It looks like Miami will be the home of the nation’s largest mall in 2022.
The Miami-Dade County Commission voted 9-1 in March to approve the plans for American Dream Miami, from Canadian mall-builder Triple Five Group. The same group owns the well-known Mall of America in Minnesota, which is significantly smaller than the projected size of American Dream. Plans propose 3.5 million square feet of retail space, compared to the nation’s current largest mall, King of Prussia, at 2.9 million square feet of retail space. Retail space, however, isn’t the only indicator of the size or scope of a mall. Aiming to be more than just a mall, American Dream also features 1.5 million square feet of entertainment space and 2,000 hotel rooms.
In this entertainment space, Triple Five spares no expense for bells and whistles:
“Entertainment features at the project would include an indoor ski slope, a Ferris wheel, amusement park rides, a submarine that dives into an aquarium with a coral reef, ice rink, miniature golf, sports center for competitive games, movie theater, fishing lake and multiple performance venues.”
The total projected cost exceeds $4 billion.
Funding for the project remains completely private, for now. The commission passed a 11-1 resolution barring the project from “receiving taxpayer funding from the county, whether it be a tax break, bond, loan or tax increment financing.” This is a huge step for Miami, which has a history of getting public funds involved in private projects. Just a couple years ago in 2009, Miami-Dade county reached into public coffers to fund three-fourths of the $650 million stadium. The New York Times called it “one of the most lopsided deals in professional sports history.”
Some public officials learned from this past mistake. Commissioner Rebecca Sosa, who voted for the 2009 public assistance deal for Marlins Park, commented on the possibility of a similar deal happening for American Dream: "I learn from past mistakes. All I want is to make sure no public funds are used."
The land for the project was sold for $12.3 million from the state to the county, and then from the county to the developer.
The main concern expressed by commissioners and constituents is that of traffic. The roads surrounding the planned establishment are already crowded and notoriously prone to traffic. The developers commissioned a traffic study which estimated 75,000 trips per day – approximately 36,000 entering and 36,000 leaving per day.. It used the existing Mall of America as a template, given their similarities. The study already rates the capacity and traffic-proneness of surrounding roads at a letter grade of “F”, and with a plan for new lanes and roads, the grade remains at “F”.
The issue of transportation to and from the mall raises some interesting questions about the role of government in the private sector. Roadbuilding is a responsibility generally attributed to the government, even though it’s not determined as so in the constitution. With four unrelated major long-term road improvement projects surrounding the American Dream site, throwing the nation’s largest mall into the mix would spell absolute disaster. The developers could leave it up to the government, which might take ten years to find and execute funding for those roads. Instead, an interesting turn of events happened.
Triple Five agreed to pay Miami-Dade $60 million in impact fees, directed towards widening surrounding roads and interchanges. In my opinion, $60 million is not enough, and in practice, the roads will still be a disaster. However, this is theoretically a big step for free-market economics. At this point, Triple Five may have realized it is worth $60 million to have better road infrastructure sooner.
For the next five years, Miami residents should hope that the city commission keeps its promise, and guards against funding requests. The same development company is managing a similar stalled project in New Jersey, with the state announcing an $800 million bond issue to save it after years of delays and changing hands. The developers have privately asked Miami for public funding back in 2015, and thankfully were denied. If problems arise in the future, hopefully, it will be kept out of public coffers. If this is the dream of a Canadian real estate company, I hope the citizens of Miami can sleep undisturbed.
Originally published at https://www.jamesmadison.org/american-dream-miami-private-deal-public-consequences/