Class A Office Space: The Catalyst to Move Ocean Drive Forward?

Susan Askew
Susan Askew

Class A Office Space: The Catalyst to Move Ocean Drive Forward?:

Developers of Bancroft Hotel and Ocean Steps Believe It Is

The developers of a proposed Class A office conversion for the historic Bancroft Hotel and adjacent Ocean Steps commercial development on Ocean Drive received final approvals for the concept from the Miami Beach Planning Board this week.

The owners, Bancroft Ocean Five Holdings LLC, include Russell and Ronalee Galbut, Richard and Ryan Wisfisch, and Ana and Walter Zeinal. According to minority partner Rory Greenberg who is managing the project, the ownership group spent seven years acquiring the 21 individual commercial condo units. They plan to renovate the historic hotel at 1501 Collins and create Class A office use across the development site which sits at the end of Ocean Drive as part of a “club membership” model. Their plans also include four ground level restaurants open to the public. Amenities for the office tenants include fitness facilities and plunge pool, indoor and outdoor meeting space, and lounge areas. The Historic Preservation Board approved the design of the project earlier this month.

At the Planning Board meeting, Greenberg emphasized the property was previously a nightclub and the proposed project will be a catalyst for needed change on Ocean Drive.

“This is a neighborhood that has seen better days and I think we are all in the same place [thinking] that Ocean Drive needs to change and what better way to change Ocean Drive than take a building… that was purposely built as a nightclub and convert it into high-end office,” he said. “Our mayor is preaching to this city, let’s fix Ocean Drive, let’s bring Class A offices, let’s round out Miami Beach as a city that can serve its constituents, its members, all within the city limits of Miami Beach.”

“We believe that this is one of the few projects that will be a catalyst to not only change Ocean Drive but the entire Entertainment District,” Greenberg said. 

“We are personally going to office there,” he told the Planning Board members. “The success of this building is crucial for us. The clean operation of this building, getting cars off the street, [and] having world-class service is our business plan. [It] is the only way this will be successful,” he said addressing concerns about traffic and potential noise from the restaurants.

Office use, Greenberg said, is going to be vastly different in a post-COVID world and he believes the small office space, membership model with amenities is the future – somewhere between commuting to a high-rise in Brickell and working from home, allowing Miami Beach residents to live, work, and play here.

“Miami Beach is a different city than it’s ever been and has the best opportunity we’ve ever had to capitalize on the growth and the migration into the City,” Greenberg said. “Class A office is a 14-ft ceiling height. That’s a much different building than we have. How do we counteract that? We service the building the way Miami Beach residents, the way Miami Beach workers want to be serviced – world-class food and beverage, gym, spa, rooftop amenities. This gives us the ability to attract a Class A office tenant into a building that is not traditionally Class A.”

“We are taking a tremendous risk by undergoing this project,” he added. “This is not the type of project that is a plug and play, simple, we open it, people lease it up. This is going to be a lot of effort on our behalf to be successful and we’re going to make that effort and we’re going to do it right.”

After six months of meetings with neighbors, businesses, and other community members, he said, the developers have reached agreements regarding the operations and are looking forward to moving ahead, “to move Ocean Drive forward.”

Attorney Graham Penn of Bercow Radell Fernandez Larkin & Tapanes noted the office areas will not be open to the general public, the outdoor areas will include shade trees and landscaping that is not there now, and there will be no entertainment.

Prior to the hearing, Penn said, the developers agreed to conditions that include reduced hours of operation and limits on music, the valet operation, special events, and outdoor bar counters, “ensuring we’re going to come in as a good neighbor.”

The lobby will be open from 9 am to midnight. A coffee bar will be open from 7 am to midnight, two restaurants in the central areas of the Ocean Steps building will operate from 9 am to 1 am, and a sushi bar will be open from 7 am to midnight. All exterior operations of the restaurants will close at 11 pm. The office terrace will operate from 9 am to 11 pm.

Greenberg further described the restaurants as including a Spanish-American and American concepts along with the proposed sushi bar and coffee bar.

“These are four high-end world class restaurants that are going to be an upgrade to the street,” he said. The food and beverage partner is LDV Hospitality which operates Dolce Italian at the Gale Hotel and Scarpetta at the Fontainebeleau. “These are highly regarded operators within our town,” Greenberg emphasized.

Board member Tanya Bhatt said she viewed the project “against the backdrop and context of what the city is facing citywide and, specifically, on Ocean Drive. We are talking about a couple of things coming together at a nexus, one of which is we are trying to attract businesses to come. We are trying to attract people who want to live and work and hang out in the same space rather than getting into their cars to do one or the other. We’re trying to attract people who want something that’s different from Manhattan South, people who don’t want to rent office space in Brickell, who don’t necessarily need massive amounts of office space but need something cool and funky and functional and high-end with a lot of amenities.”

“We’re trying to protect our barrier island from resiliency issues,” she continued, praising the adaptive reuse of the buildings, rather than tearing them down. 

“This is a much better way to approach that issue of how do we attract businesses who are looking for high-end office space when you have interesting and unique properties available to us throughout the city – not just in this case – but throughout the city and we look at them and say ‘How do we repurpose them? What can we offer that is different than perhaps a 14-ft ceiling, but it is much more interesting?’ And, no, it’s not going to attract everybody but it will attract a lot of people who share the things that we value about our city.”

Addressing those who still had concerns about noise despite the agreements with the neighboring condo associations, Bhatt said, “It used to be a nightclub. Then it was going to be repurposed as a hotel about which you have… far less control over who comes and goes and they’re not invested in the success of a project because they’re transient, the guests are transient.”

Bhatt suggested progress reports once the project is up and running to understand how it’s working or if there are any issues that need to be addressed.

Greenberg reiterated the project would only be successful if they managed traffic and noise as tenants will not stay if there are problems.

“Most people look at this project and think we’re crazy,” he said. “Most people look at this project and say ‘You’re putting Class A office space on Ocean Drive? Have you seen the news?’ That’s the point here. The point here is we are going to change the game. We are going to do something special on the street.”

He said he expects the types of tenants to be finance, tech, and law firms, some of whom may have offices in the City of Miami but want an office or meeting space on the Beach. He expects the space to be in use by the time Art Basel is here in December, 2022.

Board member Mark Meland said, “I think this is an awesome project and I think you should be congratulated… I think this is an incredibly important project for this city. Let’s reimagine what we’re going to be. And this is part of reimagining what we can be, not what we were and what’s not working.”

“This is really a visionary project,” Meland said. “You have guts. You’re a trailblazer. Hopefully you’re the first one of many that’s going to do this and I put it out there to the community, this is a heckuva lot better than the alternatives here. This is an incredible opportunity, an incredible alternative here and I was offended last month when you got jammed up and delayed here” over objections from a few people. “Delay, delay, delay. That doesn’t work here. This project needs to happen. It needs to happen now.”

Board member Ayssa DiPietro noted she recently moved her offices to Miami Beach and had to convert an old retail space “because it was the only thing that I found to be more comparable to Class A so there’s definitely a demand. I know a lot of people who are scouring the Beach for Class A office space” adding “I think we need help to diversify our economy on the Beach.”

“While I know there’s noise concerns, I don’t think offices get too rowdy and I do think the hours that you are proposing are far better than a 5 am or a 2 am nightclub,” she told Greenberg. 

Greenberg agreed to additional requests from Board member Alex Fernandez for an operational plan to be submitted to staff for approval before operations begin, have City staff review and approve the traffic plan, and to have no oversized drinks, hookahs, or parking of oversized scooters which he described as the three-wheeled slingshot vehicles on the site. Greenberg reiterated the high-end caliber of the restaurants and clientele saying he had no issue agreeing to those terms.

The project, designed by Jennifer McConney-Gayoso of Studio Mc+G Architecture and Allen Saunders Design, was approved unanimously.

Full details of the Planning Board submission are here.

Rendering: Mc+G Architecture and Allen Saunders Design