Developer offers Miami-Dade a $300 million courthouse. Rent: $1.8 billion over 99 years.
A Miami developer wants to build a $300 million courthouse for Miami-Dade in exchange for an $18 million yearly lease stretching into the next century and the right to convert the existing historic tower into a for-profit complex with shops and offices. The unsolicited proposal by developer Russell Galbut would deliver Miami-Dade a modern courthouse a few steps across Flagler Street from the existing one built in 1928 — a government building so old it once held the trial of Al Capone. While Galbut’s Crescent Heights would pay for construction, it would gain two significant sources of revenue from Miami-Dade to try and turn a profit during the 99-year deal. Crescent would collect at least $18 million a year in rent from Miami-Dade on the new courthouse, which would rise on what’s now a narrow parking lot at 54 W. Flagler Street. And Crescent would take over the existing courthouse, and refurbish it into Miami’s newest high-end office tower, with shops and restaurants on the ground floor at 73 W. Flagler St. “This icon needs a fundamental refurbishment from top to bottom,” Galbut said in an interview. His plan would deliver the modern courthouse sought by judges, lawyers and the county clerk, who complain the existing 28-story building is so out-of-date, cramped and in disrepair that it no longer can serve as headquarters for the county’s civil justice system. The new 35-story building would offer 50 courtrooms to replace the existing building’s 25 rooms, a top request by judges. But the Galbut proposal does not lay out a solution for what’s been the most vexing challenge related to the 1928 courthouse: how to pay for a replacement. Voters in 2014 soundly rejected paying higher property taxes to borrow $390 million for a new courthouse. Miami-Dade leaders say they haven’t figured out a way to generate construction money without higher taxes. Harvey Ruvin, Miami-Dade’s elected clerk court, has suggested adding an impact fee on new construction to help fund government facilities, including courthouses. A task force recently recommended raising courthouse revenue from development deals on county-owned property downtown, and closing the financing gap by going back to voters for a smaller tax increase. Under Galbut’s proposal, Miami-Dade’s rent on the new courthouse would start at $18 million a year, and then rise a little every 12 months. Galbut said the figures include a stream of rent Crescent Heights would pay Miami-Dade for use of the old courthouse over the same 99-year period. At $18 million a year, the arrangement would make total rent payments through the 99 years more than $1.7 billion. And while Crescent Heights would cover maintenance of the building’s exterior, Miami-Dade would still pay to run and maintain the inside of the new complex. When Miami-Dade proposed the tax increase to cover a $390 million bond referendum in 2014, the debt payments on the courthouse over 30 years would have cost about $730 million — less than half the price of creating a new courthouse under Galbut’s much longer payment plan. Galbut said his proposal makes sense largely because of the growing maintenance costs for a courthouse nearing its 100th anniversary. By putting the risk of preservation on the private sector, Miami-Dade can save the existing courthouse while only paying for a new once it’s ready to be occupied. With a revitalized courthouse tower and a new home for the county’s civil judicial system, Miami-Dade can also protect the core of downtown’s economic future, he said. “It’s all about saving Flagler Street,” he said. The proposal also touts a town square Crescent would create to unite the old courthouse site with the new one on either side of Flagler Street, which would remain open. Galbut said both parties could opt to buy out their leases after 30 years and purchase the real estate, meaning Miami-Dade could eventually own the new courthouse while Crescent could own the existing one. Galbut’s plan, submitted in February but only recently made public, has already drawn some heat. Eugene Stearns, a Miami lawyer who helped champion the failed 2014 courthouse referendum, took issue with the design by Kobi Karp, a prominent Miami architect, saying the narrow site left the tower with too many windowless walls. “You would never build a modern building with no windows,” Stearns said. “You might build a jail.” Galbut said there’s room for more windows but that modern courtroom designs generally exclude them. “It can have as many windows as [the county] wants,” he said. Ruvin said his clerk staff has had extensive talks with Galbut’s development team as they designed the layout of the proposed building. “Coming from this courthouse,” Ruvin said, “it would be a tremendous upgrade.”