Miami Beach Reaches Agreement with Developers on 500 Alton Road Tower

An agreement has been reached, in principle, to end the legal dispute between the City of Miami Beach and the developers of the 500-700 Alton Road project that gives the developers two additional floors within the 519-foot residential tower while reducing the maximum number of units that can be built, and providing faster delivery of a three-acre public park.

Seeking 21,000 additional square feet within the approved building envelope for the tower on the 500 block (i.e. no additional height or footprint), developers Russell Galbut and David Martin challenged the City’s historic method of calculating allowable floor area and won when the Miami Beach Board of Adjustment agreed with them that stairwells, elevator shafts, and mechanical chutes and chases should not be counted. The City sued to quash the ruling and the developers filed a motion to dismiss the City’s appeal. Meanwhile, The Park on Fifth project, which includes a three-acre public park, completion of sections of the baywalk between 10th and 12th Streets, and a pedestrian bridge over 5th Street has been on hold.

Following an executive session of the City Commission to discuss the legal issues last month, the City and developers “have engaged in extensive settlement discussions and negotiations,” according to a memo from City Manager Jimmy Morales to Commissioners.

Next week, the Commission will consider an amendment to the development agreement that includes:

Settlement of the legal dispute once the Commission approves new legislation to codify the historic floor area calculation with a carve out for the 500 Alton Road tower that allows it to proceed with the additional floor area granted by the Board of Adjustment order, “provided there is no change in the height or floor plate/massing for the residential tower for the Project,” Morales wrote. As part of the settlement, the developers agree they “will not seek additional F.A.R, for any other project, based on the BOA Order. (Please note this covenant would not apply to principals for the Developer in their individual capacity),” according to the memo.

Morales wrote that while the City’s Planning Department calculated the additional FAR allowed under the zoning board ruling at 34,000 square feet, “The Developer, however, has only expressed an intent to increase the square footage of the Project by approximately 21,000 square feet.”

Under discussion, the amount of money the developers will reimburse the City for its costs in the legal dispute. The City wants an amount up to $250,000. The developers want that capped at $125,000.

Conveyance of the park site on the 600 block to the City no later than June 1, 2020, though the date could be extended by the City Manager “until environmental remediation/permitting matters are resolved.” The initial outside date for conveyance was February 12, 2023.

“The conveyance of the Park Site to the City and completion of the Park Project is of great importance to the City, as this is the primary consideration to the City for the benefits conferred on the Developer under the Development Agreement,” which includes the 519-foot tower height where 75 feet is the maximum. Morales added, “Moreover, the delivery of these public benefits at the earliest possible date is also of significant value to the City, as the addition of the public park and green space areas in a neighborhood that otherwise lacks a passive park would greatly benefit residents in the vicinity of the Project.”

Commencement of park construction within 30 days of issuance of a full building permit which the City anticipates to be June-July 2020.  

Park construction completed within the earlier of 36 months following issuance of a building permit or 48 months from date of execution of the amendment to the development agreement, putting the estimated outside completion date “sometime between June 2023 and February 2024,” Morales noted.

Originally, the park construction was to be phased over 8 years but, per the amendment, the entire park would be constructed at the same time. Under the previous schedule, phase 1 would have been completed by December 2020; phase 2, Dec 2024; and phase three, Feb 2027. Assuming a full building permit is issued by June 1 of this year, “[T]he entire Park Project could be completed as early as June 1, 2023,” Morales noted. “[T]he Administration continues to discuss with the Developer whether a designated portion of the Park Project could nevertheless be completed on a fast track by the end of 2020.”

Included in approval of the final proposed park design is the requirement for the developers to provide “resiliency and sustainability enhancements and higher quality fitness equipment both as recommended by the Administration,” Morales said. “The resiliency and sustainability components, including significant below ground water storage and retention features, have evolved substantially,” since the original agreement with a “bioswale around the perimeter of the Park, 5 drainage wells for water quality improvement for the neighborhood stormwater systems, a cistern, use of native species throughout the Park, and Developer’s agreement to relocate trees from the City parking lot at 17th Street and Convention Center Drive… [T]hese elements are expected to result in a model park from a local and regional standpoint,” Morales added. (The trees are being relocated from the site of the planned Convention Center hotel being developed by Martin and Jackie Soffer.)

There is also a covenant for the developers “to spend a minimum” of $8 million on the park construction.

Reduction in density for the project, from a maximum of 410 residential units to a maximum of 330 residential units in the residential tower.  

Approval of the final pedestrian bridge project budget in the amount of $12,462,888 with the developers to be responsible for all costs in excess of a maximum City contribution of $9,610,000. Voters approved $10 million in General Obligation Bond funding for the bridge in November 2018.  

Approval of the final design for the pedestrian bridge “which shall include the artistic design elements created by world-renowned artist Daniel Buren,” Morales wrote.  

A strengthening of the financial security to be provided to the City to “ensure a source of funding is available for City to complete the Park Project in the event Developer fails to do so,” Morales noted.

Also under discussion, the developers’ request that the restriction to not seek any increase to the height or floor plate of the tower and the proposed reduction to 330 residential units expire if a building permit for the project is not issued by the City within a specified timeframe. “The City Attorney’s Office has proposed alternative language, and will continue to discuss this item with the Developer between first and second reading,” according to Morales.

“The time that transpired between now and the execution of the Development Agreement, together with the present dispute with the Developer over FAR, provide an opportunity for global clarity and the elimination of areas for potential further conflict,” Morales wrote in recommending approval. “Relatedly, this study revealed a path to avoid further conflict with the Developer and ensure the speedy delivery of a world class park together with a world class pedestrian bridge.”

In addition to the first reading of the amendment to the development agreement, Commissioners will consider the clarifying FAR legislation at next Wednesday’s meeting. It passed last month on first reading but, with the addition of a carve out for the 500 Alton tower, it goes back to first reading on January 15. It is the intent of the administration that the legislation and development agreement amendment will "travel together" and are dependent on one another.

Though the legislation will carve out the 500 Alton Road tower, “All other land development applications submitted to the City are – and will continue to be – required to include the [stairwells, elevator shafts, and mechanical chutes and chases] in floor area calculations,” Morales emphasized. Since the BOA ruling, the developers of Ocean Terrace and 72 Park filed amended plans with the additional floor area that would have been allowed had the Commission not acted quickly to effectively reverse the decision.  

At last month’s Planning Board meeting in which the legislation was reviewed and recommended favorably, City Planning Director Tom Mooney said once this legislation is in place, there will be time for a more strategic discussion of floor area that might include FAR bonuses for meeting certain benchmarks such as addressing flooding from sea level rise.

First reading and a public hearing for the 500 Alton Road development agreement amendment is Wednesday, January 15 at approximately 2:10 pm, City Hall, Commission Chambers. Full details are here.

Corrected January 10 to reflect the FAR legislation goes back to first reading with the addition of the 500 Alton carve out. 

Rendering: Arquitectonica