Miami-Dade weighs $438 million South Miami redevelopment fund beyond Sunset Place

Miami-Dade County commissioners are set to consider an ordinance creating a trust fund for South Miami's newly formed community redevelopment agency, a financing tool projected to capture about $438.3 million in property tax growth over 30 years to remake a 238-acre swath of the city's core, including but extending well beyond the struggling Shops at Sunset Place.

Under the proposal, sponsored by Commissioner Raquel Regalado, an estimated $235.2 million would come from the county and $203.1 million from the city of South Miami, according to Florida Politics, which first reported the measure. The money would be generated by directing 95% of applicable county and city property tax revenue above an established baseline into the trust fund, rather than into each government's general budget.

The redevelopment area is bounded by Southwest 62nd Street on the north, Southwest 76th Street on the south, Southwest 57th Avenue, also known as Red Road, on the east and Southwest 62nd Avenue on the west. That footprint takes in the Sunset Place mall site, the city's downtown along Sunset Drive and surrounding residential and commercial blocks near the Metrorail line.

What the money could pay for

Spending from the CRA trust fund could cover property acquisition, redevelopment planning, repayment of debt, affordable and workforce housing and community policing, according to the ordinance as described in published reports. Those categories are typical for Florida CRAs, which are allowed to use tax-increment revenue only for projects identified in an adopted redevelopment plan.

Affordable and workforce housing is a priority in Miami-Dade, where median home prices and rents have climbed far faster than wages over the past several years. Redevelopment agencies can use their funds to help underwrite below-market units, assemble land for housing or partner with private developers who agree to income restrictions.

Community policing is another permitted use under Florida law, which allows CRAs to fund enhanced public safety programs within their boundaries. Debt repayment matters because many agencies borrow against future tax increment to pay for large projects up front, then retire the bonds as property values rise.

Separate from the Sunset Place district

The trust fund is distinct from a special district the County Commission unanimously approved earlier to finance about $149 million in infrastructure for the redevelopment of the Shops at Sunset Place, once one of South Miami's busiest destinations and now a largely faded mall. Regalado also sponsored that measure, which created the Downtown SoMi Community Development District, according to Florida Politics.

The two tools work differently. A community development district, or CDD, is a special-purpose local government that can issue tax-exempt bonds for infrastructure such as roads, sewer lines and parking garages. Its debt is repaid through assessments levied on property owners inside the district, not from the county's general fund. A CRA, by contrast, redirects a share of the property taxes that the county and city would otherwise collect from rising values inside its boundaries.

The Sunset Place redevelopment is being led by Alex Vadia's Midtown Development, whose sister company, Midtown Opportunities, bought the property for $65.5 million in late 2020, according to The Real Deal. Plans call for up to 1,513 residential units, 350,000 square feet of retail space, a 287-key hotel, nearly 51,000 square feet of offices and a 1,300-seat movie and performing arts theater, according to published reports.

A broader push to remake downtown South Miami

The CRA's boundaries suggest local officials want a coordinated strategy for the city center rather than a single-project approach. Beyond Sunset Place, other proposals are moving through the approval process. 13th Floor Investments has sought approval for a roughly $309 million redevelopment of the South Miami City Hall site, a plan that has drawn pushback over a proposed park relocation, The Real Deal reported in September.

South Miami, a city of roughly 12,000 residents wedged between Coral Gables and unincorporated Miami-Dade, has long marketed itself as a walkable, small-town downtown. The South Miami Metrorail station and the nearby University of Miami campus give the area transit access and a steady stream of students and workers, factors that make it attractive for denser, mixed-use development.

At the same time, residents have pushed back on the scale of some proposals, raising concerns about traffic, building heights and the loss of public green space. Those tensions have surfaced repeatedly at City Commission meetings as major projects have come up for approval.

Sunset Place itself illustrates the challenge. The open-air center opened in the late 1990s as an entertainment-oriented mall anchored by a movie theater and large-format retailers, and for years it drew crowds from across southern Miami-Dade. As shopping habits shifted online and tenants left, much of the complex emptied out, leaving a large, underused property in the middle of the city's downtown. Its redevelopment is widely seen as the linchpin for the surrounding blocks, and it would likely generate a substantial share of any new tax increment.

How tax-increment financing works

Community redevelopment agencies are authorized under Florida's Community Redevelopment Act, part of Chapter 163 of the Florida Statutes. To create one, a local government must adopt a finding that an area suffers from slum or blighted conditions as defined in state law, then approve a redevelopment plan that lists the projects the agency intends to pursue.

Once a CRA is created and a trust fund is established, the taxable value of property inside the boundaries is frozen at a base year. In each later year, taxing authorities such as the county and city continue to collect property taxes as usual, but they deposit a share of the taxes generated by any increase in value above that base, known as the increment, into the CRA trust fund. In this case, the share would be 95%.

The theory is that public investment in infrastructure, land assembly and incentives will spur private development, which raises property values and generates the very increment that pays for the improvements. School district property taxes are not subject to tax-increment financing in Florida, so schools continue to receive their full share.

Because Miami-Dade is a charter county, the county must delegate redevelopment powers to a city before a municipal CRA can operate, and the County Commission must approve the trust fund that receives county dollars. That is why a South Miami agency requires action at County Hall.

The case for and against

Supporters argue CRAs allow cities to tackle problems that the private market alone will not, such as aging infrastructure, vacant commercial properties and a shortage of attainable housing. They point to examples across South Florida where redevelopment agencies helped finance streetscapes, parking and housing that set the stage for private investment.

Critics see the tool differently. Because a CRA captures most of the growth in property taxes within its boundaries for decades, county and city general funds forgo revenue that would otherwise pay for countywide services such as police, fire rescue, parks and transit. Watchdogs have also questioned whether some areas truly meet the blight standard, particularly in affluent or fast-growing neighborhoods where values might rise on their own.

Florida auditors and state lawmakers have scrutinized CRA spending in recent years, and some legislators have filed bills seeking to restrict or phase out the agencies. Concerns have included administrative overhead, spending on events or marketing rather than core redevelopment and the long time horizons of 30 years or more over which agencies can operate. Supporters counter that local control and the requirement for an adopted plan provide accountability.

In South Miami's case, a central question is whether increment generated largely by private megaprojects such as Sunset Place should flow back into the redevelopment area or into the county's general budget. With county and city contributions estimated at more than $438 million combined, the stakes for both budgets over three decades are significant.

What it means for Miami-Dade taxpayers

For county taxpayers outside South Miami, the ordinance would not raise tax rates. Instead, it would redirect a portion of future county property tax growth inside the 238-acre area to the CRA rather than to the countywide general fund. The estimated $235.2 million county share would be spread over 30 years and would depend on how quickly property values rise.

Those projections are estimates. If redevelopment proceeds faster than expected, the trust fund could collect more; if projects stall or property values flatten, it could collect less. Miami-Dade's budget office typically reviews such projections as part of its analysis of proposed CRAs.

For South Miami residents, the agency could bring new public investment in streets, housing and policing within the downtown area, along with the larger tax base that redevelopment is meant to create. It would also put a significant share of future city tax growth under the control of a single agency focused on one part of town.

What's next

The ordinance is expected to go before the County Commission, where it would need a majority vote to take effect. If approved, the South Miami CRA would begin collecting tax increment under the terms of the interlocal arrangement and its adopted redevelopment plan, with spending decisions made by the agency's board and subject to annual budgeting and auditing requirements under state law.

Residents should watch for the commission vote, any amendments to the 95% capture rate or the 30-year term, and how the agency prioritizes its first projects. The Sunset Place redevelopment, which already has its own infrastructure financing district, will be a key test of whether the combination of public financing tools can turn the long-struggling mall into the mixed-use district its developer has promised.

The separate City Hall redevelopment proposal and other downtown projects will also shape how much increment the CRA ultimately collects, and how South Miami's skyline and street life change over the coming decade.