With a development agreement allowing for a new hotel tower and legal issues resolved, the pieces may finally be in place for the redevelopment of Ocean Terrace in Miami Beach to get underway. Plans have been filed with the City’s Historic Preservation Board for a new 11-story hotel tower to be part of the operations at the existing historic Broadmoor and Ocean Surf Hotels. In addition, the developers – Ocean Terrace Holdings – have also proposed adding four stories to the residential building on the site, staying within the previously approved 235-ft height by lowering ceiling heights in the units.
The Ocean Terrace development, led by Sandor Scher and investment partner Alex Blavatnik, has been in the works since 2014 when entities affiliated with Ocean Terrace Holdings began acquiring off-market properties in the area. It is a large project, almost the full block, between 74th and 75th Streets and Ocean Terrace and Collins Avenue. The only property not included is on the southwest corner, 7401 Collins, where a Burgers & Shakes is located. Over the years, the entities have paid $85M for the assemblage according to Miami-Dade County property records.
Miami Beach voters rejected an upzoning of the area in 2015 that would have given the developers additional height and FAR (Floor Area Ratio or density) but in 2016, City Commissioners approved the establishment of the Ocean Terrace Overlay allowing construction of a 235-ft condo tower. The project was first approved by the preservation board in January 2018.
After finding a hotel flag to operate the Broadmoor and Ocean Surf Hotels which will be combined into one boutique hotel proved challenging due to its small size, the developers reached an agreement with the City of Miami Beach for a new addition. That arrangement led the City to vacate a portion of Ocean Terrace to transfer the FAR (Floor Area Ratio) from Ocean Terrace to the development site in exchange for Ocean Terrace Holdings building a $15M park/streetscape there at the developers’ cost. The City received a perpetual easement back for public access.
Then, after developers Russell Galbut and David Martin won a Board of Adjustment appeal against the City in November 2019 that provided extra FAR for their 500 Alton Road development by excluding elevator shafts, stairwells, and mechanical chutes and chases from the FAR calculation allowing more habitable space to be built, there was a brief window before the City Commission passed legislation to more specifically include those elements in the calculation. Ocean Terrace Holdings filed new plans with the HPB in December 2019 which excluded those elements, thus adding about 20,000 sq. ft. of habitable space to their development. Though a settlement agreement was reached with Galbut and Martin, there was no immediate resolution for Scher and Blavatnik. A lawsuit ensued which was settled earlier this year giving Ocean Terrace Holdings the additional FAR in exchange for a $3M contribution to the City. The developers also committed to an expedited schedule for the streetscape improvements.
Which leads us to the latest application to the Historic Preservation Board (HPB). The proposed 11-story hotel would be built over the previously approved four-story parking pedestal, thus adding seven stories of new hotel space at the northwest corner of the property. The new building will sit 125-ft above grade with the hotel portion being 85 feet above the podium fronting Collins Avenue and 75th Streets. The hotel operations will be combined with those at the Broadmoor and Ocean Surf. While the proposal includes reducing the number of guest rooms in the existing historic Broadmoor from 78 to 55 rooms, the overall hotel room count will increase with the addition of 72 guest rooms in the new hotel. A new drop off for the hotel on 75th Street is also proposed
Also included in the new application, four additional levels for the condo building. Previously approved at 16 stories and 235 feet, the developers now propose 20 stories within the same height, accommodating the additional floors by reducing ceiling heights in the residential units. Total unit numbers have increased from 58 to 75.
The number of proposed parking spaces has increased from 175 to 252 through the addition of mechanical lifts and tandem parking spaces within the same podium envelope previously approved.
In addition to the new buildings, the project includes the restoration and integration of several historic facades on the site.
In the new application letter, attorney Neisen Kasdin, Akerman Miami Office Managing Partner, wrote many elements of the earlier approved project remain the same. “At the ground floor, the proposed project is the same as the Prior Approval. The historic facades are being incorporated in the same manner, the Broadmoor and Ocean Surf buildings are being renovated in the same manner, the pedestrian and vehicular entrances into the project are consistent with the Prior Approval, and the ground-floor setbacks are the same. Of course, the primary difference is that the proposed project will now front onto a world-class streetscape designed by Raymond Jungles.” The streetscape will be part of a separate application in the future.
One other note, “The façade of the 7420 Ocean Terrace building, which had been deemed unsafe by the Unsafe Structures Board and has been demolished, is being replicated and used in an innovative way – as the entry way to an interior courtyard for the residential tower,” Kasdin stated.
In addition to the 127 hotel rooms, there will be 2,020 sq. ft. of accessory meeting rooms, 480 restaurant seats, 1,640 square feet of accessory bar use, and 17,474 square feet of retail, according to Kasdin’s letter. “The Prior Approval comprised approximately 359,590 square feet of new construction, and approximately 63,139 square feet of existing floor area to remain. By contrast, the proposed project will comprise approximately 525,692 square feet of new construction, and approximately 63,773 square feet of existing floor area to remain.”
Kasdin said the redevelopment project as proposed now is valued at approximately $75M, an increase of $10M over what was previously approved.
“Even more so than with the Prior Approval, the proposed project along with the Streetscape Project will serve as the long-awaited catalyst for further improvements to the North Beach neighborhood,” Kasdin wrote.
While changes are being proposed, Kasdin said they are “designed with the parameters of the previously approved [four] variances.”
In an email to RE:MiamiBeach, Scher said the developers “want to start as soon as possible” on the project following HPB approval with construction of the park anticipated to begin in 2022. Sales of the residential tower would also begin in 2022 with “timing to be announced.”
While financing is in place for the park/streetscape, the developers are working on obtaining a construction loan for the development. Timing of construction on the residential tower will begin once a certain number of units are sold, how many, will depend on negotiations with the lender, Scher said.
Though the park/streetscape application will be submitted to HPB separately, Scher said, “[T]he applications for the project and the park are traveling together… [I]t’s such a unified and integrated concept, they really need to be considered at the same time.”
A hotel flag has not been determined, Scher said, “but it will be very special.”
The project architect is Revuelta Architecture International. Preservation architect is Heisenbottle Architects and Enea Garden Design is the landscape architect.
The HPB application is here. It is on the agenda for September 13.
Renderings: Revuelta Architecture International
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