LTC 656-2018 Parking Garage/Retail Development Proposal, Involving City-Owned Parking Lots in North Beach, Submitted by North Beach Town Center Development, LLC, an Affiliate of Pacific Star Capital, LLC MIAMI BEACF
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeochfl.gov_
OFFICE OF THE CITY MANAGER
656-2018 LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members of th City Commi lon
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FROM: Jimmy L. Morales, City Manager
DATE: December 20, 2018
SUBJECT: PARKING GARAGE/RETAIL DEVELOP ENT PROPOSAL, INVOLVING CITY-
OWNED PARKING LOTS IN NORTH BEACH, SUBMITTED BY NORTH
BEACH TOWN CENTER DEVELOPMENT, LLC, AN AFFILIATE OF PACIFIC
STAR CAPITAL, LLC
The purpose of this Letter to the Commission (LTC) is to inform the Mayor and City Commission
regarding the status of negotiations between the City and North Beach Town Center
Development, LLC (''Developer").
BACKGROUND
At its November 30, 2018 meeting, the Finance and Citywide Projects Committee (FCWPC)
advised the Developer to substantially improve the economic terms of the submitted proposal if
it wished to continue negotiations with the City. The FCWPC also recommended in favor of
directing staff to engage a consultant to perform an economic impact study of the Developer's
proposal. At its December 12, 2018 meeting, the Mayor and City Commission accepted the
recommendation of the FCWPC and directed staff to engage a consultant to perform an
economic impact study and to include the value of the City's land in the financial analysis.
Subsequent to the December 12, 2018 Commission meeting, the Developer submitted various
revised proposals to the City. Following ongoing negotiations, on December 20, 2018, the
Developer submitted its best and final proposal for the City's consideration. The noteworthy
changes from the proposal submitted at the November 30, 2018 FCWPC are as follows:
1. The Developer will pay for the air rights and construction costs associated with all 111
parking spaces on the 31d floor of the garage. The 111 spaces represent 31% of the 358
total parking spaces. [This results in a total out-of-pocket cost to the City of
$6,203,835 which is a reduction of$5,842,520.]
2. The City will provide one hour free parking for a period up to twenty (20) years. The
Developer will pay for the costs associated with implementing a validation system. The
Developer will pay the City the amount of the operating losses, if any, plus a contribution
of $66,000 annually to replace the net revenue associated with the existing City-owned
surface parking lots. [The 11/30/18 proposal did not include any free parking as the
Developer reimbursed the City for all validated tickets.]
Letter to Commission-North Beach Town Center Garage/Retail Development
December 20, 2018
Page 2 of 2
3. Commencing on the fifth anniversary of the opening date, if the Developer's retail
tenants occupy more than 79% of the floor area ("Occupancy Threshold"), the Developer
will reimburse the City for the validated tickets, plus an annual contribution off $66,000.
[Even though the 11/30/18 proposal did not include any free parking, previous
proposals which included free parking contained an Occupancy Threshold of
70%.]
As directed by the Commission, the Administration is engaging a consultant to perform an
economic impact analysis based on these revised terms. The study is expected to be
completed in February.
The developer has requested that this item be discussed at the January Commission meeting.
Please contact Kathie Brooks at extension 6249 if you would like to discuss further.
JLM/KGB/MMM