David Martin Seeks to Purchase Air Rights for Residential Tower at Miami Beach Marina:
Proposal includes improvements to marina and adjacent baywalk and new public green space
Developer David Martin has approached the City of Miami Beach with a proposal to upgrade the Miami Beach Marina and redevelop the upland property to include a luxury condo tower and one-acre bayfront park.
Martin, co-founder and President of Terra Group, presented the concept to the City Commission’s Finance and Economic Resiliency Committee during a meeting that was held virtually due to the coronavirus stay-at-home and social distancing restrictions.
His proposal includes an investment of $35 million in marina improvements along with the purchase of the air rights to the property at 300 Alton Road for what he estimates to be a fair market value of $50 million, though the ultimate price would depend on appraisals. Martin wants to demolish the existing structure on the site, which includes Monty’s Raw Bar as one of its tenants, to build a mixed-use project with approximately 60 residential units and retail/commercial and office space. He’s proposing a height increase for the site from 150 feet to a maximum of 225 feet.
The benefits to the City, he noted, include the upfront lump sum payment for the air rights, improvements to the marina and adjacent baywalk, increased revenue from better terms in a renegotiated marina lease, additional public green space, more neighborhood-oriented retail uses, and new jobs at a time of economic uncertainty following the COVID-19 closures.
The current marina lease has been in place since 1983. It expires January 1, 2022 but has three ten-year extensions. Martin is offering a minimum annual guaranteed rent of $1,000,000 versus the current $320,000 for a new 99-year lease.
There are no provisions for capital improvements in the lease that’s in place now. Martin would spend $35 million over 30 years in marina infrastructure and capital improvements to address resiliency and sea level rise issues, adjacent baywalk improvements, and new enhanced entrance, wayfinding, and marina and baywalk lighting.
The mixed-use upland development proposal includes a total of approximately two acres of publicly accessible open green space including a one-acre, at grade, fully permeable bayfront marina park.
The residential development would take up approximately 275,000 sq ft with a maximum FAR (Floor Area Ratio or density) of 2.5 and a maximum height of 225 feet.
Martin said the 45,000 sq ft of retail and office space represents an approximately 20% reduction in the current retail/office use “while increasing minimum annual guaranteed rent.” The 30,000 sq ft of retail would be “reprogrammed” into a “neighborhood-oriented” amenity, he told the Committee. The other 15,000 sq ft is proposed as office use. Martin’s proposal also includes required parking for the development.
Once built, Martin said the development would generate $6 million annually in local and property taxes. He also emphasized the potential employment opportunities that would be created by the project which he said included 2,111 non-recurring direct and indirect jobs and 261 recurring positions.
To move forward, the proposal would require voter approval for the sale of air rights, the new long-term lease, and a potential increase in FAR. If Commissioners want to put the item on the ballot this November, City Attorney Raul Aguila said there would need to be an “aggressive timeline” of community outreach, negotiation of agreements, and two City Commission votes with public hearings, all before the end of July during a time when COVID-19 restrictions have created challenges for scheduling and holding meetings. He asked the Committee to focus on getting better lease terms for the City.
“This is a very significant transaction for the City in as much as we have not been able to really take a look at and negotiate terms in the marina lease… for over 25 years,” he said. “We’re very excited about the project but I don’t want you to feel compressed by the November referendum deadline.”
Martin discussed the challenges of community outreach which has been delayed by the coronavirus restrictions but emphasized “Without community support, this project will not move forward,” adding, “Quite frankly, if the community does not want this, neither do I.” He said he is committed to getting that outreach underway through the use of technology or whatever means allowed through social distancing, etc. over the next 45-60 days.
The proposal will be back before the Finance Committee next month after two independent appraisals of the air rights, commissioned by the City and paid for by the developer, are expected to be ready.
Meanwhile, the contemplated height increase is expected to be referred to the Land Use Committee at Wednesday’s City Commission meeting. Finance Committee Chair, Ricky Arriola noted the proposed height is “definitely shorter than all the adjacent buildings but I think that will be a point of discussion, for sure, with the residents.”
Committee members said they were “intrigued” by the idea but want to hear what the community thinks about the proposal and to get a better understanding of the benefits conveyed to the public in exchange for not just the fair market value of the property but the value that is conveyed to the developer through the purchase of the air rights.
Monty’s includes an outdoor bar and pool in addition to an enclosed seating area. According to the term sheet Martin submitted to the City, the new retail and commercial spaces “may include marina and or neighborhood oriented retail uses, cafes and/or restaurants, office and similar uses but shall not include any free-standing outdoor bars, night clubs or other uses prohibited by the Marina Lease” though a restaurant may have a full-service bar within its space.
Suntex, the operator of the Marina, has reportedly tried to evict Monty’s “alleging it has health code violations, unpaid rent and dated menu items,” according to The Real Deal. During the presentation to the Finance Committee, Martin described Suntex as a “partner” in the proposed project.
The presentation and proposed term sheet can be found here.
If Commission and voter approval is ultimately given, the project design (which has not been unveiled) would need to be approved by the Design Review Board.
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