Costco closer to getting a South Dade site through no-bid deal for cheap county land

A prominent developer wants a no-bid deal to build a Costco on county land near Cutler Bay, at a price that’s well below the appraised value.

Michael Swerdlow, the Miami-based developer behind the Dolphin Mall, is lobbying to purchase a vacant 17-acre tract off Southwest 190th Street, north of where U.S. 1 meets Florida’s Turnpike.

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He secured backing from the County Commission last year to begin the process needed to purchase the land for a fraction of what Miami-Dade says it is worth. Swerdlow wants to pay about $8 million to acquire the property, while county appraisers pegged the value of the real estate at $31 million. Swerdlow would also pay an additional $1 million over 10 years to Miami-Dade.

But Miami-Dade’s Water and Sewer Department has planned a maintenance-truck facility there that would help speed repairs of pipes after storm damage, and the agency says it doesn’t have a better alternative site available if a Costco takes over the property.

“I don’t think today we have found a site that works,” Jimmy Morales, the county’s chief operating officer under Mayor Daniella Levine Cava, told a commission committee last week. “But we are open to continuing that process.”

The administration’s coolness to the plan didn’t stop the momentum behind the deal, which passed the commission’s Airport and Economic Development committee unanimously on April 10. That leaves a final vote before the County Commission to approve the sale in the coming weeks, though the proposal did spark some concerns at the hearing.

“I’m going to need some convincing,” Commissioner Danielle Cohen Higgins said at the hearing before agreeing to advance the proposal to a final vote before the full board.

Backers of the deal are counting on Costco being enough of a selling point to overcome doubts about both the sales price and what giving up the land will mean for the county’s future Water and Sewer operations. Swerdlow would own and develop the land, then rent it to Costco through a long-term lease.

Kionne McGhee, the commissioner representing the area that includes the parcel, calls the Swerdlow proposal a natural upgrade for land that’s sat idle since the county bought it in 2003.

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Instead of the land sitting vacant for another decade, McGhee argued Miami-Dade would be better off accepting the Swerdlow offer and generating taxes with it in private hands while also bringing new retail jobs to the area. The parcel sits in an economic-development district that retains some property taxes each year for projects in the surrounding West Perrine area.

“The county wants to put their trucks and pipes and other county-owned assets in an area that desperately needs more tax dollars to help elevate the community,” McGhee said in an interview. “It’s a good idea for South Dade because it’s a great economic engine for a community that has been left out of the economic equation of the county for so long.”

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For Swerdlow, the proposal is the latest test of his ability to win government backing for big deals.

His portfolio includes the Dolphin Mall, which opened in 2001 and required a complex series of off-site transportation improvements and taxing districts to fund improvements. He’s finishing up a mixed-use development with affordable housing in Miami’s Overtown called Block 55 and is pursuing a $2.6 billion community in Miami’s Little River area anchored by county public-housing properties.

He’s one of the top donors to McGhee’s 2024 reelection effort, with $30,000 in financial support to the commissioner’s political committee, 1 South Dade. Last year, Swerdlow hired a former senior county administrator with extensive knowledge of public deals: Michael Liu, who left as county housing director in 2023 after a split with Mayor Daniella Levine Cava.

Michael Swerdlow and Miami-Dade County

A year ago, Swerdlow said he had secured an apparent endorsement from a county agency well ahead of the upcoming Miami-Dade vote, though that alliance is now apparently off the table.

The agenda item for last week’s committee hearing included a letter from a Swerdlow economic consultant describing a partnership with the Miami-Dade Economic Advocacy Trust (MDEAT), a county agency dedicated to improving prosperity for Black residents.

“MDEAT’s share of the Developer proceeds from the Subject Project will provide funds for its ongoing operation,” Andrew Dolkart, of Miami Economic Associates, wrote in the May 8 letter to Levine Cava.

Nicholas Swerdlow, vice president of his father’s company, said Wednesday that the Economic Advocacy Trust has no role in the Costco venture. “They approached us a long time ago but [we] haven’t spoken to them in well over a year,” he said in a text message.

Bill Diggs, director of the Economic Advocacy Trust, said he did have talks with Swerdlow about what economic benefits and funding the Costco project could provide through the county agency. Diggs said the Economic Advocacy Trust did not talk about being a partner in the venture.

“We had an initial conversation. It was to make sure people in the area had a shot at economic opportunity,” he said. “It went nowhere fast.”

The Dolkart letter includes the economic projections Swerdlow hopes will sell the project: 300 full-time jobs from a company that in its 2023 annual report said it set an $18.50 floor on starting wages, more than 50% higher than Florida’s $12 minimum hourly wage.

Water and Sewer could get a new site under proposal

Under a deal negotiated with the county’s legal department and McGhee, Swerdlow is offering Miami-Dade either $7.1 million cash for the county parcel or a land swap that would give Water and Sewer an equivalent parcel for a future facility.

Swerdlow also would pay an additional $1 million to the Water and Sewer Department to help fund pipes needed to connect septic tanks to the county’s sewer system. In addition to the $8.1 million upfront, Swerdlow would pay another $1 million over 10 years for a mix of sewer projects and neighborhood expenses.

Roy Coley, the county’s Water and Sewer director, told commissioners last week that Swerdlow hasn’t found a site that sits as close to a Turnpike exit as the one the agency already owns.

“The goal of the department is to have properties close to the Turnpike, because we know post a major hurricane event, the Turnpike would most likely be the pathway opened first,” Coley said. The farmland Swerdlow offered sits about a half-mile from the Turnpike, which Coley said would be manageable but still not as good as the existing Water and Sewer land. “It’s a superior location,” he said.

Another pending county land deal could boost Swerdlow’s chances.

Levine Cava wants Miami-Dade to purchase an office complex that sits next door to the Water and Sewer property. Vacant land on the 79-acre Assurant office complex site would serve as a replacement for the existing South Dade Government Center two miles away.

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While the South Dade government campus would be offered to developers for a mix of housing, offices and entertainment, Miami-Dade would move county departments to the Assurant office complex off of the Turnpike. The Assurant deal stalled in December after media scrutiny over the proposed $160 million purchase price, about 30% above the appraised value of $123 million.

In a Dec. 12 memo recommending the Assurant deal, Levine Cava signaled the office campus has enough land to let Water and Sewer sell its lot to Swerdlow and build a facility at the Assurant site.

“The acquisition also creates the potential opportunity for [Water and Sewer] to relocate its facilities planned for its 17.3-acre property,” Levine Cava wrote in what looked like a reference to Swerdlow’s Costco proposal. By replacing the existing Water and Sewer land, that parcel “may provide commercial uses such as a big box retail center, which would generate property taxes, create jobs, and provide greater access to retail options in the area.”