Class A Office Development on Miami Beach’s Terminal Island Moving Closer to Fruition

Susan Askew
Susan Askew

Class A Office Development on Miami Beach’s Terminal Island Moving Closer to Fruition:

City Commission may pave the way this week

If you build it, they will come? As companies flee higher taxes and COVID lockdowns in colder climes, the hunt for Class A office space in South Florida is on. In an attempt to get in on the action, developers and the City of Miami Beach have been considering best places to build or create the high-end office space desired by the financial and tech firms migrating here.

Now, the Related Group's proposed Class A office development on Terminal Island off the MacArthur Causeway is coming closer to fruition. Miami Beach Commissioners this week are expected to give final approval to a height increase for the site from 40 to 75 feet which Related says is necessary to provide the tall ceilings required for Class A tenants. According to the memo accompanying the item, the height increase would allow floor to ceiling heights to increase from 12 to 14 feet. The proposed development would include two five-story towers with approximately 161,671 square feet of office space and an open-air restaurant on the roof.  [Update: Commissioners gave final approval to the height increase.]

Related has owned the 3.71-acre parcel on the southeastern tip of Terminal Island since 2013. The site is approved for cargo terminal operations which was its previous use. Initially, Related proposed a 25-story, 300-ft tall residential tower and then a taller, slimmer tower at 34 stories, 457 feet but following strong objections from the US Coast Guard, Related changed gears and in May last year proposed two smaller towers and a change of use to offices.

If Commissioners approve the height increase as expected, the Planning Board will hear a request for a Certificate of Use Permit (CUP) at its meeting later this month.

In the Planning Board application, Tracy Slavens of Holland & Knight said the office areas would have an occupancy load of approximately 1,616 individuals and are expected to generate ±275 jobs. 

The buildings, Slavens noted in the application, “are positioned to maximize on the available water frontage. Stepped terraces and rounded corners draw inspiration from the nautical design of cruise ships and yachts.”

“To lure the desired Class-A office tenants, the five-story building features tall, 14-foot floor-to-floor open plan floor plates that capture spectacular views of both the Miami and Miami Beach skylines as well as moored yachts and passing cruise ships,” she wrote. 

Slavens said Related Group is in negotiations with “a user that is exactly the type of tenant that the Height Ordinance is intended to attract. It has never been more relevant or important to incentivize the type of development that will fortify the City’s economic future.” 

Diversification of the City’s economy away from its heavy reliance on tourism which has been devasted by the coronavirus pandemic has become a priority for the Administration and elected leaders. The City was forced to cut its budget and dip into reserves as the revenue losses mounted.

Two additional areas where height increases may be used to incentivize office development include parts of Alton Road and Sunset Harbour. Those proposals continue to be discussed at the Committee level after residents sought further discussion on the impact to surrounding neighborhoods. 

“Terminal Island is an industrial area with existing intense uses, including the City’s Fleet Management and Sanitation Department operations, ferry landings, an FPL substation, and the U.S. Coast Guard Base Miami Beach,” Slavens wrote in the Planning Board application. “The proposed office and restaurant uses are significantly less intense than other uses permitted, and, therefore, do not create a use or condition that causes an undue negative impact directly or indirectly to other uses or conditions in the area.”

“Tens of thousands of residents, workers, and visitors view Terminal Island as they enter or depart Miami Beach, Fisher Island, and PortMiami on a daily basis,” the application states. “The Project will significantly enhance the City’s gateway and will improve the vista from both MacArthur Causeway and Government Cut. Most importantly, the Project will promote an innovative Class-A office environment that would be both compatible and consistent with the character of the surrounding area, promote economic development, and satisfy an immediate need for this type of office space in the City.”

According to an Office Market Overview prepared for the City by CBRE in October, Miami Beach has less than 1M sq. ft. of Class A office space. Compare that to Brickell with 4.3M sq. ft. and Downtown Miami with 4.2M. Starwood Capital Group is currently developing a 160,000 sq. ft. Class A office building at 2340 Collins Avenue which it plans to use as its headquarters after vacating 120,000 sq. ft. on Washington Avenue. 

In the report CBRE noted, “As we continue to benefit from high wage talent relocating to South Florida and Miami Beach, there is a shared belief and vision that decision makers in the alternative investments industry, financial services and other sectors will strongly consider opening satellite offices or relocate certain business operations to Miami Beach.” 

Noting concerns about leasing activity and absorption rates, CBRE wrote, “However, in light of some of the titans who currently reside here and/or have opened offices in the past few years, the City appears well positioned to attract the quality and type of companies that will be accretive to the City, its stakeholders and citizens. How quickly this accelerates, and to what degree, will have a direct impact on the Class A office market.” 

The report was developed in anticipation of a Request for Letters of Interest (RFLI) issued by the City for developers to build Class A office space on three City-owned properties just off of Lincoln Road. Expressions of interest are due next month.

If the Commission approves the Terminal Island height increase, the Design Review Board will discuss the project at its February meeting.


Renderings: Arquitectonica

 
Development site

 
Proposed development

 
 
 
 
 

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