Miami Beach Marina Redevelopment Gets First Round of Approvals

Susan Askew
Susan Askew

Miami Beach Marina Redevelopment Gets First Round of Approvals:

Second reading in July, followed by voter referendum in the fall

Developer David Martin’s proposal for a new mixed-used development including a luxury residential tower on City-owned property at 300 Alton Road at the Miami Beach Marina received its first round of approvals this week. On Tuesday, the Planning Board gave the project a thumbs up followed by the City Commission on Wednesday. The proposal has to pass a second reading at Commission in July with a voter referendum in the fall. In addition to the residential tower, Martin along with marina operator SunTex is proposing a long-term lease and improvements for the marina. 

At the Commission meeting, Assistant City Manager Eric Carpenter laid out the public benefits of the proposal including a new and upgraded retail, restaurant, and office space; a new marina facility at no cost to the City; resiliency improvements; and a one-acre public park.

The Development Agreement provides for 275,000 sq. ft. of residential space in a maximum 385-foot tall tower and up to 60 residential units. It also includes 45,000 sq. ft. for retail, restaurant, office, and marina uses. The agreement has a 12-year term and limits the developer from transferring his interest prior to obtaining final Certificate of Occupancy (CO).

Martin, Co-founder and President of Terra Group, would pay the City $55 million in cash for the sale of the air rights at 300 Alton Road to build the residential tower (subject to voter approval) and provide an additional $15 million in capital improvements for the site over twenty years. The terms include a schedule of deposits starting with $5 million due by January 31, 2021, $5 million on or before January 1, 2022, and $5 million due on or before September 30, 2022. The remaining $40 million would be due within 90 days following Design Review Board (DRB) approval with an outside date of 54 months.

Construction would have to begin 18 months after DRB approval with completion within four years after commencement of construction.

The new marina lease, contingent on voter approval, would run for 99 years, effective January 1, 2022.

Carpenter said improved lease terms for the City include an increase in minimum guaranteed rent from $320,000 to $1.9 million (with annual CPI adjustment) along with percentages of parking fee revenues, sale of gasoline and diesel fuel, and other gross receipts. The developer will provide $35 million in improvements to the marina over 30 years. He would be obligated to construct an “alternate marina facility” if project approvals cannot be obtained and the new lease remains in effect.

The vacation of the City’s right of way on the western half of Alton Road abutting the City-owned parcel along 300-400 Alton Road would allow 25,500 sq. ft. to be joined with the adjacent parcel to provide enough FAR – Floor Area Ratio or density – for construction of the tower. Carpenter emphasized the ownership of the right of way would revert to the City as the owner of the parcel.

The City would hold the mortgage on the property, he said.

Commissioner Ricky Arriola said, “In a lot of cases like this, I think about, what is the alternative, what is the cost of doing nothing? If we don’t do this, we have a city-owned asset now that, in my opinion, is clearly outdated in terms of the architecture, in terms of what’s happened in that neighborhood.”

“We’ve got an opportunity here with a world class developer and a world class architect to do something that I think is cohesive with the neighborhood in terms of the residential tower but also significantly upgrades the retail component, the marina, creates some great green space and public park space for the community as well as other public benefits, not to mention the financial contribution back to the City,” Arriola said. “There’s a lot to like here.”

Appraisals for the site ranged from $70 to $80 million. Commissioner Steven Meiner asked if they had been updated to reflect the change from the original design with a shorter building to the taller, more valuable tower.

Carpenter acknowledged, “There are some shifts that have taken place going from a wider, shorter building to a taller, narrower building” which could result in “potentially some minor changes [to the appraisals]. I wouldn’t call them significant in the value to the city on the land, but we have had that conversation. I’m comfortable that the $70-80 million are reasonable appraisals” though, he said, “The developer thinks those appraisals are elevated.”

Martin said he understands the City needs to get the best deal but added, “I’d like to be clear, these appraisals were done before COVID-19 so the comps that were used were pre-COVID” and before the Federal Reserve said the economy was in a recession.

He noted he increased the initial offer on the residential parcel from $50 million to $70 million – $55 million in cash and an additional $15 million “in city requested infrastructure and resiliency improvements.”

That does not include the $35 million in marina improvements or additional revenue from the new lease or the “cost of converting a 1980s retail facility into a 21st century retail facility” with revenue to the City estimated at $25-30 million, he said.

Martin added, “The old concept was shorter, but it was also quicker to build and more cost effective to build. Although I will admit, Commissioner Meiner, the additional 8 or 9 floors from the original proposal may yield a higher premium, the appraisals and the comps that were used – some oceanfront, some bayfront – the waterfront comps did not incorporate what level, what floor those comps were at. And so, personally I feel $70 million is definitely a very high amount of value for, I repeat, 60 residential units.”

Martin noted the “enormous amount of fiscal and community benefits to the City above and beyond what this appraisal is showing… I do believe the appraisals are extremely high, but I stand here today to say I am meeting that threshold and will deliver on what commitments we have made.”

Meiner asked the City Administration to get appraisals on the latest plans reflecting the taller tower prior to the final consideration of the agreement in July. 

Following a discussion about allocating funds toward uses that would make the project appealing to all voters and not just those who live in the area, there was some agreement that affordable housing could be one good use.

Commissioner David Richardson said he agreed that would be a good use but added. “I urge strongly that we use a significant part of this money to make sure that our reserves are restored so that we’re ready for the next urgent action.” The City is facing severe gaps in revenue as a result of the COVID-19 closures and intends to use some of its reserve fund to plug the holes.

Richardson said he believed it was possible to take care of both “pressing needs,” refilling the reserves and providing funding for affordable housing.

In wrapping up the discussion, Mayor Dan Gelber said, “When the template of this marina was created it was because we desperately needed investment to do something and now that that area has really evolved into a premier community, I think we need a new template. That template was created a long time ago when everything was different.”

“Doing nothing is easy. Doing anything can be reckless. Our job is to do something special and I think this is a special project that offers numerous exceptional advantages to, not just the South of Fifth community, but I think all of Miami Beach and I would urge support,” Gelber said. “I know some folks out there won’t like this or that, but I believe in the project and I believe in the team.”

He urged Commissioners to “resist too much micromanaging” on the details of the agreement and letting “the professional staff” finish the negotiations. “They’re trying to do two things,” he said. “They’re trying to get the best deal for the City but also create a project that is viable in a marketplace where somebody else is taking a lot of the risk and it’s important to navigate both those points.”

“It’s easy to say we want more money, we want more money. But, at the end of the day, if the project’s not going to work, then it’s not going to work.”

Gelber said he agreed it would be a good idea for voters to know how the money would be used and suggested looking at affordable housing, the City’s reserves, resiliency, and senior programming.

In addition to the development agreement, sale of the air rights on the residential parcel, the marina lease, and the vacation of Alton Road, Commissioners approved legislative amendments that would permit public-private marina redevelopments and increase maximum height, among other things.

To be determined before second reading: ownership/control of the park, allocation of Art in Public Places funds from the development, and details on the alternate replacement facility if the lease moves forward but the residential piece of the project does not.

Second readings will be on July 29. If approved, the sale of the air rights and the marina lease will be on the November ballot.

Note: The developer has opened an information center at 300 Alton Road, Suite 112 (immediately adjacent to the baywalk) for the community to view renderings of the proposed project known as Marina Park and to ask questions. The office is open Monday through Thursday from 2:00 to 5:00 pm. There’s also a new website which includes renderings, an outline of community and fiscal benefits, resiliency and sustainability features of the proposed development, and an FAQ. Visit and click here to view the virtual community meeting held by the City and the South of Fifth Neighborhood Association on the proposed project.

Rendering: Bjarke Ingels Group (BIG)


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