Miami Beach voters to decide on controversial Peebles, Sternlicht office projects near Lincoln Road

A pair of controversial office development proposals in Miami Beach are headed to a November referendum.

City commissioners gave final approval for the two proposals — one by Don Peebles,
and the other by Integra Investments that includes Barry Sternlicht as a co-developer — to proceed to the Nov. 8 ballot.

The 5-1 vote also approved ground leases for the city-owned lots totaling 3.4 acres near Lincoln Road and development agreements with the city.

Commissioner Kristen Rosen Gonzalez,
who has long argued that the leases are bad financial deals for the city, cast the sole dissenting vote.

The referendum could prove to be a landmark decision for the city,
as residents are divided on the image Miami Beach aims to evoke for the future.

Project proponents, including Mayor Dan Gelber and commissioner Ricky Arriola,
want the city to shake off its anything-goes party image and transform into an office hub that would score some of the influx of tech and financial firms to South Florida.

Opponents have pushed back, citing increased traffic,
and raising questions on the sufficiency of the rent payments to the city, especially factoring in inflation.

In one of the projects, Peebles is partnering with former Miami Beach mayor Philip Levine and Scott Robins to propose 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 project 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 voters to decide on controversial Peebles, Sternlicht office projects near Lincoln Road

Miami-based Integra joined forces with Sternlicht’s Starwood and Comras’ The Comras Company, both based in Miami Beach,
on plans for The Gardens at Lincoln Lane with 130,000 square feet of Class A offices, 25,000 square feet of ground-floor retail,
and more than 425 parking spaces, 192 of which will be for the public, according to a release from the developers.

The project would include one six-story building on a 0.9-acre lot at 1680 Lenox Avenue,
and an eight-story building on the nearby 1.1-acre lot at 1080 Lincoln Lane North, city records show.
It would include a “pocket park” with a water feature and 1,000 square feet of public space for a nonprofit or an educational organization.

In an emailed statement, the developers cited their ties to Miami Beach – where Comras, Sternlicht and Integra’s Victor Ballestas live,
as a way to show they have a stake in the city’s future.

Rosen Gonzalez wasn’t convinced about the projects, saying the $4.5 million in combined initial lump sum rental payments from the two developments is not enough and “embarrassing.”

“Let me put this in perspective, because you think this is such a great deal. [Michael] Shvo is vacating a 5,500-square-foot alley, and he is paying us $3.5 million, and he is not building up on it,” she said, referring to Shvo’s plans for an office-retail project along Alton Road. “We are giving up more than 3 acres and we are getting a $4.5 million down payment.”

Over the term of the 99-year leases, the projects are expected to yield from $1.1 billion to $1.5 billion to the city,
although this could go up to $1.3 billion to $1.7 billion if parking revenue the city would collect is included,
according to a city staff presentation.
In contrast, if kept as parking lots, they would generate $200 million to the city over the 99 years, city staff said.

The projects would replace the parking lots with garages with public spaces for which the city will collect parking fees.
Arriola turned to these numbers when countering Rosen Gonzalez.
“Or we can continue to collect $1 an hour to park cars on these service lots,” he said.

Commissioner David Richardson took issue with Rosen Gonzalez, calling the $4.5 million initial lump sum rent a “down payment.”

He said a down payment is when property is sold, but in this case, the city is the landlord. The phrase is “catchy,” he said.
“And if you want to mislead the public, that’s the way you do it.”

Commissioner Steven Meiner questioned the city’s plan for providing public parking during construction.

Overall, spaces will not be lost, as one of the lots would be reconfigured to absorb lost spaces while another of the lots is being built out.
City staff members suggested the city also provide a valet service during construction at slightly higher rates than drivers pay now,
so as not to take away from the valet business of nearby restaurants.

“I just don’t understand why we are going to charge more for residents during construction,” Meiner said.
“It sounds like a small issue, but it’s not.”

Office development has already started in Miami Beach.
Sternlicht’s Starwood Capital Group completed its six-story headquarters at 2340 Collins Avenue last year.

Marc Andreessen and Ben Horowitz’s Silicon Valley venture capital firm a16z announced this week it leased 8,000 square feet at the building.

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