A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, TO CONSIDER APPROVAL, FOLLOWING FIRST READING/PUBLIC HEARING, OF A DEVELOPMENT AGREEMENT BY, BETWEEN AND AMONG THE CITY, MIAMI-DADE COUNTY, TCH 500 ALTON LLC, 740 ALTON RD, LLC, TCH 700 ALTON, LLC, AND TCH 663 ALTON, LLC AS AUTHORIZED UNDER SECTION 118-4 OF THE CITY CODE, AND SECTIONS 163.3220 - 163.3243, FLORIDA STATUTES, WHICH DEVELOPMENT AGREEMENT DELINEATES THE CONDITIONS FOR THE DEVELOPMENT OF THE PROPERTIES LOCATED AT 630 ALTON ROAD, 710 ALTON ROAD, 720 ALTON ROAD, 740 ALTON ROAD, FOLIO 02-4203-001-0095 (CANOPY PARK), AND FOLIO 02-4203-001-0090 (CURRENTLY A PARKING LOT SERVING THE FLORIDIAN CONDOMINIUM) TO ACCOMMODATE A NEW MIAMI-DADE COUNTY COMMUNITY HEALTH CENTER AND LIBRARY AT 663 ALTON ROAD AND OTHER TERMS FOR DEVELOPMENT CONTINGENT UPON SATISFACTION OF THE CONDITIONS SET FORTH IN THE DEVELOPMENT AGREEMENT AND ENACTMENT OF CERTAIN AMENDMENTS TO THE CITY'S COMPREHENSIVE PLAN AND LAND DEVELOPMENT REGULATIONS, AT ITS SOLE DISCRETION; AND FURTHER, SETTING THE SECOND AND FINAL READING OF THE DEVELOPMENT AGREEMENT FOR A TIME CERTAIN.

The Administration recommends approval upon First Reading, subject to Commission direction on the outstanding item highlighted below, of the negotiated Development Agreement in order to implement the voter approved Floor Area Ratio (FAR) increase in the Alton Road Gateway Overlay to accommodate a new Miami-Dade County Community Health Center at 663 Alton Road and other proposed and agreed upon properties for development (Public Library, Canopy Park, and a mixed-use private building). The most recent draft of the Development Agreement (DA) is attached for your consideration and the specific deal points are discussed in more detail in this memorandum.

I.              New Development Agreement

On March 9, 2022, the City Commission referred Item R9 T - Discussion Regarding Miami-Dade County Community Health Center At 710 Alton Road, proposed and sponsored by Vice Mayor Ricky Arriola, to the Land Use and Sustainability Committee (LUSC) and the Planning Board.

On April 8, 2022, the LUSC discussed the proposal and continued the item to the May 13, 2022 LUSC meeting. On May 13, 2022, the LUSC discussed the proposal and moved the item to the Planning Board and the City Commission and directed the developer to continue its community outreach efforts.

On May 25, 2022, the City Commission approved, at First Reading, Ordinances amending the Comprehensive Plan and Land Development Regulations (LDR) to expand the boundaries of the Alton Gateway Overlay (bounded by Alton Road on the east, West Avenue on the west, 5th Street on the south and 8th Street to the north), as well as FAR and height increases in the overlay. The LDR ordinance was approved, subject to voter approval of the proposed FAR increase, and Second Reading / Adoption of both ordinances was scheduled for September 14, 2022. Additionally, the City Commission adopted Resolution No. 2022-32173 approving a ballot question for a special election on August 23, 2022 to increase the maximum FAR from 2.0 to 2.6 on the entirety of the Alton Gateway Overlay.

On August 23, 2022, 62.02 percent of the City’s electorate voted in favor of the ballot question that sought to increase the maximum proposed FAR from 2.0 to 2.6, which made the Ordinance eligible for City Commission adoption. In keeping with the practice of having the Development Agreement (DA) and Land Development Regulations ultimately be passed concurrently, the Ordinance became a companion to the new DA to apply to the properties located at 600 Alton Road, 630 Alton Road, 710 Alton Road, 720 Alton Road, And 740 Alton Road (the “New DA”), as well as a proposed third amendment to the DA that currently governs the properties located at 500-630 Alton Road (the “Existing DA”).

On September 14, 2022, Second Reading / Adoption of the LDR and Comprehensive Plan Ordinances were opened and continued. As the replacement of the Community Health Center was the threshold issue and there was still much work to complete with Miami- Dade County (County) regarding the Community Health Center agreement between the Developer and the County, the Developer focused efforts on advancing that portion of the project. Second reading of the LDR and Comprehensive Plan ordinances are currently set for July 26, 2023 but will be opened and continued to coincide with the second reading of the DA.

At the February 1, 2023 City Commission Meeting, an ordinance was referred to the LUSC and Planning Board, amending the Alton Road Historic District Buffer Overlay and Pharmacy Regulations to accommodate the proposed relocation of the Miami Beach Community Health Center. On April 19, 2023, the LUSC recommended approval of the ordinance. On May 23, 2023, the Planning Board transmitted the ordinance to the City Commission with a favorable recommendation.

On June 28, 2023 the draft Development Agreement was presented to the City Commission highlighting the three specific deal points that were unresolved.  The Commission gave comments on the identified items as well as asking any additional questions regarding the proposed Development Agreement.  Based upon the feedback received from the Commission, the height of the private development was accepted by the Development Team at 150 feet.  The Administration is performing a preliminary traffic analysis and scheduled several additional public meetings to ensure the community is aware of the details of the proposed agreement.  There remains only one unresolved deal point, the inclusion of 740 Alton Road in the development.

On July 26, 2023 the item was heard and following a substantial public hearing was deferred to the September 13, 2023 Commission meeting.

The September 13, 2023 Commission item was deferred at the request of the Development Team in order to revise the concept plan to fit the private development into a smaller footprint that only includes the 710/720 Alton Road existing Health Center site as well as the southern half of the 740 Alton Road site.

II.            Existing Development Agreement

On December 12, 2018, the Mayor and City Commission adopted Resolution No. 2018-30647, approving a Development Agreement between the City and the Developer for the development, design and construction of a mixed use residential and commercial project on the 500-700 Blocks of Alton Road, and providing for the Developer to develop, design and construct a 3.0 acre public park, which would be conveyed to the City and operated as a municipal park for the benefit of the general public.

The unified development site established pursuant to the Existing DA consists of 500 Alton Road, the former 6 Street right of way, 630 Alton Road, Folio 02-4203-001-0095 (Canopy Park), and Folio 02-4203-001-0090 (currently a parking lot serving the Floridian Condominium).

In an effort to improve the overall quality of life in the City of Miami Beach, the City Administration has made strides to negotiate the best terms to ensure that the City is provided with a state-of-the-art Community Health Center, public library, additional world-class greenspace, and a mixed-use building for residents and visitors to utilize for years to come in the vicinity of 700 Alton Road. The City Administration has included provisions in the proposed DA that will ensure the completion of the Community Health Center before any development may proceed on the unified site within the Gateway Overlay.  In addition, the latest version of the private development has significantly reduced the footprint of the site to include only 710, 720 and the southern half of 740 Alton Road.

PROPOSED DEVELOPMENT AGREEMENT

Sections 163.3220 – 163.3243, Florida Statutes, and Section 118-4 of the City’s Code require two public hearings for a Development Agreement. The Administration and Developer have negotiated the Development Agreement, a copy of which is attached hereto as Exhibit “A” to the Commission Memorandum accompanying this Resolution.

The Development Agreement provides, among other provisions, the following terms and conditions:

• Developer shall convey to the County that portion of the Development Site consisting of 663 Alton Road, in fee simple, by special warranty deed (the “Health Center”), on which the Developer shall design, permit and construct, at its sole cost and expense, a Community Health Center as required by a separate agreement between the Developer and the County. The Health Center, once completed, will be owned, maintained, and programmed by the County for public purposes; and

• Developer shall develop the Project in accordance with the City’s Land Development Regulations and the limitations set forth in the Development Agreement with respect to the Project, including, without limitation, the following conditions:

o   Any private building greater than 60 feet in height built on the Development Site would be located northeast of the existing Park site, and with a height not-to-exceed 150 feet to the top of the roof; and

o   The tower will contain up to 158 units (including multi-family residential units, single-family detached units, townhomes, condominiums, and apartments), this is an increase from the prior number of 120 units but more than offset by the reduction of 39 units at the 500 Alton project from 330 to 291.

o   A concept plan for the proposed private building is attached as Exhibit “B.”  The new concept plan shows the significantly decreased footprint of the building only fronting Alton Road and leaving the existing Floridian parking lot parcel in its current condition.

• In order to permit the Project to proceed as a unified development site, the City shall convey to the Developer the additional FAR related to the Park site by executing a new unity of title as may be required at the time of permit application for the private building

• The Park’s boundaries shall be increased resulting in a net gain of 6,838 sq feet of land The Developer shall design and construct, at the Developer’s cost and expense, the improvements on this expanded Park land.

• The boundary modification resulting in the gain of Park land shall be accomplished by a fee simple deeding of an additional 6,838 sq feet by the Developer to the City from the current commercial land located on the Southeast boundary of the Park to provide for a better Park experience and better interface between the Park and commercial development on that site.

The City will not issue a building permit for the Project until the Developer conveys the new Health Center Site to the County, and all documents required by the Development Agreement have been delivered to the City.

Upon approval of the terms of the proposed agreement between the City of Miami Beach, Miami-Dade County, and the collective property owners of the land or structures and for the proposed Community Health Center and Library, mixed-use private building, as well as the Canopy Park Project (TCH 500 Alton LLC, 740 Alton RD, LLC, TCH 700 Alton, and THC 663 Alton, LLC), the developers can proceed with applying for the necessary permits and other due diligence to begin construction on the aforementioned sites in accordance with the terms of the agreement.

The New DA contemplates the inclusion of additional properties within the unified development site and, accordingly, requires the modification of the boundaries of the unified development site established in the Existing DA. In addition, a portion of Folio 02-4203- 001-0095 (Canopy Park) and all of Folio No. 02-4203-001-0090 (currently a parking lot serving the Floridian Condominium) will be removed from the scope of the Existing DA and be covered by the New DA instead. The contemplated Third Amendment to the Existing DA will address these matters, as well as modifications to the assignment of development rights for the impacted properties.

UPDATE ON PENDING ITEMS

1.    Height of Private Development. On May 13, 2022, the Land Use Committee discussed the height of the private development. The City Administration recommendation was not to exceed 150 feet and the position of the Developer at the time was that they needed a minimum of 180 feet but would like 200 feet. At First Reading of the LDR ordinance on May 25, 2022, a maximum building height of 150 was approved.

The developer previously sought a maximum building height of 180 feet.  Based upon the recommendations of the Commission on June 28, 2023 the building should remain with a maximum height of 150 feet.

The developer has indicated that the height of the tower will remain at 150 feet.

2.    The east side ground level and inclusion of 740 Alton in the unified development site. As previously proposed, the design of the proposed new private building was inadequate on the east side, fronting Alton road. Specifically, the proposal to front a major urban corridor with access ramps, restrooms and storage is contrary to good urban design.

In 2019, the Developer obtained a building permit for a medical cannabis treatment center at the 740 Alton Road property, which is currently active, and the current conditions of the site, including the existing building, are exceedingly poor and remain less than optimal for a major urban corridor. The Developer also has a tenant lease, with 16 years remaining, at the 740 Alton Road site, and has indicated that the existing lease prevents changing the current tenant at the 740 Alton Road site. The Developer is proposing to transfer 30,000 square feet of available floor area (FAR) from the 740 Alton Road property to the proposed private development program on the abutting lots that currently consist of the surface parking for the Floridian condominium and the existing Community Health Center. This would leaves only 19,000 square feet for future development of the 740 Alton Road site.

The Administration believes that the best option would be for the existing building on the 740 Alton Road property to be demolished, and the east side of the proposed building to be completely redesigned, with the proposed new building expanded across the entirety of the 740 Alton Road site. The Developer has indicated that they would be willing to expand the new building over the southern portion of the 740 Alton Road site (surface parking area), leaving the existing building in place. The developer has also indicated that they would continue to agree to leave 19,000 square feet of available floor area on the 740 Alton Road site, for future use.

The Administration believes the best option would be for the developer to construct the proposed new building over the entire 740 Alton Road site, including the existing building, as there is ample room on the north side of the existing building to accommodate the vertical support columns. This would ensure that at the conclusion of the lease at the 740 Alton Road building, a new storefront system could be constructed within the first level of the entire property. The developers proposal to expand the new building over the parking area is an improvement over the previous proposal. Combined with the retention of 19,000 square feet of floor area this would, potentially, allow the redevelopment of the ground floor of the 740 Alton Road site upon the termination or conclusion of the lease.

3.    Proposed surface parking for satellite retail buildings. The Administration is supportive of the proposal to modify the previously approved 2-story retail building on the south side of the park (Alton Road and the former 6th Street) and create two separate one-story structures. The proposal allows for better engagement with the park, as well as the elimination of a vehicular curb cut on Alton Road.

However, the Developer is also proposing a surface parking lot, which bisects the park from the retail buildings on the west side. The overall development site already contains 2 large parking structures, and a separate, underutilized garage is just across the street. 

The Administration previously recommended that the surface parking lot proposed adjacent to the revised one-story retail buildings on the south side of the park either be removed or redesigned to include a limited number of spaces parallel to the driveway, to accommodate drop-off / pick-up, loading, as well as parking during non-peak times. The City Commission was not opposed to the configuration of the surface parking lot for the satellite retail buildings, as proposed by the developer.

No financial impacts.

After a series of extensive discussions and negotiation meetings with the development team of the TCH 700 Alton and the other proposed properties, the terms set forth in the proposed Development Agreement that will pave the way for the construction of a new Community Health Center and a Public Library that will eventually serve the greater good. Most of the previously identified key issues have been resolved and the City has negotiated in good faith to obtain the best outcome for all parties including a significantly reduced footprint for the private development. The long-term vision of this vicinity of Alton Road is paramount to the overall objective, as well as providing residents and visitors with access to facilities and amenities to further enhance their quality of life. Lastly, the overall agreement will accommodate a new Community Health Center and Public Library at 663 Alton Road.

In view of the foregoing, the Administration recommends the following:

1.    Approval at First Reading of the negotiated Development Agreement, subject to the following modifications:

a.    The maximum height of the proposed new residential building shall not exceed 150 feet.

b.    The developer shall reduce the footprint of the proposed new building encompassing only the 710/720 lots fronting Alton Road and extend it northward, over the top of the existing building at 740 Alton Road, to allow for a new storefront system at the conclusion of the lease of the 740 Alton Road building. Alternatively, the proposed new building may extend over the surface parking area on the southern portion of the 740 Alton Road property.

c.     A minimum of 19,000 square feet of floor area shall remain at the 740 Alton Road property for the redevelopment of the ground floor of the site upon the termination or conclusion of the lease. Additionally, the first level of the east elevation of the proposed residential tower shall be redesigned to fully activate and engage the sidewalk along Alton Road, consistent with best planning practices.

2.    Set a Second Reading / Public Hearing of October 18, 2023 for adoption of the Development Agreement.