A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS FEBRUARY 19, 2021 MEETING AND AUTHORIZING THE CITY MANAGER TO PREPARE A REQUEST FOR PROPOSALS (RFP) FOR MIXED-USE DEVELOPMENTS INCORPORATING CLASS A OFFICE SPACE NEAR LINCOLN LANE NORTH, INCLUDING THE 17TH STREET MUNICIPAL GARAGE, AS DIRECTED BY THE CITY COMMISSION AT ITS FEBRUARY 24, 2021 MEETING.

Approve the preparation of a Request for Proposals (RFP) in accordance with direction provided by the City Commission and submit such RFP to the City Commission for approval in April 2021.

On October 9, 2021, at the direction of the City Commission, the Administration released a Request for Letters of Interest (RFLI) seeking expressions of interest from developers interested in developing Class A office space on any or all of the three parking lots adjacent to Lincoln Road, known as P25, P26, and P27.

Following issuance of the RFLI, the due date for the submission of letters of interest was extended from November 9, 2020, to February 11, 2021. This extension enabled the RFLI process to gain momentum while the Administration invested $8,000 in a strategic marketing campaign focused on the out-of-state business and development market and which included targeted digital advertisement.

Upon closing of the RFLI on February 11, 2021, the City had received statements of interest from eighteen (18) entities, which are identified in the RFLI Receipt Log Sheet attached to this Memorandum as Exhibit A. The list of interested parties includes accomplished real estate developers and investors, known both locally in the region and nationally.

On February 19, 2021, the Finance and Economic Resiliency Committee (FERC), as part of a recurring discussion item to formulate policies aimed at attracting out-of-state tenants in targeted industries, recommended the Administration seek City Commission authorization to prepare an RFP .

On February 24, 2021, the City Commission discussed the RFLI and provided further direction that the 17^th Street parking garage be included in the forthcoming solicitation for Class A office space.

With South Florida continuing to benefit from high wage talent relocating to the region, there is a shared belief and vision that decisionmakers in the investment industry, financial services, technology, and other sectors will strongly consider opening headquarters or satellite offices to Miami Beach. The city benefits from several competitive strengths, including a prestigious cultural fabric; attractive beachfront real estate; access to international capital; a dedicated focus from City leadership to enhance the business climate; a diverse and educated workforce; and a robust resiliency strategy. The ample amount of City-owned land and the potential to bundle government incentives for business attraction both provide great opportunity to capitalize on the migration of investment funds and technology firms from higher-tax environments. CBRE’s Q3 2020 Miami Marketview Report forecasted a swift real estate market recovery and signs of economic resurgence, with a reported total Class A inventory in Miami Beach of 937,526 SF and 10.4% vacancy. 

The definition of “Class “A” office space is subjective and varies based on market/submarket and the changing landscape of tenant desirability. In today’s market, tenants desire highly amenitized leased spaces, not merely the traditional luxury office space on upper floors with water views and high-end finishes. CBRE provided the following description for Class A office space:

In general, a class A building is an extremely desirable investment-grade property with the highest quality construction and workmanship, materials and systems, significant architectural features, the highest quality/expensive finish and trim, abundant amenities, first-rate maintenance and management; usually occupied by prestigious tenants with above average rental rates and in an excellent location with exceptional accessibility. Such spaces are most eagerly sought by international and national investors willing to pay a premium for quality and are often designed by architects whose names are immediately recognizable. A building described as Class A is often considered to be a landmark, either historical, architectural, or both. It may have been built within the last 5-10 years, but if it is older, it has been renovated to maintain its status and provide many amenities. Buildings of this stature can be one-of-a-kind with unique shape and floor plans, notable architectural design, excellent and possibly outstanding location, and a definite market presence.

SOLICITATION

The RFP solicitation will aim to maximize use of underdeveloped City-owned assets and encourage private capital investment, offering developers a tremendous opportunity to access public land steps away from Lincoln Road and the Convention Center Campus. Proposals must incorporate Class A office space and could provide for replacement of any existing public parking. Any public-private partnership (P3) project(s) on each of the parcels would observe the surrounding CD-3 (Commercial, high intensity) zoning. Pursuant to the City’s Charter, any long-term ground lease of the parcels would require approval at referendum by a majority of the electorate. 

Surface Parking Lot P25

Lot P25 is comprised of five tax folios measuring a combined 37,116 sf (0.85 acres) which provide a total of 86 parking spaces available to the public. The land is zoned GU, Government Use, which is limited by the adjacent zoning, which in this case is CD-3, Commercial High Intensity, the most intensive of the commercial districts. Within the CD-3 zoning district, maximum height is 80 feet and properties equal to or less than 45,000 sf have a maximum FAR of 2.25. Therefore, redevelopment on the entire site could potentially reach a maximum built floor area of 83,511.

Surface Parking Lot P26

Lot P26 is comprised of six tax folios measuring a combined 48,863 sf (1.12 acres) which offer a total of 106 public parking spaces. The land is zoned GU, Government Use and is limited by the adjacent zoning, which in this case is also CD-3, Commercial High Intensity. Within the CD-3 zoning district, maximum height is 80 feet and properties larger than 45,000 sf have a maximum FAR of 2.75. Therefore, redevelopment on the entire site could reach a maximum floor area of 134,373 sf.

Surface Parking Lot P27

Lot P27 is comprised of seven tax folios measuring a combined 60,202 sf (1.38 acres) which offer a total of 151 parking spaces available to the public. The land is zoned GU, Government Use and is limited by the adjacent zoning, which in this case is also CD-3, Commercial High Intensity. Within the CD-3 zoning district, maximum height is 80 feet and properties larger than 45,000 sf have a maximum FAR of 2.75. Therefore, redevelopment on the entire site could reach a maximum floor area of 165,555 sf.

17^th Street Garage – G5

In addition to the three surface lots, the Administration, at the direction of the City Commission, will also include a fourth City-owned parcel adjacent to Lincoln Road, the 17th Street Garage. In addition to 1,460 public parking spaces, the 162,000 SF garage includes storage and administrative spaces used by a few City departments.

Given the number of subject parcels, varying development options, and potential for transformative growth, the Administration may deem necessary to seek the assistance of a real estate consultant to assist with preparation of the RFP solicitation. In addition, prior to issuing a solicitation, the Administration could conduct industry meetings in order to discuss questions or concerns that would be subject to the cone of silence upon issuance of an RFP. The objective of industry meetings would be to obtain information to ensure preparation of an RFP that best promotes the City’s interests while maximizing benefits the City may receive from any development.

The Administration therefore recommends that the Mayor and City Commission accept the recommendation of the Finance and Economic Resiliency Committee as to development of an RFP, and authorize the Administration to prepare an RFP, and submit such RFP to the City Commission for approval in April 2021.