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 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, and 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 meeting, the Committee requested that the Administration further develop and propose a general parking incentive policy and return to FERC on May 27, 2022 to discuss details of the proposal.

During the May 27, 2022 FERC meeting, the Administration presented the proposed pilot Parking Incentive Program, as outlined further below. The Committee recommended approval and funding of the Program with transmittal to the City Commission for consideration.

Although 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 (the “Program”) be piloted for a three (3) 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.

Purpose and Goals:
• Support the hospitality industry;
• Attract and retain businesses in the targeted industries of technology, financial services, and health and wellness;
• Promote economic diversification; and
• Promote quality of place and quality of life for employees.

Financial Incentive:
Eligible businesses will 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 $108. The business could then purchase any available parking access cards from the City and/or utilize the funds to access available parking from private operators at their sole discretion. For example, the pilot Parking Incentive Program subsidy could be reduced over a three (3) 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
• 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)).

Funding:
The Parking Enterprise Fund has financial obligations; therefore, the goal is to either provide available parking 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 (3) 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:

Under a three-year pilot, no new businesses would be added in Fiscal Years 2024-2025.

Eligibility Criteria:
Applications will be evaluated on criteria approved by the City Commission as determined by the Administration, including but not limited to:
• New-to-market or existing expanding business with a physical location within the City;
• New-to-market businesses must demonstrate a rental of leased space through an executed lease agreement (or signed Letter of Intent);
• Existing businesses must demonstrate an expansion/increase of leased space through an executed lease agreement (or signed Letter of Intent);
• Business must be in the technology, financial services, hospitality, or health/wellness industries;
• Business must have an executed commercial lease agreement with at least three (3) years remaining (if less than three years remain on the lease, lease must include a renewal option which could extend through the three (3) year Program period; and
• If the business owns the building in which it operates, the business must show evidence of ownership/site control and a lack of existing parking facilities necessary for employment levels and operations.

* 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/Disbursement:
• 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 and disbursed on an annual basis (for a three (3)-year period) after verification and documentation by the Administration of all Program criteria, including executed lease/mortgage and employment records; and
• The incentive is revocable at the discretion of the Administration.

The Administration is confident that the pilot Parking Incentive Program will assist, attract, and retaining businesses in a manner that is equitable and respectful of the individuals and companies already on the waiting list for available monthly parking access cards. Due to current parking demand in the desired areas, it is not feasible for the City to address multiple ad hoc parking requests on a consistent basis and therefore adoption of a comprehensive policy is recommended to promote transparency.

The Administration recommends approval of the pilot Parking Incentive Program with an annual evaluation to measure Program goals and pilot status.