Commission To Consider Sale Of Parking Lot 24 To Doctors Hospital, Below Appraised Value

Ariel Fernandez

Founder & Editor
[email protected]


Over the last few months, residents have been joking that the new welcome signs for the City of Coral Gables should be “for sale” signs. Properties have been changing ownership at a large rate and new families have been moving into the City Beautiful.

However, in the public front something that has never been done by one sitting Commission may take place at the May 10th Commission meeting, the second sale of a City real estate assets in a one year period.

As you will recall, the Commission approved the sale of the Greco Avenue surface parking lot at the September 28th Commission meeting.

Now, just a little over seven months later, staff is proposing the sale of Parking Lot 24 (5151 University Drive) to Doctors Hospital.

Correct Valuation?

As it was with the Greco lot, staff has once again negotiated a sales price below the highest appraised value. The negotiated sales price is $3.5 million while the highest appraisal was for $3.6 million. A new set of appraisals was conducted last week at the Commission’s request, as staff was seeking to move forward with the sale using the values of appraisals conducted in late 2021.

The number has been questioned by commercial realtors Gables Insider spoke with, as the value of properties has risen by more than the 16.7% increase in the value of this deal. In fact, just last week, a deal was announced to sell the lot where Deel Volvo was located on Bird Road and US1 for $34 million. That lot is 108,900 square feet. The City’s lot is 45,635. Price per square foot of the Volvo lot is $312 a square foot, while the City’s lot is $76.69. Although we understand that the profitability of the Volvo lot is greater and would not imply Doctors pay a comparable rate for a $14 million sale; the City’s lot size compounded with Doctors’ need for the lot in order to operate, should clearly increase the value well about the $3.5 million. This is money that would go to taxpayer use.

The deal has been in the works since 2017. Several issues delayed that sale and it was brought back for first reading at the April 26th City Commission meeting.

No Board Approvals Since 2017

Sales of City assets, require the measures be presented to the Property Advisory Board, the Economic Development Board and the Budget Advisory Board. Staff’s memo implies each of these boards recommended the approval of the sale. However, the reality is that these approvals were with the 2017 terms. Most of the members of these boards have changed and the reality is, so has the real estate market in Coral Gables.

“Robbing Peter To Save Paul”

The City has been leasing this property to Doctors Hospital for years. It has been a productive partnership, which has addressed Doctors’ need for parking and the City’s receiving a steadiy income stream from the lease of the lot. So why are we selling this lot? Why did we have to sell Greco?

The answer is simple, we have mismanaged funds for so long that we are being forced to sell assets to get ourselves back on good financial standing. We are “robbing Peter to save Paul,” selling a City owned asset from residents to cover for staff’s financial mismanagement.

Financial Mismanagement

Gables Insider has been investigating the City’s financials for several months. Although we are still working on it, we can shed light on this much:

The City Commission approved the construction of the new Public Safety Building in 2018. It was completed, but the project was so poorly run that it cost the City over $16 million more than what was budgeted and approved by the Commission. (Initial project cost was $52.2 million, the final cost was upwards of $69 million). Part of the funds used, came from the construction funds allocated for the adjacent parking garage on Minorca Avenue. As such, the garage could not be built, leaving Police and Fire to use street parking in the area to alleviate their high demand for parking. Enter the Greco lot sale. The sale of the Greco lot was required, in order to build the Minorca garage, which should have been built with the money that was used for the Public Safety Building. But it doesn’t end there. According to staff’s memo to the Commission about this sale to Doctors Hospital, “50% of net proceeds” will go to the “Public Safety Building.” So another $1.75 million to cover the mismanagement of the Public Safety Building.

In other words, in order to have the Public Safety Building, we have now been forced to sell two City surface parking lots, which have brought in a steady stream of annual revenue to the City.

Sidewalks

At the April 26th City Commission meeting, Mayor Vince Lago brought up the need to complete sidewalks around Doctors Hospital as a requirement for the sale to move forward. City Manager Peter Iglesias, who managed the Public Safety building project, argued that the City would pick up 50% of the cost of the sidewalk construction and that he would have Doctors agree to the other 50% after the sale was complete. In the world of negotiations, this is known as an ad-on and never a sure thing.

Following a comment by longtime Coral Gables resident Maria Cruz, the Commission asked that Doctors be asked to agree to the full cost of the build, as well as the completion of the sidewalk on the north side of the hospital.

Seemingly, Iglesias was unable to secure that commitment, as Doctors only agreed to $100,000 for sidewalks. This would put Doctors Hospital at the appraised value of the lot, $3.6 million, in total commitment.

The question is why isn’t Doctors being asked to pay at minimum the appraised value? The fact is, in Coral Gables, most properties are currently being sold above appraised value. The deal worked out by Iglesias and his team, will leave the City and its residents indirectly footing the full bill for the sidewalks.

Right-Of-Way Lease

Doctors Hospital is also on the agenda for the approval of the lease for use of the right-of-way for parking. For years, neighbors had complained about Doctors’ use of the right-of-way for parking. The City had never collected a penny for its use.

Now, they seek a lease to use this City property for parking. The City’s proposed lease for the lot is at a rate of $6 per square foot per year with a 3% increase year-over-year.

Mathematically, however, it calls into question the long-term losses the City will take if they sell the lot.

With the Greco parking lot, staff made the argument that the City was not making money off the parking on the lot. It would take many years before the City made back the money the sale was providing.

In this case, the City’s own lease of the right-of-way counters its argument. A simple calculation of the square footage at the $6 per year with the 3% year-over-year increase would mean the City’s income from the lot would begin at $273,810 on year one and secure its $3.5 million by the first month in year 12. In 30 years, at the same 3% rate increase, the City would bring in over $12.8 million. So selling the lot will represent a loss for the City of $9.3 million over the next 30 years. Even if the City remains in the current 30 year lease started in 2017, the income over 30 years will surpass the $3.5 million deal on the table.

The Commission will take up the sale and the lease at the May 10th Commission meeting.

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10 thoughts on “Commission To Consider Sale Of Parking Lot 24 To Doctors Hospital, Below Appraised Value

  1. I can’t believe continue reading about the dishonesty that plagues the City’s Administration!! Where is our internal audit staff??
    I believe is time for a forensic audit of the City’s operations specially prior to the sale of City property.
    PLEASE consider terminating “for cause” the City “mis-manager” . Is it not clear of his shananigans?

  2. Once again, thank you to Mr. Fernandez for peeling back the covers of the graft and corruption in this administration.

  3. Doctors Hospital should not be given any deals. They kill our residents there. Never ever go to their ER!!!

  4. Ok — Lago is whinning at the 5/10 meeting. Burger Bob’s deal in its current form is because of resident uproar and oversight. CGCC in its current form is because of resident uproar and oversight. Had we been silent . . . Barreto would have had Burger Bobs and a steakhouse across the street. Give credit where credit is due. Don’t you love elected trashing residents for actually standing up and saying hell no!! I appreciate the Commission listening to the residents and moving forward with OUR vision. How about patting the residents on the back for standing up for what they want for their community and holding the City accountable as WE THE PEOPLE own these assets and pay for them.

  5. Charged $5,000 for a CT scan at that hospital. Mom admitted with Medicare at the same hospital & she was billed around $300. My insurance Blue Cross paid them $3K, more than what an MRI costs. They say I still owe them $2,000. The City should charge them as much as possible. They charged me 10x more than Mom; we should likewise charge them 10x. You can only sell ONCE. Better to let like the few SMART Brits, who own most of London and ensure their kids will be RICH in the future.

  6. Looks like Gables Insider touched a nerve (or a few) at the Commission. I’d like to hold Menendez to task — let’s have a full blown audit of the City of Coral Gables and required audits going forward. I’m honest, I really am. Trust me. See, I said I was honest. Therefore I am honest. And, by the way, Andersen was right to request the 18 story limit as per the committee recommendation.

  7. Fully funded sidewalks, as a condition of sale, had been suggested by staff as far back as when Commissioner Quesada sat on the dais. This isn’t a new idea, it just wasn’t the right person’s idea. Check the records, Commission meeting 1/8/2019, it was discussed.

    Weren’t you giving kudos to the PSB construction in the past? It seems everyone turned a blind eye to the issues. What changed? What did Peter do to upset you and Lago?

  8. Wow! Just when I think it can’t get worse it does! Keystone cops’ stuff at its worst! Is it incompetence? or is this part of a devious plan to deplete the city’s assets at the highest rate of return for city managers’ own purposes? where is the oversight for these people?

    If it is true, that the Mayor loathes to sell city assets let him tells us where he stands on this issue! Want to bet?….

  9. Another very bad decision by the local “leaders”.

    The taxpayers pay for their bad decisions.

    The “leaders” must go.

  10. This was not brought up to the budget advisory board. These City Assets should be leased, not sold. The sale is final, and a “one off” infusions of capital. Real property typically goes up in value over the years, and the use of these funds now forecloses the potential uses of the property for a future commission, 20 or 30 years from now. It is a myopic move, that does not take into account the opportunity cost of the transaction. The Mayor has said that he loathes to sell city assets for that very reason. They should all put the breaks on this, and game it out.

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