The Miami-Dade County Board of County Commissioners recently adopted an ordinance establishing off-street parking requirements for electric vehicles (EVs) which mandates minimum EV parking spaces in all new uses with limited exceptions provided below. The ordinance defines the terms pertaining to EV infrastructure, such as EV Supply Equipment (EVSE), EVSE Space, and EVSE-Ready Space and establishes penalties for misuse of parking spaces designated for EV charging.
The ordinance establishes two sets of criteria. One set to be used prior to January 1, 2022, and another to be used after January 1, 2022, when it is anticipated that most automakers will have switched to predominantly EV production lines thus the number of EVs is expected to increase considerably. In particular, the ordinance recognizes that automakers are investing over $90 billion in the development of electric and hybrid models and that General Motors specifically announced an all-electric path to zero emissions with the introduction of at least 20 new EVs to launch by 2023.
Pursuant to the ordinance, parking spaces specifically designed for charging of EVs will be required for all new uses other than single-family, duplex, townhouse, and properties with a current certificate of use or occupancy for a church or religious use. The number of required EVSE/EVSE-Ready Spaces will be based on the total number of required off-street parking spaces and will count toward off-street parking requirements. For example, where 10 or more off-street parking spaces are required, a minimum of 10% of those required parking spaces must be EVSE-Ready prior to January 1, 2022, and a minimum of 20% must be EVSE-Ready on or after January 1, 2022. The ordinance also permits the EVSE operator to charge a fee for EV charging and requires that all EV parking spaces be prominently designated with permanent above-ground signs.
The ordinance represents the first step at the level of Miami-Dade County toward addressing the growing number of EVs by requiring the installation of the infrastructure needed to enable future EV charging stations. Requiring EV infrastructure may increase the cost of construction and may undermine other incentives aimed at increasing the affordability of housing stock. As the County receives feedback on EV spaces, perhaps exceptions can be made for projects that include an affordable or workforce housing component. One thing is for certain, developers will no longer have the option to decide whether to include EV parking and will therefore need to include it in the budget for future real estate projects.
The City of Coral Gables’ zoning code landscape and open space requirements were recently amended as of May 14, 2019. The Coral Gables’ zoning code now requires landscape open space to be provided at the ground level and to be “open to the sky.” This update will have a significant impact on real estate development proposals in areas such as the Coral Gables Central Business District (CBD), downtown Coral Gables in general, and North Ponce de Leon corridor.
Of critical importance, the ordinance provides that any submittals which have not received final Board of Architects approval must comply with these amendments; thus, potentially delaying approvals. This will create a new challenge to developers who may be required to redesign projects already proposed in order to comply with the new requirements.
Previously, the open space requirements of the Mixed Use District (MXD) regulations could be satisfied by providing landscape open space in “elevated areas”, not only on the ground floor. The prior code thus allowed for rooftop gardens and terraces spaces. The ordinance deleted this provision and specifically provides that required landscape open space must be provided at the ground level, be accessible and visible to the public, and that it integrate pedestrian features in a coordinated design with right of way improvements.
The ordinance also revised several other definitions related to open space requirements, including a new definition for “Paseo.” The ordinance now defines “Paseo” as a publicly accessible space located on the ground level that enhances pedestrian activity and provides pedestrian oriented amenities. A paseo is now also specifically prohibited from counting towards landscape open space requirements unless the paseo is “open to the sky.” The definitions for “pedestrian pass-through”, “plaza or square”, and “urban open space” were also amended to clarify that all three must be provided at the “ground level.”
We previously wrote about whether and how public-private partnerships (P3s) could be the answer to U.S. infrastructure issues and the many ways in which the P3 delivery model provides unique value. While P3s are used in a variety of sectors of infrastructure development, energy and power projects particularly lend themselves to the P3 delivery model. Technology is the main driver in any energy project, whether it is power plants and natural gas facilities, implementation of wind and solar power, or the overhaul of entire utility systems. Furthermore, because of the importance of renewable, efficient, and sustainable energy, this technology is constantly changing and improving.
Federal and state governments are also constantly implementing new policies that incentivize different types of energy and power infrastructure projects. For example, the Environmental Protection Agency just released a replacement for the Clean Power Plan, called the Affordable Clean Energy Rule, which allows states to set their own carbon emission standards, and provides certain options to improve coal-fired power plants, but does not allow carbon capture technology. States are also taking action that will not only incentivize, but require that new infrastructure projects use certain types of energy technology. Following in California’s footsteps, the New York legislature also just passed a bill, currently awaiting the Governor’s signature, that requires the state to obtain 70% of its electricity from renewable energy sources by 2030 and become 100% carbon free by 2040.
Because of the rapid innovation of these technologies and policies, the P3 delivery model is especially useful. In any P3 the private sector typically operates and maintains the project for decades. The private sector is much better equipped to quickly react to and implement new technologies that may make the project more efficient, when governments may not be able to act as quickly or fund such implementation. The private sector’s enhanced technical capacity is critical to the ongoing success of the project. Recent P3 successes include a wind farm in Lafayette Township, Michigan, the Ohio State University overhaul of its heating, cooling, and power systems, and Duquesne University’s recent waste-to-energy deal. Fresno State University and the Puerto Rico Electric Power Authority have similar projects in the pipeline.
In the recent decision of Publix Supermarkets, Inc., v. Miami-Dade County, Case No. 17-082 AP, the 11th Judicial Circuit Court in and for Miami-Dade County held: (i) the applicant successfully carried its burden in a quasi-judicial hearing before the zoning appeals board of Miami-Dade County (the “County”); and, (ii) that the opposition failed to establish the required “competent, substantial evidence” to deny the application. Thus, the circuit court granted the applicant’s Petition for Writ of Certiorari, quashed the resolution that denied the application, and remanded the case to the zoning appeals board.
Publix Supermarkets, Inc., (“Publix”) applied for a special exception to permit a liquor store less than 1,500 feet from an existing liquor store pursuant to Section 33-311(A)(3) of the Miami-Dade County Code of Ordinances (the “Code”) and a non-use variance to permit alcohol sales on Sundays pursuant to Section 33-311(A)(4)(b) of the Code.
Importantly, the County staff recommended approval of the special exception and the non-use variance with conditions limiting alcohol sales to certain hours and requiring that Publix obtain a certificate of use.
At the public hearing, both the attorney for and owner of T-Rexx Liquor Store (“T-Rexx”), a competing liquor store, spoke against the application. The attorney submitted a petition signed by 705 individuals opposing the application and argued that if the application was approved, T-Rexx’s business would be damaged and likely close.
On appeal, the circuit court was charged with determining: (1) whether procedural due process was provided; (2) whether the essential requirements of law were observed; and, (3) whether the administrative findings and judgments were supported by competent substantial evidence, in accordance with City of Deerfield Beach v. Vaillant, 419 So. 2d 624 (Fla. 1982); Florida Power & Light Co. v. City of Dania, 761 So. 2d 1089 (Fla. 2000).
Publix argued that once it successfully demonstrated compliance with Code requirements, the burden then shifted to require T-Rexx “to present competent, substantial evidence that the criteria were not actually met or that the proposed liquor store was actually adverse to public interests.”
In reaching its decision, the circuit court turned to Jesus Fellowship, Inc. v. Miami-Dade County, 752 So. 2d 708, (Fla. 3d DCA 2000), in which the Third District Court of Appeal held:
“An applicant seeking special exceptions and unusual uses need only demonstrate to the decision-making body that its proposal is consistent with the county’s land use plan; that the uses are specifically authorized as special exceptions and unusual uses in the applicable zoning district; and that the requests meet with the applicable zoning code standards of review. If this is accomplished, then the application must be granted unless the opposition carries its burden, which is to demonstrate that the applicant’s requests do not meet the standards and are in fact adverse to the public interest.”
Ultimately, the circuit court determined that the submittal of a petition in opposition to the project and the project’s potential negative impact on a competing business in the neighborhood were not sufficient to establish the standard of substantial competent evidence required to defeat the application. Accordingly, the court granted Publix’s Petition for Writ of Certiorari, quashed the resolution denying Publix’s application, and remanded the matter to the zoning appeals board.
As this case demonstrates, applicants should be apprised of their rights and what burden they must carry when seeking a special exception or unusual use, or any other relief, at a public hearing. It is critical to recognize that for special exceptions and unusual uses, once the applicant meets its burden of proof, that burden then shifts to the opposition to demonstrate that the applicant’s requests do not meet the standards and are in fact adverse to the public interest. This case provides another example of the need to seek redress from the court to overturn an improper municipal ruling that impinges private property rights.
We recently provided an update on the status of higher-education and social-infrastructure projects being delivered under the P3 model. This update focuses on water and sewer projects—although water and sewer infrastructure is rarely given much attention, its proper operation is obviously critical to our well being. Unfortunately, many of our nation’s water and sewer systems are the victims of deferred maintenance (a problem that P3s can address), and the current situation is dire. As discussed at last week’s USP3 conference in New York, public water systems in the United States require $335 billion in upgrades over the next 20 years, and the public sewer systems require another $298 billion in upgrades. Fortunately, several jurisdictions are considering P3s to address these needed projects. Water-and-sewer P3s currently in the procurement pipeline include:
Ascension Parish, Louisiana, Consolidated Sewer System
Ascension Parish selected a preferred proponent last month for the development of a new regional sewer system under a 30-year DBFOM P3 agreement. Estimated construction costs for the first phase of the system are $225 million. The preferred proponent is led by Bernhard Capital Partners.
Lake Oswego, Oregon, Wastewater Treatment Plant
Lake Oswego shortlisted three teams last month for this project with an estimated construction cost of $130 million. The shortlisted proponents are EPCOR Foothills Water Partners, Foothills Water LLC, and NW Natural Holding Company.
Edison, New Jersey, Water and Sewer Concession
The Township of Edison has negotiated a 40-year concession agreement, which includes $481 million in infrastructure improvements, with Edison Environmental Partners, which is led by KKR Global Infrastructure Investors and Suez. The agreement is pending approval by the Township.
Fargo-Moorhead, North Dakota, Diversion Project
After a delay due to litigation, the Fargo-Moorhead Flood Diversion Authority is going to move forward with the procurement for this $2.75 billion project this summer. The shortlisted teams are Lake Agassiz Partners (AECOM, Meridiam, and Walsh), Red River Valley Partners (Plenary, Fluor, Ames, and Bernard), and Red River Valley Alliance (Acciona, InfraRed, Shikun & Binui, and North American Construction Group).
In the last twelve months, four national public-private partnerships (“P3s”) have been financed in the U.S. private placement market, accounting for over $800 million in project cost financing. While there has been a shift towards private placement investors as a P3 financing source, the market activity in the last year has confirmed investor appetite in P3s, particularly those with availability payment-based compensation structures.
Private placements are securities offerings to limited numbers of sophisticated investors. These offerings are exempt from registration under the U.S. Securities Act of 1933. Conservative, long-term investors, such as insurance companies and pension funds, tend to dominate the U.S. market. While private activity bonds and TIFIA loans present cheaper financing options, they are not available as financing sources across certain asset classes, including social infrastructure and smart city initiatives. Many features of the traditional private placement market align with financing features of the P3 market. For example, private placement investors favor long-term debt, with tenors of 30 years or more depending on the project, far exceeding the short tenors available in the bank finance market. In addition, as private placements in the P3 context are typically closed with a small number of investors, the project benefits from more flexibility in financing terms and, if needed, a simplified process for amendments and waivers over the life of the project, as compared to similarly-tenored bond financings. Finally, because of their long tenors and fixed credit spreads, private placements minimize project refinancing risk.
In addition, private placements offer significant benefits during the proposal phase for both the public and the private sectors. With credit spreads typically fixed at the time of the financial proposal, private placement financings are beneficial from a grantor’s perspective as credit spread risk protection between the time of proposal and financial close is not necessary. In addition, bid costs, particularly as compared to bond financing solutions, tend to be lower with private placement financing solutions, and there are no public rating requirements (even though a least one public rating is customary.)
We have written about how the public-private partnership (P3) project delivery model can and should be used to meet infrastructure needs. Because P3s are constantly being considered and tested all over the country, we wanted to provide an update on the status of these projects so that interested stakeholders can easily keep an eye on the market overall. Our first installment of the National P3 Update will focus on higher education and social infrastructure P3s. We will issue more updates on these projects, as well as updates on projects in other industry sectors.
Travis County Civil and Family Courts Facility P3: The Travis County Courthouse P3 reached financial close on May 9, 2019. The facility, located in Austin, Texas, is a 430,000 square foot civil and family court facility that is set to be complete in 2022.
Santa Rosa Junior College Student Housing P3: Santa Rosa Junior College selected Servitas as its preferred bidder for its student housing P3. The project is to design, build, finance, operate, and maintain a 360-student housing facility. The other shortlisted developers were Greystar and the Michaels Organization.
Vanderbilt University Student Housing: Vanderbilt selected Lendlease as its preferred bidder to design, built, operate, and maintain a graduate and professional student housing village.
Miami-Dade County Courthouse P3: Miami-Dade County shortlisted three respondents for its Civil and Probate Courthouse P3—teams led by Meridiam/EllisDon, Plenary, and Sacyr. The County will issue a RFP in the coming weeks, with responses due by the end of July.
California State University, Fresno Central Heating and Cooling Plant Modernization P3: Fresno State shortlisted four respondents for its Central Heating and Cooling Plant Modernization P3 in April 2019. The shortlisted teams include Bulldog Energy Alliance, Bulldog Infrastructure Group, Plenary Utilities Fresno, and Victor E. Energy Partners. The project is for the design, build, finance, and maintenance of a central utility plant, ancillary infrastructure, and implementation of energy efficiency upgrades all over campus. A RFP is to be issued this fall.
Alabama Department of Corrections P3: The Alabama Department of Corrections is analyzing five responses to its Request for Expressions of Interest for the construction of three new prison facilities. The respondents were tasked with identifying the scope of the agreement. A RFQ will be issued this quarter, with a RFP to be issued in the fall.
Dartmouth Heating P3: Dartmouth College received responses to the Request for Qualifications for its Heating Plant and Distribution System project in late April. Three of the teams that submitted were Fengate/Ameresco/WorleyParsons, Kiewit/Enwave, and Merdiiam/ENGIE North America. The project is to design, build, finance, operate and maintain a thermal generation facility that will be powered by a renewable fuel source, as well as a new hot water distribution system. The shortlist is expected to come out in June, with issuance of a RFP in September and selection in 2020.
City of Los Angeles Civic Center P3: The City of Los Angeles issued a Request for Qualifications for the Los Angeles Civic Center P3 on April 2, 2019. Responses are due on May 28, 2019. The project is a design, build, finance, operate, and maintain that will include a government office facility, childcare center, and conference center. The city expects to issue a RFP at the end of 2019, with responses due in the beginning of 2020 and award and execution of a project agreement at the end of 2020.
In 2007, the Miami-Dade County Board of County Commissioners adopted Ordinance No. 07-05, which created a voluntary Workforce Housing Development Program in order to encourage development of land available for residential use targeted towards the workforce income group. The program allows real estate developers to obtain density and intensity development bonuses by providing either workforce housing units (WHUs) or a monetary contribution to the Miami-Dade County Affordable Housing Trust Fund. In 2016, the Miami-Dade County Board of County Commissioners adopted Ordinance No. 16-138, which created a mandatory Workforce Housing Development Program and amended certain provisions of the County’s existing voluntary Workforce Housing Development Program.
administrative adjustments for setbacks and lot coverage through the administrate site plan review process; and
a two-year deferral program for road impact fees.
These developers, however, should be sure to understand some of the administrative requirements of the program before proceeding with a WHU project.
For starters, all potential renters must be members of qualified households. Qualified household means an eligible household that has received a certificate of qualification. Such certificates are issued by the Housing Department or qualified designee establishing a qualified household’s eligibility to purchase or rent a WHU. Each eligible household’s income must meet the income limits at the time of receipt of a certificate of qualification. For example, for a family of four to qualify as extremely low income (30% of median), the income limit is $25,100; to qualify as very low income (50% of median) the income limit is $39,350; and to qualify as low income (80% of median), the income limit is $62,950.
Potential renters must then be provided a lease with a minimum period of twelve (12) months and the lease must comply with all applicable federal and state laws. The lease must include without limitation provisions that specify the maximum household size allowed in the unit, a prohibition against subleasing, and a requirement that the qualified household report any changes in household size or income during the tenancy. If in fact a qualified household’s income increases above the maximum allowed income levels, the qualified household may choose to remain in the WHU for the remainder of the lease term. At the end of the lease term, the formerly qualified household and the developer can even agree to extend the lease term. If the lease is extended though, then the developer must make the next comparable vacant unit at the project available to another eligible household at the WHU rent.
While there are a number of other administrative requirements related to WHUs, those outlined herein are key to any developer considering the benefits of the WHU program.
After last month’s meeting with Democratic leaders in the House and Senate, President Trump’s $1 trillion infrastructure plan has become $2 trillion. As the legislature continues to digest the plan, many are beginning to raise questions about the plan’s viability. The fundamental issue is a predictable one–$2 trillion is a big number, and legislators are having trouble deciding how to pay for it.
Unfortunately, $2 trillion is not nearly big enough—even if the legislature were to come together and agree on a method of budgeting for the $2 trillion, it would cover less than half of the country’s critical, short-term infrastructure needs. The American Society of Civil Engineers has estimated that the U.S. needs to spend $4.5 trillion by 2025 just to ensure the continued operation of our infrastructure. That number is the minimum to keep limping along—it does not contemplate upgrades to address long-term sea-level rise and climate change or the new “green” infrastructure projects that are desired by many, such as the six new mass-transit corridors included in Miami-Dade County’s SMART Plan.
Ultimately, we cannot rely on government alone to meet our infrastructure needs. Although the $2 trillion plan would be extremely helpful, it is not alone sufficient, and government funding will need to be used to leverage new private investment in order to solve this issue (there is over $200 trillion in private capital invested globally, and that capital is constantly searching for good investments). Fortunately, public/private partnerships backed by private investors are a proven model for delivering critical infrastructure improvements. P3s have become a dominant model in several countries, including Canada, and they will need to become dominant in the U.S. as well if we are ever to transition from talking about funding infrastructure to actually funding infrastructure.
The Forum will touch on topics including: strategies to unlock transformative economic potential and create lasting change in South Florida’s blighted neighborhoods; IRS and Florida’s legislation as it pertains to the governance of Opportunity Zones and related investment issues; the greatest benefits and obstacles for investing in an Opportunity Zone; and which asset classes are most ripe for development on OZ legislation. Click here if you would like to register for this event.
About Opportunity Zones
The Opportunity Zone rules promulgated in December 2017 offer investors significant tax benefits for investments in certain low-income communities. Investments in Opportunity Zones receive three primary tax benefits. First, taxpayers can elect to defer capital gains by investing them in qualified Opportunity Zone funds within 180 days of recognition of the gain. If the taxpayer maintains its investment in the fund, this gain will become payable in 2026. Second, subject to certain timing requirements, the underlying basis of the original capital gain will receive a 10% step-up after the taxpayer holds the gain in the fund for 5 years, and an additional 5% step-up if the taxpayer holds the gain in the fund for 7 years. Finally, if the taxpayer maintains its investment in the fund for 10 years, the taxpayer will receive a step-up in basis equal to the fair market value of the investment.