Miami Beach Expected to Approve Additional Class A Office Incentives

Susan Askew
Susan Askew

Miami Beach Expected to Approve Additional Class A Office Incentives:

Sunset Harbour, Alton Road corridor on commission agenda

Miami Beach Commissioners are expected to give final approval this week for incentives to develop Class A offices on the edges of Sunset Harbour and on portions of Alton Road. 

In Sunset Harbour, the City plans to create an Overlay district with a height increase to 65 feet for office uses on properties fronting Dade Boulevard between Alton Road and Bay Road, properties fronting Alton Road between 20th Street and Dade Boulevard as well as those fronting Purdy Avenue between 18th Street and Dade Boulevard.

The Alton Road Office Development Overlay would increase maximum building height from 50 feet and 60 feet to 75 feet on the west side of Alton Road between 8th Street and 11th Street and between 14th Street and 17th Street. There would be a minimum setback of 20 feet from the rear property line for portions of a building above 60 feet in height. The ordinance also contains a sunset provision applying the development regulations only to projects that have obtained a full building permit by December 31, 2031.

Both overlays passed on first reading and will be heard on second reading at Wednesday’s Commission meeting, one immediately following the other beginning at 5 pm. (Fair warning: A time certain notation on the agenda doesn’t always mean time certain!)

The Sunset Harbour Overlay also includes a prohibition on hotels. At first reading, Commissioners agreed to an exception for developer Ronny Finvarb to move forward with a suite hotel at Dade Boulevard and Alton Road, though they asked Finvarb to work with the community to address their concerns about the hotel prior to second reading. Attorney Mickey Marrero of Bercow Radell Fernandez Larkin & Tapanes said a meeting did take place and Finvarb reiterated his proffer to limit maximum occupancy to four adults and maximum occupancy of six with children. Marrero said Finvarb also provided clarification of its being a 4-star hotel. 

The request for an exception came after Finvarb’s SOBE 18 LLC went “hard” on a contract to purchase the vacant property at 1790 Alton Road on February 1. At that point, according to Marrero, Finvarb’s “substantial” deposit was nonrefundable, he had negotiated an agreement with Kimpton to operate the suite hotel and was well into the design process. Ten days later, the City began discussing the hotel prohibition as part of the new Sunset Harbour Overlay. Finvarb has since closed on the property which is across Dade Boulevard from his Kimpton Palomar Hotel.

The push for Class A office space comes as the City is trying to diversify a tourism-dependent economy that has been battered by hurricanes, Zika, and, most recently, COVID. Starwood Capital was the first to jump into the recent round of Class A office construction in Miami Beach – pre-pandemic – with its new headquarters at 24th and Collins Avenue nearing completion. 

Though two studies show high vacancy rates for office space in Miami-Dade County – 16.9 and 20 percent, respectively – City Manager Alina Hudak’s memo accompanying the Alton Road legislation indicates Miami Beach’s Class A office vacancy is 9 percent with an 11 percent vacancy rate for Class B space.

Hudak cited an analysis from consultant CBRE:

Total Class A space – 937,526 SF with 9% vacancy
Total Class B space – 892,885 SF with 11% vacancy
South of Fifth Street – Approx. 400,000 SF of Class A & B space
Lincoln Road (including adjacent side streets) – approx. 1.13 million SF of Class A & B space

“As it pertains to the migration of office tenants from the northeast (e.g. New York and Connecticut) and Chicago to the greater Miami area (212 to 305), the Administration has discussed this with CBRE, who was able to provide some anecdotal data regarding leasing they have done in the larger office market area,” Hudak wrote.” In general, there appears to be a meaningful increase in interest from financial services and related firms, some of which are focused on the greater Miami market, and others in downtown West Palm Beach.”

Class A office space users prefer taller ceilings which is why the City has entertained height increases for the developments. Already approved, Related Group’s proposed project for Terminal Island which received an increase in allowable height from 40 to 75 feet and Deco Capital’s proposed development in Sunset Harbour which was approved for a height increase from 55 to 65 feet.

Diversifying away from the primarily entertainment focus of Ocean Drive appealed to members of the City’s Planning and Historic Preservation Boards when approving an adaptive reuse of the historic Bancroft Hotel at 15th and Collins and adjacent Ocean Steps commercial development. The ownership group, which includes Russell Galbut, plans to create private Class A office space that will be available as part of a membership model along with four restaurants open to the public. 

In the works…

Lincoln Lane and 17th Street Garage: After the City received 18 positive responses to its Request for Letters of Interest to develop Class A office space on three City-owned lots on Lincoln Lane North adjacent to Lincoln Road, Commissioners added the 17th Street garage to the mix. Last month they approved a formal Request for Proposals (RFP) prepared by the Administration which has since gone out to developers. Bids are due by November 15.

In early stages of discussion…

41st street committee recommendation re Class A office: Deferred from last month when Commissioners ran out of time… Commissioner Ricky Arriola is sponsoring a discussion item to consider a recommendation from the Mayor’s 41st Street Committee for the Commission to authorize the issuance of a request for proposals to repurpose the City-owned parking lots adjacent to 41st Street into Class A office space. 

“I am asking that the Commission provide the administration with the direction to begin crafting a RFP for these surface parking lots due to the incredible response the City received with its Lincoln Road Office Space RFLI and the overwhelming regional demand for office space,” Arriola wrote in a memo to Commissioners.

Details on the Commission agenda items:

R5K Alton Road height limits (second reading/public hearing 5:01 pm)

R5L Sunset Harbour Overlay with office incentives (second reading/public hearing 5:02 pm) 

R9T Consider 41st Committee Motion for Class A office space (discussion item)

Information on how to participate in the City Commission meeting is here.

Photo: Alton Road and Dade Boulevard. The west side of Alton between 14th and 17th Streets is one area under consideration for office development. Credit: Felix Mizioznikov /


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