On October 18, 2023, the Mayor and City Commission discussed item R5 G, the second reading of a proposed Ordinance to amend the Land Development Regulations (LDR) related to zoning uses of a Harding Townsite Single-Family home. The subject property located at 7605 Collins Avenue (the Property) is a privately-owned, single-family residence. The Property is nestled in Altos del Mar Park to the north, bounded by a RM-1 zoning district to the west, the North Shore Library to the south, and Collins Avenue to the east. The Ordinance was not adopted and remains open and continued, pending a sponsor. At said meeting, the Mayor and City Commission directed the Administration to:

•  Meet with the property owner and explore the opportunity to purchase the property at its true fair market value.

• Obtain two additional appraisals for the property.
• The purchase price considered shall not exceed $10.0 million.
• Report back to the City Commission before action is taken.

In accordance with the above directives, on January 31, 2024, the Administration reported to the Mayor and City Commission (item R9 Y) to discuss the City’s potential purchase of the subject site.

The Administration conducted a site visit with the Property owners to obtain additional appraisals. The results of three (3) valuation studies commissioned by the City are detailed below:

•  CBRE – $4.2 million
•  Colliers International -- $2.1 million
• ACP Appraisals, LLC -- $3.75 million

The City appraisals are set to estimate the “As Is” market value of the Property. Data on the Property is collected from various sources including but not limited to, the Property owner, the county property appraiser’s office, surveys, and building plans. The land size is based on surveys, public records and/or recorded plats. A search is then performed for comparable properties through various sites and sources. All information is analyzed in processing the appraisal report as support for the estimated value of the Property.

Once the appraisals were received and reviewed by all parties, the Property owners also had a valuation study conducted by Hemisphere Real Estate, Inc., which provided a market value of $7.25 million. The Property owners are very motivated to sell to the City of Miami Beach versus an independent buyer and initially set their asking price at the appraised value. The Administration had recommended negotiating a purchase price of $6.0 million.

Subsequently on January 31, 2024, the Mayor and City Commission deliberated on the item, considering the appraisals presented and the owner’s ask. Upon further discussion, the owner proposed a selling price of $6.5 million. The Mayor and City Commission voted in favor of purchasing the Property at $6.5 million price, with a referral to the Finance and Economic Resiliency Committee (FERC) to discuss funding for the purchase.

This acquisition is an unbudgeted expenditure not currently part of the City’s FY 2024-2028 Capital Improvement Plan nor the FY 2024 Operating Budget. In considering the purchase of the subject site and allocate funding, the City must consider all other expenses associated with this real estate acquisition, including closing costs, transaction fees, surveys, title search and tax lien searches. Based on these sources, the estimated cost for this purchase is $6,522,109.

The Administration has reviewed potential sources which include:

•  PayGo Capital Fund
•  Building Fund
  • Existing capital project to purchase building in North Beach
• North Beach CRA (Partial funding available)
• Parking Fund
• General Fund Reserves

All funding sources listed, with the exception of the North Beach CRA, have sufficient reserves available to fully fund the acquisition of the Property. However, some of the sources have restrictions of use, such as Parking and Building Funds, while use of other sources would have a negative impact in the City's ability to fund the FY 2024-2028 Capital Improvement Plan.

Based upon the foregoing, the Administration recommends the FERC discuss the City’s acquisition of Property located at 7605 Collins Avenue in the amount of $6,522,109 with the funding sources detailed herein, finding that it is in the City’s best interest to obtain this land adjacent to Altos Del Mar Park.