On September 17, 2021, the Mayor and City Commission approved a referral item to the Finance and Economic Resiliency Committee (“FERC” or “Committee”) to discuss possible business retention incentives for Groot Hospitality, LLC (“Groot”), an established Miami Beach based hospitality company.

During the September 24, 2021 FERC meeting, the Committee discussed the potential to offer a parking incentive to encourage Groot to maintain its headquarters in Miami Beach. The Parking Department shared information on existing challenges and opportunities to identify solutions and maximize usage, including reassessing and evaluating existing parking access card waiting lists for accuracy. Additionally, the Parking Department shared a few proactive strategies to improve operational efficiency including offsetting demand, prioritizing access card issuance, balancing parking demand, increasing access card percentages, and working with private parking operators.

Notwithstanding the application of these strategies, it was noted that free parking cannot be offered. The Parking Department operates as an enterprise fund and its revenue bonds are impacted by parking revenue. The Committee also discussed exploring a long-term approach to leverage parking, as a city asset, by evaluating parking demand data, utilizing technology, and engaging with stakeholders and the business community to ascertain need. Specific to Groot, the Committee recommended that the Administration identify and make a parking solution available to Groot, and return to the FERC to discuss a broader parking incentive policy recommendation to promote equity and transparency.

During the October 22, 2021 FERC meeting, the Administration provided information on parking demand, usage and capacity to increase issuance of access cards. It was noted that the greatest demand for parking is largely during daytime office hours allowing for evening availability to support nighttime uses and activities. The Administration also presented a conceptual parking subsidy program in-lieu of providing guaranteed city-owned parking accommodations for restaurant and hospitality firms and venues. The Administration indicated that the City Commission could establish a program to offer city parking (if available) and offset costs with an allocation from the General Fund, or if city parking is not available, provide funding for an alternative to city-owned parking, such as privately-operated parking facilities.

During the April 29, 2022 FERC discussion of the potential fiscal impact of a parking incentive for Groot, the Committee affirmed its desire to assist Groot and recommended that a parking incentive for Groot be discussed at the upcoming June 22, 2022 City Commission meeting. The Committee also requested that the Administration develop and propose a general parking incentive policy and return to FERC to discuss details of the proposal.  

Although the City Commission has directed the Administration to prioritize the recruitment and retention of technology and financial services industry businesses, there is also a desire to elevate and firmly support the hospitality industry, the backbone of the City’s economy. A parking subsidy in lieu of providing city-owned parking accommodations for this industry may be feasible.

Parking Incentive Program for Business Attraction and Retention

As the Administration considers parking demand and fiscal impact, it is recommended that the Parking Incentive Program be piloted for a three-year period with a focus on the technology, financial services, hospitality, and health/wellness industries. The Program would accommodate at least five (5) unique eligible businesses with a 100% subsidy in year one (1), 75% subsidy in year two (2), and phase out by year three (3) with a 50% subsidy.

Program Purpose and Goals:

• Promote economic diversification; and

Financial Incentive:

Eligible businesses would be provided a financial incentive for the dollar value associated with up to the value of twenty (20) parking access cards, at current City rates. The current City rate per access card per month is approximately $108. The business could then purchase the parking access cards (if available) from the City or utilize the funds to access parking from private operators at their sole discretion. As funding will be needed to sustain this incentive over time, a step-down approach could be used to allow more new-to-market and existing businesses to participate. For example, the Parking Incentive Program subsidy could be reduced over a three-year period as follows:

·        Year 1 (12-month period): 100% subsidy at current parking rates = $25,920

                                                (up to 20 cards x $108 fee x 12 months = $25,920);

·        Year 2 (12-month period): 75% subsidy at current parking rates = $19,440; and

·        Year 3 (12-month period): 50% subsidy at current parking rates = $12,960

Each participating business would receive a maximum incentive of approximately $58,320 over the course of three (3) years.

Incentive Amount:

Value of up to twenty (20) parking access cards over a 12-month period: Business must show employment records attributed to its Miami Beach location with employment of up to twenty (20) employees. Incentive amount will be based on number of current employees (up to twenty (20)).

Program Funding:

The Parking Department is an Enterprise Fund with financial obligations, therefore the goal is to either provide the parking (if available) and offset costs with an allocation from the General Fund, or if parking is not available, provide funding for an alternative to city-owned parking. Funding for the proposed Parking Incentive Program is not currently identified or appropriated. If this financial incentive is to be offered during the current fiscal year, a budget appropriation would be required. Funding for future fiscal years would require approval through the annual budget process.

Based on a three-year pilot, the Program would allow for at least five (5) businesses to participate with a budget enhancement for Fiscal Years 2023-2025 as follows:

Eligibility Criteria:

Applications will be evaluated on criteria approved by the City Commission as determined by the Administration, including but not limited to:

* The City Commission, at its discretion, may consider any other criteria at the request and recommendation of the City Manager.

Application and Section Process:

·       The Application will be made available online;

·      Incentive applications and awards will be evaluated and approved on a first-come, first-qualified, first-authorized basis;

·   Applications will be received and evaluated by the Administration via the Economic Development Department;

·        Upon evaluation by the Administration, applicants will be informed of eligibility status. 

·    Within thirty (30) days of application receipt, the Administration will schedule an application presentation/recommendation to FERC;

·   The Administration will notify the selected applicant when the application is scheduled for consideration at any public meeting;

·     Pending recommendation from the FERC, the Administration will prepare its recommendation on the application to the City Commission; and

·       Upon approval by the City Commission, the applicant will enter into an agreement with the City.

Award:

·        After authorization by the City Commission and execution of an agreement, the incentive will be awarded to participating businesses within sixty (60) business days upon request via an annual invoice as required by the City and following vendor registration.

·        Business must show evidence of an active Miami Beach Business License and State of Florida Business Registration prior to award;

·      Business (owner/operator/applicant) shall be in good standing and have no outstanding code liens, fines or violations, pending litigation with the City of Miami Beach or any unpaid ad valorem property taxes (regardless of property ownership by the business or landlord);

·   The incentive will be awarded on an annual basis (for a three (3)-year period) after verification and documentation by the Administration of all Program criteria, including executed lease and employment records; and

·        The incentive is revocable at the discretion of the Administration.