Sandor Scher: What's Next for Ocean Terrace

North Shore

Susan Askew
Susan Askew

Sandor Scher: What's Next for Ocean Terrace:

searching for a hotel flag and planning for residential sales

Getting approval of his plans to redevelop almost an entire block around Ocean Terrace in North Beach was three years in the making but the hard work is just beginning for Sandor Scher. Last week, Scher and Alex Blavatnik, partners in Ocean Terrace Holdings were given the nod from the Miami Beach Historic Preservation Board for a mixed-use development that includes a residential tower, restoration of two historic hotels, ground floor retail and restaurants. The plan includes new construction and partial renovation of contributing buildings on the site.

Scher spoke with RE:MiamiBeach about what’s next.

The HPB approval allows Ocean Terrace Holdings to go out and find a hotel flag. “Obviously our ability to now point to the [approved] project and say this is what we can actually do is very important,” he said. “Now we’ve got to try to find a hotelier that can make it work. We’ve spoken to a few but now we can have more serious conversations.”
 
“I’d love to be able to bring these historic hotels up to a very high standard that’s fitting of where Miami Beach tourism is.” The hotels – the Broadmoor and Ocean Surf – will be restored and combined into one. He said he’d like the new hotel to still be boutique but “at a luxury level of service … We’d like to see really great food and beverage items, not just in the hotel but that permeate out in all of the retail.”
 
“Food and beverage and activation is really key to bringing locals to the properties and I think in Miami Beach that’s the holy grail in the hotel world as far as finding success.”
 
“One of the most important things is, are the locals coming to the hotel, the people who create the cultural fabric of Miami Beach? Do [the hotels] offer things of interest to them? I think that travellers and people that are coming to Miami Beach find they’re enriched more at hotels where the locals come because their experience is more authentic. It’s not a Disney experience but a Miami Beach experience that’s all about being here and experiencing the rich culture of Miami Beach.”
 
[Scher talked about that concept in a discussion last June on trends in hotel construction and design.]

While seeking a hotelier, Ocean Terrace Holdings also needs to focus on sales of the residential units. For potential buyers, Scher said, “I think that the retail and hotel components are a very compelling storyline.”
 
The residential tower is “really what makes the whole project possible,” he said. “Without that the economics aren’t there to do the hotels. That’s not my decision. The financial community needs more than just a hotel to make a sizable loan.”

“Everybody’s excited and everybody has the same question, ‘When are you going to start? We want to see change, we want to see change.’ It’s great to hear that but it’s a very complicated process. There’s a lot of steps we still have to take and we can’t really just start whenever we want. We have to go through the steps that we need to take.”
 
“Everybody’s been vey congratulatory and excited that something’s happening in North Beach. There hasn’t been any real significant development in North Beach in a long time, certainly anything that’s addressed the community’s needs and wants. They’re thirsty. They’re very desirous to see something happen. They’re very excited.”
 
“There’s a difference between approvals and actual commencement … as a government, as a city they [city leaders] have to ask themselves what more can they do … If you were bringing a project like this to most others cities, they’d be doing a long list of things for you like public improvements. There would be heavy participation by the local municipal government because they would see the upside, the increased taxes, and ask ‘how quickly can we make this happen?’”
 
In Miami Beach, he said, public policy has worked differently for a long time. “There’s no connection between the benefits that development brings to every resident of Miami Beach and how important those benefits are.” For example, he said when a developer spends $100m on a property and “They’re going to take that property from paying $600,000 a year in taxes and turn it into a property that is going to pay $8m a year in taxes, a 12-fold increase in tax revenue, that is something most cities would be falling over themselves to figure out, ‘what can we do to make this happen?’”
 
That extra tax revenue, he said, “provides money that could be used to pay for parks, school improvements, new roads, new sidewalks. There’s no connection that I see in that line of thinking and the way we govern in Miami Beach.”
 
 

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