As expected, Miami Beach Commissioners approved new incentives for Class A office developments on parts of Alton Road and Sunset Harbour. The initiatives are part of the City's efforts to diversify its tourism dependent economy after several recent economic blows from hurricanes, Zika, and, most recently, the coronavirus pandemic. Approval of the Sunset Harbour Overlay, which includes a prohibition on hotels, could land the City in court, however, after Commissioners narrowly defeated an exception for developer Ronny Finvarb to build a hotel on a property he put under contract with a nonrefundable deposit prior to the prohibition being discussed.
On second reading, Commissioners approved the Alton Road Office Development Overlay which increases the maximum allowable 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. Minimum setbacks of 20 feet are required 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.
The Sunset Harbour Overlay which provides incentives for office development on the edges of Sunset Harbour and includes a prohibition on hotels was also approved. There were not enough votes to allow an exception for developer Ronny Finvarb’s proposed suite hotel at 1790 Alton Road across from his Palomar Kimpton Hotel. Finvarb, who had already placed a non-refundable deposit of “several hundred thousand dollars” on the property based on current zoning and what he says was no mention of a potential hotel prohibition in the area when he met with City staff about his plans, sought an exemption. By that time, attorney Mickey Marrero of Bercow Radell Fernandez Larkin & Tapanes, said, Finvarb had negotiated an agreement with Kimpton to operate a suite hotel and was well into the design process. Ten days later, he said, the City began discussing the hotel prohibition as part of the new Sunset Harbour Overlay. Finvarb later closed on the property.
The exemption, or applicability clause, passed on first reading but Commissioners urged Finvarb to work with the neighborhood association to address their concerns about the hotel.
Geoffrey Aronson, a member of the Sunset Harbour Neighborhood Association Board of Directors, said the neighborhood was united in its support for the Neighborhood Vision Plan which was developed over the past year and was equally united in its opposition to an exception for Finvarb’s hotel.
The opposition, he said, “has nothing to do with the quality of this developer. He’s a decent guy and a very good developer,” but, Aaronson said there are already a number of hotels in the area and residents don’t want another one, “let alone a suite hotel.”
Aaronson said the neighborhood association and developer held an “honest three meetings.”
“They’re very personable and I especially like their attorney,” he said, “but that has nothing to do with this. That has nothing to do with this. We don’t want a hotel in the area. You know, if we don’t want a cow, no matter how beautiful it is, no matter how long its eyelashes are, we don’t want the cow.”
“I moved into that area for a reason and I don’t expect it to be the next entertainment district,” he said.
Aaronson suggested that once Finvarb became aware of the prohibition, he could have walked away from the deal and not closed on the property.
Marrero countered Aaronson's claim, saying “A closing is almost a ministerial act. You go forward with what you’ve already agreed to and committed to.”
He cited a two-page list of specific requests from the neighborhood association. Marrero said Finvarb had agreed to 49 of the 50 items including a limit on room occupancy to a maximum of four adults, six total in a room with children, as well as doing away with the washer/dryers in each room. Finvarb also made assurances regarding a four-star rated hotel, a 24-hour concierge, no entertainment and no outdoor speakers, among other things.
The only thing the developer could not agree to was to place the hotel entrance on Dade Boulevard. Marrero, who represented the prior owner of the property, said he was aware that “The County will never approve that so I could not have him commit to that.”
Finvarb, who said he continues to get compliments from the neighborhood about the Palomar Kimpton across the street and the Morini restaurant located there, said he has a “vision of creating an intersection that will serve as a beautiful gateway to Miami Beach.”
He emphasized to Commissioners that his team was “playing by the rules here” and “did all of our due diligence.”
“We played by the rules and the rules are being changed in the middle of the game,” he said. “We were not willing to walk away from a large nonrefundable deposit. It’s not prudent and I don’t think anyone here would do that as well.”
“Please consider the fairness here,” he implored. Citing the many projects he’s done in Miami Beach, he added, “We think we’ve done right by the city. We’re long-standing members of the community.”
Mike Llorente of Llorente and Heckler, another of Finvarb’s attorneys, said from a compatibility standpoint, “This property is on the outermost band of the Sunset Harbour Overlay District. It’s at a busy intersection at one of the City’s busiest thoroughfares. It sits sort of wedged in there between a Michael’s and an Office Depot. I think it’s a really hard argument to make from a planning perspective that this proposed use of a small-scale boutique hotel, with a ground floor restaurant, strict occupancy limits, is not compatible with the area.”
Then he pointed out the City’s risk of a potential lawsuit. “I think the opponents of the project are essentially asking the City to take on what, I believe, is a significant legal liability to prevent a compatible use from moving forward and risk having a much less compatible and potentially destructive use in that property in the future.”
During public comment, Lyle Stern, President of Koniver Stern Group, a retail leasing and consulting company that owns and operates properties on Lincoln Road, said, “It is unconscionable that someone would meet with our City staff, go out and put down hard deposits on property, take advantage or utilize zoning that’s been in place for decades on a piece of a property and after doing everything right have the rules change on them in the middle of the game. This is much more important than whether or not this hotel gets built or not. This is the ongoing struggle of bringing business to Miami Beach… We must be a city where we have credibility.”
Sunset Harbour resident Bruce Backman questioned if the new incentives for offices would make the property more attractive for office use. With “two busy streets and no view or access to the water,” Backman suggested it would be better suited to office space than a hotel.
Commissioner Mark Samuelian said the decision was a “tough call.”
“We have a very well established, good local developer who does high quality work,” Samuelian said. Acknowledging the nonrefundable deposit, Samuelian said the City’s regulations convey grandfather status on a property – allowing its use to remain as previously allowed under the City Code – if a project had received approval from the Design Review Board (DRB). Not having reached that point in the process and given the neighborhood voices “telling us loud and clear they don’t want [the hotel],” Samuelian said he would “have to give deference to the local community,” indicating he would be opposed to the exception for Finvarb.
“I would love to see another use there,” he said. “Maybe it’s office, maybe it’s residential.”
Commissioner David Richardson supported the exception, asking “What message are we sending to the business community? That if you come into Miami Beach we might change the rules in the middle of the game on you even if it costs you hundreds of thousands of dollars? That to me is not fair.”
Adding that he would “normally give deference to the homeowner association” he expressed concerns about the wording of a neighborhood poll in which more than 220 community members expressed opposition. “We read pieces of it the last time [we voted on the item] and it was clearly biased. It wasn’t objective, in my humble opinion.”
Richardson agreed the City had legal risk. “If we don’t pass this, we’re going to have a lawsuit,” he said. Citing recent settlements with developers, he added, “A year from now, after a lot of legal costs, paid by the City,” there will a closed-door session of the Commission in which the City will “settle that litigation in favor of this developer.”
If that happens, he told representatives of the neighborhood association, the 49 items the developer agreed to would be lost.
“Right now,” he said, the neighborhood is “in a position to get 49 of the 50 things they want based on what we heard today and in that litigation settlement they’ll get nothing, so I don’t get it… Why not take the 49 things?”
“I promise you this is going to go to litigation and I promise you we will settle it,” Richardson said. Providing the exception is “just the fair thing. It’s just the right thing to do.”
Commissioner Micky Steinberg echoed Richardson’s thoughts. “I do believe that there’s a true equity issue here,” she said. “I’m concerned for the neighborhood. I want to make sure that the neighborhood has the quality of life that they deserve.”
Steinberg, a licensed realtor, said, “The problem is, if this doesn’t get approved, we will be in a litigation situation… There is an equity issue when you go hard on a deal. It’s really, really tough. It’s not just a deposit. You could be sued. You’re responsible to close.”
She noted that short-term rentals are allowed in the area now. “Anybody can build a building that has short-term rentals” which would have none of the protections offered by Finvarb.
Calling it “the hardest vote I’ve taken,” Commissioner Steven Meiner said he was torn. “There is a risk,” he acknowledged. The area “is zoned for short-term and we could end up with something worse.”
“Ronny has been a very good partner to our city,” Meiner continued. “It’s not based on his efforts or his product… ultimately, I fall out on this transient nature that we are fighting, literally every day, in trying to bring up the quality of life in Miami Beach.”
“The neighbors live there every day and they’re facing it… they’re telling us this is not good for our neighborhood and I trust them,” he said, indicating he would oppose the exception.
Sunset Harbour resident, Commissioner Ricky Arriola questioned the community poll and representation by the neighborhood association that it is speaking for the entire community. Arriola, who serves on his condo board, said the item was never discussed by his board.
The cost and risk of litigation is “very significant and I know that was not presented to people who took this poll,” he said. The question posed was simple, he noted. “Do you want a hotel?”
“They also didn’t say we’re going to get sued and we’re going to lose, ‘Would you like to pay that Mr. Taxpayer to the tune of 500,000 in legal fees?’” Arriola said.
Miami Beach Planning Director Tom Mooney said his department supported the exemption responding to Commissioners’ questions about the alternatives which could include a fast food restaurant. “There’s a lot of uses that would be less desirable,” he said.
Citing Finvarb’s track record and the Palomar across the street which is also a Kimpton Hotel, Arriola said, there’s “not a lot of risk there,” calling it a “good deal” that the City should move forward with.
Commissioner Michael Góngora agreed the Palomar is a “nice project and I think he is a wonderful business owner… If I lived in the neighborhood, I don’t think I’d be disturbed by it.”
Góngora was not convinced, however, that there’s an equity or legal issue because the project had not gone through the DRB process. While he said it was a “difficult decision,” he added, "I have only ever regretted one vote and it was the time that I didn’t vote on the side of the residents.” Saying he would “err on the side of the residents” this time, he indicated he would vote against the exception.
Though there were four votes in favor of the exception for the hotel (Arriola, Steinberg, Richardson, and Mayor Dan Gelber), the item required five votes to pass.
When the hotel applicability clause was removed, the Sunset Harbour Overlay ordinance passed unanimously. One of its key components is 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.
Neither of Finvarb’s attorneys responded to a request for comment on the developer’s next steps.
Complete details on the Alton Road Overlay are here.
Information on the Sunset Harbour Overlay can be found 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. The building on the corner is Ronny Finvarb’s Palomar Hotel.
Credit: Felix Mizioznikov / Shutterstock.com
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