Lincoln Road Property Owners: We'll pay up for master plan but...

Lincoln Road

Susan Askew
Susan Askew

Lincoln Road Property Owners: We'll pay up for master plan but...:

Leaders say they won’t pay for infrastructure, will help businesses during construction

For the most part, Lincoln Road property owners say they believe in the potential of the master plan designed by James Corner of New York City Highline fame, but they say they will only support it if the construction timeline can be drastically reduced. They also want Miami Beach officials to know they’re willing to put money behind it but they won’t spend it on infrastructure. Instead they want to create robust programs that will bring people to the street to mitigate damage to local businesses during construction.
 
Last week, in a workshop with Mayor Dan Gelber and City Commissioners, property owners heard a request for $9 million from them to construct a signature trellis at the east entrance to the Lincoln Road pedestrian mall, provide for art in public places, and create a play area on an adjacent block on Euclid Avenue. Commissioner Ricky Arriola upped the ante, asking for a $20 million contribution from the property owners citing the street’s $1.9 billion in assessed property values.
 
The owners, Arriola said, have “a lot of abandoned stores” and “they’re asking us to bail them out” by paying to upgrade the street. Citing high rents that have “priced mom and pops out… now they’re saying ‘hey, come bail us out.’” He said the owners will benefit from the improvements and he wants to see them contribute more and come up with “a plan for bringing back mom and pops, a plan for bringing back art and culture.”
 
A follow up discussion this week amongst the Lincoln Road Business Improvement District (BID) Board of Directors was tense at times as owners asked why they should have to foot the bill for a public street. The BID is a special taxing district approved by the property owners to market and promote the street and advocate for the property owners and businesses on Lincoln Road.
 
Though property owners paid half the cost of an $11 million renovation in 1994, they say the money was for non-infrastructure related costs. Since then, they say no other commercial property owners in Miami Beach have contributed to or been asked to contribute to area upgrades, pointing to Sunset Harbour and Española Way as examples. While property owners contributed to the recent upgrades to Coral Gables’ Miracle Mile and Giralda Plaza – a project being used as an example for BID participation here – Lincoln Road property owners bristled at the idea.

Paul Cejas owns 420 Lincoln Road, a mixed-use building that houses office space, Zara and a Starbucks among others.  He also owns a parking garage at 1601 Drexel Avenue adjacent to Lincoln Road. The retail space on the ground level of that building has been vacant since 2012. It is set to become a Time Out Market

“Why are they picking on us?” he asked. “We’re suffering,” paying higher taxes while competition increases. He wants to tell Commissioners “It’s your tax base and you’re attacking it.”
 
Property owners, he said, have invested large sums of money and continue to invest. “Time Out cost us $12 million, just to bring life to Lincoln Road.”
 
Cejas and Terranova Corporation are two of the largest property owners on Lincoln Road. Mindy McIlroy, President of Terranova, said, “We are responsible for investing in our properties, investing in our tenancies, responsible for bringing the right tenants to Lincoln Road. Our job is not to pay for the improvement of [the City’s] street.”
 
McIlroy focused on a shared concern among the property owners and City leaders – how to ensure businesses stay in business during construction and, ultimately, to shore up the street’s property tax base. McIlroy was president of the Coral Gables BID during the Miracle Mile construction. She said the estimated timeline for the Lincoln Road construction has to come way down from five years to two, otherwise the impact is too great. Though the City has said they will take it block by block, she said that still creates “disruption to the entire community because each block relies on the other blocks.”
 
“We did not lease one space [on Miracle Mile] during the time the project was underway,” she said, though Terranova founder and chairman Stephen Bittel added, “We did not lose one tenant” because they worked with them throughout the construction to mitigate the impact.
 
That delicate and precarious balance has some property owners concerned. Ben Brody whose family has owned buildings in the 1000 block of Lincoln Road for more than 40 years, said, “Four to five years [of construction], you might as well just walk away, dump the buildings, and go to cash… or clean up what we have and keep going.”
 
“Deal flow is weak,” Brody said. “A lot of people are just waiting. They hear rumors [about the construction]… It’s getting scary.”
 
“If it’s going to take five years, we’re all dead,” Cejas said.
 
The group agreed a 24-month timeframe with a focus on getting the pedestrian mall finished first was their top priority. Proposed extensions in the 2-300 block, the block between Alton and West, and side streets should be done after the pedestrian mall, they said. 
 
Lyle Stern, president of Koniver Stern, a retail leasing and consulting company said, “The 2 and 300 blocks and the 1200 block grew the cost and grew the timeframe” and should be dealt with last. “We have the left ventricle to take care of and we can take care of the arteries later, my opinion,” he said. “The cure is worse than the disease.”
 
Extending the BID beyond the current pedestrian mall to cover the additional construction areas received support from the group as well as the potential for contributing more money, but only if it’s used in ways that attract people to Lincoln Road.
 
Protecting businesses and people’s life savings, Stern said, “That resonates with all of us.”
 
It isn’t just the physical space that needs an uplift, he said. “Without appropriate money to program, to me seems meaningless.” He proposed an international RFP for a consultant to bring high-end programming and events to “build the brand before construction is over.”
 
The BID needs to figure out “how we’d help tenants before, during, and after construction,” Stern said. “Otherwise we’re allowing this complete erosion.”
 
Howard Herring, President and CEO of the New World Symphony, said there needs to be a “consistent artistic offering” that generates a feeling that “’You will always be surprised on Lincoln Road’ and that’s the only thing that’s going to make us different.”
 
Bittel said “We need a shortened execution plan. If we can get that, I’m prepared to advocate forcefully for … a doubling of [the BID] tax per foot, tripling our budget.” The BID currently has a budget of $1.4 million. However, he said, 100% of the money would go “to increase marketing and art in public places.” He also suggested the BID take over the licensing of artists that perform on the street from the City. 
 
Brody wasn’t completely on board. “We pay almost $1M in real estate taxes and we have no debt,” he said. Right now, he pays $47,000 annually to the BID. “There’s a breaking point. I don’t want to pay $100,000… I’m not so convinced that everything is going to be amazing and rents are going to go up.”
 
Mel Schlesser who owns the building at 1627 Euclid said, “After the [1994] project was finished… it was incredible. There was a remarkable change in value and tenant desire for the buildings. I’m pretty convinced there will be a major uptick when its finished.”
 
Schlesser said the message from the BID to the City should be “You build it, we’ll market it.”
 
The 1994 renovation created the “first renaissance of Lincoln Road,” Bittel said. “The City has the opportunity to invest in the second renaissance” and, indeed, needs to, he said. “Our future is at stake.”
 
But, Bittel reiterated, “We’re not paying for what the City should pay. We all love our residents and want to do for our residents and we want to bring them in” but “the idea a stadium is built and they will come doesn’t work.” 
 
Stern said, “We want to spend our money creating active programming on the road” before, during, and after construction. He added the BID might be willing to spend “more dollars than [the City is] asking us to spend. We just want to spend it more intelligently.”
 
“It’s worth every penny if you can get that [construction] period shortened,” Schlesser said.
 
McIlroy told Adrian Morales, Miami Beach Property Management Director, “Nights, weekends, whatever it takes” to keep the construction moving.
 
Morales said the City is scheduling another workshop when the contractor is present to discuss the project and answer questions. Though property owners were surprised when it was suggested at the workshop that the construction timeline could be reduced from five years to four if sidewalk cafés were closed during a projected six months on each block, Morales emphasized to the BID’s Board, “The City has a responsibility to minimize the impact to sidewalk cafés.” He said the administration is looking at fees, relocation of spaces, and potentially allowing pop-ups. The key, he said, is that owners and the City “come together to exchange ideas.” Last week's workshop, Morales added, “was to start the conversation.” What was discussed is “not ironclad or set in stone.”
 
“It didn’t feel like an opening conversation,” Bittel shot back.
 
“Sequencing and how long this project is going to take is the most important thing to us,” McIlroy said. In addition to a shortened timeline, the group urged Morales to move faster and get the project bid out now. Bittel said, Lincoln Road has languished “the last four or five years. While our competition has been getting better, we have not.”
 
“Lincoln Road with no Convention Center still saw about 12 million people [last year] which is an amazing number,” Stern said. He urged moving forward with “Lincoln Road 2.0 while things are still strong” adding “We just want to spend more intelligently than they’re asking us to” with the $9 million request for the trellis, playground, and art in public places.
 
Cejas said, “I’m willing to write a check when it makes sense” which he reiterated meant “events and things that will bring people to Lincoln Road.”
 
At last week’s Commission workshop, Bittel referenced the temporary Umbrella Sky art installation which was designed to bring people back to Giralda Plaza after construction was completed and which caused a sensation on social media. “Traffic exceeded everyone’s wildest expectations. It’s still packed and the umbrellas are long gone," he said. The installation reportedly cost $94,000 and was shared by the City of Coral Gables, the Coral Gables Community Foundation, and the Coral Gables BID.

 
Umbrella Sky temporary exhibit, Coral Gables


Stern said, “We heard loud and clear about business disruption and mitigation” from City leaders as well as property and business owners. “We need to activate the road now so everyone survives.” Waiting until after construction wasn’t an option for the group.
 
The message they gave to Morales to take back to his bosses:
  • Get the construction timeframe down to two years
  • Allow work from 10 pm to 10 am, 7 days a week
  • Do the pedestrian mall first before extensions on the side streets, the 2-300 block and Alton to West (1200 block)
  • Create a steering committee for the BID to have active and continued involvement in the project with half the seats going to representatives of ownership, tenants, and trade professionals
  • Expand the BID area to include the new extension areas and increase the term
  • Put the bid package out immediately to understand the actual cost of the construction
 
BID President Steven Gombinski said “I believe the master plan can change the future of Lincoln Road making us much more competitive.” Gombinski owns the building at 900 Lincoln Road.
 
Despite the tense discussion, he told Morales to carry another message back. “We are in their corner and we are willing to put a stake in this. What matters is to not lose our businesses.”
 
Stern said, “I think we’re in a good place… I really do.”
 
 “9 of 11 board members” attended the Board meeting, Gombinski said. “That says a lot about owner commitment.”
 
“It says a lot about the importance of what we’re discussing,” Schlesser responded.
 
 
 
Rendering of Lincoln Road courtesy James Corner Field Operations

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