| | | | | | | | | TO: | Finance and Economic Resiliency Committee Members
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| FROM:
| Alina T. Hudak, City Manager |
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| | DATE: | September 24, 2021
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| | SUBJECT: | DISCUSS POSSIBLE BUSINESS RETENTION INCENTIVES FOR GROOT HOSPITALITY |
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| | | | | | | | HISTORY:
| On September 17, 2021, the Mayor and City Commission approved a referral item to the Finance and Economic Resiliency Committee (“FERC”) to discuss possible business retention incentives for Groot Hospitality as sponsored by Vice-Mayor Ricky Arriola. The desired incentive includes parking spaces in order that Groot Hospitality (“Groot”) may continue to locate and potentially expand its corporate headquarters in South Beach, at 1680 Meridian Avenue.
Groot is an established hospitality company with business operations throughout the city. Groot currently employs hundreds of employees at its numerous Miami Beach restaurants and nightlife venues including LIV at the Fontainebleau Hotel, Papi Steak, Story, Strawberry Moon at the Goodtime Hotel and Sushi Fly Chicken (SFC), Toothfairy and Winker’s at the old Firestone Tire and service center. Groot’s multiple hospitality ventures generate significant tax revenue, employ residents, and enhance our tourism and hospitality-centered economy.
Groot seeks 30 parking spaces via monthly permits for access and use by its employees in the Lincoln Road area. Groot’s landlord, Market Street Real Estate Partners LLC (MSREP), has communicated the company’s plans to hire approximately 40 fulltime employees and 10-15 vendors. To accommodate these employees, Groot also intends to expand its office footprint from 2,800 sf to 7,600 sf. According to a recent discussion among members of the Lincoln Road Business Improvement District, without parking, Groot may consider relocating to Wynwood or another location away from Miami Beach. |
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| | | | | | | | ANALYSIS:
| The Parking Department manages multiple surface parking lots in the Lincoln Road area nearby Groot’s headquarters including P25, P26, and P27, each with the maximum amount of allowed parking permits issued. If additional permits were issued beyond the current amount, at peak times, permit holders would have challenges with accessing an available parking space as spaces are not reserved but rather utilized on a first-come, first-served basis. The City also manages three area parking garages – the City Hall parking garage (G7), the Pennsylvania Avenue parking garage (G9), and the 17th Street parking garage (G5), each at capacity with an extensive waiting list.
The Administration is sensitive to Groot’s contribution as an employer and purveyor of various first-rate dining and entertainment offerings in the City. While Groot has not formally requested monthly parking permits or joined the waiting list through the Parking Department, the Administration acknowledges Groot’s unique position as a local mainstay in the hospitality industry and as an iconic pop culture staple.
After months of discussion by the FERC on methods to diversify the city’s economic base, on March 17, 2021, the Mayor and City Commission adopted resolutions identifying technology and financial services as targeted industries for business attraction, retention and expansion efforts including inducements and incentives for locating or expanding a local headquarters or regional office for other industries, which Groot may qualify for. The Mayor and City Commission authorized baseline criteria and performance standards for the Economic Development Department to market and offer services and financial incentives for the targeted industries. It is important to note, that companies in the established targeted industries are not currently offered a parking incentive, however, they often seek parking accommodations when considering relocation to or expansion in Miami Beach.
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| | | | | | | | CONCLUSION:
| Although services and financial incentives are an important component of the city’s targeted industry attraction and retention strategy, incentives for non-targeted industry retention is an important policy decision as existing businesses are valuable assets to our economy. The Administration aims to continue to support and nurture the hospitality industry, a pillar of the city’s economy.
The Administration desires to assist Groot in a manner that is equitable and respectful of the individuals and companies already on the waiting list for monthly parking permits. Due to the waiting list and current parking demand in the desired area, it is not feasible for the City to address this ad hoc parking request at this time. If a parking incentive were to be offered in response to this request, without a holistic approach to prioritizing limited parking spaces, we anticipate additional parking consideration and incentive requests may come forward in the future from other businesses and applicants currently on the waiting list. As an alternative, there are private parking operators in the vicinity that may be able to provide parking accommodations.
The Administration seeks policy guidance as to parking incentives for Groot Hospitality.
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| | | | | | | | Applicable Area
| | South Beach |
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| | | | | | | | | Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? | | Does this item utilize G.O. Bond Funds? | | | Yes | | No | |
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