Casino giant Genting wants Miami-Dade to fund a $770 million monorail system linking the Miami mainland with South Beach, an elevated rail system that would require about $60 million a year in payments from the public.
The proposal made public Monday night would give Miami-Dade the kind of “Baylink” system that’s been a local transit goal since Ronald Reagan was president. But the details of the plan that would put a transit station next to Genting’s planned waterfront casino also lay out the financial hurdles to getting it built.
The private group formed by Genting and partners that would build and operate the four-mile “Miami Beach Monorail” would turn over fare revenue to Miami-Dade, in exchange for yearly payments from the county of $59.4 million over 30 years. The payment to a consortium that includes majority partner Meridiam, the company behind the PortMiami tunnel, would cover operating costs for the monorail trains and the developer’s construction costs with interest and would pay back the investors with profit over three decades.
The monorail system would start on the mainland at a new Metromover station built on property where Genting plans to build a casino complex under its Resorts World brand, if it can secure the changes in Florida gambling laws needed to bring the project to the waterfront where the Miami Herald once stood.
If built, the three-car monorail trains would offer a five-minute ride over the MacArthur Causeway. The proposal describes a $5 fare per trip, enough to generate about $4 million a year to offset required payments. Miami-Dade could choose to give discounts for riders with transit passes and extend free trips already granted seniors and veterans on county trains and buses.
There is no detailed information on potential fare revenue, which typically covers about 20 cents of costs in Miami-Dade for every dollar of operating expense. Because the monorail would be financed with private dollars and then paid back with interest by Miami-Dade, the payments cover both operating and construction costs.
The monorail consortium was the lone bidder on what would be one of the priciest transit projects in the county since Metromover was launched in 1986.
Mayor Carlos Gimenez revealed the lack of competing bids in a memo to county commissioners on Monday evening, before the monorail proposal became public. In the memo, Gimenez said two other teams cited time constraints in their decisions not to submit bids after initial discussions with county contracting administrators.
Last July, commissioners accepted Gimenez’s recommendation to launch an accelerated timetable for the Beach transit corridor after Genting and partners submitted an initial monorail proposal that has not been made public. In August, Miami-Dade agreed to invite proposals for the Beach corridor, based on the first monorail proposal looking attractive enough to consider.
The process began as the county and Florida were paying millions to a consultant to study which transit mode made the most sense for easing traffic between Miami and Miami Beach under the 2016 SMART Plan Initiative. That study by the Parsons consulting firm ended in December, and found extending Metromover to South Beach would attract the most riders. It recommended Metromover or monorail as the best options.
Genting and partners were not obligated to stick with its initial proposal, which included Chinese-built trains to keep costs down. While that $400 million project was described as costing Miami-Dade just over $10 million a year, the new proposal uses trains built by Canada’s Bombardier at significantly higher costs. After criticism of the first monorail plan, Miami-Dade approved rules banning Chinese trains from the project, tying it to federal legislation with similar rules.
In its latest monorail effort, the main financial backing comes from Meridiam, which the proposal describes as the leader of the partnership. The firm also backed the PortMiami tunnel project, which was built with private funds under an arrangement that has Meridiam and partners operate it in exchange for yearly government payments.
Most of the upfront money to build the monorail would come from $693 million in private loans. About $77 million would come in equity from Meridiam and a small part from Genting. Equity serves as an investment stake, which is then bought out by Miami-Dade over time as government dollars also cover the outstanding debt, operating costs and profit for the developers.
Meridiam is contributing most of the equity dollars, nearly $74 million, and less than $4 million coming from Genting. The financial plan shows Meridiam and Genting making a 12 percent yearly return on their equity investments.
Genting’s partners in the monorail project also include two lobbyists who were at the center of Gimenez’s 2016 reelection bid: campaign manager Jesse Manzano-Plaza and finance chairman Ralph Garcia-Toledo.
Gimenez, his wife, Lourdes, and Audrey Edmonson, the chairwoman of the County Commission that would vote on the contract, filmed a promotional video in early 2019 that had them pretending to ride the proposed monorail. Garcia-Toledo and Genting have not released the video, which the county declared a public record.
With no competing bids, Gimenez on Monday said his administration could review the monorail proposal and make a recommendation. Or it could scrap the process and start again if commissioners demanded competition in the process. “In light of the receipt of a single proposal, guidance is sought from the board for future steps,” he wrote.
Economic devastation unleashed by the coronavirus emergency has the county’s transit system bracing for a sharp drop in the sales tax that funds transportation projects in Miami-Dade, along with a slump in property taxes that subsidize bus and train operations.
But with Washington also pledging more than $200 million in transit rescue to Miami-Dade and the county hoping for even more in stimulus dollars for large projects, the monorail developers could see coronavirus relief as a financial boon to the effort. Even so, the proposal arrives at a time when future transit habits are in doubt amid depressed ridership during a pandemic that has buses and trains running at half capacity and demand down 80 percent.
Though not outlined in this proposal, the monorail team has said it wanted state funds and contributions from Miami and Miami Beach to reduce the money Miami-Dade taxpayers would have to pay for the monorail project.
Kelly Penton, a spokeswoman for the monorail group, said the nearly $60 million yearly payment was tied to the terms Miami-Dade required for initial proposals and “we expect that that number will be reduced once an optimal financial structure can be finalized.”
This post was updated to more precisely refer to the role of Genting as part of the partnership proposing the monorail project.
This story was originally published May 12, 2020 6:00 AM.