Miami Beach plans to issue $620 million of bonds between Nov. 17 and 24 to finance a long-planned makeover and expansion of its convention center.

BRADENTON, Fla. – Miami Beach hopes to feed investor's appetites in the coming weeks with a $620 million, multi-faceted deal that marks the city's largest-ever financing.

Bond proceeds will support the city's $652 million plan to transform the 1950's-era-styled Miami Beach Convention Center into what local officials call a world-class facility in the heart of South Beach.

The expansion and upgrade project will be financed with three tranches of bonds secured by different funding sources.

Each tranche will have serial and term bonds structured to offer attractive options for both retail and institutional interests, finance officials said.

Strong demand is expected from investors "given the city's recognition as one of the most vibrant and desirable destinations in the world," said John Woodruff, the city's interim chief financial officer.

RBC Capital Markets Inc. is the city's financial advisor.

The first negotiated offering will price on Nov. 17 with a $212.4 million resort tax revenue bond deal backed by a first lien on a 4% bed tax and a 2% tax on restaurant food and beverage sales.

The resort tax bonds are rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.

Both have stable outlooks.

Analysts said the taxes have shown robust growth.

The Miami Beach Redevelopment Agency will issue $343.4 million of tax increment financing bonds on Nov. 18.

The TIF bonds are rated A1 by Moody's and A by S&P, a downgrade from A-plus that S&P said was based on weakened debt service coverage. Both have stable outlooks on the 332-acre district covering 50 city blocks.

On Nov. 25, Miami Beach will return to the market offering $64 million of revenue bonds for parking projects at the renovated convention center.

The security for the debt will come from 10,196 metered spaces in the city as well as 10 garages with 6,079 spaces, and parking citation revenue.

The parking bonds are rated A2 by Moody's and A-plus by S&P, an upgrade form A. Both outlooks are stable.

Bond insurance quotes are being obtained for each tranche, though the final decision about whether the use the enhancement will be based on the cost-effectiveness and investor demand at pricing, Woodruff said.

All three bond issues will close on Dec. 15, the first of a two-day meeting by the Federal Open Market Committee, which some analysts believe will lead to an uptick in interest rates.

Woodruff, however, said that the timing of Miami Beach's sale was not related to the Fed meeting but rather approval of the guaranteed maximum price contract for construction and implementation of a 1-cent bed tax increase – both of which were finalized in late October.

Bond proceeds will fund upgrading and enlarging the convention center to 1.44 million square feet from its current 1.17 million square feet, adding ballrooms, meeting and support space as well as 878 parking spaces.

The facility will be LEED-certified and built to comply with the latest sustainability building standards, according to Woodruff. He said a special website on the project is posted at www.mbccfuture.com.

"It's a huge project, not just for the city [but] for the region," Woodruff said, noting that the convention center serves all of Miami-Dade County. "It's been a long time coming, and this year is the centennial, so on the city's birthday we're launching the latest reinvention of a world-class destination."

Miami Beach, an offshore barrier island in Miami-Dade, has been planning the convention center expansion project for more than a decade.

City officials plan to break ground in December.

When completed in mid-2018, the project will include 505,000 square feet of contiguous exhibit space, a 60,000-square-foot grand ballroom, three 20,000-square-foot junior ballrooms, 59,000 square feet of breakout meeting space, 806 rooftop parking spaces, and 12 acres of surrounding parks.

"This will be one of the most functional, state-of-the-art convention centers in the country," said Maria Hernandez, project director for the Miami Beach Convention Center District. "We are not only transforming the building, but the entire site by removing surrounding asphalt areas and converting these into wonderful public green spaces for future conventioneers, visitors, and our residents to enjoy."

With the convention center just 2-1/2 blocks from the beach, city and tourism officials have said they expect its makeover will boost the meeting center's competitiveness as a top convention business destination.

City officials are now turning their efforts to planning for a headquarters hotel. That project is not expected to require bond financing, Woodruff said.

Officials hope to use city-owned land next to the convention center for an 800-room hotel that would be leased for privately financed development.

Voters would have to approve the lease. A referendum will be held in March.

Similar convention and hotel projects are on the drawing board across the country.

In Atlanta, four firms are vying to build an 800-room to 1,200-room convention hotel on the campus owned by the Georgia World Congress Center Authority, a state agency that owns the convention center as well as the Atlanta Braves stadium.

The GWCC authority is hoping to use a public-private partnership to build the hotel on its 200-acre campus. The financing structure has not been made public, though procurement documents indicate that a number of job and tax incentives could be available for the project.

Firms being evaluated for the Atlanta hotel project are Capella Hotel Group Drew Company Inc.,

Legacy Property Group/Stormont Hospitality, and Matthews Southwest, according to documents released by GWCC.

In Broward County, about 30 miles north of Miami Beach, a convention center expansion and hotel project is under way for the Greater Fort Lauderdale/Broward County Convention Center.

On Tuesday, County Commissioners approved the shortlist of three developers for the estimated $550 million expansion that will add 300,000 square feet to the convention center along with new parking, entertainment and public space.

Broward is also using a public-private partnership to develop a 750-room to 1250-room headquarters hotel.

The county estimates that it will issue about $155 million of tourist tax revenue bonds for the convention expansion portion, according to chief financial officer Robert Miracle.

Design, construction and finance proposals will be received in February from Fort Lauderdale Convention Center Hotel LLC, a partnership of RIDA Development Corp and Ares LP; Matthews Holdings Southwest Inc.; and The Related Companies LP with PRH Investments LLC.

Broward officials expect to select a concessionaire in April, Miracle said.

In Denver, Colo., in Tuesday's election, voters approved an indefinite extension of a 1.75% car rental and hotel room tax to help fund $700 million for convention center expansion and an upgrade of the National Western Stock Show complex.

On all three upcoming deals from Miami Beach, Squire Patton Boggs LLP is bond counsel and Steve E. Bullock PA is disclosure counsel.

Bank of America Merrill Lynch is the book-runner for the Nov. 17 resort tax bond pricing.

Co-managers are Citigroup, Morgan Stanley, and Siebert Brandford Shank.

Moskowitz Mandell Salim & Simowitz PA is disclosure counsel.

Morgan Stanley is the book-runner and senior manager for the Nov. 18 TIF bond deal. Co-managers are Bank of America Merrill Lynch, Loop Capital Markets, Raymond James & Associates, and Wells Fargo Securities.

Underwriters' counsel is Greenberg Traurig, P.A.

JPMorgan is the book-runner for the parking revenue bonds pricing on Nov. 24. Co-managers are Estrada Hinojosa & Co. Inc., and SunTrust Robinson Humphrey.

Greenberg Traurig PA is counsel to the underwriters.

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