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Ownership and Historic Preservation Board Applications
The Developer is the fee simple owner of the northern half of the right-of-way in the 100 Block of Lincoln Road, adjacent to the Walgreens property and extending from Collins Avenue to the beachwalk. In 1999, the Developer granted the City perpetual easements over and across this property for vehicular and pedestrian access; the easement includes a pedestrian pathway to the beach walk. The City maintains ownership of the southern half of the 100 Block.
The 100-300 blocks of Lincoln Road fall within a local historic district, therefore improvements require approval from the Historic Preservation Board (HPB). The Developer recently submitted two separate, but related, applications for HPB review:
1. HPB23-0574: 1 Lincoln Road & 1671 Collins Avenue (“Private Project”)
The first application includes a request for a Certificate of Appropriateness (COA) for the redevelopment of the Ritz-Carlton and Sagamore properties. Specifically, the applicant is requesting approval for the construction of a new 15-story (182’-10” tall) ground level tower addition behind the existing Sagamore Hotel and cantilevered over the existing Ritz-Carlton cabana building, and the construction of a 1-story rooftop addition proposed to be located on top of an existing 4-story cabana building located on the north side of Ritz-Carlton building. The project includes 30 new residential units within the 15-story addition and the number of hotel units is being reduced from 477 to 434. The project also incorporates renovation of the lobby and exterior areas including the pool deck. The only private property immediately adjacent to the project site is the National Hotel located at 1677 Collins Avenue. Impacts on the nearby properties will be evaluated as part of the Planning Department’s staff analysis and recommendation report presented to the HPB. The project as currently designed does not require any variances.
2. HPB23-0575: 100 Block of Lincoln Road Right-of-Way and 1 Lincoln Road. (“Public/Private Project”)
The second application is a request for a COA for a proposed public/private development plan that includes modifications to the Lincoln Road public right-of-way and the Ritz-Carlton property as well as the beach walk area. Specifically, the applicant is proposing a new pedestrian path on the south side of Lincoln Road, pedestrian and vehicular access modifications to both the north and south sides, the installation of a new gateway element at the street end, improvements to the beach access path, and the introduction of new green space and landscaping on the beach walk. Access to the Decoplage Condominium, located at 100 Lincoln Road, and surface parking lot located adjacent to the south side of the Lincoln Road right-of-way is proposed to remain as is.
The participation of the Developer in the Public/Private Project (100 Block) is contingent upon the final approval of the necessary applications to allow for the development of the Private Project. As the City owns the southern half of the 100 Block of Lincoln Road, the City would be required to endorse the HPB application for the Public/Private Project. Both applications are tentatively scheduled for the September 12, 2023 HPB agenda.
Traffic Impact Studies
As indicated in Resolution No. 2022-32444, at this stage in the vetting process, a number of
transportation-related items associated with the proposed improvements require further study and analysis. Completion and approval of a traffic impact study, at the Developer's expense, using an independent traffic engineer, remains an outstanding requirement.
Improvements to the 100-300 blocks of Lincoln Road have been segmented into two separate project phases - one for the 100 Block and one for the 200-300 blocks - each with its own traffic impact study. Both traffic studies were reviewed by the City’s traffic consultant (peer review), the City’s Transportation and Mobility Department staff, and the Miami-Dade County Department of Transportation and Public Works (DTPW). Based on comments provided by the reviewing parties, the Developer’s traffic engineer is in the process of revising and resubmitting the traffic impact studies accordingly to address the outstanding comments and concerns.
The Developer recently notified the City that it modified the initial proposed design configuration for the 100 Block of Lincoln Road based on input provided by affected properties. While the 100 Block traffic impact study is currently on the third round of reviews based on the initial design, this latest change will trigger additional reviews by the City’s peer reviewer and DTPW staff. As such, it is difficult to forecast when the two traffic impact studies will be finalized and approved by the City and DTPW.
The proposed pedestrianization of the 200-300 blocks of Lincoln Road will impact the current County bus and City trolley routes in the area, and in particular, the existing bus stops on Lincoln Road located between Collins and Washington Avenues. As a result, the City requested that the Developer submit a transit mitigation plan. The transit mitigation plan has been submitted and is currently being reviewed by the Transportation and Mobility Department as well as DTPW. On Monday, June 5, 2023, the Developer’s traffic engineering consultant, City Transportation and Mobility Department staff, and DTPW staff met to discuss the findings and recommendations of the draft traffic impact study for the pedestrianization of the 200-300 blocks of Lincoln Road. The Developer has scheduled a follow-up meeting with DTPW and City staff on Friday, June 23, 2023 to discuss the transit mitigation plan in further detail. This particular traffic impact study is currently on the fourth round of review. Subsequent iterations of the traffic study may be needed depending on the results of DTPW’s review.
From a vehicular traffic perspective, the proposed modifications to the 100-300 blocks are not anticipated to result in a significant impact on the operational level of service or vehicular delay at the affected intersections.
Infrastructure Needs
While the Developers’’ initial proposed improvements for the area involved only above-ground improvements, the City anticipates that the above-ground improvements, particularly in the 100 Block of Lincoln Road, may adversely impact existing infrastructure (i.e., the sewer pipes in this area are made of vitrified clay which is susceptible to rupture as a result of construction above). In addition, the project presents an opportunity to upgrade other infrastructure (e.g., water and stormwater) to better serve the properties located within the 100 Block. The following infrastructure improvements, proposed by the City’s Public Works Department, will provide for long-term resiliency, efficiency and beneficial use and enjoyment of the above-ground improvements.
· The Stormwater system receives drainage from Lincoln Road to a collection point at the Collins Avenue and Lincoln Road intersection. The system is connected to a 24-inch drainage line along Collins Avenue. However, the existing inlets and pipes are extremely undersized and do not meet the minimum pipe size criteria. As such, the existing pipes would be upgraded to 24-inch pipes.
· The Sanitary Sewer system is comprised of two 8-inch clay pipes on either side of Lincoln Road that connect to a manhole at Collins Avenue. The clay pipes were built in the 1940s, have exceeded their useful life and are susceptible to breaks which cause Sanitary Sewer Overflows (SSO). These clay pipes are no longer approved by regulatory agencies and would be replaced with polyvinyl chloride (PVC) 900 pipes.
· The watermain runs along the center of Lincoln Road and connects to an existing 20-inch watermain on the east side of Collins Avenue. The current pipe size is 8 inches and to provide for adequate flows and fire protection the pipe would be upgraded to a 12-inch watermain.
Key Terms
With a view toward preparing and finalizing a long-form, recordable Improvement and Maintenance Agreement between the City and the Developer, the Administration and City Attorney’s Office have dedicated staff resources to establish and refine the deal terms. The 100-300 Blocks of Lincoln Road Improvement and Maintenance Agreement Term Sheet, dated June 22, 2023 (Term Sheet - Attachment A), reflects the key terms, as discussed and negotiated by the parties to date, in connection with a public-private collaboration to construct improvements as shown in the Phased 1 Project and Phase 2 Project Concept Plans (Attachments B and C). Tangentially, a separate, but related Maintenance and Enhancements Agreement is being negotiated between the City and the Developer to provide for immediate opportunities to beautify and maintain the area.
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Key Terms - Improvement and Maintenance Agreement
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Developer
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SOBE SEA, LLC, partnership between the Ritz-Carlton and Sagamore hotels
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Developer Affiliates
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(1) Di Lido Beach Resort Land LLC;
(2) Di Lido Beach Resort LLC;
(3) EBJ Sagamore LLC;
(4) Di Lido Beach Commercial LLC;
(5) Di Lido Beach Commercial Lessor LLC; and
(6) Sobe Sky Development LLC.
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Phase 1 Project
(100 Block)
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a. Relocation and redesign of pedestrian paths and vehicular access from Collins Avenue to the beachwalk;
b. Installation of landscaping features along the pedestrian paths and within median;
c. Installation of a “Morris Lapidus [inspired] Arch” aesthetic design feature at the eastern edge of the Lincoln Road right of way;
d. Construction of a public green amenity at the intersection of the beach access walk and beachwalk;
e. The replacement of water and sewer lines and improvements to the stormwater collection system; and
f. The design of the Phase 1 Project shall be consistent with the Concept Plan.
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Phase 2 Project
(200-300 blocks)
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a. The pedestrianization of the 200-300 blocks of Lincoln Road through the removal of vehicular travel lanes, the relocation of the pedestrian access rights-of-way, alterations to the medians and incorporation of pedestrian pavement markings;
b. Installation of landscaping features along the pedestrian path; and
c. Subject to obtaining the necessary approvals from the City and Miami-Dade County, Florida (the “County”), the installation of two (2) new bus shelters on Washington Avenue to replace the bus stops along the 300 block of Lincoln Road.
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Project Implementation and Administration
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Phase 1 Project - City and Developer will collaborate to:
a. Preparation of the Phase 1 Project Concept Plan (Developer in consultation with the City);
b. Prepare and submit HPB application (and any new HPB application as required) (Developer with approval of City);
c. Evaluate and refine the preliminary budget which will be subject to change pending completion and approval by both parties of the design development documents and construction documents;
d. Commissioning by Developer (and peer review by the City) of a traffic study of the 100 Block of Lincoln Road;
e. Develop design development documents based on the Concept Plan and preliminary budget (Developer in consultation with the City);
f. Prepare the final construction documents, design and permit plans, and materials necessary for any development permits required by the City, County, and State (Developer in consultation with the City);
g. Prepare and approve the final budget;
h. Select and engage a general contractor and enter into a construction contract (Developer with approval of the City); and
i. Primary project oversight and administration (Developer).
Phase 2 Project - Prior to securing funding to cover hard costs, City and Developer will collaborate to:
a. Commissioning by Developer (and peer review by the City) of a traffic study of the 200-300 blocks of Lincoln Road;
b. Preparation of the Phase 2 Project Concept plan (Developer in consultation with the City);
c. If City and the Developer secure dedicated funding sources to cover all of the hard costs within 10 years of execution of the Improvement and Maintenance Agreement, Developer will: 1) Prepare/submit HPB application; 2) Retain and fund the cost of the work of all design professionals necessary to prepare design development documents and final construction documents based on the Phase 2 Concept Plan and Phase 2 Budget as approved by the City, including the preparation of design and permit plans, and the preparation of materials necessary for any development permits required by the City, County, and State; costs for any and all revisions required during the construction process including revisions to drawings needed during construction or the fees of the design professionals to address requests for information (RFIs) and site visits during the construction phase, etc.*; and 3) Subject to obtaining the necessary approvals from the City and the County, complete the installation of two (2) new bus shelters on Washington Avenue to replace the existing bus stops along the 300 block of Lincoln Road.
* Developer has estimated costs to be 20% of design budget.
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Costs
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a. Phase 1 Project/Concept Plan Costs: Will not exceed $12 million subject to annual increases based on the lower of the Consumer Price Index (“CPI”) or 3%.
b. Phase 2 Project: Subject to further development.
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Funding
(City and Developer)
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Phase 1 Project: The City and Developer will share the hard and soft costs, with the following limitations:
a. City Contribution: maximum contribution shall be the lower of 50% of the Costs or $4 million subject to annual increases (lower of CPI or 3%), of which $1 million subject to annual increases (lower of CPI or 3%) will be devoted to the Water and Sewer Improvements. If Water and Sewer
Improvements exceed $1 million, City may, in its sole discretion, fully
fund or reduce scope of Water and Sewer Improvements
b. Developer Contribution: No less than the total City Contribution
Phase 2 Project: Subject to further development
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Funding
(Other Agencies)
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· The City and the Developer will cooperate to seek funding from other agencies, including, but not limited to, the State of Florida to cover at least the difference between the Costs and the aggregate amount of the City Contribution and Developer Contribution.
· The Developer has agreed to hire a lobbying team, at its sole cost and expense, to support the effort to secure State participation in the funding of the Phase 1 Project. Any funding from other agencies will first cover the Costs not funded by the City or Developer and then be applied to reduce the obligations of the City and Developer equally. The lobbying team will also seek funding for the Phase 2 Project. Lobbying for the Phase 2 Project will occur simultaneously with lobbying for the Phase 1 Project. Lobbying efforts will occur during not less than a twelve-month period.
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Funding Timeline for Phase 1 Project
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· City Contribution: The City shall appropriate or otherwise secure funding from alternative sources for the Phase 1 Project by the date on which the Fiscal Year 2027 budget is approved by the Mayor and City Commission (the “Funding Deadline”). If the City does not secure the City Contribution by the Funding Deadline, as may be extended by mutual agreement of the parties, the Agreement and the Developer’s obligations shall automatically terminate, the parties shall be released of any further liability or obligation except as otherwise provided in the Agreement.
· Other Agencies: If the Developer is unsuccessful in securing funding from other agencies to cover Costs for the Phase 1 Project in excess of the combined City Contribution and Developer Contribution by or before 6:00 pm on June 3, 2024, then the City and the Developer will discuss value engineering/scope modification of the Phase 1 Project to reduce the budget to an amount not exceeding the combined City Contribution and Developer Contribution. In no event will the allocation for Water and Sewer Improvements be eliminated or reduced.
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City Contribution Payment Schedule
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City will pay the City Contribution for the Phase 1 Project in five equal installments based on milestones as follows:
(1) the issuance of a permit for the Phase 1 Project;
(2) when the Developer achieves twenty-five percent (25%) completion;
(3) when the Developer achieves fifty percent (50%) completion;
(4) when the Developer achieves seventy-five percent (75%) completion; and (5) when the Developer achieves Substantial Completion.
Issuance of a certification of contractor payment applications by the Phase 1 Project architect is sufficient to demonstrate 25%, 50%, and 75% completion.
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Maintenance
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Phase 1 Improvements: The Developer will be responsible for maintenance, excluding the Water and Sewer Improvements, any other underground improvements and the Lincoln Road vehicular travel lanes, which will remain the City’s maintenance responsibility, provided, the cost of maintaining materials used for the vehicular travel lanes is comparable to the cost the City would incur to maintain stamped concrete or asphalt. The Developer will not be required to expend more than $15,000 annually in the replacement of landscape material.
*Duration/term of the Maintenance responsibility [Open Item]
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Termination Rights
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· Failure by the Developer to obtain HPB approval for the Private Project
· Failure by the City to meet the Funding Deadline (FY 2027 Budget)
· Expiration or non-renewal of the separate Concession Agreement [Open Item]
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Outstanding and Open Items
Outstanding and open items requiring further negotiation and/or action by the City, Developer, or third parties are described more fully below.
A. Outstanding Items
1. Satisfactory Completion of Traffic Impact Studies
Completion (by the Developer) and approval (by the City and DTPW) of both traffic impact studies for the 100 Block and the 200-300 block are required prior to finalization and approval of the Improvement and Maintenance Agreement.
2. Verification of Estimated Construction Costs
The City will work with the Developer to evaluate and refine the preliminary Phase 1 Project budget attached to the Term Sheet as Exhibit B which outlines the estimated costs for the Phase 1 Project and which would be subject to change pending completion and approval by both parties of the design development documents and construction documents.
3. Private Project and HPB Approval Contingency
The participation of the Developer in the Phase 1 Project and Phase 2 Project is contingent upon the final approval of the HPB application for the development of the Private Project on terms acceptable to Developer in its sole discretion, which shall include the successful termination of any action, suit or proceeding brought by a third party challenging the validity or issuance of any HPB approvals for the Private Project. The Developer will have the right to terminate the Improvement and Maintenance Agreement if the Private Project HPB application is denied or HPB approvals of the Private Project contain any terms, conditions or obligations that are inconsistent with the terms and conditions contained in this Term Sheet or are otherwise unacceptable to Developer, in its sole and absolute discretion.
B. Open Items
1. Art in Public Places (AiPP) Obligation: Morris Lapidus Arch
The Project will set aside a budget of 2% of construction costs for AIPP as described in Sections 82-537 of the City Code. The Developer has proposed to install a “Morris Lapidus Arch”-inspired aesthetic design feature at the eastern edge of the Lincoln Road right-of-way as an AiPP equivalent.
2. Concession Stations
In consideration of the Developer’s execution of the Agreement and assumption of the maintenance obligations specified herein, following the execution of this Agreement, the City and Developer shall enter into a concession agreement (the “Concession Agreement”) pursuant to which Developer shall have the right to locate up to two (2) portable food and beverage service stations operated by Developer or one or more vendors selected by Developer. The Developer proposes that its maintenance obligations under the Agreement will cease in the event the Concession Agreement is not renewed each year. In any event, the terms of a Concession Agreement, including the City’s share of revenues, will be subject to good faith negotiation between the parties.
3. Maintenance Term for the Phase 1 Project Improvements
The Administration believes the Developer’s maintenance obligation should be comparable to other similar agreements particularly in light of the substantial financial contribution to be made by the City ($4 million). The City believes the Agreement should have a term of thirty (30) years after the date of recordation, unless modified, amended or released by the City prior to the expiration thereof. The Developer would like (a) to reduce the duration of the Agreement to 15 years and (b) the right to terminate the Agreement prior to its expiration in the event the Concession Agreement is not renewed for additional one-year terms that run through the end of the term.
FISCAL IMPACT:
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