Miami Beach City Manager: Negotiate with two developers for Byron Carlyle Theater

Susan Askew
Susan Askew

Miami Beach City Manager: Negotiate with two developers for Byron Carlyle Theater:

Hotel and Workforce housing options proposed for city-owned site

Miami Beach City Manager Jimmy Morales is recommending pursuing both options presented by developers for the City-owned Byron Carlyle Theater. In response to a Request for Proposals (RFP) to redevelop the site, two bidders came forward, one with a plan for a hotel with retail and a restaurant/bar, the other workforce housing, Class A office space, and retail. Both, as required, included a cultural space component.

Shortly after, the proposals were ranked by an evaluation committee that included City staff and one North Beach resident.  While the hotel proposal was ranked highest, the discussion reflected divided opinions over the proposals and the best use of the property.

Now, Morales wants the City Commission to authorize negotiations with both developers, a recommendation they will take up at this week’s Commission meeting.
Pacific Star Capital, led by Aria Mehrabi, is proposing an 11-story hotel designed by architect Kobi Karp along with retail space in an adjacent City-owned parking lot which was also an option for development in the RFP. Pacific Star already owns the City National Bank building and several parcels around it.

The other bid is from a partnership between Menin Hospitality and KGTC, LLC. Menin Hospitality is led by Keith Menin and Jared Galbut. KGTC’s managers include Matis Cohen and Marisa Galbut. The group submitted a proposal for a seven-story building with 114 workforce housing units and a separate Class A office building with retail in both designed by Arquitectonica. KGTC recently received Design Review Board approval for Seventy Second Park in the block across the street.
“As articulated by the Evaluation Committee, both teams are qualified and have worked in the City, which demonstrates each firm’s ability to comply with the City’s building code and development standards,” Morales wrote in a memo to Commissioners. “Moreover, both teams have developments near the project location. However, the proposals provide very different visions in terms of programming and aesthetics.”
“Given that the two proposals offer different perspectives on the project, I think the City would benefit from negotiating with both parties to see which one ultimately offers the best overall package to the City in terms of public benefit, income and truly viable and achievable economic activity,” he said. Final selection and approval of terms would be subject to approval by the Mayor and Commission which requires a 6/7th vote. Any project would also require approval by the Design Review and Planning Boards.  
Morales' memo lays out the terms being proffered by each developer. 
In the case of Pacific Star (PSC), they propose a 23,220 sq. ft. theater/cultural component controlled by the City. The RFP required a minimum of 10,000 sq. ft. be set aside. The development includes 11,430 sq. ft. of ground level commercial (retail and restaurants) and 73,560 sq. ft. of hotel use. On the adjacent P80 parking lot, the proposal is for 10,920 sq. ft. of commercial space to include retail shops and bar/restaurant space.
“PSC has proposed a one-time ground lease payment of $8,797,088 for a 99-year term for the primary site (Byron Carlyle Theater and Lot P85) to construct the hotel, and PSC has also offered to purchase Lot P80 for $3,000,000 with the intent to redevelop the surface parking lot as retail,” Morales indicated.
Menin/KGTC’s business plan, according to Morales, is designed “to fulfill the City’s need for workforce housing and cultural destinations, with little expense to the city.”
On the Byron Carlyle and P85 lot sites, their proposal is for a 10,000 sq. ft. cultural center, 120 workforce housing units and a retail component. On the adjacent P80 lot, the group would build a five-story office building. (Note: Morales' memo conflicts with the developers' proposal which listed 114 housing units.)
“In lieu of leasing the land, Menin Hospitality and KGTC, LLC have offered cash payment to the City for the land at a fair market value determined and agreed to by all parties,” Morales wrote. “In addition, Menin Hospitality and KGTC, LLC have proposed to offer public benefits in the form of publicly-available workforce housing managed by the proposer, as well as deeding back the cultural center space to the City.”
The City purchased the Byron Carlyle Theater at 500 71st Street in the early 2000s “to spur economic development and bolster North Beach arts and culture,” Morales wrote. “Redevelopment in this location may play a significant role in the revitalization of the 71st Street corridor. The property is considered an important piece of the North Beach Town Center redevelopment strategy given its location and relative size. Public ownership of the site ensures that the property continues to serve as a cultural anchor in North Beach.”
The severely deteriorating condition of the Byron Carlyle building is forcing its closure at the end of this month. Meanwhile, O Cinema which has occupied a portion of the building for the past five years has taken over as the operators of the Miami Beach Cinematheque at 1130 Washington Avenue and will consolidate its operations there at the end of October.

The city issued the RFP for the Byron Carlyle in January 2019 with notices to 411 companies, ultimately resulting in the two bids.
Link to Morales' memo and both proposals can be found here.

Updated October 17, 2019: Commissioners voted to accept City Manager Jimmy Morales’ recommendation to negotiate with both bidders on the RFP to redevelop the theater. 

Pacific Star Capital has proposed a hotel designed by Kobi Karp for the Byron Carlyle site.

Menin/KGTC is proposing workforce housing in an Arquitectonica-designed building.

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