At a meeting this week, Commissioners discussed whether to move forward with a development agreement based on the draft term sheet presented by the City Administration. The vote was 5-1 against with Commissioner Ricky Arriola, a “yes” vote, leaving the meeting in frustration prior to the vote saying “Thanks for wasting my time” with the three-hour discussion. Commissioner David Richardson was left as the only "yes" vote. Steven Meiner was still working his way through his thought process after asking a detailed set of questions about the terms but noted it was a moot point when it was clear the item would not generate the 6/7 vote it would need when it came back for final approval.
Galbut and Cohen were left as the only bidders in the RFP process to redevelop the site on 71st Street between Byron and Carlyle Avenues in North Beach. In October 2019, the City Commission authorized negotiations with the two respondents, Pacific Star Capital which proposed a hotel and Menin/KGTC which proposed workforce housing. Both proposals included a required cultural center component with a minimum of 10,000 sq. ft. In August 2020, Pacific Star Capital withdrew, leaving Menin/KGTC.
The RFP, however, was for a long-term lease of the property, not a sale. In trying to get a deal “in the best interest of the City,” Interim City Manager Raul Aguila wrote in a memo to Commissioners, the Administration wanted “to explore ALL potential options to creatively achieve the delivery of the Project, including a sale of the Project under a condominium structure, with the City to receive full ownership and control of the Cultural Center condominium unit.”
At the Commission meeting, Interim City Attorney Rafael Paz noted an approval of a sale would require Commissioners to approve a bid waiver “because it is materially different than what was in the RFP.”
The sticking points during the discussion:
- Uncertainty over whether the residential units would, ultimately, be workforce housing or market rate rentals. As the developers increased the size of the cultural component from 10,500 sq. ft. to 12,000 and added a minimum of 5,000 sq. ft. in shared back of house space, the type of housing was left open, though the City’s consultants indicated workforce housing units would be more appealing to the developers given the additional units that could be built with that designation and the lack of a parking requirement for workforce housing. Commissioners, however, expressed concern over the open-ended nature of the draft agreement.
- Because short-term rentals are permitted in the area, there were concerns raised about the units being more appealing as short-term rentals rather than workforce housing. With workforce housing, Paz said he didn’t see how short-term rentals would work. But, again, with the uncertainty as to their actual use, this became a major point of contention.
- The developers proposed turning over a 12,000 sq. ft. “grey shell” for cultural use with the City responsible for any buildout which was estimated to be $5 – $10 million. Though the City would receive a cash payment of $2 million over seven years, the costs of a buildout raised questions of where the money would come from and the true value of the deal.
Noting the required 6/7 vote to approve a final deal, Samuelian said, “For me, what that really means is that it has to be compelling” with “amazing terms” financially through a competitive process and that has overwhelming public support.
“I do not believe that this current proposal meets, at least for me, the threshold of a compelling offer,” he said. “I really want to know what the other doors are.” He suggested a referral to a Commission committee to “have a real discussion of how we get a world-class cultural center that fits into this neighborhood.”
The Byron Carlyle Theater has been closed since October 2019 when then-City Manager Jimmy Morales wrote in a letter to Commissioners that it was “unsuitable for operations” given numerous electrical and structural issues which the City did not have the money to fix.
Arriola said, “I have a fear if we don’t do this, that building’s going to stay empty for a very long time. I think this is a very thoughtful, hard negotiated deal from our City Administration with this developer.” Noting the property was “the subject of two RFPs,” he said, “This was the only developer to respond. It’s been in our pipeline for three years.”
Resident Paula King urged the Commission to “put together an alternative plan where the City can still own the property. We’re very tired of losing our icons, our landmarks, whatever you want to call them. We’re hoping not to lose the Byron Carlyle. We need to hold onto our jewels.”
Anthropologist Ariana Hernandez-Reguant, also a North Beach resident, was one of the initial activists rallying support around saving the theater. A petition she started seven months ago had 1,195 signatures leading up to the meeting.
Hernandez-Reguant put the Commissioners on notice if they voted in favor of selling the property. “We will continue to fight… We are not going away,” she said.
Cohen said he and Galbut had gone “above and beyond what the RFP called for” and said it would do a “grave disservice to this community” to leave the closed, uninhabitable building to sit and become a “further blight to Town Center.” He acknowledged the “deep nostalgic sentiment” around the property but lamented the “misinformation train” on social media that, he said, was designed to mislead residents about the deal and its value to the City.
Miami Beach Chamber of Commerce President Jerry Libbin who also lives in North Beach said Commissioners needed to also look at increased recurring revenue to the City from food and beverage taxes generated by people dining in the area before and after going to the theater and property taxes on the redeveloped site. “There are a lot of reasons why this will bring added value to the current residents and businesses,” he said. Libbin pointed out the City, which purchased the property in 2001, hadn’t spent money to renovate the facility in twenty years. “[You have] one bidder left. What is the next step? What is our alternative?”
In a memo to Commissioners, Aguila listed the projected economic impacts from the proposed project referenced by Libbin:
- One-time $60 million in output and 427 temporary jobs earning $28 million during construction
- $120,000 in one-time consumption and production taxes from development (excluding property taxes and impact fees)
- $16 million in annual output and 119 permanent jobs earning $5 million associated with recurring annual retail sales, Cultural Center activities, and consumption expenditures from new households occurring every year (2021 dollars)
- The addition of 151 multi-family units targeting workforce households will create roughly $9 million in aggregate household income and generate $2.2 million in annual demand for food-away-from-home, retail, and entertainment spending
- $75,000 annually in consumption and use taxes from annual retail, Cultural Center activities, and household consumer spending (excluding property taxes) solely benefitting the City each year (constant 2021 dollars), and an additional $535,000 annually benefitting other State and Local taxing jurisdictions
One of the Steering Committee members, Betsy Pérez, said “The building can’t be saved.” Twenty years ago, she said she and her husband, singer/songwriter/producer Rudy Pérez, were approached by the City to invest in the Theater. “Twenty years ago,” she emphasized, “and our advisor told us it was not a good investment because of the condition.” Acknowledging the emotional attachment residents have for the property, she said, “I’m one of those residents” with “many memories” but “its’ time has passed and it needs to be torn down” and a new facility built where “new families can make their own memories.”
Resident Rick Kendle noted, “The terms are materially different from the original RFP” going from a long-term lease of the property to a sale. Potential legal challenges would cause the property to “sit vacant for years,” he warned, indicating he might mount a challenge. Kendle also objected to the appraisals valuing the property between $4 and $6 million. Based on sales in the area, he said he believes the value to be “at least $15 million.”
Another of the leaders in the movement opposing the redevelopment, Manning Salazar, urged the City to “save what can be saved of the building” and incorporate it into a new cultural center which he advocated paying for through the CRA or money from the redevelopment of the Seagull Hotel in Collins Park.
Tanya Bhatt decried the “vitriol and scare tactics” leading up to and during the tense meeting. “That being said, I’d like to focus on the opportunity we have in front of us.” The deal “as well intended as it may be,” she said, “[is] trying to fit a square peg into a round hole.” Bhatt urged the City Commissioners to “think outside the box.” She suggested looking to the North Beach Bandshell and the North Beach Oceanside Park and “tie that altogether” with the Byron Carlyle “in a reimagined cultural center capacity.” Doing that would “reinvigorate retail and property values,” she said.
The last speaker, Atiosis Blanco, took exception to calls for the building to be saved. “There’s nothing special about that building… it is dilapidated. It needs to be torn down,” he said.
The actual costs of the City taking on a full renovation of the building are unknown, but Assistant City Manager Eric Carpenter said, “The cost is $3 million just to [fix] the mechanical, electrical, and structural components to make the property inhabitable. Anything we would do to fix up that space would be over and above that.”
Using the same calculations for the 12,000 sq. ft. space as proposed by Cohen and Galbut at $300 to $600 per sq. ft. depending on the quality of the finishes, Carpenter said, “You’re probably talking about another $5 to $10 million” in buildout costs for the same amount of space. “It could be more than that if we’re talking about building out the whole Byron Carlyle Theater to a new high-end facility for whoever our partner ends up being.” The entire structure is about 28,000 sq. ft., he said.
In addition to the sticking points of sale vs lease, size of the cultural center, and what type of housing would actually end up on the site, Commissioner Michael Góngora said, “A sale of this property requires a 6/7 vote meaning it should be compelling and I’ve not felt compelled” by the proposal.
“The shell that we’re getting is not enough… and there’s no well thought out plan of what should go in there or what we really need,” he said. “The numbers that we’re seeing… feel low to me, notwithstanding what our appraisers have said.” Pointing to the “outside date” in the term sheet giving the developers seven years to finish the project, Góngora said, “I can’t believe that we can’t find the money to do something better sooner.”
“This deal is not compelling,” Góngora said. “More troubling for me, this deal has too many open questions…This deal has gone off-track and it’s not what we envisioned. It’s not what we wanted, it’s not what the community wanted, and I think we need to put a stop to it tonight.”
Arriola tried again to generate support. “We heard a lot of passionate pleas both ways on this. Where there’s consensus is folks want to see a cultural center remain at the Byron Carlyle site… Focusing on that, how do we get there? When I look at this, I see a proposal to give us better than what we have currently… Let’s not squander this.”
As to where the money could come from to pay for it if the City were to take it on, Arriola objected to suggestions the City could use money from the Seagull Hotel development. “I don’t think it’s fair to say we’re going to take money from Collins Park and move it to North Beach… I’m strongly predisposed to keeping that money in Collins Park,” he said.
Commissioner David Richardson suggested the Administration and developers go back for more negotiations to continue working on the short-term rental and parking concerns. “This is an amazing catalyst project” for North Beach, he said. Not moving forward would mean “another 10 or 15 years before something happens.” Like Arriola, he objected to the suggestion to use the Seagull redevelopment money after a “year of a pandemic when our reserves have been hit.” Richardson has advocated replenishing those reserves with any extra money the City takes in. He warned his colleagues "I will be a no vote” if that were to come back to the Commission.
Commissioner Micky Steinberg in a nod to the original RFP said the City “really veered off that path quite dramatically.” The fact that it had changed so much “not to mention the open issues… are troubling to me.”
“If this is our ‘best and final,’ I don’t know how much more negotiation there is,” Steinberg said.
“With the timetable and the cost that the City would still have to incur” for a buildout of the shell it would receive, she said, “I don’t see how this is the best we can do as a city.”
“We don’t have a Plan B,” Arriola said. “This RFP took three years just to get to this point.” Killing it, he argued, would send a “bad message to the development community.”
“We’re sending them a signal, ‘go ahead and work your butts off,’” and the Commission “will cave because we’re pandering for votes,” he said. “We don’t have a Plan B and we’re misleading the public… The building will lay dormant [and] may have to be demolished because we don’t have the money to maintain it.”
Wrapping up the discussion, Mayor Dan Gelber said, in preparation for the meeting he reviewed the RFP again. “We got pretty much what we asked for,” he said of the Galbut/Cohen term sheet.
“It’s very possible,” he said, that the Byron Carlyle will “lie dormant for decades” with a rejection of the deal. If the City is able to find the money, “I’m all for that.”
But, after hearing both sides of the discussion, Gelber said, “We have pulled this thread to the end. We just have.” Noting “at least 2 or 3 no votes,” he said, “It’s clear to me, we’re not going to get to a 6/7 vote.”
“The people who don’t want this deal may regret it,” but, he said, the deal would have to be “something that people think is terrific” in order to achieve near unanimity and the proposal before the Commission did not reach that level.
“We have a lot of other things our City needs our attention on,” Gelber said. “I think it’s time we moved on and started focusing on other things.”
After the meeting, Interim City Manager Raul Aguila said, “With negotiations and the RFP effectively terminated, it would be up to the City Commission to decide what’s next.”
Samuelian told RE:MiamiBeach he would put an item on the March Commission agenda to refer a discussion of the Byron Carlyle’s future to the Commission’s Neighborhoods and Quality of Life Committee.
March 1: Corrected to reflect the City would have received a cash payment of $2 million over seven years. An earlier version of the story said it would have been an upfront payment.
Photo (top): The Byron Carlyle Theater in 2019 prior to its closure
Rendering: Built Form Architecture