Convention Center Hotel Redux

City Center

Susan Askew
Susan Askew

Convention Center Hotel Redux:

Negotiations to proceed with developer, voters may see it in november

The City may, once again, test Miami Beach voters’ willingness to have a hotel adjacent and connected to the new Convention Center. In 2016, a proposed 800-room hotel more than 280 feet tall failed to reach the required 60% approval threshold but City leaders are hoping a new proposal for a building that is one hundred feet shorter will win the day. This week, the City Commission gave the go ahead to begin lease negotiations with an eye toward a voter referendum this November.
 
The City received only one proposal – from David Martin and Jackie Soffer – to develop a hotel but City Manager Jimmy Morales told Commissioners this week, an evaluation process was still conducted and he believed it is a good deal for the City. The critical points, he said, are that it requires no subsidy from the City and provides a “significant income stream particularly starting in year five.”
 
In a memo to Commission, Morales said the new “state-of-the-art [Convention Center] will enable our City to compete for world-class events and meetings. A hotel adjacent to the Miami Beach Convention Center is the next step in creating a highly competitive convention destination.”
 
“Out of the top 30 U.S. convention destinations,” Morales wrote, Miami Beach is one of four that currently does not have a headquarter hotel attached or adjacent to its convention center.” He noted of the other three cities, two, Fort Lauderdale and Los Angeles are in process of developing a hotel, and the third, New York City, “does not need a headquarter hotel in view of the significant hotel inventory in the nearby Broadway District.”
 
“The City and the Greater Miami Convention and Visitors Bureau (GMCVB) have reached out to the Convention Center’s target market and continue to receive feedback that many convention planners will only consider Miami Beach for their event if there is an attached hotel.”
 
He addressed concerns about receiving only one proposal saying the City’s requirement that any hotel not require a City subsidy as well as the 60% referendum requirements create challenges for bidders. “Fortunately,” he wrote, “we have received a proposal from a qualified team that requires no subsidy.”
 
The proposal from Martin and Soffer’s Miami Beach Connect includes more than 96,000 sq ft of ballroom and meeting space, a 400 seat restaurant club, a lobby lounge, pool grille, and lobby bar. The 800 rooms are divided into 735 standard rooms, 55 suites, and 10 hospitality suites. The proposed hotel includes 320 parking spaces.
 
If voters approve the lease in November, Morales said the hotel is anticipated to open in September 2022. The lease would be for a period of 99 years with rent payments reaching $3.3m by year five. Miami Beach Connect estimates a total annual fiscal benefit by year five of $10.2m including the $3.2m in rent, $3.0m in real estate taxes which they note would be the 5th highest paying property in Miami Beach, $0.8m in food & beverage taxes, and $3.1m in resort taxes.
 
The 185 proposed height “is the same height as the Lincoln Road 'clock tower' at 407 Lincoln Road,” according to Morales.
 
“During the construction and development phases of the Project, the Proposer estimates to create 1,900 full-time equivalent jobs,” Morales wrote in the memo. “Once the hotel has reached a stabilized level of operation, the hotel is estimated to employ 724 full-time workers.”
 
As to resiliency, Morales said the proposed building is “at a raised elevation that protects the building from expected rises in sea levels in the future but its design maintains the street’s existing walkability by providing stepped transitions, landscaping and shade at the sidewalk level. Similarly, several floors are designed to adapt to changing conditions, such as the double height retail spaces on the ground level that can allow for higher finished floor elevations in the future and the adaptable upper floors that can transition in use and shape as needed.”
 
In addition, the building will incorporate some innovative ideas for resiliency. “The design also weaves green and blue infrastructure designs throughout the building, including bioswales and a cutting-edge blue roof that retains stormwater for reuse on-site,” Morales wrote. “Native vegetation is also a cornerstone of the design and is used to lower the groundwater levels around the property, to capture additional stormwater, and to create beautiful vistas.”
 
The public benefit, he wrote, includes the revenue impact of the hotel, City resort taxes and property taxes, and an increase in funding from the County once the hotel is opened. “The value of this revenue stream over the lease term is $223 million net present value,” Morales said. He also noted a contribution from the hotel of $3.2m to the City’s Art in Public Places fund to be used for projects in the City.
 
At this week’s Commission meeting, Morales said the concept rendering (above) shows “iconic architecture” as requested by the Blue Ribbon Panel on the Convention Center Hotel. “The Blue Ribbon committee also recommended 800 rooms,” he said. “Arquitectonica along with the developer has come up with a way to, by going with more standard hotel room layout for a convention center hotel, to actually fit 800 rooms in a 185 ft tall building, nearly half the size of the last one three years ago. So I think a lot of the concerns that had come up and were raised, not only three years ago, but also in discussion with the Blue Ribbon [Panel] have been addressed.”
 
David Martin of Terra and Jackie Soffer of Turnberry have formed Miami Beach Connect for the hotel project. The architecture team is led by Arquitectonica's Bernardo Fort-Brescia who noted he has been involved in designing several convention center hotels previously.
 
In a video presentation first, Martin emphasized the project’s role in the City’s resiliency efforts. “We need to have this project be a leading symbol in what resiliency can mean for development of future buildings. For us, I think, technology, innovation, resiliency, these are big themes that are important to the project.”
 
Martin and Soffer emphasized their local roots. Soffer said she is a long-time resident and, for her, “At this point in my life it’s about delivering a quality project. Everything isn’t all about the money. It’s more about creating an environment that is an asset to our community and that people enjoy.”
 
“For me to develop something in this neighborhood where I live – I’m raising my children where I grew up – and to add something to the community that we’ll all be proud of is, really, that’s my goal.”
 
Martin told Commissioners his group is committed to working closely with residents, the business community, the arts community, and the City to get the project approved via referendum. “We’re very excited and, you know, there’s a lot of work. This is the start of a process of working with the City, of working with the community, and we’re committed to working with them to see this through.”
 
Fort-Brescia presented the concept, noting the connection from the hotel directly into the Convention Center. Hotels with such direct connections “usually have an advantage” when bidding for conventions, he said, using Houston and Philadelphia as examples. Houston is one of the convention center hotels he’s designed. 


 


He also said the Miami Beach Connect proposal learned from previous objections. “Instead of what had been done before, we pulled the building as far away as possible from the corner and the podium is what comes forward in scale with City Hall, in scale with New World Symphony and with the other buildings in the neighborhood,” he said. “We recede the height of the building way back on the site and this creates a whole other feeling at the ground floor where the building is lower, where we have shaded walkways, landscaping that takes care of the elevation, the flood elevation differentials.”
 
“There are active sidewalks with restaurants and shops that are connected to the hotel,” he continued. 

 


“And we developed an enormous pool deck that creates a resort environment. That’s the expectation when you come to a hotel in Miami Beach, even if it’s for a convention.” The pool deck would provide a view of the sunset and the skyline on Biscayne Bay.
 

 


To deal with traffic concerns, the hotel would focus on internal circulation of valet and taxi and rideshare drop-offs. The concept also proposes sharing the Fillmore Theater loading area and includes two ingresses/egresses rather than the one proposed previously.
 
Morales reminded Commissioners they were not approving the design as the hotel would need to go to referendum first, and then, if approved, through the design review process with “plenty of opportunity for Commission and public input.” This was just a “preliminary design,” he said. 
 
Commissioner John Alemán said, “Not only are they the best of the best in their industry in developing and operating hotels, I love that they’re local. They have skin in the game which I appreciate.”
 
“I think this is a dream team,” Commissioner Ricky Arriola who chaired the Blue Ribbon Panel said. “Local folks who are invested in the community, have a track record locally and nationally doing these kinds of things, so I couldn’t think of better partners to do this venture with.”
 
While agreeing “that it’s wonderful we have a local group,” Commissioner Michael Góngora said, “I’m also personally disappointed that we only had one person bid on the RFP… I believe competition leads to better design ultimately.” 
 
He expressed concern about the lack of up-close details in the renderings. “I don’t really know what the hotel is going to look like… I’m very, very curious about the design… that’s typically been the most important thing for me when I vote is whether I think it’s going to be the best hotel for Miami Beach on design.” 
 
Góngora also expressed a concern about the proposed 800 rooms after voters rejected an 800-room hotel in 2016. While the RFP sought proposals “for up to 800 rooms” he said he was expecting 550-600 in briefings with staff. “I was a little surprised when it came back at 800 and I’d like to better understand that.”
 
“I do want to see a hotel pass and I’m concerned that if we just tell people we’re putting the hotel on the same site, shorter but it’s still an 800-room hotel, we might not get to where we want to be,” he said. “I do want to see it pass so we’re going to have to do a better job explaining to residents who are going to have to ultimately vote on this why this is a better project.”
 
The biggest concern he sees is traffic. “That’s the number one issue on residents’ minds all the time so I think they’re going to have to understand – and I’m going to have to understand – how this hotel is going to impact traffic.” 
 
“I want to see this move forward but I’m not committed in any way to the room size of the hotel,” Góngora said. “If I vote yes today, I want to make sure that I’m not committed to an 800-room hotel.”
 
Morales said while the desire for an 800-room hotel was there given its advantages for attracting higher quality conventions, it was assumed the proposal would be for less, “because we didn’t think you were going to fit 800 rooms in 185 ft [of height].” He noted that if the Commission were to give the go ahead to enter negotiations, he would need to understand the number of rooms to be negotiated as the economics of the deal would change based on the number of rooms. 
 
City Attorney Raul Aguila said any lease would need to come back to the Commission for two readings. In order to get it on the ballot for November, both readings would need to be completed by July 25. “The time is so compressed,” he said. “Negotiations would proceed on the assumptions in the proposal unless you say otherwise.”
 
Góngora said he understood the short window, but he wanted to understand how residents would see the renderings and get a better feel for what they were voting on.  
 
Miami Beach Connect attorney Alex Heckler said that the group had been under a “cone of silence” during the RFP period which terminates as soon as the Commission votes to enter negotiations. At that point, he said, the group could then reach out to the Commission and the community to begin the education process.  
 
Martin said, “At the end of the day, we need to hopefully be able to inspire 60% of the people who live and vote in Miami Beach.”  
 
“[We] are going to have to meet with each individual person that’s interested,” he said. “We know it’s going to be a daunting task. From a weekly standpoint, we’re prepared for 5-10 meetings a week if it takes that. Whatever it takes for us to be able to inform the public of our project, show elevation drawings, renderings and also show all the traffic mitigations and solutions… We’re committed to meeting with everyone.”
 
Góngora told Martin, “I know you and Jackie to be quality local developers, but the bulk of the residents that are going to be voting probably don’t know who you are or what you’ve built and exactly what the hotel is going to be about, so you really have a challenge to be able to inform them what the changes are between this project and the last project.”
 
With regard to traffic, Morales said the idea of the Convention Center hotel is “to bring conventions and high-end trade shows that don’t bring the [daily] car traffic” but rather attract out of town visitors who use a ride share service to get them from the airport to the hotel. And with people staying closer to the Convention Center, there “will be less cabs going to distant properties,” he said. 
 
Commissioner Kristen Rosen Gonzalez, the vice-chair of the Blue Ribbon Panel on the Convention Center Hotel, questioned calling for a vote on a Convention Center hotel in November at the same time the City may seek a vote on a General Obligation Bond offering. “Putting this on the ballot and the G.O. Bond is going to be a lot,” she said. “So I know that this is timely and we have to do this and I’m going to vote in favor of the negotiations today, I just want everyone to remember that this is two major initiatives that you’re going to push on the electorate at the same time and maybe the G.O. Bond should go to the next election and possibly not November if you really want to get something passed because what you risk is failure, of both items failing at the ballot box, especially if you don’t give residents something that they want and they feel like they’re suffering from traffic so I just wanted to mention that as well.”
 
With regard to Góngora’s concerns about the number of rooms, Arriola said, “I chaired the Blue Ribbon Panel on the hotel for over a year and we had extensive public input… we had a total of 13 meetings, expert consultants, and what they all came back with was we need, at a minimum, an 800- to 1000-room hotel so… if we go smaller, I won’t support this because we won’t solve our problem… We have to get at least 800 rooms to try to solve the issue… We need to solve the problem to attract sizable conventions to justify the $600m [bond] issue on the Convention Center. We need a proper hotel so I hope we get close to 800 rooms on this site.”
 
Bill Talbert, CEO of the Greater Miami Convention and Visitors Bureau said, “The last time we were here, we said we were going to go out and lower the height 100 feet, try to deal with the traffic, leave Jackie Gleason [Filmore Theater] alone. We came back. All that’s been done. It happened so you can’t keep moving the line.”
 
“We get calls every day about this hotel. This is the single most important item,” he said.  “We actually started at 1000 and we came to 800” rooms. 
 
It’s not him asking for the larger hotel, he said, “It’s the meeting planner who’s asking for this. All of our competition has that size or higher, so we just want to be competitive.”
 
Mayor Dan Gelber said he now recognizes the idea is “trying to avoid the daily shows that just attract traffic in the morning and the afternoon,” to instead attract overnight guests who are “not congesting streets [and are] spending money here.” The 800 room size changes “the profile of the people coming so that they’re not the daily car” visitors. “I didn’t understand it until somebody explained it to me,” Gelber said. “It really is a different group that alleviates some of the congestion.”
 
Talbert said the Convention and Visitors Bureau’s “top priority… is conventions, not trade shows.”  
 
Calling 800 rooms “a sweet spot, probably 59% of the business that’s out there”, he urged Commissioners to “Complete the job. We’ve been doing this for 15 years. The meeting planners call every day… we want to be able to give them the good news that we’re moving forward.”
 
Commissioner Mark Samuelian said, “We need a Convention Center hotel. We build hotels all the time and this is the hotel that would do the most public good. We have a great team. We have a fabulous design.”
 
However, he too, had a concern with timing. “The importance of getting this done couldn’t be higher. Sixty percent [voter approval] is a very difficult threshold… Do I think we could put this on the ballot in November and pass it in November? I think we may. I think we may. But it is my strong view that we have a much better chance at passing this in the spring and that’s my recommendation.”
 
“The bottom line,” he said, “we need the most informed electorate to make the right decision for the community.” He said there would be “a lot of people coming out to vote in November” given the many races on the ballot. “They may or may not be the folks engaged on this issue. The folks who will come in the spring will be much more informed about Miami Beach whether they support the hotel or not,” he said.
 
In addition, he said he feared the ability to get the message out during a crowded ballot and amidst many election ads. “Our ability to educate the public is limited.” Noting the City itself may be filling the ballot with issues such as the G.O. Bond and the Inspector General, he said, “The poor voter has to make their way all the way through and what I hear from people, if you sort of don’t know you vote no. I fear about the crowded ballot.”
 
“I’m 100% supportive of you,” Samuelian said, “and I’m voting yes whenever it’s on the ballot… but in terms of our opportunity in this one very critical time, from my understanding of the electorate, we have a much better chance in the spring.”
 
Gelber said, “It’s very apparent to me that this is a design that has been informed with previous efforts and I think that’s very wise. It’s clear you’ve addressed congestion and I think our residents will be very grateful for that.”
 
“I also like that fact that it’s people that are going to have to live with this and not just build it and leave,” he said of the local development team. “With regard to timing, I still believe this can go in November. I actually like the idea that more people will be there.” Saying special elections cost money and have very low turnout, he said, “I always think that more voters are better than less voters.” He suggested the Commission give the go ahead for negotiations and that the timing can be discussed again.  
 
“I think this is a very evolved and informed project,” Gelber concluded. “I think our job is to give our voters the best possible version of this thing so that when they look at it they can make their decision and so, for me, I think this is the template for the best version of a Convention Center hotel we could expect or hope for.”
 
Góngora pushed for further renderings. “It would behoove you and us to be able to get the word out to the community. The only rendering is from a distance,” he said. “I’m not committed to the hotel, but I am committed to the negotiations.”
 
Commissioners voted unanimously to start the lease negotiations with first reading at the Commission meeting on July 17th and second reading on the 25th, the deadline for placing items on the November ballot.
 
To read Morales’ memo and view the developer’s PowerPoint presentation, click here.

 
Renderings: Miami Beach Connect

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