June 21, 2018 | South Florida Business Journal
By Brian Bandell
A team led by Jackie Soffer of Turnberry Associates and David Martin of Terra presented their plans for a Miami Beach Convention Center hotel to a city evaluation committee on Thursday, revealing details of their 800-room project.
The city issued a request for proposals (RFP) to build a hotel on the 2.5-acre site at the corner of 17th Street and Convention Center Drive through a lease with the city. The plan is to have a hotel to complement the convention center, which is currently undergoing renovation and expansion, to attract more major events.
Previous efforts to approve a convention center hotel in Miami Beach have failed, including one rejected by voters. Veteran local developers Soffer and Martin have a proposal for a building with lower height and a design they say emphasizes sustainability and mitigating traffic impacts on surrounding streets.
The committee recommended approval of the bid, which is expected to go before the city commission in July. If approved by the commission, the bid by Miami Beach Connect – the sole respondent to the RFP – would go before voters in November.
“Our community has invested a significant amount of money in cultural facilities,” Martin said. “Our job is to connect the district and to unlock its full potential, and to create better green space and better pedestrian walkability."
The hotel would cost $348 million to $362 million to develop, with 35 percent expected to come from developer equity and the rest from construction financing, said Aly-khan Merali, president and CFO of Turnberry. There would be no capital contribution from the city, which would provide the land.
Starting in the fifth year of the 99-year lease, the developer would pay the greater of 2.5 percent of gross operating revenue or $2 million. Merali said the projected annual lease payment, based on the hotel's expected revenue, would be $3.3 million.
Including lease payments and taxes for real estate, sales and hotel beds, the city would receive about $10.2 million in annual revenue from the hotel, Merali said. There would also be about $4.1 million in permit fees upfront, he added.
The project would create 1,909 jobs during construction and 724 full-time jobs upon completion, the developers said.
The team has letters of support for the project from Hilton, Hyatt and Marriott, who would aggressively pursue becoming a brand for the new hotel, Merali said.
Under the proposal, to be finalized after negotiations with city staff, the sale of the hotel would trigger a payment to the city of the lesser of $2 million or 0.25 percent of the price. This payment could be triggered up to three times during the life of the 99-year lease.
Randy Weisburd, a member of the evaluation committee, said the city should negotiate the payment connected to the sale of the hotel carefully so it’s protected in case the developer sells it for a big profit.
“We know we can deliver the quality project you are looking for,” said Soffer, who previously built a convention center hotel in Nashville. “We intend on engaging the community and working with the city to deliver what you are looking to have."
Bernardo Fort-Brescia, founding principal of Miami-based Arquitectonica, walked the committee through the design of the 800-room hotel.
The hotel tower would rise 185 feet – almost 100 feet shorter than proposals from previous developers – and be set back from the street. The building’s pedestal would be about 53 feet tall, roughly the same height as the convention center. The ground floor of the building would have active uses such as retail along the sidewalks, including a Miami Beach Welcome Center.
The sidewalk would be elevated and set back 35 feet from the road to avoid sea-level rise and flooding, Fort-Brescia said.
There would be a large, resort-style pool deck atop the pedestal featuring outdoor dining and gardens. The hotel would also have an 8,000-square-foot spa, 5,000-square-foot fitness center, and ballrooms.
Many of the panelists asked about the traffic impact of the project. It would have 320 valet-only parking spaces, Fort-Brescia said. There would be an internal L-shaped road from 17th Street to Convention Center Drive to allow for drop-offs, including dedicated spaces for buses and ride-sharing vehicles.
Truck deliveries would be received on a new private street between the hotel and the Fillmore Miami Beach, said John McWilliams of Kimley-Horn, the team’s traffic engineer.
Soffer said the new hotel could reduce traffic during major events such as Art Basel. Attendees could stay on-site at the new hotel and walk, instead of staying at hotels elsewhere and taking a car to the event, she said.
The city required the hotel to achieve Gold-level LEED certification for environmental sustainability. Walter Meyer, the team’s sustainability consultant with Local Office Landscape & Urban Design, said it could easily exceed that. The roof of one hotel tower would have solar panels to keep the hotel functional during a power outage, he said. The second tower would have a “blue room” with a pond to retain stormwater for several days and alleviate flooding, Meyer said.
If the convention center hotel is approved by at least 60 percent of voters in November, it would probably break ground around the end of 2019, City Manager Jimmy Morales said.