2
MIAMI TODAY
WEEK OF THURSDAY, MAY 17, 2018
TODAY’S NEWS
The Insider TAX STICKER SHOCK: A Florida TaxWatch study released Tuesday projects property taxes could rise by more than $700 million on non-homestead properties like businesses, apartments and second homes if voters reject a proposed constitutional amendment in November that would extend a current 10% cap on annual increases in assessed values of non-homestead properties, a cap that voters approved in 2008. Said TaxWatch Vice President Kurt Wenner, “If Amendment 2 fails to pass, it doesn’t mean that the cap is just no longer going to be in effect going forward. It means that all of this property will suddenly be assessed at full value. This can be quite a big sticker shock when some people get their tax bills.” UNDERWRITING UNDERLINE: Coral Gables is moving closer to developing its stretch of The Underline, a county-wide plan to transforming land under the elevated Metrorail into a linear park and urban trail. The Miami-Dade Transportation and Public Works Committee last week unanimously backed an understanding between the county and the city to spend $150,000 from the city’s park and mobility impact fees, as well as any other available funds specified for the project, to develop the space. Coral Gables will provide the county with $15 million as available to develop the project, of which 26.4% is in the city. In October 2014, county commissioners provided a plan to build and fund The Underline. A year later, Coral Gables contributed $50,000 toward the project’s master plan. The first phase, Brickell Backyard, will use $1 million of City of Miami park impact fees and is to begin before year’s end. POINTLESS CONVERSATIONS: While Miami-Dade commissioners on Tuesday deferred a discussion on the civil courthouse, further delaying its development, Commissioner Jean Monestime said he was frustrated by all of the conversations that haven’t led to action. “This whole exercise has been a waste of time,” he said, referring to hours-long talks in commission meetings about the courthouse. “The mayor is laughing because he said it from the beginning,” Mr. Monestime said, referring to Mayor Carlos Giménez, who hasn’t always seen eye-to-eye Jean Monestime with commissioners on the courthouse track. DISNEY, TRIBE PUSH GAMBLING VOTE: In a major escalation of their support, Disney Worldwide Services and the Seminole Tribe of Florida each plowed $5 million last month into a proposed constitutional amendment that would make it harder to expand gambling in the state. Disney and the tribe had already provided almost all of the money for the political committee Voters In Charge, which collected enough signatures to get the amendment on the November ballot. But with the $5 million contributions in April, Disney had funneled a total of $9.655 million while the tribe had contributed $6.775 million, according to a state campaign-finance database. Disney has long opposed the possibility of casino gambling in the state. The tribe, meanwhile, operates casinos but has battled proposals that could expand gambling at pari-mutuel facilities. COUNTY CARPOOLING: A vote to study whether rush hour congestion could be reduced by having Miami-Dade County employees share rides to work will soon come before county commissioners. The Transportation and Public Works Committee last week unanimously backed a resolution directing Mayor Carlos Giménez to study employee carpooling or ridesharing and offer recommendations and an action plan in six months. County employees, the resolution states, commute primarily in rush hour, often in the same direction and on similar routes, and carpooling or ridesharing would alleviate gridlock, reduce air pollution and increase public safety. State and local governments across the county have set up varying carpooling and ridesharing programs, according to the resolution by Commissioner Jose “Pepe” Diaz, which will be placed on a county commission agenda. COMMISSIONERS KUMBAYA: At the Miami-Dade County Commission meeting Tuesday Barbara Jordan asked to amend legislation by Esteban Bovo Jr. that had been passed earlier this month. Mr. Bovo accepted Ms. Jordan’s amendment, saying he was in a good mood and did not want to delay the meeting: “In the spirit of kumbaya and to get on with the agenda, I have no problem with what you’re suggesting,” Mr. Bovo said.
County to steer transportation hub near airport, looks toward revenues By Jesse Scheckner
Miami-Dade County will assume control the Miami Intermodal Center (MIC), a multi-million dollar transportation hub adjacent to Miami International Airport currently owned and operated by the Florida Department of Transportation. Commissioners voted unanimously on a pair of resolutions Tuesday (5/15) permitting the county to take over the 25-acre center, whose tenants include Amtrak and Tri-Rail, after amending the resolution to allow revenue to be used for county projects once the center becomes profitable. The MIC, which costs about $2 million a year to operate, currently runs at a $1.87 million annual deficit and is projected to lose money for seven more years, according to a memo from Deputy Mayor Alina Hudak. To compensate, the state transportation department has agreed to subsidize the county’s deficit on the center until it breaks even. Commissioner Dennis Moss, who pulled the resolution for discussion at the Tuesday meeting, said he supported the county’s acquisition of the center on the condition that its aesthetics were preserved. “We want to make sure the level of maintenance and upkeep at the facility, once we take over its operations and maintenance, that the level continues to be world-class quality,” he said. “This is our front door, and I we want to make sure people have a very good impression of our community, and the MIC represents that.” In November 2015, the state proposed transferring control of the hub to Miami-Dade County. The Miami-Dade Expressway Authority (MDX) was briefly considered as a candidate to take over the facility, but Esteban Bovo Jr., the county commission chair, said he preferred that the county own and operate the center or, if that were not possible, that it fall under joint ownership of MDX and the county.
CAREFUL ATTORNEYS: After getting the run-around from county attorneys at the Miami-Dade County Com- Barbara Jordan mission meeting Tuesday, Commissioner Joe Martinez joked that he could never get a straight answer. “You are a great attorney,” Mr. Martinez told Assistant County Attorney James Edwin Kirtley. “You have evaded every question I have asked you. Give him a raise!” Mr. Martinez said sarcastically. Commissioner Barbara Jordan also teased the county attorneys, asking them to exclusively answer her questions using ‘yes’ or ‘no.’ The News Service of Florida
Metrorail rolls into Miami Intermodal Center, which the county will run.
‘This is our front door, and I want to make sure people have a very good impression of our community, and the MIC represents that.’ Dennis Moss About a year later, under a plan by Mayor Carlos Giménez, the county hired an appraiser who listed a hotel, convenience center, offices and retail outlets as possible uses for 10 acres of the MIC under long-term ground lease at the site. Residential use was also considered but deemed less feasible.
FPL agrees to refund extra costs it recovered after 2016 hurricane
FEDERAL FUNDS FOR COLLEGE: Miami Dade College will receive more than $1.4 million in three National Science Foundation awards to help close the gap in Science, Technology, Engineering and Mathematics and technical education programs. The awards are $965,817 for STEM-Mia to promote the success of low-income STEM students, $213,714 to support three years of funding to implement the Dade Enterprise Cloud Computing Initiative, and $225,000 for the Cybersecurity Opportunities and Methods that Promote Access and Student Success program to add minority students to the cybersecurity workforce.
Florida Power & Light has reached an agreement to refund $27.7 million to customers, in part because of an “over-recovery” of costs following Hurricane Matthew in 2016. The agreement, announced Tuesday between the utility and the GUN-SAFETY PROGRAM DEFERRED: Miami-Dade County com- state Office of Public Counsel, still missioners at the Public Safety and Health Committee needs approval from the Florida last week again deferred legislation that would create Public Service Commission, which educational gun safety programs in schools throughout could sign off next week. The Ofthe county. The committee deferred the legislation to fice of Public Counsel represents buy time to work with the Miami-Dade Public Schools consumers in utility issues. system on the best way to integrate the gun-safety FPL said if the deal is apcurriculum. Commissioner Rebeca Sosa pointed out proved, a one-time refund would that the commissioners may be stepping on the school be applied to customer bills. For system’s toes by passing the legislation. “When we ina residential customer who uses volve another governing body, we need to include them Rebeca Sosa 1,000 kilowatt hours of electricity in the dialogue,” said Commissioner Sally Heyman at the meeting last week. “It’s a busy time for schools, so once we have the a month – a standard benchmark opportunity to talk to them, we’ll be back.” in the utility industry – the credit
would amount to $3.18. The refund is tied to $316.5 million that the company charged customers following the October 2016 storm that ran northward along the East Coast without making landfall in Florida. Utilities are typically allowed to recoup costs of restoring power and rebuilding systems after hurricanes and to replenish storm reserves. But they also have to return to the Public Service Commission to justify the amounts recovered from customers. As part of that process, the commission had scheduled a hearing next Tuesday on the Matthew costs. To recover the costs, FPL added extra charges to customers’ bills for a year. For a residential customer who uses 1,000 kilowatt hours a month, the charge was $3.35 a month. The storm charge expired in March.
In February 2017, Miami-Dade began negotiating with the state over tenants and dividing the costs of taking over the center, according to Alice Bravo, director of the Miami-Dade Department of Transportation and Public Works. Under the newly passed agreement, current tenants at the center’s Miami Central Station are responsible for operating their own systems and maintaining the areas assigned to them, while the county must operate and maintain all common areas of the station and property. South Florida Regional Transportation Authority, Greyhound and Megabus will have their present leases with the state transferred to the county as part of the agreement, the revenues from which will be used to offset common area maintenance costs. The state transportation department, which retains its lease of the center’s east headhouse, is currently in lease negotiations with the space’s current tenant, Amtrak. If an agreement is not reached, the state can either lease the space out to a third party or to the county, which could sub-lease the space for market rent.
A Singular Voice in an Evolving City
Phone: (305) 358-2663 Staff Writers:
Gabi Maspons gmaspons@miamitodaynews.com John Charles Robbins jrobbins@miamitodaynews.com Katya Maruri kmaruri@miamitodaynews.com Jesse Scheckner jscheckner@miamitodaynews.com People Column people@miamitodaynews.com Michael Lewis mlewis@miamitodaynews.com
Like us: Miami Today Follow us: @MiamiTodayNews
MIAMI TODAY
WEEK OF THURSDAY, MAY 17, 2018
On your desk
At the office
or in your pocket
or on the road
Be informed, stay informed. Miami Today e-paper is always with you Subscribe to our E-paper only $60 a year • Easy to read and navigate • Unlimited access to 12 years of searchable archives • Available before print edition GET YOURS AT MIAMITODAYEPAPER.COM
MiaMiToday A Singular Voice in an Evolving City
11
12
MIAMI TODAY
TODAY’S NEWS
WEEK OF THURSDAY, MAY 17, 2018
County big wheels tire of ‘bike-itis,’ spoke of sharing woes By Jesse Scheckner
Something must be done to regulate bike-sharing companies like LimeBike, which have thousands of bikes scattered across the county, Miami-Dade Commissioner Javier Souto told the Economic Development and Transportation Committee last week. “Neighbors complain about the bikes being just thrown in front of yards, left [on] sidewalks,” he said. “We have an inflammation of ‘bike-itis.’ There has to be a way to bring order.” While Citi Bike in Miami Beach, North Miami Beach and several downtown areas uses solarpowered docking stations to rent and collect its bikes when not in use, newer bike-sharing companies have eschewed stationed docking and instead depend on customers leaving their bikes on public property. Three such operations are now in Miami-Dade County: California-based companies LimeBike and Spin, founded in 2017 and 2016; and Ofo, which was founded in 2014 in Beijing and made its stateside debut in 2017. All three companies use mobile apps to help customers find and rent their bikes for as little as $1 per hour. Customers can find available bikes nearby using their phones’ GPS systems, and scanning each bike’s unique digital code disengages a rear-wheel smart lock that
‘Neighbors complain about the bikes just being thrown in front of yards, left [on] sidewalks. We have an inflamation of ‘bike-itis.’ There has to be a way to bring order.’ A pair of LimeBike rentals awaits customers on the village green of Key Biscayne on Sunday afternoon.
Javier Souto
Biscayne, Miami Shores and North Bay Village inked contracts with LimeBike. In November, Spin entered into exclusive arrangements with Doral and Miami Lakes. That same month, the City of South Miami welcomed Ofo to the area with a city hall celebration. “Station-free bike-sharing is another way to bring another technology to our community that can change the way residents experience their city, help tourists get around, improve access and positively impact our environment,” South Miami Mayor Phillip Stoddard said at the time.
Today, thousands of green, orange and yellow bikes are strewn throughout the county, and more are on their way. A uniform means by which to regulate them, Mr. Souto said, is necessary. “We started with one company,” he said. “Now we have three or four companies – different colors, different things – and really, my guys are getting nervous.” Ms. Sosa said a resolution addressing how the bike-sharing companies will be managed, with Mr. Souto listed as its primary sponsor, will be written for future discussion.
inhibits unauthorized riders. Once they’ve reached their destinations, riders need only re-engage the lock, which makes the bike available to others. The committee chair, Rebeca Sosa, seconded Mr. Souto’s complaint, which was not on the agenda for discussion. “Who controls them?” she asked. “Who sets the guidelines? Where are the locations selected to have them? What is the responsibility of whoever rents a bike to bring it back, or do they pay extra if they don’t bring it back? We would like to hear all the informa-
tion from the administration and from the legal side.” In July 2017, one month after LimeBike entered the South Florida market through Key Biscayne, Miami Beach city officials pushed back against the company with $1,000 fines, warning the city would impound any LimeBikes obstructing the public right-of-way. The company responded by collecting stray bikes, though bikes frequently return to the area. Some municipalities struck deals with the companies. Between July and December 2017, Key
MIAMI TODAY
WEEK OF THURSDAY, MAY 17, 2018
13
Commercial Real Estate & Office Space Swap of city’s river office tower for new site not ready yet By John Charles Robbins
A complicated deal to gain a new office complex for the City of Miami in exchange for a triple tower private development on the Miami River is not as advanced as recently proclaimed. In fact, City Manager Emilio González said it’s far from being a sure thing. The deal arises from the city’s intent to sell or lease Miami Riverside Center, its office tower complex on the river at 444 SW Second Ave. Saying they had outgrown the building, city officials began to explore a sale or swap with a developer to gain a new main office building elsewhere. Negotiations between Lancelot Miami River LLC, an affiliate of the Adler Group, and the city have been ongoing for more than a year, yet there’s not been a peep publicly since the city commission hired an outside legal firm specializing in real estate to work in consultation with the city attorney in those negotiations. Any final deal would have to be approved by city voters. The city charter requires a referendum on any sale or lease of city-owned waterfront. Miami Today reported last week on a May 7 meeting of the Miami River Commission where an attorney for Lancelot, and officials with the city’s Department of Real Estate and Asset Management, gave the group a status report. Michael Llorente, an attorney for Adler, told river commissioners that negotiations had progressed enough to target the August primary election for the proposal, and the parties asked to go on the May 7 agenda. But at the May 7 meeting he said that “upon further reflection” they agreed to shoot for a November vote by the public, affording more time to work out details and get a full review by all players. He then asked to meet with the commission’s Urban Infill and Greenways Subcommittee in June, and the river commission July 9. River Commission Chair
‘Clearly, they are not ready for prime time. I’ve agreed to nothing.’ Emilio González An Adler Group affiliate aims to raze the city’s 10-story river offices and build three towers on the site.
Horacio Stuart Aguirre approved that schedule. Miami Today’s front page article got the attention of City Commissioner Joe Carollo, who read portions aloud at the May 10 city commission meeting, before quizzing the city manager about the important matter. Mr. González said he did meet with an Adler representative as one of his first moves after beginning the city manager’s job in January. They talked about the deal and “I was not enamored … I put it on hold,” Mr. González said. “Clearly, they are not ready for prime time,” he told the commission, adding, “I’ve agreed to nothing.” The comments came up late in the meeting, which had spilled over from day to evening, and on the heels of Mr. Carollo complaining how lobbyists for Hyatt Regency did not register as lobbyists on Hyatt’s behalf until May 10 – the day of the meeting. Mr. Carollo wanted to know when Mr. Llorente had registered as a lobbyist for Lancelot (Adler). A check of the city’s new database for lobbyists shows Mr. Llorente signed up as a lobbyist for Lancelot Miami River LLC
on Jan. 8 regarding the issue of “Disposition of Miami Riverside Center and new administrative facility.” Questioning the status of the Riverside Center project also comes as some commissioners have complained of not being updated on major matters by the administration. Adler proposed to build new offices for the city elsewhere and turn the river site into Nexus Riverside Central – residential towers, a hotel, retail and restaurants. In early 2016, with the assistance of CBRE Inc., the city solicited proposals to relocate its administrative hub and subsequently dispose of the present facility. In December 2016, city commissioners conceptually approved the sale or long-term lease of the Riverside Center and development of a new city administration building. Commissioners authorized then city manager Daniel Alfonso to begin negotiations with Lancelot (Adler). Commissioners voted June 8, 2017, to hire Weiss Serota Helfman Cole & Bierman as special real estate counsel to work with the city attorney in those negotiations. Commissioners said the
matter is so big and complicated they wanted an outside real estate expert to help the city get the best deal. The city administrative building is on choice land near downtown and Brickell, directly across the river from a planned mixed-use development to be called Miami River. The high-profile parcel is also next door to city-owned open green space with three boat slips. The 10-story office building is more than 25 years old and “unable to fully and satisfactorily meet the city’s future operating and client service needs,” the request for proposals said. The goal is a new Class A space for city administrative offices within city limits that will “functionally, securely and conveniently serve the citizens of the City of Miami.” Adler proposed constructing a 375,000-square-foot office building for the city elsewhere, with three possible locations listed: near the Lyric Theater in Overtown, next to Marlins ballpark in Little Havana, or as part of a mixed-use project on county land surrounding the Douglas Road Metrorail Station being built by an affiliate of Adler.
Adler says it is “uniquely positioned to maximize the value to the [city property] given that Adler owns the adjacent property directly to the north, which includes the access easements to the [Miami Riverside Center] and the plaza in front of the city property. “Adler has a unique understanding of the MRC Property as it relates to all of the underlying easements and is in the best position to deliver and execute a plan to provide the city with a fair market value for the property,” the proposal read. Adler’s long-term plans for the river property would see the creation of Nexus Riverside Central, a project the company says would provide much-needed market rate housing and activate a stretch of the growing public riverwalk. The development would consist of about 1,350 residential units in three distinct towers, a 150-key hotel along the riverwalk, and about 30,000 square feet of retail and restaurants connecting and activating the area along the river to the frontage along Southwest Second Avenue and Southwest Third Street, according to the developer.
High-end residential re-sales surge, but overall deals drop Re-sales of Miami-Dade residences priced over $1 million surged 12.3% in first quarter of the year as median prices rose for the 25th consecutive quarter, according to data that the Miami Association of Realtors and the Multiple Listing Service released Tuesday. Sales in the price range rose to 421 in the quarter from 375 in the first quarter of 2017. Median prices for single-family residences rose 5.9% to $337,000. Existing condo median prices rose 4.5% year over year to $230,000. Single-family home sales priced at $1 million and up jumped 16.2%, from 185 to 215. Existing condo sales in that price range rose 8.4% year over year, from 190 to 206. While the over $1 million sales rose, total
existing Miami-Dade County residential sales fell 6.5%, from 6,169 in the first quarter last year to 5,770. The total sales volume was $2.6 billion for the first quarter, down from $2.7 billion a year earlier. The totals don’t include the new construction condo market. Total distressed sales in Miami-Dade fell 39.7%, from 755 in last year’s first quarter to 455. Some 7.9% of all closed residential sales in Miami were distressed in the first quarter, down from 12.2% in the first quarter of 2017. In 2009, distressed sales comprised nearly 70% of Miami sales, the Miami Association of Realtors noted. The median price for single-family homes rose to $337,000 in the first quarter, up 5.9%
from $318,375 in last year’s first quarter. The median price for existing condominiums gained 4.5%, from $220,000 to $230,000. At the current sales pace, the number of active listings represents 6.2 months of inventory for single-family homes and 14.9 months for condominiums. A balanced market between buyers and sellers offers six to nine months of supply inventory, making the condo inventory clearly a buyers’ market. Miami-Dade real estate had 22,560 active listings in the first quarter, up 3.6% from 21,771 at the same time last year. The inventory for single-family homes rose 2.5%, from 6,355 to 6,517. Miami existing condo inventory grew 4.1%, from 15,416 to 16,043. The median percent of original list price
received was 95.2% for single-family homes and 93.6% for condos in the first quarter. The median time to contract on singlefamily home listings was 48 days. The median time to contract on existing condos was 80 days. The median time to sell a single-family home fell 11.8%, from 110 days to 97. The median time to sell existing condos fell 3.9%, from 127 days to 122. Cash sales represented 40.8% of the community’s closed sales in the first quarter, compared to 44.8% in the quarter last year. About 20% of US home properties are sold in cash. Cash sales accounted for 54.2% of all Miami-Dade existing condo sales and 26.7% of single-family sales.
14
MIAMI TODAY
COMMERCIAL, OFFICE SPACE AND RESIDENTIAL
WEEK OF THURSDAY, MAY 17, 2018
Learning it has affordable housing plan, county will update it By Gabi Maspons
After declaring affordable housing the county’s most critical issue at a committee meeting last month, Miami-Dade County commissioners this week voted to update the county’s Master Affordable Housing Plan. “This is one of the most unaffordable cities in the nation,” said Commissioner Daniella Levine Cava at the Housing and Social Services Committee last month. “We all know housing is a crisis, perhaps even
more important than transit.” Earlier this year, the housing committee received feedback from residents that it needs a report on the creation of a master plan for affordable housing. After further research, commissioners in the housing committee found that an affordable housing master plan already existed. The existing affordable housing master plan was passed in 2013 and hasn’t been updated since. The plan is set to sunset in 2019, prompting commissioners to update it.
Barbara Jordan and Ms. Levine Cava sponsored the legislation to update the Master Affordable Housing Plan, which came before the full county commission Tuesday for a vote. Commissioners passed the legislation unanimously without comment, directing Mayor Carlos Giménez’s administration to report on the status and outcome of the existing master plan and recommend the next steps for creating an updated plan. “We need metrics on the number of units we have in the county, the number we create
and the number that are lost and replaced,” Ms. Levine Cava said last month. The report is to include an assessment on whether the plan accomplished its goal, identify any obstacles that the county faced in trying to comply with the existing plan and recommend strategies for overcoming those barriers when creating an updated plan. The report is to also anticipate future affordable housing needs past the sunset date of 2019. The mayor’s office has 60 days to bring a report before the full commission.
Year’s biggest office lease: long-vacant boulevard penthouse By K atherine Lewin
Downtown Miami just saw its largest office lease in 2018 signed and secured. Duane Morris LLP is the new penthouse tenant at the CitiGroup Center with the help of Tower Commercial Real Estate. Duane Morris LLP is making a short jump from its current location at 200 S Biscayne Blvd. to its new offices at 201 S Biscayne Blvd. According to Jon Blunk, president of Tower Commercial Real Estate, the law firm reduced its space by 7,000 square feet and will save money in the long term. The firm’s new space is 23,128 square feet with unobstructed views of the bay. The long-term lease is valued at $16.8 million and it begins in October. Cristina Glaria, the director of Tower Commercial Real Estate, declined to say exactly how long the lease lasts. The penthouse office’s previous tenant was the law firm Ferrell Schultz Carter Zumpano and Fertel. The law firm dissolved when one of the main partners passed away in 2008. It has remained vacant since then, Ms. Glaria said. CitiGroup Center got a $20 million makeover that was completed in 2017. The renovation was designed by Richard Meier,
‘A lot of this is driven by the fact that Brickell is sitting at less than 8% vacant.’ Brian Gale
Duane Morris is shedding 7,000 square feet in its across-the-boulevard move to a vacant penthouse.
a world-renowned architect, and included modernized elevators and a new lobby. “It was tired. It needed it. We did the renovation to make it competitive,” said Brett Reese, the South Florida acquisitions and development director for Crocker Partners, the owner of the CitiGroup Center. “It was part of our strategic business plan to reposition the asset
to be the preeminent Class A building.” The CitiGroup Center has 34 stories and 809,594 square feet of space. Floors 15 to 18 are still vacant. It is Florida’s second largest Class A office building and is adjacent to the InterContinental Hotel, which offers fine dining and a fitness center. More big deals like the one
brokered between Duane Morris LLP, Tower Commercial Real Estate and Crocker Partners could be in the cards for downtown Miami. Brian Gale, vice chairman at Cushman & Wakefield, said he thinks leasing rates will continue to increase for Class A office space and more companies will move to the area. In downtown, there is plenty of space and rent
is in the upper $40s per square foot. On average, that is $8 to $10 less per square foot than Brickell, Mr. Gale said. “Even though the vacancy rate downtown has been slightly increasing, rents are going to continue to increase. A lot of this is driven by the fact that Brickell is sitting at less than 8% vacant,” Mr. Gale said. “There are not a lot of large blocks of good space in Brickell with great views.”
First quarter industrial space nosedive doesn’t faze experts By Marcus Lim
Industrial realty investment sales volume in Miami-Dade County was down 40% for the year’s first quarter, prompting some analysts to refer to the decrease as the start of the market’s “plateau.” In actuality, most real estate firms say they aren’t worried in the slightest. An Avison Young Industrial Market Report of the first quarter was released last month, and a summary by Real Capital Analysts stated that the 40% slowdown in sales to $907 million in the first quarter “could mark the beginning of the market’s plateau after several years of strong gains.” At an industrial real estate conference this month, Miami Today asked more than 20 companies about the comments and the current state of the industrial market. Though most experts agree there is a slowdown, it speaks more about 2017’s robust year in the industrial market, which was a record year for sales. Avison Young principal David Duckworth said that while there is a downturn in sales, it was to be expected, the situation was not as “daunting” as what was written and the market was not going to be in trouble.
“There is certainly no fear in the brokerage community. The office has been as busy as it ever has been and there is no apprehension,” Mr. Duckworth said. “The first quarter there has been a lot of product online, there are many things under $200 million contract. We will see a strong second half of the year when it comes to sales volume.” He said if one were to just look at the numbers, there is definitely a decrease and it could look ominous for the market. But numbers, he said, don’t reflect everything accurately. “If there is a slowdown, it won’t continue infinitely. On the ground, we are dealing with buyers and sellers every day. The market is very active,” Mr. Duckworth said. “Anything is possible, but on the ground, there is no shortage David Duckworth of activity and people wanting to transact.” Warren Weiser, chairman and co-founder of CREC, said the bulk of the sales were closed during the last quarter of 2017, causing last year to finish strongly and thus weakening the start of 2018, causing
the statistic of sales to be much lower, especially when compared to a robust 2017. But there are proposals lined up, he said, with a lot of activity. He said he expects a strong second quarter. “There was a lot of hangover from 2017 that some deals got finished right at the deadline and 2018, there was a lull in the action for the first few months,” Mr. Weiser said. “But I definitely see the activity picking Warren Weiser up significantly in the second quarter.” The two have said there is no weakness in the market, only challenges: higher interest rates and hesitant sellers. The higher interest deters people from selling, they said, because owners can’t get the prices they hope for and are unsure if they will have another good buying opportunity, and buyers don’t get what they expect. “The first quarter is usually about lining up deals and getting them under contract, not much closing. Based on what we are seeing, the buyer pool is strong, it’s just getting sellers to sell that is the issue,” Mr. Duckworth said. “There is plenty of
interest from buyers and a lot of investor demand. The sellers are just holding out more so.” While not as robust as 2017, the first quarter showed no shortage industrial development deals. There is a proposed 1.5 million square feet of delivery of new space throughout the year. The trick to ensure success for buyers, according to Mr. Duckworth, is to buy buildings that are mostly occupied, since occupancy levels are much higher, and creating value through the form of increasing rental rates, repositioning assets or growing revenue to renovation. “That is the next step for investors, creating higher level returns,” he said. “If you sell a property that is 75% to 80% leased, you have more buyers than you know what to do with.” Mr. Weiser said he doesn’t expect 2018 to reach the dizzying heights of 2017 as it was a “special year” but knows the market will be just fine. “There is nothing that points to any sustained downturn right now, shy of any unforeseen geopolitical event that would derail the real estate market,” he said. “I believe in South Florida that we will not be affected in a dramatic way.”
WEEK OF THURSDAY, MAY 17, 2018
COMMERCIAL, OFFICE SPACE AND RESIDENTIAL
MIAMI TODAY
15
City slows Hyatt bid to get three-tower river deal on ballot By John Charles Robbins
Hyatt Regency executives are eager to lock in a new long-term lease of Miami riverfront so they can build a new hotel and more, but city commissioners are in no rush and made that clear May 10. Proposed legislation to put the matter on the August primary election ballot was deferred for at least two weeks. The City of Miami owns the 4.2-acre site at 400 SE Second Ave., home to a Hyatt Regency hotel and the city’s James L. Knight Convention Center. Hyatt has grand redevelopment ideas and is trying to get a lease extension. Voters will ultimately be involved as it requires a city charter amendment to extend the lease impacting city-owned waterfront. The current conceptual plan would clear the site of all buildings, including the convention center, making room for a new 900-room hotel and two mixeduse residential towers with 900 units each, about 50,000 square feet of retail, some office space and parking. A key feature of the latest plan being touted by the Hyatt team is to raise the three towers 45 to 50 feet above ground for open vistas and a type of town square green space connected to a landscaped public riverwalk. The deal would mean more revenue to the city, with a minimum guaranteed rent of $2 million a year plus a percentage of gross profits from other uses. Staff of the city’s Department of Real Estate and Asset Management and Hyatt representatives have been working on redevelopment of the site for years. Going into the May 10 meeting they were hopeful of having the matter placed on the August ballot. But it was not smooth sailing, and several commissioners said they’re not about to hurry the process on the fate of what arguably is one of the city’s most valuable assets. The downtown property, on the north side of the Miami River, abuts Brickell Avenue on the east and is connected by the riverwalk to the nearby Fort Dallas Park, also owned by the city. Commissioner Joe Carollo wants more time to study the proposal. Commissioner Manolo Reyes wants more details before putting it before voters. Commissioner Ken Russell wants a guarantee of affordable housing and a commitment to more green space. Daniel Rotenberg, director of the Department of Real Estate and Asset Management, was giving commissioners a status report on the property, and explained the city’s giving up the convention center land for the redevelopment. “Let them [Hyatt] use it to go vertical, so the city can increase their revenues at the site and have an iconic hotel and residential complex,” he said. Mr. Carollo was upset that he’d not been informed of the ongoing negotiations around the
Miami Convention Center and the Hyatt Regency behind it would be replaced by three new towers in deal.
‘It’s not ready for the ballot and I’m not in a rush.’ Keon Hardemon Hyatt until very recently. “We’re supposed to make a decision on huge amounts of money, for a 99-year lease, and this had to have been going on for some time. I certainly didn’t know about it,” he said. Mr. Carollo said rushing into million-dollar deals has gotten the city into trouble in the past. He referenced developer Flagstone and its Island Gardens resort planned for city-owned Watson Island. Flagstone Island Gardens LLC sued the city after the commission found the developer in default of a ground lease of island property, determining little to none of the upland portion of a planned mixed-use mega-resort had been built. A deep harbor marina was completed in 2016. Flagstone won the first round in court, and the city was planning an appeal. “I’m not necessarily against this,” Mr. Carollo said of the Hyatt proposal. “This might be a good option for everybody … but this is a business deal that is very complex, it’s for 99 years. This is beyond our lives, our kids’ lives, and maybe even beyond our grandchildren’s lives. So we need to be very careful of what we’re doing here so that we don’t end up in anther fiasco like Flagstone and then all the staff that we have turns around and they’re testifying against their own city. “And I’m seeing too many of the same players. I’m feeling very uneasy and I want to go easy at this so that we could be sure that we understand everything. I want to go through
the thick contract … I think we all need to. We owe that to the public. That’s why we were elected – not to just rubberstamp something,” Mr. Carollo said. “I do know that this is being thrown at us – boom – all of a sudden, and there’s been a lot of people that have known about this and working on this long before I even heard about it, and this concerns me,” he said. Commissioner Wifredo “Willy” Gort said the conceptual look of the project is beautiful, “but you’re not ready to take it to the voters.” Commission Chairman Keon Hardemon said he agreed. “It’s not ready for the ballot and I’m not in a rush.” Officials with the city and Hyatt, along with CBRE representatives, have been presenting the latest proposal to city review boards with a goal of getting the plan before voters in August. A draft of the ballot wording reads: “Shall the City Charter be amended to extend City’s Lease with Hyatt of 4.2 acres of waterfront land at 400 S.E. 2nd Avenue for additional 49 years (total 99-year term) and include: convention center land; new hotel and mixed-use development; new public Riverwalk and other public amenities; and Minimum guaranteed rent to City of $2,000,000 annually, plus percentage of gross profits from all other uses?” The Miami River Commission recently recommended approval of the Hyatt redevelopment proposal. The plan calls for adoption of a new master plan and selection of a third-party developer. In seeking developers, the parties have prepared developer guidelines. Those read, “Hyatt shall provide preference to developers that place particular emphasis on the below guidelines and objectives when submitting their proposals:” ■Development of a mixeduse river plaza, inclusive of a state-of-the-art Hyatt Hotel and other compatible uses, including, but not limited to, residential, office, meeting space, retail and public amenities. ■Incorporate plans to include either workforce housing on site or a monetary contribution to
qualifying affordable housing projects, which will support attainable housing within the city and provide significant public benefits to city residents. ■Provide sufficient open and green space for a welcoming public atmosphere. ■Attract visitors to the public riverfront by providing visual and physical connections to the river from the street, including pedestrian and bicycle paths along view corridors. ■Provide for native landscape design, including shade and coverage. ■Renovate and expand the riverwalk to encourage safe public use, walkability, connectivity, and ease of access to the nearby Fort Dallas Park and Riverwalk MetroMover Station. ■Specify plans to enhance lighting and aesthetics to connecting riverwalk, including
lighting and other enhancements under the adjacent bridge. ■Facilitate access to site by means of the Knight Center Metromover Station. ■Include sufficient on-site parking to accommodate proposed uses. ■Incorporate adaptability and flexibility to consider traffic patterns both within and surrounding the site, including potential rearrangement of the I-95 Downtown Distributor. ■Create intuitive site entrance(s) and exit(s), maximizing connectivity to surrounding traffic by increasing flexibility to enter and exit site. ■Incorporate adaptability and flexibility to provide staging areas in the event Brickell Avenue bridge is relocated or a tunnel is constructed in the future. ■Improve the revenue-producing capacity of the site while balancing public uses. ■Include long-term sustainability within design, including considerations for sea level rise. ■Specify construction timelines, including any proposed phasing (note if phasing is proposed, riverwalk improvements must be completed before issuance of a Temporary Certificate of Occupancy for the initial phase). ■Provide demolition plans, including mitigation strategies to minimize debris within the river and surrounding areas (such as by providing riverbottom surveys or other strategies). ■Address applicable archeological concerns and historic preservation guidelines. ■Incorporate a 50-foot unobstructed public riverwalk/ greenway at the same elevation as the connecting riverwalk.
A Family Tradition of Service Since 1932. Located on the border of Miami-Dade and Broward Counties, Miami Lakes contiues to provide for easy commuiting and fast access to all the business, residential and recreational areas in South Florida. Managing over 4 million square feet of Office, Industrial and Retail Space in Miami Lakes, The Graham Companies can find you the ideal space to fit you business needs.
Come Visit Us and Experience Today’s Miami Lakes! For leasing information please contact Steve Style, Vice President of Marketing, 305-817-4025 steve.style@grahamcos.com www.MiamiLakes.com The Graham Companies 6843 Main Street Miami Lakes, Florida 33014
16
MIAMI TODAY
TODAY’S NEWS
WEEK OF THURSDAY, MAY 17, 2018
Two drivers told to each steer Formula One race dealmaking By John Charles Robbins and Jesse Scheckner
A power move may be in the making between City of Miami and Miami-Dade County over who will steer negotiations to bring a Formula One race to the area. Each government has tapped its own point man to lead the talks. The city commission on May 10 directed City Manager Emilio González to negotiate the holding of race events in Miami, and the county commission agreed Tuesday to authorize its chairman, Esteban Bovo Jr., to negotiate with Formula One. The county’s resolution identified the county mayor or his designee as lead negotiator, but Mayor Carlos Giménez recused himself. An early proposed race route had included the area behind AmericanAirlines Arena, property owned by the county known as Parcel B and home to a park. The bayfront parcel is in County Commissioner Audrey Edmonson’s district and she was not having it. Ms. Edmonson was adamant that the county board remove Parcel B from contention for any part of the Formula One course. After much debate, and a plea from a Formula One representative not to limit the course options, Parcel B was not included in the final approval. Formula One is the internationally popular single-seat auto racing enterprise with a season consisting of a series of races known as Grand Prix and held worldwide on purpose-built circuits and on public roads. In the city’s resolution, it says commissioners support the efforts to bring FIA Formula One World Championship racing to the City of Miami for 10 years, from 2019 through 2028, with the first Formula 1 Miami Grand Prix taking place in October 2019. The commission further directed the city manager to continue to work to formalize the Host City Agreement between the City of
The City of Miami and Miami-Dade County each tapped a point man to negotiate for the race. The county on Tuesday altered the race course.
Miami and Formula One and to conclude the agreement no later than July 1. And the city will also coordinate as necessary with other entities such as Miami-Dade County, Florida Department of Transportation and PortMiami, the resolution reads. The agreement must be brought back before the city commission for final approval. A map provided to city commissioners showed the potential race course which would have cars looping around AmericanAirlines Arena, traversing a portion of Biscayne Boulevard, onto a half-circle entry drive to Bayside Marketplace, and onto Port Boulevard to PortMiami and back on Northeast Sixth Street. The language of the county’s resolution mentions a host municipality. The resolution directs “the county mayor or mayor’s designee to negotiate an agreement with the appropriate entity for the hosting of Formula One racing events in Miami-Dade County and, on or before July 1, 2018, to present said agreement to this board or, if such agreement is not ready, to report to this board on the status of negotiations; and further direct-
ing the county mayor or county mayor’s designee to coordinate with any hosting municipality and with adjacent municipalities.” County Commissioner Dennis Moss urged county officials to make sure lines of communication were open among the county, PortMiami and the City of Miami. Mr. Moss also suggested talks include the Miami Heat – whose home court is AmericanAirlines Arena – and NASCAR in Homestead, to ensure no negative impact from a Formula One race in Miami on those venues. But Mr. Moss also voiced concern about the county appearing to take control of the entire event. “The last issue is what the mayor and the chair, what are they going to be expected to basically do in this process, and that is, we don’t expect the county to come in and somehow take control of this process in any kind of way. I just want some clarification for what is expected of Miami-Dade County,” Mr. Moss said. Commissioner Jose “Pepe” Diaz, prime sponsor of the county’s resolution, characterized the legislation as a simple and basic directive that would allow negotiations to begin. “It’s a skeleton-type of reso-
lution if you look at it … to specifically give the ability to the chairman and the people involved to negotiate and help the City of Miami land this event that the world would go crazy to have,” said Mr. Diaz. “To Commissioner Moss’s position as to why we’re taking control, we’re working alongside the City of Miami to help them any way we can,” Mr. Diaz said. “Whatever that is, that will now fall into the chairman’s hands to work together with them, including where they’re going, how they’re going to go, to make sure this is a reality. The amount of money that’s going to be coming into this community to help with jobs … any time we can get something [like this] in this community, so long as we work out the details so it doesn’t hurt anybody else, we want to do it.” Mr. Diaz made a brief appearance at the city commission’s May 10 meeting, touting the huge economic benefits of securing a Formula One race for the city for a decade of races. “It means incredible financial gain for the city, the county and beyond,” he said. “Basically, it’s like having a Super Bowl every year.”
Formula One delivers significant economic benefit to its host locations. The Formula 1 United States Grand Prix at the Circuit of the Americas delivered $2.8 billion of total economic benefit to the Austin, TX, metro area between 2012 and 2015. The organization boasts of generating a material uplift in tourism activity and in 2017, on average more than 200,000 people attended each Formula 1 Grand Prix race weekend, including a large number of international visitors. And the auto sport giant provides host locations with significant global exposure and media value. City Commissioner Joe Carollo was successful in adding a requirement to the city resolution that the Bayfront Park Management Trust have a seat at the negotiating table. City of Miami Mayor Francis Suarez voiced support for the proposal, mentioning the global spotlight and financial gains to the area. Mr. Suarez said the entire deal needs to be vetted by the community, and city leaders must consider the concerns of the many new downtown residents.
Tax district disclosures delayed as realtors hunt alternatives By Gabi Maspons
Miami-Dade commissioners on Tuesday delayed the start date of a previously accepted ordinance that requires any sellers of real estate property in the county to disclose to buyers if the property is in a special taxing district. Residents request to create special taxing districts with the county and pay an extra fee for services in their area for additional lighting, security, landscaping and road maintenance. Last year special taxing districts were a contentious county issue, ‘People haven’t under- as residents in the districts had stood that they need to to pay higher tax rates to cover pay the special fees, and a deficit from previous county in billing. we worked with the real errors Any deficit in special taxing estate industry to under- districts cannot be absorbed by the county, but must be paid by the stand better.’ residents in special taxing districts Jose “Pepe” Diaz receiving the services. Commissioners said residents weren’t always aware their prop-
erties belonged to a special taxing district and were surprised by the increased rates. Previously, the county required developers of new residential property located within a special taxing district to disclose the existence of the special taxing district within the real estate contract, but there was no measure in place to inform future buyers that the property was within a special taxing district. After residents told commissioners they weren’t always notified that their homes were in special taxing districts prior to the sale, Jose “Pepe” Diaz sponsored legislation requiring the clerk’s office to keep notarized statements from buyers of properties in special taxing districts to ensure all property owners have notice of their tax rates. “Disclosure is something important that we’ve always discussed,” Mr. Diaz said of the legislation earlier this year.
The legislation was to take effect this month, but commissioners delayed the start date 90 days after the real estate industry requested time to come up with alternative solutions. Once the legislation takes effect, all sellers of residential and non-residential property must prove to the county that the buyer knows the “actual cost of owning the property,” Mr. Diaz’s legislation says. The buyer must also acknowledge knowing the property is in a special taxing district by a notarized statement sent to the clerk’s office and filed in the county’s public records. “People haven’t understood that they need to pay the special fees, and we worked with the real estate industry to understand better,” Mr. Diaz said. Commissioners on Tuesday accepted the delay unanimously without comment. The county won’t require
disclosure documents for another three months. Until then, the county is to continue its marketing campaign to promote awareness of the notice requirements to the real estate industry, including the Florida Association of Realtors, the Miami Association of Realtors, the Real Property, Probate & Trust Law Section of the Florida Bar and local real property title insurance companies.
F ilming
in
M iami
These film permits were issued last week by the Miami-Dade County Department of Regulatory & Economic Resources’ Office of Film and Entertainment, (305) 375-3288; the Miami Mayor’s Office of Film, Arts & Entertainment, (305) 860-3823; and the Miami Beach Office of Arts, Culture and Entertainment-Film and Print Division, (305) 673-7070. Inffinito Art & Cultural Foundation Inc. Miami Beach. Option America. City of Doral, Miami Beach citywide, Unincorporated Miami-Dade County. TV3 Television Network. Dublin. Ireland AM. Miami Beach citywide. Twenty Twenty Productions Ltd. London. Faster. Miami Ave., Ocean Drive/Fifth to 15th streets, Rickenbacker Causeway, Washington Avenue, William Powell Bridge Turnaround. Traveling Dog Films. Miami. MOM…140 Building - Metro Flagler Building. Machine Kings Media LLC. Miami. Its Voice. A.D. Barnes Park.
24
WEEK OF THURSDAY, MAY 17, 2018
MIAMI TODAY
BRAMAN MIAMI’S
NEW 2018 CADILLAC XT5
299
$
Lease OR Per Month
0
%
APR Available For Up To
60
Mos.
B R A M A N CA DILL AC
2020 Biscayne Boulevard – Miami, Florida 33137 855.229.2299 – BramanCadillac.com Offers plus tag, tax and fees. New 2018 Cadillac XT-5 FWD: MSRP $42,455: Lease for $299 per month for 36 mos. with $1,989 down payment. With four thousand three hundred two dollars total due at signing. 10k miles per year with leases. Lessee responsible for excess wear and tear. No security deposit required. Must finance & qualify for credit through GM Financial. Includes GM Lease Loyalty program in the amount of $1,500.00. Must have a Buick, Cadillac, Chevrolet or GMC lease in house hold to qualify. 0% APR for 60 months for qualified buyers. Monthly payment is $16.67 for every $1000 you finance. Example down payment: 18%. Some customers will not qualify. Offers require 700+ Beacon Score. Dealer retains all rebates and incentives. Residency restrictions apply. Offers exclusive. All offers with approved credit. See dealer for complete details. Offers subject to manufacturers’ end date.
For a Limited Time Get Up To
W E K N C 0 TO 30 S R N E I V S O INI M
BRAMAN MIAMI’S
6,000 OFF MSRP
$
on Remaining New 2015, 2016 & 2017 Models*
New 2018 MINI Cooper Hardtop 2 Dr.
115
$
Lease per month
OR
5,771
$
FlexPay One Pay Lease
B R A M A N M I N I of M I A M I
2060 Biscayne Blvd., Miami FL, 33137 305.571.1200 – BramanMiniOfMiami.com New 2018 MINI Cooper Hardtop 2 Door model: STK# M2H29214; MSRP $24,800: Must lease thru & qualify for credit from MINI Financial Services. FlexPay on 2018 MINI Cooper Hardtop 2 Door model is a 24 month lease with a one time lease payment of $5,771. Or lease a 2018 MINI Cooper Hardtop 2 Door model for $115 per month for 24 mos. with $3,000 down. All prices and payments plus tax, title, license, registration, dealer and bank acquisition fees to eligible, qualified MINI Financial Services Customers. Offers include $500 loyalty credit. Customers must qualify for loyalty credit. Dealer contribution may affect terms. 5,000 miles per year with leases. Lessee responsible for excess wear and tear as defined in the lease contract and a disposition fee of $350 at lease end. No security deposit required to qualifying customers. *See dealer for specific models with up to $6,000 in savings off MSRP. All offers with approved credit. Optional equipment extra. Offers do not combine. Offers include all rebates and competitive incentives. Dealer retains all incentives and rebates. Not all customers will qualify. All pictures for illustration purposes only. See dealer for complete details. Offers subject to manufacturer’s end date.