TriStar Capital is not moving forward with a planned retail development on a courtyard belonging to the historic Miami Beach Community Church at the corner of Lincoln Road and Drexel Avenue. In 2014, TriStar entered into an 85-year ground lease with the church to build a two-story retail building. Now, following a legal settlement, the lease has been terminated and the property returned back to the church which is looking at options for moving forward with the development.
From the beginning, it was rough sailing for the project. The deal and subsequent design approval by the Historic Preservation Board faced challenges that were finally settled by the City Commission and a Circuit Court judge. Following two lease amendments to adjust terms of the deal, the church filed suit in June 2020 against South Beach TriStar LLC “to recover possession and evict a non-residential tenant from commercial real property…”
The suit alleged TriStar was in default of the lease since September 2019, and, as of May 2020, owed $245,106 in back rent. The church sought possession of the premises, attorneys’ fees and rent. TriStar and Miami Beach Community Church settled out of court and, while details were not released, according to a memo to Commissioners from Interim City Manager Raul Aguila, “On August 14, 2020, the Ground Lease was terminated. No private retail development was ever constructed at 1620 Drexel Avenue, and the entirety of the Property is once again owned and occupied by Miami Beach Community Church.”
According to the lawsuit, TriStar prepaid a nonrefundable base rent of $3.5 million following Historic Preservation Board approval of the retail building. The original lease included with the court filing called for an annual base rent starting at $1 million per year for five years (after the 42-month prepaid rent period) and escalating every five years up to $3.5 million in years 50 through 85 – more than $200M over the lease term.
In an amendment signed in January 2018, TriStar was to pay a $75,000 nonrefundable extension fee to move the start date for rent payments from November 2017 to February 1, 2018. Then in September 2018, the parties signed a second amendment which deleted the base rent section and replaced it with one that reduced total rent paid over the 85-year lease by nearly two-thirds, to just over $81M over the term, and assigned 40% of net profits from the retail development to the church.
The agreement stated that the development and construction of the building “shall commence no later than December 31, 2018.” In addition to being in default on the rent, the church’s court filing stated, the construction commencement date “has long passed.”
The court case was dismissed in August last year with a notice from the judge that the “action has been amicably settled” with each party bearing its own attorneys’ fees and costs.
The arrangement wasn’t all for naught. The 100-year-old church – the oldest in Miami Beach – underwent a complete restoration with the prepaid rent, reopening last Christmas, though it was forced to close during the pandemic and only now is planning to reopen for services by reservation only.
Church leaders, however, were counting on the rent to ensure the church's financial stability long into the future. Now, Board member Eric Donahoe said they are looking at the options for moving forward with the building as planned.
The church owns the plans, he said, for the nearly 15,000 sq. ft. building which includes a landscaped rooftop garden designed by Touzet Studio.
“It’s a beautiful building,” Donahoe said. “We do hope that all goes as planned” and the development will move forward in some manner so that the church “can realize revenues off of it… securing the long-term financial stability of Miami Beach Community Church.”
The Miami Beach Community Church, founded by Carl Fisher and designed by noted architect Walter De Garmo, opened in 1921.
The church property sits within the Lincoln Road Business Improvement District (BID), a special taxing district established to improve the Lincoln Road retail business district through marketing and promotion and other efforts. While the church property is exempt, the area that was to be leased by TriStar has been included in the BID since September 2015. At their meeting on Wednesday, City Commissioners will be asked to remove the courtyard from the BID’s assessment roll and waive an outstanding $42,000 in assessments.
TriStar did not respond to a request for comment.
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TriStar Not Moving Forward with Development at Miami Beach Community Church:
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