Related Group is putting some skin in the game in their bid to take control of Miami Dade College’s prime property on Biscayne Boulevard.
An email from a Related representative explains that should the developer beat out three other bidders for the property, they will pay out $5 million to the college for the option on the land.
If they sit on the property for five years and fail to build anything, they would forfeit the $5 million. However, they would be able to pay another $5 million to the college to hold the land for an additional five years, according to documents submitted by Related.
(Rivals have pointed out that this could be a cheap way to keep the land undeveloped and keep out competitors.)
If Related does move forward with construction, they would put $50 million of equity into building the public elements portion of the proposal. They would also cover another $15 million in naming rights if a sponsor cannot be found. The remainder of the public elements portion will be financed through TIF funding.
The email from Related:
1) Related would give MDCC $50,000,000 up front of its own cash (not borrowed using tax payer funds but as outright cash payment to pay for public improvements for College).
2) Related would further guarantee $15,000,000 in naming rights. That is, if College could not obtain these funds, Related would give this amount to the College. This would serve as an additional guaranteed cash payment towards the public improvements.
3) Additionally, Related would give 10% of every dollar of revenue derived from condo sales in excess of $750 per square foot. For example, we are projecting sales at $850/sf thereby creating an ADDITIONAL $5.3 million of proceeds to the College.
4) Related would charge no developer’s fee but would build at its cost.
5) Related, will guarantee lien free completion as it would use no Community Development Bonds or other obligations that could cause the College to be foreclosed on land and improvements.
6) Related’s proposal is not contingent on condo sales, market fluctuations, financing etc. When reaching and executing their agreement, Related will put up $5 million dollars which they will lose should project not go forward. Once construction starts, Related will give a completion guarantee as well as a guarantee of lien free completion.