Ocean Terrace: Trading a park for a hotel addition

Susan Askew
Susan Askew

Ocean Terrace: Trading a park for a hotel addition:

Commissioners to consider proposal to vacate city streets

It’s been a year and a half since developers unveiled the designs for their proposed revitalization of the one block area between 74th and 75th Streets on Ocean Terrace in Miami Beach. Since then the biggest challenge hasn’t been the Historic Preservation Board which gave its approval last January, but the economics of getting the project off the ground. This week, City Commissioners will consider a proposal that would allow the developers to build an addition to the historic Broadmoor Hotel and, in exchange, deliver an oceanfront public park to the City.

Sandor Scher and Alex Blavatnik, partners in Ocean Terrace Holdings, plan to build a mixed-use development that includes a residential tower, restoration of two historic hotels and partial renovation of other contributing structures along with ground floor retail and restaurants. Finding a hotel flag to operate the Broadmoor and Ocean Surf hotels (photo above) which will be combined into one boutique hotel is proving challenging due to its small size. 
Miami Beach, meanwhile, has been looking for a way to fund public streetscape and park improvements in the Ocean Terrace Neighborhood Urban Design Plan. Earlier this year, the Commission’s Finance Committee suggested exploring a public-private partnership to fund the estimated $15 million to bring those to fruition.
It’s the classic recipe for deal making.
In this case, the developers are proffering an oceanfront park and streetscape improvements between 73rd and 75th Streets valued at $15 million (sketch below). They are asking for the “vacation” of a portion of Ocean Terrace and 74th and 75th Streets for a total of 45,920 square feet. In exchange, they would be able to use the FAR (density) from the vacated streets within the development to build the hotel addition. Within the Ocean Terrace Overlay District, the maximum height for residential buildings is 235 feet and for hotels, 125 feet. Without the vacation and use of the FAR from the right of way, an increase in FAR for the site would require voter approval.
Assistant City Manager Eric Carpenter told the Commission’s Finance Committee last week the agreement would allow the developers “to attract a higher end hotel flag by providing additional keys that makes their project more viable and, ultimately, we believe better for the community in the long term.”
At the Land Use and Development Committee in May, Scher told Commissioners the developers hired the noted landscape architectural firm of Raymond Jungles to create detailed schematic designs for the five-acre park “to make sure that the residents of the City know what they’re getting. It’s illustrating the magnitude of this transformational project.”
The park would replace an asphalt street including 62 parking spaces along the beach in front of the development project.
Addressing concerns about a “developer giveaway,” Scher said, “The central theme I want to highlight has always been what is public space today will always be public space and what is asphalt for cars will become enhanced greenspace for the residents and visitors.” 

“We strongly believe this will be a catalyst for the entire North Beach community just as South Pointe Park has been for South of Fifth,” he said.
When it was before the Planning Board, which gave the proposal a favorable recommendation, preservationist Nancy Liebman (who is also a member of the Historic Preservation Board) said, “This project should be applauded by everyone in this city, not only for the financial input from the developer, from Sandor Scher and Mr. Blavatnick, but from everybody who understands what it is. It would be a shame not to move this forward. It is going to make North Beach happen… this is the beginning.”
“You never get the opportunity to regain beachfront and gain a public park,” North Beach resident Tom Richerson said. It’s so beneficial to the North Beach community. This could be an oasis maybe even a model for what you could do down there [on Ocean Drive]… a catalyst, a wonderful community benefit, an opportunity that rarely arises. We really have to capitalize on it.”
The Finance Committee was the proposal’s last stop before Wednesday’s Commission meeting. Carpenter noted the approximately $47 million net present value in additional City property taxes and resort taxes over 30 years from the Ocean Terrace development.
In addition to the vacation, the City is negotiating a development agreement which will travel together for approval.
Finance Committee Chair Ricky Arriola summarized the proposal from his perspective. “We’re taking an asphalt parking lot for cars, it’s going to be turned into a park at zero cost to the City, so we’re taking a space for cars and turning it into a space for people. And we’re taking something that’s asphalt, gray concrete, and turning it into greenspace. Why wouldn’t we do that?”
“Do we all agree on the big picture or do we want to fight for this asphalt parking lot that we have because there’s some folks that are saying this is a giveaway and I don’t understand what the giveaway is when we’re taking asphalt and turning it into greenspace,” he said.
Seeking to assuage concerns, Commissioner Mark Samuelian asked Carpenter to simplify things. “Do we maintain the full rights and control on the property?”
“Yes,” Carpenter responded.
“I think people hear these terms and think we’re losing control and losing access,” Arriola said. “And that is absolutely 100% not the case.”
Carpenter gave a “similar but not exact” example of the 1100 block of Lincoln Road which once was open to cars with pedestrian access and was turned it into a pedestrian plaza. “That’s more or less what we’re proposing to do with the City still having all the rights and controls that we have today, tomorrow.” 
Commissioner John Alemán called it “a no brainer transformative project” that will be a connector for a “seven block contiguous park and recreation space” from Altos del Mar park at 77th and wrapping to the west at 72nd Street through the North Shore Park and Youth Center.
There are still some points to be negotiated in the development agreement including the timing of delivery of the park. Samuelian said, “If we have a project like this that adds value, we want to get there as soon as possible… I’d like to see if we can do some of these things a bit faster… I’m supportive of where we’re going… but I would like to see what we can do to accelerate so we get the benefits faster.”
Ocean Terrace Holdings Attorney Neisen Kasdin said there has been an extensive planning and negotiation process. As to the timeline, he said, “We want to be responsive to it.” But, with his experience as Mayor of Miami Beach from 1997 to 2001, he warned, “North Beach has been the maid in waiting in this city for decades as everyone says. No one has made a significant economic investment in this neighborhood.”
“If [the project] does not happen… there is a good likelihood that investment will pass over this city for many years to come,” he said. 
Kasdin said he works with “top national and international developers” through his work and has watched as “dozens and dozens and dozens times the amount of investment” goes into the Design District, Brickell, and other areas.
“I have tried to interest people,” he said. “I believe in North Beach… I think the Town Center plan is a great idea. I think Ocean Terrace could be the next great street that people talk about in Miami Beach because of the [proposed] linear park and because of the redevelopment of the block. But it is very difficult to get people to invest. They do not believe that North Beach is there. They do not believe that it is ready or is ripe for investment.”
Bill Vitale, President of the Board of Directors of the neighboring St. Tropez condominiums, said, “We are in support of this,” noting that Scher told him first thing in the process “We want you included in this. And he’s been good to his word about that.” 
“We’re invested in this,” Vitale said. “This is transformational for us. We get it. We have a world-class park coming to our front door, literally. What’s not to like?” 
Commissioner Michael Góngora also sought to provide comfort around the vacation issue. “There is a lot of rumors about it being given away, deeded away, but we are keeping the same rights,” he said, with “a perpetual easement and it would be open to the public.”
That said, prior to voting on it Wednesday, Góngora said he wanted to have a better understanding of the appraised value of the street versus its value as part of the development. “The developer is building the park but he is taking those development rights and FAR and putting another tower on the Collins Avenue side,” he said. “There’s a value to that.” Asking “Is the park worth the building?” he said he wanted to understand the valuation better. How parking would be handled with the loss of the 62 spaces prior to the construction of the 72nd Street garage along with a faster timeline for delivery of the park were also issues he wanted addressed at the Commission meeting before the vote.
Finally, he said, he wanted to be sure the rights were not assignable. “My vote will be contingent on my relationship to this particular developer who I’ve come to know and like and trust over the years and who’s very popular but I don’t want to approve a project that’s flipped to someone I don’t know or I don’t trust that might not live up to the promises that they’ve made to the community.”
Because the Finance Committee meeting was also a budget meeting, the entire Commission and Mayor Dan Gelber were present. Gelber said, while he wanted to get the best deal for the City, it was also important to understand that there’s a risk to the developer to come into an area that “has been resistant to development.”
“If we’re not careful, if we try to carve this close, then we’re going to end up just losing it,” he said. “And I think that’ll be terrible, frankly, because I don’t think there’s anybody who wants this area to not reach its potential.”
“Honestly, it’s not just to have a beautiful beachfront,” Gelber said. “So many of our issues in this city are captured by our failure to create inviting town centers close to our residents. Our transportation issues, our housing issues, all of them, so the idea that we can create something that’s dynamic, that’s beautiful, that’s inviting, that’s embracing, that’s walkable, that’s commercially viable, is transformational to a third of our city. So, I don’t want to lose this. I don’t wanna give away the farm, but I don’t think we are.” 
He told Carpenter to do the best job he could for the City. “I have utmost confidence in you, so let’s get this thing going.”
First reading on the items related to the vacation and development agreement are Wednesday. A second reading and public hearing date will be set at the same time.
Details on the item are here and here.
Sketch below shows the proposed park that would replace a street and parking area on Ocean Terrace.

UPDATE: The City Commission gave final approval to the proposal on July 31, 2019.

Sketch: Raymond Jungles


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