Miami group fights potential subsidies for rival $3B-$4B mall
Update: May 25, 2018: Miami-Dade County commissioners voted 9-1 on May 17 in favor of zoning designations that pave the way for developer Triple Five's American Dream Miami mega-mall entertainment complex, according to the Miami Herald.
Major Miami-area malls and retailers have joined forces in an effort to bar any public subsidies or incentives from ending up in the development agreement for the American Dream Miami project, the Miami Herald reported. When the project is completed by 2023, it is expected to be the largest indoor theme park and mall in the country. While the Herald pegged the project's estimated costs at $3 billion, other newspapers, such as the Sun-Sentinel, reported that it's likely to cost $4 billion.
The mega mall's developer, Canadian firm Triple Five, has not officially requested tax breaks or other special incentives, but it reportedly raised the issue in previous informal discussions with Miami-Dade County Mayor Carlos Giménez.
Lobbying against such potential breaks is a group that includes regional heavy hitters in retail. Representatives reportedly argued that giving Triple Five taxpayer dollars creates an unfair advantage over similar projects that they said did not have access to that type of financial backing, such as Dadeland, Dolphin Mall and International Mall. A Miami-Dade panel voted in favor of a development agreement for the mega mall, without any mention of subsidies. On May 17, the Miami-Dade County Commission will conduct the final vote on the project. Some commissioners have come out against using public funds to help bring the project to fruition.
One of the reasons local governments may dole out incentives to projects like the American Dream Miami, which is slated to draw in 30 million visitors a year, is that they create thousands of construction jobs and even more full-time, permanent positions. Construction jobs alone could last for a few years on large projects, boost the local economy and spur economic growth in nearby neighborhoods and business districts. Project officials have previously stated that the development would create a staggering 32,000 construction jobs at the peak of work and 25,000 permanent jobs. It would also provide $230 million of extra annual revenue for the county. Triple Five is behind other mega malls, such as Minnesota's Mall of America.
But even with all that extra money flying around, these are not great times for run-of-the-mill malls, including those in Miami, as internet retail sites like Amazon cut into malls' profits. Yet consumers — particularly millennials — are continuing to look for unique shopping experiences that offer what they can't get online. In order to grab some of that business – and stay in business – mall developers are adding features like family entertainment venues and revamped movie theaters and are even converting vacant storefronts into office space.
Given that Credit Suisse projects that 25% of U.S. malls will close by 2022, those owners who want to stay in the game would be smart to follow the examples of those trying to innovate rather than simply survive.
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