ANALYSIS:
City staff completed a ground floor storefront survey within five commercial corridors (41st Street, Lincoln Road, Washington Avenue, Ocean Drive, and the North End 63rd to 70th). A complete list of those vacancies along with their full address and corresponding photos for each is attached (Exhibit A).
The following counts were concluded:
41st Street: 8 vacancies
Lincoln Road (100 block - 1100 block): 23 vacancies
Washington Avenue (5th-15th Street): 55 vacancies
Ocean Drive: 10 vacancies
North End (63rd to 70th Street): 21 vacancies
Concurrently, Staff began further reviewing and researching background information for each of the vacant storefronts, with the specific intent to identify the reason for extended vacancy and to identify any barriers that might be alleviated at the City level. This study includes cross-referencing each address with the City's BTR registry along with vetting each address through property appraiser and Sunbiz to determine ownership. We also reviewed all permits that are currently active with the Building Department. A full spreadsheet of this information is attached (Exhibit B). Through this process we were able to identify that 15 of the properties mentioned above had active permits and were currently under construction or in the process of redevelopment.
This information allowed for Staff to begin outreach to better understand the challenges and issues brokers and property owners have been facing in finding new tenants. Staff contacted all of the brokers that were identified through Sunbiz and/or property appraiser that represented the properties surveyed. Unfortunately, many of these representatives did not provide information or respond to our inquiries. Therefore, we began to survey additional industry professionals in the community (Business Improvement District, Miami Beach Chamber of Commerce, and individual property owners in Miami Beach).
We used the following set of questions to guide the conversations within our outreach:
1. How long has this property remained vacant?
2. What have been some of the challenges you have faced in leasing this space?
3. Did the previous tenant disclose to you why they decided to leave this space?
4. Do you have any ideas for how the City could help better support your efforts in finding a new tenant?
5. Do you represent other commercial spaces in Miami Beach? If so, do you have the same challenges in leasing those spaces?
Below is a summarized list of the feedback and its associated corridor:
- The current conditions of the street do not attract new and emerging businesses (Washington Avenue, 41st Street)
- Creative marketing and branding of our City needs to be a priority to increase and promote businesses (North Beach, Washington Avenue)
- People are leaving for the mainland, they can receive a better value (more space for less) with less traffic (City-wide)
- Poor lighting and lack of parking are a barrier (North Beach)
- Miami Beach used to be the dominating municipality for entertainment, the competition has grown throughout the County
- Capital improvements in the pipeline will be able to address many of the issues the streets are facing sidewalk enhancements, increased lighting, bike lanes (41st Street, Lincoln, Washington)
- Independent stores are competing in the world of Amazon, they are struggling to maintain the rent with loss of demand (Lincoln Road)
- Starting a business and converting a property from one industry to the next (retail to restaurant) is financially burdensome, especially for small startups (City-wide)
This information will allow City staff to properly address and recommend a set of interventions for reducing ground floor storefront vacancies within the commercial corridors. There are many ways that the City can help better support our commercial districts through direct improvements within the public realm and also through building the internal capacity of our small businesses. We have listed below several ideas and pilot programs that could be developed to help reduce such vacancies and attract new businesses to the Beach:
Create a storefront vacancy registry: Create a vacancy registry that allows property owners and brokers to self enroll when a property becomes vacant. This online portal would allow Staff to keep track and manage vacancies while allowing us to help recruit new businesses into those spaces. These properties could also then be tracked by Code Enforcement to ensure they are in compliance with the storefront window covering ordinance.
Curated Storefront Initiative: Create a series of ongoing exhibitions that will activate unused storefronts through multimedia art installations. Through collaboration with Cultural Affairs we could commission different local artists and cultural institutions to curate different empty storefronts. This initiative has been adopted in various cities and can be run at a low cost. The Lincoln Road BID has partnered with Miami City Ballet to do similar installations in the past.
Estimated Cost: $5,000 per window; the City could pilot this concept out in one commercial corridor using five vacancies for a total of $25,000.00).
Encourage Small-Scale Manufacturing: Review of current zoning regulations and expand the industrial/warehouse zoning allowance to other commercial corridors. Encouraging more small-scale manufacturing (textiles, breweries, coffee roasters, tech labs) on main streets can foster entrepreneurship and homegrown industries. These business create well-paying jobs for people with a variety of education and skills levels and brings vitality to commercial districts. This also helps diversify our employment base from just food and beverage.
Estimated Cost: Not applicable, this would require zoning changes through the approval of the City Commission.
Pink Zones: Designate key commercial corridors in a state of transition as a "pink zone". The City could pilot this concept out in either 41st Street, Washington Avenue and Town Center. By simplifying zoning and building codes we are apply to better support businesses to emerge.
Cost: Estimated $50,000.00 to hire a consulting agency to assist the Administration in creating and implementing a pink zone.
Fund for Storefront Coverings: Previously, the City had allocated some funding to produce CMB designed window coverings for vacant storefronts, and provided these at no cost to vendors, landlords and tenants. The last completed order was in April 2017, for 30 window wraps it cost the city $18,908.00. However, that funding is no longer in place, so the City currently provides the template for this printout, and costs of printing must be borne by the storefronts. The City will continue to encourage the local BID's to use these window coverings instead of the brown paper. Another option is to reallocate funding to allow the City to produce these wraps.
Staff recently conducted further research into the existing Oridinance, to determine whether or not the City can obligate vacant storefronts to use our vinyl wrap. Staff discovered that in fact the Ordinance 2016-4006 does require all storefront vacancies to either use the pre-approved Miami Beach vinyl window wrap or another opaque covering that is in compliance with design review and historic preservation criteria. However, this ordinance had not been updated in Municode and therefore was not being enforced as part of City Code. Legal has since codified this ordinance and updated Municode accordingly. TCED will work with Code Enforcement to notify property owners of this ordinance and allow businesses/landlords a three month grace period to make this change to their respective property.
Estimated Cost: $50-75,000.00 to offset costs of production of the Miami Beach vinyl wrap.
Anchor Tenant Incentive Program: Create an incentive grant based program for commercial property owners and/or commercial tenants to assist with interior building improvements and business start-ups. As a way to attract high quality businesses to our commercial corridors this program, modeled from the Clearwater CRA, would allow eligible participants to apply for funding to help offset interior building improvements and business costs that are typical barriers for new and emerging businesses. The link below is the program model from Clearwater, Florida:
http://downtownclearwater.com/wp-content/uploads/2018/01/CRA-Anchor-Tenant-Program_Final.pdf
Estimated Cost: Up to $25,000.00 in grant funds to eligible establishments. First year allocation of $125,000.00 to allow for five grants in designated commercial corridors. Require a 2:1 match.
Grand Opening Assistance Program: A significant portion of the feedback received was regarding the brand and narrative around Miami Beach and the increased competition throughout Miami-Dade County. This program which has been adopted through the West Palm Beach Downtown Development Authority, provides small grants to new businesses to help with their grand opening and marketing. This would allow for them to create their unique narrative and help increase their visibility. The link below is the program model for West Palm Beach, Florida:
http://www.downtownwpb.com/grand-opening-assistance/
Estimated Cost: Up to $3,000.00 in grant funds. First year allocation of $30,000.00 to allow for ten grants in designated commercial corridors.
Staff will continue to conduct outreach and work with the BID's and business associations to develop programs to help increase downtown vibrancy and business retention. Should any of the above recommendations be adopted or pursued, funding would need to be identified to support these programs.