now, that the accusations have been made, they began to show us how honest they are. Hypocrites.