BACKGROUND
In March 2016, a referendum of the voters of the City of Miami Beach to approve a lease for a Convention Center Headquarter Hotel failed to reach the 60% threshold for approval. On April 29, 2016, recognizing the potential benefit and significant economic impact to the soon-to-be renovated Miami Beach Convention Center (MBCC) and the City as a whole, Mayor Philip Levine authorized the creation of an Ad Hoc Blue Ribbon Steering Committee on the Convention Center Headquarter Hotel as allowed by Section 2-23 of the City Code. The mission of the committee was stated in the Mayor’s memo creating the Committee as:
The Committee shall have the purpose of openly and fairly engaging the community in the development of a plan to build a Convention Center Headquarter Hotel that will meet the needs of the community and the newly expanded Convention Center
Through a memorandum to the City Commission, the Mayor created this seven-member committee by appointing two Commissioners to lead the committee and granting himself and each of the remaining City Commissioners an appointment to the committee. The Committee ultimately was set with the following members:
· Chair – Commissioner Ricky Arriola
· Vice Chair – Commissioner Kristen Rosen Gonzalez
· Jorge Exposito (Appointment of Mayor Levine)
· Saul Gross (Appointment of Commissioner Aleman)
· Debra Leibowitz (Appointment of Commissioner Grieco)
· Paul Freeman (Appointment of Commissioner Malakoff)
· Leslie Tobin (resigned 3/20/17) (Appointment of Commissioner Steinberg)
· Frank Kruszewski (appointed 4/4/17 to replace Leslie Tobin) (Appointment of Commissioner Steinberg)
The Committee was authorized through April 30, 2017, a period which was extended by Mayor Levine to July 31, 2017 to accommodate additional fact-finding and review by the Committee. The Committee was charged with three primary objectives:
1. Obtaining input and feedback from the public (residents, property owners, business owners, and visitors) regarding the need for a Convention Center Headquarter Hotel
2. Disseminating information at its meetings on behalf of the City to the public (residents, property owners, business owners, and visitors) regarding the need for a Convention Center Headquarter Hotel
3. Providing recommendations to the Mayor and City Commission regarding a new Convention Center Headquarter Hotel development plan that might achieve the 60% voter approval threshold.
The Committee met on twelve separate occasions between May 9, 2016 and June 1, 2017 to determine issues of importance to the public, research these issues, and formulate recommendations to the Mayor and Commission. In addition, the Committee, through the City, commissioned a survey of City of Miami Beach voters, conducted by the Metropolitan Center at Florida International University, to identify the issues of concern to the public regarding a Convention Center Headquarter Hotel.
Through public input and based upon the results of the voter survey, the Committee identified the following three issues of concern to the public:
1. The hotel’s potential impact on traffic.
2. Design, height, compatibility with the neighborhood and location of the hotel, including possible expansion of footprint to include the Jackie Gleason Theater site
3. An independent assessment of the need for a Convention Center Headquarter Hotel.
ANALYSIS
As the Committee was focused on a subjective and expert opinion in regards to the need for a headquarter hotel, the Committee requested the Greater Miami Convention & Visitors Bureau (GMCVB) engage an outside consultant to provide a professional and objective analysis. From inception, the Committee’s meetings focused largely on community input and the findings of this independent needs assessment consultant. The public and relevant experts, outside consultants, and persons with specific knowledge were asked to present and/or appear before the Committee to offer their input and ideas on how to address these issues of concern to the public. The last several meetings were dedicated to the summary of findings from the independent consultant.
The GMCVB engaged Convention Sports and Leisure (CSL) as the outside consultant that conducted a study on the potential need for a headquarter hotel to support the Miami Beach Convention Center. The study compared the size of the convention center and overall convention activity with comparable cities. CSL also developed the optimal size of a headquarter based a review of what would give the Miami Beach Convention Center a competitive hotel package given the targeted size of future conventions. Based on this, CSL completed a survey of meeting planners to solicit feedback on the optimal and desirable size and capacity of the potential headquarter hotel. The conclusion of the CSL study was that an 800-1,000 room headquarter hotel is critical to position Miami Beach as a viable destination for conventions in the future.
The Committee’s analysis and discussion of the outside consultant’s report, coupled with the recent work completed by the GMCVB to identify prospective conventions, validates the overall need for a headquarter hotel. Of those prospects, 34 have already declined to consider Miami Beach because of the lack of a headquarter hotel and the overall challenging hotel package. This equates to more than $128 million dollars in economic impact lost to the Miami Beach community (see appendix).
In addition, the optimal capacity of the MBCC, according to the outside consultant’s work, is 21 conventions annually. This represents 15 more than what was secured in the 2015-2016 fiscal year. Recently, the GMCVB has been working to identify new convention prospects and have nearly 1,000 new prospect conventions interested in coming to Miami Beach. However, the primary factor needed to convert these new prospects into secured business at the MBCC is through a potential headquarter hotel.
Achieving the optimal conventions as noted above, will substantially reduce traffic around the Convention Center. The new booking policy at the Convention Center puts the priority on securing high value conventions and the lowest priority on local events with minimal economic generation, which are the high traffic events. The Committee spent substantial time on this issue with the outside consultant – and determined the need for a public education forum on the difference between convention shows (high volume hotel room bookings; low to no traffic impact) and trade shows (low to no hotel room bookings and high traffic and congestion impact).
Should the headquarter hotel come online, the consultant estimated that less than 20% of bookings at MBCC would be utilized by trade show events compared to approximately 60% of the current bookings. This shift toward convention business coupled with the new booking policy will create a tangible mitigation of traffic and will have a bottom line positive effect on overall revenues for the City of Miami Beach.
Also of note from the consultant’s analysis is the room block agreement with the hotel developer. This agreement is critical and essential to ensure the success of a headquarter hotel. A room block agreement stipulating the minimum amount of room available for convention bookings will allow MBCC to become a competitive entity in prospecting and confirming highly sought after conventions.
As an area of concern over design, height, and compatibility with the neighborhood, the following four potential sites for a Convention Center Headquarter Hotel were proposed:
1. The parking lot adjacent to the Jackie Gleason Theater (site of the previous proposal)
2. The parking lot across the street from the Convention Center
3. The 17th Street Parking Garage
4. The parking lot next to the Jackie Gleason Theater and the land on which the Theater is on
After all four sites were presented to the Committee; the members deemed that Site 4, the parking lot next to the Jackie Gleason Theater and the land on which the theater currently sits would be the best parcel to develop in order to meet the height restrictions and size requirements.
In order to fully assess whether or not a Convention Center Headquarter Hotel that met the height and sizing restrictions could fit on the selected site, the Committee requested a massing study that illustrated a hotel at the selected site given the height limitations. This study confirmed that a hotel could be developed with the desired number of rooms and stay well under the 185 feet height goal that has been set and validated in community discussions.
As a staple in the community, the Committee discussed and proposed that if the selected site is to house the Convention Center Headquarter Hotel, then there should be a replacement and rebuilding of the Jackie Gleason Theater. Potential designs for the Convention Center Headquarter Hotel that would accommodate a new Jackie Gleason Theater could be developed separately but in conjunction with the hotel through an array of funding mechanisms, such as a public-private model.
It is imperative to note that through this process and the Committee’s dedication and diligence, there is an opportunity to test a stronger, more refined message in the community. Throughout the year, the Committee gained much stronger insight and knowledge on the complex business balance between convention and trade bookings; traffic and the MBCC new booking policy; and ultimately the critical role of a Miami Beach Convention Center Hotel in the revenue stream for the Miami Beach Convention Center, and more widely for the City and community of Miami Beach.
COMMITTEE RECCOMMENDATIONS:
Based upon all of the data and feedback received, the Committee concludes and recommends the following:
1. It is critical to the City and the Miami Beach Convention Center that the construction of a Convention Center Hotel be pursued. The following are recommendations regarding the size, footprint, community impact, and general planning:
a. The headquarter hotel should contain between 800-1,000 rooms to maximize the number of conventions and promote a business mix that would reduce the number of consumer/trade shows, which cause traffic issues and increase the number of convention shows which bring greater revenue and less traffic to the City;
b. The hotel should be compatible with its surrounding neighborhood by measuring no more than 185 feet in height (the height of the Clock Tower Building on Lincoln Road);
c. The hotel should be located on land between Washington Avenue and Convention Center Drive north of 17th Street, which is currently occupied by a parking lot, the 555 17th Street building, and the Jackie Gleason Theater. Increasing the size of the land will support the desired height guidelines by allowing a reduction in the height and mass of the hotel;
d. Best efforts should be made to engage a world-class architect to promote the creation of an iconic design;
e. The design should maximize the number of vehicular access points to the hotel and theater campus in order to distribute vehicular traffic in the area and minimize impacts on the nearby residential communities;
f. The hotel should have sufficient parking for visitors and employees as required by City Code.
2. The Convention Center Hotel lease should specifically contain:
a. A guaranteed room block agreement allocating at least 80% of the Convention Center Hotel’s rooms for Convention Center events and which is designed so that it runs in perpetuity and cannot be eliminated or significantly altered by the City Commission.
b. A provision that no gambling of any kind will be allowed at the hotel or on the site.
3. If the Jackie Gleason site is utilized, it is critical that a new state-of-the-art Jackie Gleason Theater be constructed that is of similar size and function. The new Gleason Theater should be a flexible space available for use during the day by Convention Center shows.
4. The City should develop a detailed public information plan, to include hosting public informational meetings and the utilization of other methods to disseminate information in order to share with the public:
a. Current and future traffic mitigation strategies
b. Design aspects of the hotel
c. An explanation and commitment to the convention center’s new booking policy that prioritizes conventions over consumer/trade shows and the positive impact on traffic and City revenue which will result from this new policy
d. The independent consultant’s rationale, research, and exhaustive comparison reports substantiating the need for a Convention Center Hotel
5. In order to determine if the project is on the right path, the Committee recommends the City Commission may consider a straw ballot to gauge public sentiment before seeking a hotel developer. The straw ballot should be held following the creation of the alternative site plan and following the public information campaign.
6. The Committee recommends that the hotel be placed on the ballot for the August 2018 Primary Elections.
7. Upon acceptance of the recommendations above, it is further suggested that the Ad Hoc Blue Ribbon Steering Committee on the Convention Center Headquarter Hotel be extended for a six month period to conduct community outreach and education sessions. Understanding that a new headquarter hotel plan would need the support of more than 60% of voters, the Committee believes it is critical to reach out to the public to engage in a thoughtful education process on the many issues discussed above. This effort may be supplemented by assistance from City staff or a consultant to ensure all relevant information is presented to the public in a clear, concise, and easy to understand manner.
CONCLUSION:
Administration is seeking direction as to whether the Commission wishes to adopt the Recommendations of the Ad Hoc Blue Ribbon Steering Committee on the Miami Beach Convention Center Hotel.
KB/ES/VPC