Referendum 2: Amending Lease of City Property: “Smith and Wollensky Restaurant” Site at South Pointe Park
Here’s how the question will read on the ballot:
City’s lease of 0.56 acres of property to 1 Washington Avenue Corp. for “Smith and Wollensky Restaurant” in South Pointe Park expires November 2025. Per Resolution 2021-31805, shall this Lease be extended through December 2045, plus renewal options, Restaurant providing:
- Minimum $3,305,970 in Restaurant upgrades;
- Rent greater of: guaranteed rent, increased annually by 2.5% ($11,680,085 over first ten years) or percentage of revenues;
- Free restaurant mentorship seminars;
- Park’s security gate installation?
Smith and Wollensky has operated its restaurant on the City-owned site since 1997. In addition to the extension to 2045, there would be two consecutive renewal options of ten years each.
With regard to rent, according to the City’s Voter’s Guide, the extension would “Provide for an increase in the annual rent paid to the City, consisting of the greater of (i) $1,042,550 guaranteed rent (subject to a 2.5% annual escalator) or (ii) 9% of the gross revenues of the Restaurant’s operation.”
Smith and Wollensky would be required to complete a minimum of $3,305,970 in upgrades to the restaurant at its “sole cost and expense, including any improvements that may be necessary to satisfy the 40-year re-certification for the building, all of which must be completed within 5 years,” according to the Voter’s Guide.
Community benefits required under the lease extension include a free monthly lunch for seniors living in nearby Rebecca Towers and a free mentorship program for Miami Beach start-up restaurants and bars conducted by Smith and Wollensky. In addition, the restaurant would reimburse the City’s costs to purchase and install electric security gates at the entrance to the South Pointe parking lot and provide more access for public parking in the lot during the day.
According to the City, the lease amendment would increase the minimum guaranteed rent “by over ten times” as compared to the existing lease while “the percentage rent will increase by more than double the amount of the existing percentage rent, to 9% of the Restaurant's gross sales.” Smith and Wollensky will be responsible for all maintenance expenses, property taxes, insurance, and other public charges for the building.
While the existing lease expires in 2025, Smith and Wollensky has agreed to start paying higher rent beginning in January 2022, if the lease amendment is approved, with a three-year “ramp-up” period – paying $1.25M in 2022, $1.5M in 2023, $1.75M in 2024 and $2M in 2025. These payments include a minimum $400,000 annually from a separate nine-year concession agreement approved by the City Commission for outdoor seating.
Under the current lease, Smith and Wollensky has the right to use 105 parking spaces in the lot adjacent to the restaurant. If the lease amendment is approved, Smith and Wollensky “may designate up to 50 of the 105 parking spaces for public parking during off-peak hours (Monday through Thursday, from 8:00 a.m. to 4:00 p.m., excluding holidays),” according to the City’s Voter’s Guide.
Note, the Commission agreed that for a minimum of five years, it would dedicate a portion of the revenues from the lease amendment and outdoor concession agreement “for public safety purposes, including police and security, in South Pointe Park and the surrounding South of Fifth neighborhood."
Supporters (Yes on the question):
As of October 12, the following organizations have taken a position on the question
Miami Beach Chamber of Commerce
Miami Beach United (MBU)
Photo courtesy Smith and Wollensky