Miami Beach Cataloging Storefront Vacancies

Susan Askew
Susan Askew

Miami Beach Cataloging Storefront Vacancies:

Commissioners considering options for reducing number of empty storefronts

Miami Beach Commissioners are turning their attention to the number of vacant storefronts in the City. Ricky Arriola, Chair of the Commission’s Finance Committee, started a lively conversation on Facebook recently when he posted an article from the New York Post about the idea of a vacancy tax floated by New York City Mayor Bill DeBlasio

Arriola told his colleagues on the Committee, “It’s not my intent to be levying taxes or fines or whatever you want to label it on empty storefronts. It really had to do with an observation I have, a lot of people have, with all of our commercial districts and what we’re seeing. Empty storefronts, blight and that kind of thing … Right now there are portions of our city where there’s an excessive amount of empty storefronts.”
In an effort to understand what’s causing the vacancies and how the City can provide incentives for landlords to fill their stores, Arriola and the Finance Committee sought an inventory of vacancies and ideas from City staff.
Miami Beach Economic Development Manager Michelle Huttenhoff says her department worked with Code Compliance to put together a vacancy count of five of the City’s denser commercial corridors. The count included only ground floor storefronts.
The raw numbers show:
41st Street with 8 vacancies
Ocean Drive, 10 vacancies
Lincoln Road (100 block – 1100 block), 23 vacancies
Washington Avenue 5thto 15th, Streets, 55 vacancies
North End 63rd to 70th on Collins, 21 vacancies
Huttenhoff said this first pass did not take into account properties that are under a current building permit or actively recruiting tenants.
For example, Washington Avenue is in a redevelopment phase following implementation of the street’s Master Plan and several projects are either under construction or about to start. 
On Ocean Drive, a quick check of the ten properties listed indicates at least five that are not of the problem vacancy variety. The Celino Hotel is under construction on two of the properties listed, the restaurant at the Cardozo is under renovation and will return, the Tides Hotel has been closed following damage from Irma and is under renovation, and the owners of 1200 Ocean Drive are reportedly in final stages of discussions with a restaurant tenant.

Huttenhoff said, “This is just a sample study and we recognize that there are other corridors that need to be analyzed like Alton Road and Normandy Isle but we wanted to do kind of a base count.”
The initial findings, she said, are that “we have significant vacancies.” 
Next step is to cross reference the addresses identified with the City’s BTR (business license) list and SunBiz, the state’s business registry to get all of the property ownership information.
“We’re reaching out to them to basically find out what are their challenges for bringing in new tenants,” Huttenhoff told the Finance Committee. “What are they actively trying to do? With that information, we will be better informed to create either incentives or a registry.”
Until that information is gathered, she said, it would be premature to make any recommendations although she shared some anecdotal information to date. 
“What we’ve been hearing is a few different things,” Huttenhoff said. “One, rent is high because of property values and it’s difficult to bring tenants in.” Others are waiting to see who the best tenants are that they can attract.
Commissioner John Alemán noted the construction on Washington Avenue indicates the incentives put into place under the Master Plan are working and those sites should not be considered vacancies for this analysis. “What drives me crazy is Lincoln Road,” she said. “There’s no active construction and the rents are sky high but that’s the property owners’ decision. We can’t control what rental prices they charge. I understand if somebody makes a property acquisition, then there’s financing issues about what they can or can’t take, that’s one thing but that I don’t think is the case on Lincoln Road.” In some financing agreements, owners have a minimum rent they are allowed to charge or their loan can be recalled, leaving them stuck with a vacant property if the required rent is too high.
“So then we look at spending $40m on a Lincoln Road Master Plan to make the whole area even more fabulous and gorgeous and I want to do that but I don’t want to do that if all they’re going to do is charge even higher rents and have vacant storefronts … That animal bothers me,” Alemán said. Residents have been worrying about the Lincoln Road vacancies for the past year. RE:MiamiBeach found a significant number of vacancies last summer.
Arriola commented, “I want to encourage all of us to be thinking about progressive ideas to change what’s going on in our city … look at other cities to see what they’re doing to have lively commercial corridors because in the case of Washington Avenue, I know that it’s undergoing a renaissance now, but for well over a decade it’s a magnet for homeless and vagrancy. We can’t have that. We can’t sustain a city with that kind of activity.”
Huttenhoff said San Jose recently passed an ordinance calling for a storefront vacancy registry. “After 60 days you have to self-register an address as a vacant property and then put forth your plan of action to recruit a new tenant or if there’s a permit” for construction, she said. “I believe for them it’s about 300 days if there hasn’t been progress made they invoke an annual registration fee.” In addition to supporting the program, Huttenhoff said the fees also go into a business incentive program to support small businesses. 
With a vacancy registry, she said, City staff and Chambers of Commerce can help attract businesses to vacant properties. 
She also reminded the Commissioners that “municipalities here do not have authority to create our own taxing systems so we couldn’t do a vacancy tax but we could look at other avenues.”
Commissioner Mark Samuelian said once the initial data is collected, he would like to see it updated periodically to show trends. He also wanted to know if the vacant storefronts were following City code with regard to aesthetics. 
Currently, Huttenhoff responded, vacant storefronts are required “to have an opaque window covering and then if they don’t have that then they are able to purchase the blue window wraps from the city but they do need to have a covering.”
933 Washington Avenue with "blue wraps" provided by the City. Photo courtesy City of Miami Beach.

Sarah Saunders, Assistant Director for Code Compliance, said while officers were helping with the vacancy count, they checked on properties with open violations for compliance and also found new violations on other properties. “This is something that we’ve been working on for quite some time,” she said. Code Compliance has done “blitzes” along Washington Avenue to ensure compliance and they continue to monitor the vacant storefronts 

710 Washington Avenue. Photo courtesy City of Miami Beach.
1541 Washington Avenue. Photo courtesy City of Miami Beach.

“I think this is an important priority,” Samuelian said, “because getting the market to find tenants, you know that’s a tough one but making the aesthetics more pleasant is something we can do.” He asked Saunders to come back with thoughts on any legislation that might be needed to help them do their jobs. “My thought is we need to nail the aesthetics quickly.”
“It really is unsightly,” echoed Arriola. “I know Code does a great job but be extra vigilant and let us know if you need legislative tools because it matters. The City needs to always look at its best and when we have landlords who aren’t taking care of their properties it affects all of us.”
Mickey Marrero, attorney for Infinity Real Estate which owns several properties on Ocean Drive and Española Way, said his clients “are very actively trying to renovate these properties and restore them.” 
“We contribute to the vacancies [on the list] because it takes six months to get permits … We share your concerns,” Marrero said. “We don’t want vacancies either as active members of the business community.”
But, he cautioned, “All vacancies aren’t vacancies … a lot of the vacancies … are ones that are actively under building permit to be renovated. A lot of these are historic buildings that require restoration over a certain amount of time and when we do a list or any sort of action, just make sure that if we qualify something with a permit that’s currently being renovated that’s there not any sort of action taken against that property as long as they’re complying with the aesthetics of the code and things of that nature.”
“The only other thing is sometimes you pick a great tenant, you’re happy,” Marrera continued. “The tenant fails for whatever reason and it’s a hit to the business already to lose a tenant so it takes some time even with best efforts. I recognize on Lincoln Road there’s some concerns. We see that too. We don’t own properties there but I think a lot of these are some that the business community is working together to fix.”
Arriola concluded, “I want to reach out to the business community to find out what the City can do to help you open more quickly because sometimes we’re part of the problem, because of our own red tape, and one of the discussion items that we’re going to be having, I think soon, in the near future, is streamlining our processes because I have talked to businesses who complain about how long it takes to open so we contribute to the vacancies because it takes six months to get permits and whatnot and so to the extent that we can do our part we’ll help solve this problem.”
“I’m not looking to tax anybody. I’m trying to solve a problem,” he said.
For the staff report on vacancies, click here.


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