Miami Beach Exploring Height Increases to Incentivize Office Development

Susan Askew
Susan Askew

Miami Beach Exploring Height Increases to Incentivize Office Development:

City Looks to Diversify Economy Away from Heavy Reliance on Tourism

It’s only a committee referral at this point, but City of Miami Beach Commissioners are opening the door to potential height increases in certain areas to incentivize development of office space. With COVID-19 closures ravaging the hospitality industry and, along with it, the City’s economy and businesses, the Administration and elected leaders have begun to contemplate ways to reduce Miami Beach’s dependence on tourism. The idea of attracting Class A office space – and financial services firms to fill it – has been kicking around since at least the end of last year though the pandemic has increased the urgency of diversifying the City’s economy.

Mayor Dan Gelber is the lead sponsor on proposed text amendments that would increase allowable height in the CD-2, I-1, and CPS-2 zoning districts for commercial and office buildings. Generally, that includes Sunset Harbour, Alton Road, Washington Avenue, 5th Street, and Terminal Island. (The City’s Zoning Map can be found here.)

“I think the discussion our community has to have right now is what kind of office space do we want here, how close we want that office space to be to where people live,” Gelber said. Having office space on the Beach would allow people to “live and work in proximity to each other which is a good thing and I think that’s probably the future of our community.”

Miami Beach Planning Director Tom Mooney said the proposal was initially made by a property owner in Sunset Harbour who wants to adapt plans for a residential project to primarily office use with some residential. Mooney said because of minimum parking requirements, the developer would not be able to get the floor to ceiling height needed for Class A office space.

Mooney said he recommended that the ordinance not be specific to just Sunset Harbour “but that we also include Alton Road and 5th Street because those are designated transit corridors.” 

“Down the line with robust transit we could eventually get to a point where your parking pedestal is going to be lower if not non-existent and you might not need to go to the maximum allowable height, but until we get there, by raising the overall height for office uses it gives more latitude for the type of floor to ceiling height that Class A office spaces are looking for.” Uses could also eventually include medical offices, he added.

“In turn this could help diversify our economic base so that we’re not solely dependent on just tourism,” Mooney said.

Proposed height increases: 
  • For the CD-2 Districts in Sunset Harbour and on Alton Road from 6th Street to Collins Canal, from 50 and 60 feet to 75 feet, minimum of 10,000 square feet of office use.

  • In the I-1 Districts (Sunset Harbour and Terminal Island) from 40 to 60 feet, minimum of 7,500 square feet of office use.

  • In the CPS-2 District from 50 to 75 feet West of Washington Avenue for mixed-use and commercial buildings with a minimum of 10,000 square feet of office use. 

Mooney noted the text amendments are “not a proposal to increase FAR” or Floor Area Ratio – the density of a building – which requires voter approval.

One of the co-sponsors, Commissioner Ricky Arriola said, “Unless we diversify our economy, we are really at risk and it’s not just this pandemic. We had Zika. We have hurricanes and we do need to diversify our economy.”

“The office market is low hanging fruit,” he said. “If we don’t want to see more hotels continuing to be built and further tying our fortune to hospitality, development of office space not only is a quality of life issue for our residents who can just drive a few blocks from their homes to go to their law practice instead of having to go to Brickell, but it’s also just smart business to diversify.”

Commissioner Michael Góngora, a member of the Land Use and Sustainability Committee where the item was referred, said he has concerns that he will raise at the Committee level including the inclusion of large areas which border residential areas, the minimum area for office use, and restrictions on other uses that he didn’t see in the draft proposal.

If the proposal is referred out of Committee, it will come back to the City Commission for discussion and referral to the Planning Board.

The draft text was initially proposed by Bradley Colmer whose Deco Capital has approval to build a residential project in the Sunset Harbour neighborhood in the 1700 blocks of Purdy Avenue and Bay Road. The approved project – Eighteen Sunset – contains 12 residential units, parking, and ground floor commercial space. The new proposal (rendering above) is for two floors of Class A office space which Deco Capital is considering taking for its own use, parking, and two penthouse residences. 

Under current code, Colmer said the ceiling height at Eighteen Sunset would be 8 1/2 to 9 feet versus the 12 to 14 feet for Class A space.

Deco Capital attorney Tracey Slavens of Holland & Knight said high-end financial services and family firms are the targets Miami Beach should want to attract but to do that you need to be able to provide tall ceilings and other first-class amenities that those firms are looking for. She argues the height being proposed “is not out of character” with surrounding buildings in Sunset Harbour and the additional areas recommended by Mooney.

Colmer added, “You have to differentiate between commodity sort of office space… and the type of boutique, luxury spaces that are typically a more low-density use.” Those spaces don’t exist on Miami Beach now, he said. “Even with COVID, that’s an attractive product.” 

As the City seeks to diversify its economy, Colmer said, “I believe, yes, this type of space makes more sense. There’s been a glut of condo development in Miami, in general.”

Meanwhile, he said, “There’s a lot of distress in the hospitality space” and that’s causing City revenues to plummet. “It’s a volatile space that’s the most sensitive to any economic downturn.”

The potential users of Class A office space – the financial service firms – are “arguably the least susceptible to that kind of downturn. They’re active even in the worst of times,” Colmer said.

Another project in the pipeline that could take advantage of an increase in height for office use is Related Group’s proposal for two low-scale office buildings on Terminal Island. Like Colmer, Related pivoted away from residential to office after its proposed 25-story tower faced stiff opposition from the Coast Guard.

There is one Class A office building under construction now – the Starwood Capital headquarters in the 2300 block of Collins Avenue.

Details of the proposed amendments that will be considered at a future Land Use Committee meeting can be found here.

Rendering: DOMO Architecture + Design

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