Miami Beach gives preliminary OK to controversial Peebles, Sternlicht office projects near Lincoln Road

Developers’ controversial proposals to build offices on city-owned parking lots near Lincoln Road in Miami Beach gained ground on Wednesday.

In a 5-to-2 vote, the Miami Beach City Commission gave preliminary approval to two development groups

— one that includes Don Peebles and former mayor Philip Levine, and another that includes Barry Sternlicht and Michael Comras —

to construct offices on properties roughly between 17th Street and Lincoln Road, and Meridian Avenue and Alton Road.

The ultimate decision will be made by Miami Beach voters in a referendum expected for Nov. 8.

The proposed projects have divided the commission over South Beach’s future development path.

Mayor Dan Gelber and commissioner Ricky Arriola have supported the redevelopment.

Arguing that Class A offices will help shed the area’s anything-goes party image and transform it into a true live-work-place city.

Vice Mayor Kristen Rosen Gonzalez, one of the dissenting votes, countered that the plans hardly are the best financial deal for the city.

And raised concerns over increased traffic that would be generated by these and other nearby projects in the pipeline.

The city issued a request for proposals in 2021 and narrowed down the vying groups to two in February.

Miami Beach gives preliminary OK to controversial Peebles, Sternlicht office projects near Lincoln Road

In one of the proposals, a group consisting of Peebles, as well as Scott Robins and Levine, want to build a six-story, 159,000-square-foot building on 1.4 acres at 1664 Meridian Avenue, according to a city staff memorandum sent to commissioners.

The real estate would include 46 market-rate apartments on two stories; 80,000 square feet of offices on three stories; 9,500 square feet of ground-floor retail; and parking.

Miami Beach gives preliminary OK to controversial Peebles, Sternlicht office projects near Lincoln Road

The other proposal, by Sternlicht’s Starwood Capital Group and Comras’ The Comras Company, both based in Miami Beach.

As well as Miami-based Integra Investments, is for a 1.1-acre parking lot at 1080 Lincoln Lane North and a nearby 0.9-acre lot at 1680 Lenox Avenue.

According to the staff memo.

They envision a total of 129,280 square feet of offices and 24,884 square feet of retail.

With a six-story building on Lenox Avenue and an eight-story building on Lincoln Lane.

Parking garages would be incorporated in the buildings.

The city would lease the land to each development team for 99 years, or a 51-year term with two 24-year extension options.

The Starwood team would pay the city an initial $2.5 million lump sum; $650,000 in rent in the second year.

$725,000 in rent in years three and four; $750,000 in years five and six.

and a $1 million lump payment once construction is completed.

From there the rent would increase at various intervals of the lease.

The Peebles team would pay the city an initial $2 million lump sum.

$150,000 once construction starts; $680,000 once the project is completed; and follow-up increases.

Each development team also would pay the city a percentage of its revenue from the real estate, such as tenant lease payments.

Overall, the city will get $354 million minimum base rent, and potentially another $550 million from both projects over the 99 years, according to city staff.

Rosen Gonzalez called the payments “ridiculous” and said the ensuing traffic would create a “circus-like atmosphere.” A better financial term for the city, she said, would be if the developers vowed to share profits with the city if they sell the completed projects.

“Right now we are not getting anything, and I am embarrassed by the terms of this contract,” she said.

Commissioner Mark Samuelian cast the other dissenting vote, saying he supports economic diversification, but prefers the city pursue one project at a time.

Gelber countered that much of Miami Beach’s marquee projects, including the Holocaust Memorial and the New World Center, were built on city-owned parking lots.

Plus, this is ultimately about the future the city wants to chart for itself, he said.

Arriola, who spearheaded the redevelopment initiative, said the city’s reliance on tourism is not sustainable because it is susceptible to events such as the Covid-19 pandemic, meaning Miami Beach has to find other drivers.

“Class A office space will hopefully attract some global companies to move here, particularly in tech and finance that would provide an ecosystem,” he said.

Wednesday’s vote approved changes to the land use and comprehensive plan.

And also directed city staff to hammer out agreements with the developers.

The items are scheduled to come back for a public hearing and commission vote on June 22.

With the development agreements also slated to go before a city planning board.

South Beach has shown some signs of becoming a budding office market. Sternlicht relocated Starwood’s headquarters from Greenwich, Connecticut, to Miami Beach at 2340 Collins Avenue.

The Gebbia family also is moving the headquarters of its Siebert Financial and Rise Financial companies to 653 Collins Avenue.

The family paid $6.8 million for the 12,000-square-foot building.

Which used to be retail space and is being retrofitted to offices.

For More News!

Related Posts