A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER, PURSUANT TO INVITATION TO NEGOTIATE (ITN) NO. 2019-099-KB, FOR THE DEVELOPMENT OF THE COLLINS PARK ARTIST WORKFORCE HOUSING PROJECT, AND AUTHORIZING THE ADMINISTRATION TO NEGOTIATE A DEVELOPMENT AND GROUND LEASE WITH ATLANTIC PACIFIC COMMUNITIES, LLC, WITH THE FINAL NEGOTIATED AGREEMENT SUBJECT TO PRIOR APPROVAL BY THE PLANNING BOARD AND MAYOR AND CITY COMMISSION, IN ACCORDANCE WITH SECTION 82-37 OF THE CITY CODE AND SECTION 1.03(B)(4) OF THE CITY CHARTER.

On July 20, 2016, the City Commission directed the Administration to pursue a workforce and artist housing facility on the City-owned lots east of Liberty Avenue (behind the library). The project site located on the block, south of 23rd Street, west of Liberty Avenue, and north of the Miami-Dade County Public Library is part of a Unified Development Site that includes the current surface parking lot and the library. Immediately to the west is the City-owned building occupied by the Miami City Ballet as well as the planned new parking facility. Immediately east of the site is the Shep Davis affordable housing property, privately owned and operated.

The Planning Department estimates that the site has an available Floor Area Ratio (FAR) of approximately 90,000 square feet. The building can have a 75-foot maximum height as approved by City Commission Resolution 2016-29679 on December 14, 2016. The City’s Capital Improvements Office evaluated a concept which allowed for a building with seven (7) floors and approximately 9,200 sq. ft. per floor.

As part of its direction on July 20, 2016, the City Commission approved the option to include (1) floor of residential development for ArtCenter/South Florida (ACSF) and the building’s ground floor for artist studios to promote artists in the area; in addition to the option of two (2) residential floors of the new development for Miami City Ballet, Inc.  Any areas developed for ACSF or Miami City Ballet would be paid for and have condominiumized ownership by ACSF and Miami City Ballet, respectively. However, subsequent to the issuance of the ITN, ACSF notified the Administration that it had acquired a property within the City of Miami and that it is no longer interested in partnering with the City on this particular project.

The Administration is still interested in having Miami City Ballet be involved in the project. However, that involvement must meet the goals of both the City and the Miami City Ballet. In the event that the MCB elects not to move forward, the Administration is recommending that the additional two floors be used for a combination of artist and/or other workforce housing and the ground floor be developed as either commercial retail or ground floor artist studios.

These are the general parameters for the project site:

1.           The top floors will be dedicated to a combination of workforce housing units targeting employees of artistic institutions and area educators employed in Miami Beach.

2.           Target population – Artists and employees of artistic institutions as well as area educators earning up to 140% Area Median Income (AMI) (Resolution 2017-29758).

3.           Rent levels - Rents should not be more than 30% of the AMI of targeted incomes, which has been established by the City Commission as households earning up to 140% AMI.

4.           The City adopted Ordinance No. 2017-4149 in 2017 which reduced the minimum/average unit size to 400 square feet and reduced requirements that mandate a minimum number of parking spaces for new workforce and affordable housing developments.

5.           The project would be structured as a 50-year lease, with two (2) 20-year renewals, for a potential total of 90 years.

The City engaged The Concourse Group, its P3 consultant for housing projects, to determine the project's viability and feasibility for leveraging the City's property to entice a private developer to maximize the project. The Concourse Study for the Collins Park Workforce Housing Project report (the “Study”) attached as Appendix “F”. The Study does not supersede any of the parameters presented above.

ITN PROCESS:

On January 16, 2019, the Mayor and City Commission approved to issue the Invitation to Negotiate (ITN) No. 2019-099-KB, For the Development of the Collins Park Artist Workforce Housing Project.  On January 18, 2019, the ITN was issued.  A voluntary pre-proposal conference to provide information to proposers submitting a response was held on February 5, 2019.  Two addenda were issued.   The Procurement Department issued bid notices to 961 companies utilizing www.publicpurchase.com website. 115 prospective bidders accessed the advertised solicitation.  ITN responses were due and received on March 26, 2019. 

The City received proposals in response to the ITN from Atlantic Pacific Communities, LLC and Servitas, LLC.

On January 16, 2019, the City Commission approved the City Manager appointed Evaluation Committee. The Evaluation Committee convened on April 12, 2019, to consider proposals received.  The Committee was comprised of Maria Cerna, Deputy Director, Office of Capital Improvement Projects, City of Miami Beach, Maria Ruiz, Director, Housing and Community Services, City of Miami Beach, Deborah Tackett, Chief of Historic Preservation, Planning Department, City of Miami Beach and Allison Williams, Deputy Director, Finance Department, City of Miami Beach.  The Committee was provided an overview of the project, information relative to the City’s Cone of Silence Ordinance and the Government Sunshine Law.  The Committee was also provided with general information on the scope of services and a copy of each proposal.  The Committee was instructed to score and rank each proposal pursuant to the evaluation criteria established in the ITN. 

The evaluation process resulted in the ranking of proposers as indicated in Attachment A, in the following order: Atlantic Pacific Communities, LLC as the top ranked Proposer and Servitas, LLC as the second ranked Proposer. A brief summary of each firm based on the information contained in the proposals.

Atlantic Pacific Communities, LLC

Atlantic Pacific Communities is an affiliate of Atlantic Pacific Companies, a fourth-generation family owned real estate company with over 125 years of experience in purchasing, developing, leasing and managing residential and commercial properties.  Headquartered in Miami, the firm has over $2B in real estate owned; employs over 1400 people; and has over 44,100 units under management. The Atlantic Pacific team consists of leaders in affordable housing development, and in particular, complex projects involving true partnerships with local government.  The firm has developed over 11,100 affordable and mixed-income housing units.

Servitas, LLC

Servitas, LLC has delivered, or is currently developing, more than student housing 8000 units in types ranging from two story, wood frame walkups to nine-story, concrete and steel high-rises.  Servitas has developed approximately $1B in projects, including more than $600M in new on-campus housing in the last four years.  Having delivered the largest student housing public-private partnership in the nation, a 1540 unit development built in 24 months by three general contractors, Servitas has extensive experience managing large complicated teams as part of its projects, the firm has delivered over 2200 units using conventional private equity or institutional funding and has served more than 45 systems and institutions in 15 states.

I have reviewed the proposals from both firms and the results of the Evaluation Committee process. In doing so, I note that the Evaluation Committee found Atlantic Pacific’s proposal to be top-ranked, followed by Servitas as second-ranked. I also note a number of important differences between the two proposals.

While both firms appear to be well qualified, in reviewing the record of each firm with regard to development and operation of workforce housing, I find that Atlantic Pacific has a significantly stronger proven track record of successfully developing and managing workforce housing projects locally. In Miami-Dade County alone, Atlantic Pacific has extensive experience developing public-private housing projects totaling over 1,800 units. Servitas appears to primarily be focused on the college/university dormitory sector and does not appear to have developed any workforce housing projects locally or nationally. In addition to the significant differences in developing similar projects between the two firms, I find that the principals of Atlantic Pacific have established deep business and personal roots locally, which gives them a clear perspective of the needs of the community and its residents.

Further, while the Administration certainly welcomes the participation of the Miami City Ballet in this project and acknowledges the importance of this partnership, it is somewhat concerning to me that Miami City Ballet has chosen to be included exclusively as a team member to the proposal submitted by Servitas. The City was clear in the solicitation that any proposal would have to incorporate the needs of Miami City Ballet, should the parties come to an agreement. Frankly, it is my opinion that the position that Miami City Ballet has taken in partnering with Servitas in the submittal of a proposal is premature. Notwithstanding, from the Administration’s perspective, Miami City Ballet is not precluded in partnering with the City on the project regardless of the proposer selected.

Finally, I am also concerned with the language in Servitas’ proposal which claims that “Miami City Ballet will be the tax-exempt owner of the facility.” Again, while the Administration welcomes a partnership with the Miami City Ballet on this project, at no time has it considered transferring ownership of the project.

Therefore, after reviewing each proposal and the deliberations of the Evaluation Committee, I recommend that the Mayor and City Commission authorize the Administration to enter into negotiations for a Development and Ground Lease Agreement with Atlantic Pacific Communities, LLC. Following approval from the City Commission, the Administration and the City Attorney’s office would negotiate with Atlantic Pacific to arrive at the details of the project, including Miami City Ballet’s needs and the financial and management aspects of the agreement. The final agreement is subject to the approval of the Planning Board and the City Commission.