Recently, it was revealed that the government of Miami-Dade County, the most populous county in Florida, has decided to purchase a building that will house a group of government departments through the issuance of municipal debt worth 234 million dollars, with the aim of avoiding leasing properties given the high prevailing costs.
Jimmy Morales, the county's chief operating officer, said that Miami's commercial real estate market prices have skyrocketed to unprecedented levels, making it more convenient to purchase a property than to spend large sums of money on rent.
He said: "It is better to own than to rent if you can afford it," even if you have to go into debt. He also stressed that the adoption of such a decision will have a positive impact over the next 30 years, since it will allow the county to save more than 860 million dollars during that period.
Office of Management and Budget Director David Clodfelter said: "We had to do something," arguing that rent increases in recent years have been exorbitant.
The idea came about after the county's Department of Regulatory and Economic Resources was notified of an expiring lease and an increase in the cost of rent for the property in question.
According to information provided by an article published by Diario Financiero, the building that the county intends to buy is quite old, as it was built in 1974 and has also been subject to several renovations. At the end of last year, the main tenant left and this resulted in a reduction in its occupancy level to almost 20%.
The property is located in the Fontainebleau neighborhood west of Miami and covers 625.000 square feet and 26 acres of land. The initial asking price was $205 million, but Mayor Daniella Levine Cava's administration reached a less onerous agreement that was set at $182 million, a figure that is $23 million lower than the first.
Anthony Rodriguez, vice chairman of the Board of County Commissioners, said the office building will concentrate county department services and resources and save taxpayers money. When the property is open, residents will be able to complete a variety of tasks on-site, including filing a building permit or fire inspection application and appealing a property tax assessment.
However, there were some officials who opposed the initiative. Such was the case of Commissioner René García, who voted against the bond sale, saying that the final price of the building was still too high.
He added: “Just because we are a government doesn’t mean we should throw money out the door. I think the county could have gotten a much better deal.”
Despite the mixed opinions, Moody's gave the bond sale an Aa2 rating, the highest level, considering that the bonds are backed by the county's substantial revenues. S&P Global Ratings gave it an AA rating. These results reflect the confidence that the county will be able to meet its credit obligations.
