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Resolution 2022-32203 RESOLUTION NO. 2022-32203 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AT ITS APRIL.29, 2022 MEETING, AND AUTHORIZING A BUSINESS RETENTION INCENTIVE FOR GROOT HOSPITALITY, LLC, LOCATED AT 1680 MERIDIAN AVENUE, TO PROVIDE UP TO TWENTY (20) PARKING ACCESS CARDS PER YEAR, FOR USE OF PUBLIC PARKING FACILITIES IN THE LINCOLN ROAD AREA, BASED UPON AVAILABILITY, FOR A THREE (3) YEAR PERIOD, SUBJECT TO ANNUAL VERIFICATION OF CERTAIN MINIMUM ELIGIBILITY REQUIREMENTS, AS SET FORTH IN THIS RESOLUTION, AND ANNUAL BUDGET APPROPRIATION BY THE CITY COMMISSION IN THE AMOUNT OF THE ANNUAL INCENTIVE. WHEREAS, Groot Hospitality ("Groot") is a Miami Beach based hospitality company with a portfolio of restaurants, cafes, nightclubs and hotels that currently employs hundreds of staff, generates significant tax revenue, employs residents, and enhances the Miami Beach tourism and hospitality-centered economy; and WHEREAS, Groot has expanded its headquarters office footprint, located at 1680 Meridian Avenue, from 2,800 sf to 7,600 sf to accommodate growth and seeks monthly parking access cards for its employees in the Lincoln Road area; and WHEREAS, prior to Groot's office expansion, the Lincoln Road Business Improvement District expressed concerns that Groot was considering relocating its corporate headquarters outside of Miami Beach due to limited access to additional monthly parking in the multiple surface parking lots and garages in the Lincoln Road area, managed by the Parking Department; and WHEREAS, the 2019 Customer Satisfaction Survey illustrated that though 70% of Miami Beach business survey respondents have a positive overall image of the city, 52% of respondents indicated that the effectiveness of public transit for employee commuting was fair or poor, and only 28% of businesses reported providing free or subsidized parking for employees; and WHEREAS, on March 17, 2021, the Mayor and City Commission adopted Resolution Nos. 2021-31618, 2021-31619, and 2021-31620, identifying technology and financial services as targeted industries for business attraction, retention and expansion efforts, identified methods including, but not limited to inducements and incentives for locating or expanding local headquarters or regional offices for other industries, and authorized baseline criteria and performance standards for the Economic Development Department to market and offer services and multi-year financial incentives, such as the Job Creation Incentive Program for the targeted industries; and WHEREAS, at the September 24, 2021 Finance and Economic Resiliency Committee ("FERC") meeting, the Committee discussed the potential to offer a parking incentive as a business retention strategy to encourage Groot to maintain its headquarters in Miami Beach, and noted that free parking cannot be offered as the Parking Department operates as an enterprise fund and its revenue bonds are impacted by parking revenue; and • WHEREAS, the Administration is sensitive to Groot's contribution as an employer and purveyor of various first-rate dining, hospitality, and entertainment offerings in the City, and recognizes Groot's unique position as a local mainstay in the hospitality industry and investor in the Miami Beach community; and WHEREAS, at the October 22, 2021 FERC meeting, the Administration provided information on parking demand, and usage and capacity to increase issuance of access cards and noted that the greatest demand for parking is largely during daytime office hours allowing for evening availability to support nighttime uses and activities; and WHEREAS, by conducting parking counts and analyzing transient and access card usage at the 17th Street (G5) and Pennsylvania Avenue (G9) parking garages, the Parking Department determined that there was room to increase access card availability by approximately fifty (50) spaces; and WHEREAS, there is a desire to elevate and firmly support the hospitality industry, the backbone of the City's economy, and based on the discussions during the September 24, 2021 and October 22, 2021 FERC meetings, the Parking Department evaluated parking demand and access at area parking facilities, and is able to separate twenty (20) parking access cards for use by Groot; and WHEREAS, at the April 29, 2022 FERC meeting, the Committee affirmed its desire to assist Groot and recommended the creation of a parking incentive for business retention to the City Commission, with advisement that the Groot incentive be brought to the City Commission along with a proposed parking incentive policy; and WHEREAS, at the May 27, 2022 FERC meeting, the FERC approved and recommended the Administration's proposed criteria and guidelines for a three (3) year pilot Parking Incentive Program for business attraction and retention designed to focus on technology, financial services, hospitality, and health/wellness industries and that would accommodate at least five (5) unique eligible businesses with a 100% subsidy in year one (1), 75% subsidy in year two (2), and phase out by year three (3) with a 50% subsidy; and WHEREAS, the proposed pilot Parking Incentive Program establishes a model and parameters and guidelines for the Groot Business Retention Incentive; and WHEREAS, the purpose and goals of the Groot Business Retention Incentive are to: 2 • Support the hospitality industry; • Attract and retain businesses in the targeted industries of technology, financial services, and health and wellness; • Promote economic diversification; and • Promote quality of place and quality of life for employees; and WHEREAS, the business retention incentive will provide Groot with a financial incentive for the dollar value associated with up to the value of twenty(20) parking access cards, at current City rates, which are currently approximately $108, and will allow Groot to purchase any available parking access cards from the City and/or utilize the funds to access available, parking from private operators, at its sole discretion; and WHEREAS, the Groot Business Retention Incentive will be reduced over a three (3) year period as follows: • Year 1 (12-month period): 100% subsidy at current parking rates = $25,920 (up to 20 cards x $108 fee x 12 months = $25,920); • Year 2 (12-month period): 75% subsidy at current parking rates = $19,440; and • Year 3 (12-month period): 50% subsidy at current parking rates = $12,960; and WHEREAS, pursuant to the criteria and guidelines of the Groot incentive, which are more fully described in the Commission Memorandum accompanying this Resolution, Groot will be eligible to receive a maximum financial incentive of approximately $58,320 over a three (3) year term; and WHEREAS, after authorization by the City Commission, the parking incentive will be awarded within sixty (60) business days upon request via an annual invoice as required by the City and following vendor registration; and WHEREAS, Groot will be required to, at a minimum, (1) show evidence of an active Miami Beach Business License and State of Florida Business Registration prior to award, (2) be in good standing with respect to its headquarters location and have no outstanding code liens, fines or violations, pending litigation with the City of Miami Beach or any unpaid ad valorem property taxes (regardless of property ownership by Groot or its landlord), and (3) verify and document, on an annual basis, all criteria, including an executed lease and employment records; and WHEREAS, the City Commission, at its discretion, may consider any other criteria at the request and recommendation of the City Manager and the incentive is revocable at the discretion of the Administration if Groot is in violation of the incentive guidelines; and WHEREAS, the Administration recommends twenty (20) parking access cards to Groot as a three (3) year business retention incentive, upon annual, verification of required documentation; and 3 WHEREAS, as the Administration has proposed a pilot Parking Incentive Program, void of a holistic approach to prioritizing limited parking spaces, the Administration recommends the aforementioned limited business retention incentive for Groot, and recommends that incentives of this kind be curtailed until such time as a general policy is adopted and funds appropriated. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the recommendation of the Finance and Economic Resiliency Committee, at its April 29, 2022 meeting, and authorize a Business Retention Incentive for Groot Hospitality, LLC, located at 1680 Meridian Avenue, to provide up to twenty (20) parking access cards per year, for use of public parking facilities in the Lincoln Road area, based upon availability, for a three (3) year period, subject to annual verification of certain minimum eligibility requirements, as set forth in this resolution and annual budget appropriation by the City Commission in the amount of the annual incentive. PASSED and ADOPTED this as day of J-(4114- , 2022 ATTEST: c?1 JUN 2 3 2022. Dan Gelber, Mayor Rafael E. Granado, City Clerk _ t i .E9 cy,,, 'if I ':IHCORP GRATED' APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION G —) 3 -�� City Attorney Oats 4 Resolutions- R7 K MIAMIBEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Alina T. Hudak, City Manager DATE: June 22,2022 SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE,AT ITS APRIL 29, 2022 MEETING, AND AUTHORIZING A BUSINESS RETENTION INCENTIVE FOR GROOT HOSPITALITY, LLC, LOCATED AT 1680 MERIDIAN AVENUE, TO PROVIDE UP TO TWENTY (20) PARKING ACCESS CARDS PER YEAR, FOR USE OF PUBLIC PARKING FACILITIES IN THE LINCOLN ROAD AREA, BASED UPON AVAILABILITY, FOR A THREE (3) YEAR PERIOD, SUBJECT TO ANNUAL VERIFICATION OF CERTAIN MINIMUM ELIGIBILITY REQUIREMENTS,AS SET FORTH IN THIS RESOLUTION, AND ANNUAL BUDGET APPROPRIATION BY THE CITY COMMISSION IN THE AMOUNT OF THE ANNUAL INCENTIVE. RECOMMENDATION Approve the Resolution authorizing a business retention incentive for Groot Hospitality for up to twenty(20)parking access cards. BACKGROUND/HISTORY On September 17, 2021, the Mayor and City Commission approved a referral item to the Finance and Economic Resiliency Committee ("FERC" or "Committee") to discuss possible business retention incentives for Groot Hospitality, LLC ("Groot') as sponsored by Commissioner Ricky Arriola. The desired incentive includes parking spaces that Groot may utilize to operate at its expanded corporate headquarters at 1680 Meridian Avenue, Suite 303, Miami Beach. Groot is an established Miami Beach based hospitality company with a portfolio of restaurants, cafes, nightclubs, and hotels. Groot currently employs hundreds of employees at its numerous Miami Beach restaurants and nightlife venues including LIV at the Fontainebleau Hotel, Papi Steak, Story, Strawberry Moon at the Goodtime Hotel, and Sushi Fly Chicken (SFC). Groot's multiple hospitality ventures generate significant tax revenue, employ residents, and enhance the Miami Beach tourism and hospitality-centered economy. Groot seeks thirty (30) parking spaces, via monthly permits, for access and use by its Page 973 of 1232 employees in the Lincoln Road area. Groot's landlord, Market Street Real Estate Partners LLC (MS REP), has communicated the company's plans to hire approximately 40 full-time employees and 10-15 vendors. To accommodate these employees, Groot recently expanded its office footprint from 2,800 sf to 7,600 sf. Prior to Groot's recent expansion, the Lincoln Road Business Improvement District expressed concerns that Groot was considering relocating its corporate headquarters to Wynwood or another location away from Miami Beach unless the company could find access to additional parking. The Parking Department manages multiple surface parking lots in the Lincoln Road area near Groot's headquarters, including P25, P26, and P27, each with assigned parking permits. At peak times, permit holders experience challenges with accessing available parking as spaces are not reserved but rather utilized on a first-come, first-served basis. The City also manages three (3) area parking garages — (1) 17th Street parking garage (G5), (2) City Hall parking garage (G7), and (3) Pennsylvania Avenue parking garage (G9), each are at or near capacity with an extensive waiting list. During the September 24, 2021 FERC meeting,the Committee discussed the potential to offer a parking incentive to encourage Groot to maintain its headquarters in Miami Beach. The Parking Department shared information on existing challenges and strategies to identify solutions and maximize usage, including reassessing and evaluating existing waiting lists for accuracy. Additional proactive strategies proposed included offsetting demand, prioritizing access card issuance, balancing parking demand, increasing access card percentages, and working with private parking operators. Notwithstanding the application of these strategies, it was noted that free parking cannot be offered. The Parking Department operates as an enterprise fund and its revenue bonds are impacted by parking revenue. The Committee also discussed exploring a long-term approach to leverage parking, as a city asset, by evaluating parking demand data, utilizing technology, and engaging with stakeholders and the business community to ascertain need. Specific to Groot, the Committee recommended that the Administration identify and make a parking solution available to Groot, and return to the FERC to discuss a broader parking incentive policy recommendation to promote equity and transparency. During the October 22, 2021 FERC meeting, the Administration provided information on parking demand, and usage and capacity to increase issuance of access cards. It was noted that the greatest demand for parking is largely during daytime office hours allowing for evening availability to support nighttime uses and activities. By conducting parking counts and analyzing transient and access card usage at the 17th Street (G5)and Pennsylvania Avenue (G9) parking garages, the Parking Department determined that there was room to increase access card availability by approximately fifty(50)spaces. The Administration also presented a conceptual parking subsidy program in-lieu of providing guaranteed city-owned parking accommodations for restaurant and hospitality firms and venues. As initially proposed during the October 2021 FERC meeting and discussed further at the May 27, 2022 FERC meeting,the City Commission could establish a program to offer city parking (if available). The costs could be offset with an allocation from the General Fund, or if city parking is not available, the funding could provide for an alternative to city-owned parking, such as Page 974 of 1232 privately-operated parking facilities. During the April 29, 2022 FERC meeting,the Committee affirmed its desire to assist Groot and recommended a parking incentive for Groot to the City Commission, with advisement that the Groot incentive be brought to the City Commission along with a proposed parking incentive policy. At the May 27, 2022 FERC meeting, the Administration presented criteria for a three (3) year pilot Parking Incentive Program for business attraction and retention. The pilot Program is designed to focus on technology,financial services, hospitality, and health/wellness industries. If approved by the City Commission, the pilot Program may accommodate at least five (5) unique eligible businesses with a 100%subsidy in year one(1), 75% subsidy in year two (2), and phase out by year three (3)with a 50%subsidy. ANALYSIS The Administration is sensitive to Groot's contribution as an employer and purveyor of various first-rate dining, hospitality, and entertainment offerings in the City. The Administration also acknowledges Groot's unique position as a local mainstay in the hospitality industry and investor in the Miami Beach community. While Groot has not formally requested monthly parking permits or joined the waiting list through the Parking Department, it is likely that Groot ultimately made the decision to expand and remain in Miami Beach with anticipation that the parking incentive discussion would yield a favorable outcome. After months of discussion by the FERC on diversifying the city's economic base, on March 17, 2021, the Mayor and City Commission adopted resolutions identifying technology and financial services as targeted industries for business attraction, retention and expansion efforts. Identified methods included inducements and incentives for locating or expanding local headquarters or regional offices for other industries, a category which may include Groot. The Mayor and City Commission authorized baseline criteria and performance standards for the Economic Development Department to market and offer services and multi-year financial incentives, such as the Job Creation Incentive Program for the targeted industries. It is important to note that companies in the established targeted industries are not currently offered a parking incentive, however, these businesses often seek parking accommodations when considering relocation to or expansion in Miami Beach. Although the City Commission directed the Administration to prioritize the recruitment and retention of technology and financial services, there is a desire to elevate and firmly support the hospitality industry, the backbone of the City's economy. Based on the discussions during the September 24, 2021 and October 22, 2021 FERC meetings, the Parking Department has evaluated parking demand and access at area parking facilities and has separated twenty (20) parking access cards for use by Groot. While services and financial incentives are an important component of the city's targeted industry attraction and retention strategy, non-targeted industry retention is an important policy decision as existing businesses are valuable assets to our economy. Accordingly, the Administration continues to support and nurture the hospitality industry, a pillar of the city's economy. Page 975 of 1232 As mentioned above, FERC discussed a broader parking incentive policy at its May 27, 2022 and favorably recommended a pilot Parking Incentive Program (Program). The Program is currently being proposed for City Commission approval and includes criteria which would also set parameters and guidelines for the Groot business retention incentive, described further below. Groot Business Retention Incentive Purpose and Goals: • Support the hospitality industry; • Attract and retain businesses in the targeted industries of technology, financial services, and health and wellness; • Promote economic diversification; and • Promote quality of place and quality of life for employees. Financial Incentive: Groot will be provided a financial incentive for the dollar value associated with up to the value of twenty(20)parking access cards, at current City rates. The current City rate per access card per month is approximately $108. Groot could then purchase any available parking access cards from the City and/or utilize the funds to access available parking from private operators at its sole discretion. The subsidy would be reduced over a three (3)year period as follows. •Year 1 (12-month period): 100% subsidy at current parking rates =$25,920 (up to 20 cards x$108 fee x 12 months =$25,920); • Year 2 (12-month period): 75%subsidy at current parking rates = $19,440; and • Year 3 (12-month period): 50%subsidy at current parking rates=$12,960 Groot could receive a maximum parking incentive of approximately$58,320 over the course of three (3)years. Incentive Amount: The value of up to twenty (20) parking access cards over a 12-month period: Must show employment records attributed to its Miami Beach headquarters location with employment of up to twenty(20)employees. Incentive amount will be based on number of current employees (up to twenty(20)). Eligibility: • Must demonstrate an expansion/increase of leased space through an executed lease agreement(or signed Letter of Intent); and • Must have an executed commercial lease agreement with at least three (3)years remaining (if less than three years remain on the lease, lease must include a renewal option which could extend through the three (3)years Program period. After authorization by the City Commission and execution of an agreement, the incentive will be awarded within sixty (60) business days upon request via an annual invoice as required by the City and following vendor registration. Groot will be required to: • Show evidence of an active Miami Beach Business License and State of Florida Business Registration prior to award; • Be in good standing with respect to its headquarters location and have no outstanding code Page 976 of 1232 liens,fines or violations, pending litigation with the City of Miami Beach or any unpaid ad valorem property taxes (regardless of property ownership by the Groot or landlord);and • Verify and document, on an annual basis, all criteria, including an executed lease and employment records. The City Commission, at its discretion, may consider any other criteria at the request and recommendation of the City Manager. The incentive is revocable at the discretion of the Administration if Groot is in violation of the terms of the agreement. SUPPORTING SURVEY DATA According to the 2019 Customer Satisfaction Survey, the majority of Miami Beach businesses, approximately 70%, have a positive overall image of the city. However, in terms of parking and transit,there are opportunities for improvement. When businesses were asked how it would rate the effectiveness of public transit for employee commuting, 52% of respondents indicated fair or poor. Only 28% of businesses reported providing free or subsidized parking for employees. When asked about the availability of public and private parking for customers, 57% of businesses replied that there were seldom or almost never any parking spaces nearby. FINANCIAL INFORMATION The three (3) year incentive would have a maximum cost of approximately $58,320 including $25,920 in year 1, $19,440 in year 2 and $12,960 in year 3. Funding for this incentive is not currently identified or appropriated. If this financial incentive is to be offered during the current fiscal year, a budget appropriation would be required. If the incentive is to be applied for a future fiscal year, an appropriation would be required on an annual basis during the term of the incentive. CONCLUSION As a major Miami Beach tourism and hospitality stakeholder, the Administration recommends assisting Groot in a manner that is equitable and respectful of the individuals and companies already on the waiting list for monthly parking access cards. Due to current parking demand in the desired area, it is not feasible for the City to address multiple ad hoc parking requests on a consistent basis. With authorization of a business retention parking incentive for Groot, the Administration anticipates additional requests for parking accommodations and incentives may come forward from other businesses and applicants currently on the waiting list. Although a pilot Parking Incentive Program is currently being proposed for City Commission approval, void of a holistic approach to prioritizing limited parking spaces, the Administration recommends the aforementioned limited business retention incentive for Groot, but recommends that incentives of this kind be curtailed until such time as a general policy is adopted with funds appropriated. The Administration also recommends a three (3) year recurring award of the incentive to Groot upon annual verification of the criteria recommended for the pilot Parking Incentive Program, including, but not limited to an executed lease at 1680 Meridian Avenue or subsequent Miami Beach headquarters location, with a remaining/renewal term through the three-year incentive term, at a minimum, and a footprint equal to or greater than Groot Hospitality's current reported 7,600 sf of office space. Page 977 of 1232 Applicable Area South Beach Is this a"Residents Right Does this item utilize G.O. to Know" item. pursuant to Bond Funds? City Code Section 2-14? No No Strategic Connection Prosperity - Market and promote Miami Beach as a world class arts, culture, and quality entertainment destination. Legislative Tracking Economic Development Sponsor Commissioner Ricky Arriola ATTACHMENTS: Description © Resolution Page 978 of 1232