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009-2001 LTC CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\ci.miami-beach.fl.us L.T,C. No, '1-2001 LETTER TO COMMISSION January 9, 2001 TO: Mayor Neisen O. Kasdin and Members of the City Commission SUBJECT: Jorge M. Gonzalez t~ City Manager . 0 NORTH BEACH S TEGIC PLAN FROM: Several important and concurrent initiatives affecting North Beach are currently underway and will be presented for your consideration over the next few months. In an effort to provide a full and proper perspective, an anticipated schedule of each initiative is provided below. Each initiative directly or indirectly affects the area-wide strategy and revitalization effort. Additionally, on January 23"' and 24th, Howard Kohn, the City's consultant from the Chesapeake Group, is available to meet with each of you individually prior to conducting a community meeting to discuss the findings of the Economic Analysis for North Beach. Preliminary draft copies are attached for your reference and please advise as to your availability. DATE INITIATIVE January 10,2001 - Appropriate funding for deposit/consultant studies for Byron-Carlyle. January 24, 2001 - Business Community meeting to discuss North Beach Strategic Plan January 31, 2001 - Supermarket Area Siting Analysis Status Report - Implementation Schedule for DPZ Plan - Single Family - Altos del Mar - Historic District Design Guidelines. February 21, 2001 - Nortb Beach Strategic Plan Presentation to Mayor and City Commission - 72nd Street RFQ Proposer Selection - Byron-Carlyle Sale and Purchase Agreement - City-wide Parking Study RFQ, prioritizing Nortb Beach. If you have any questions, please contact me. JMG/C~IJG/rar~ F:\CMGR\$AL1.\RAR\LTC\NORTHBCH.PLN attachments c: Assistant City Managers and Executive Assistants to the City Manager Saul Frances, Acting Parking Director Jorge Gomez, Planning Director Joyce Meyers, North Beach Planning Coordinator Gus Lopez, Procurement Director Kevin Crowder, Economic Development Division Director o\l~ The Chesapeake Group, Inc. Building A Foundation For The Future II,. January, 2001 I 8516 GREEN LANE BALTIMORE, MARYlAND 21244 410-265-17841(FAX)410-521.Q480rrcGROUP@EROLS.COM DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future c 0 Introduction 1 Neighborhoods & Housing 2 n ortunities 5 t Residential Marketing 7 Elevation of Household Income 7 e Business Develo ment 9 n Business & Investor Recruitment 10 Additional S ecific Sites 13 t Additional Su estions 16 S Additional Fundin Sources 17 8516 GREEN LANE, BALTIMORE, MARYLAND 21244 410-265-1784/(FAX)410-521.o4801TCGROUP@EROLS.COM DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future In_rocluo_lon The following represents the second part of a two part economic analysis and strategy for the North Beach area of the City of Miami Beach. This and the previous section are prepared by The Chesapeake Group (TCG), under contract to the City of Miami Beach. The Chesapeake Group is a Baltimore-based economic development consulting firm, formed in 1974, with significant experience and strategic business alliances in South Florida. This strategic implementation program is based upon the findings of the business survey, the supply and demand analysis presented in the economic analysis, interviews with individual 'stakeholders" in the North Beach area, numerous meetings with community interests and City staff, and TCG's experience with commercial and community reinvestment and economic enhancement. The following are findings of the business survey and market assessment that significantly affect the proposed implementation program. " One in ten business operators approaching retirement age have not identified anyone to operate the business in the future. This could result in the closing of viable businesses, increased vacancies and blight, and a loss of services to the community. There is a need for efforts to effectuate a smooth transition of these businesses to new ownership that will continue to operate viably. " At least 40% of the businesses have had problems attracting qualified and capable employees. Since such problems can stymie growth and reinvestment, enhanced linkages to job training and educational facilities should be fostered. ". Widely held negative perceptions are associated with parking and Jack of security leading to crime. Since perceptions are reality to those that hold them, elimination or mitigation of negative perceptions will contribute to success with fostering reinvestment or is necessary in fostering reinvestment. " Reasonable opportunities for business restructuring exists through expansion, investment, relocations, and, in some cases, contraction. Facilitating these opportunities could yield community reinvestment returns. The following are findings from the market analysis that also impact the implementation strategy. " There is opportunity to expand available food or 'supermarket" space either through expansion or replacement of the existing operation and operator. " expanSion or additional concentrations of food service establishments in the area are also possible. Demand is sufficient to support between three and six new establishments. New and existing establishments would benefit from clustering. . ...... p . Ee ...... Ee ... t -=- t - . C>> .... ~ t r -=-Ãt ~ 9 Y 8516 GREEN LANE BALTIMORE, MARYLAND 21244 410-26S-17841(FAX)410-521-04801TCGROUP@EROLS.COM 1 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future ./ Additional opportunity exists for hardware or "home improvemenr operations in the area, but at a scale that is below that typically associated with national chains. ./ Significant fumiture, general merchandise, and other limited product demand exists but these kinds of operations either are not typically associated with neighborhood shopping experiences or would be difficult to attract or physically accommodate in North Beach. ./ About 250,000 square feet of multi-tenant office space could be added to North Beach. An important growing and potentially catalytic niche is that associated with the "home/office" market. Such office space could be technologically linked to other offices elsewhere in the local area, another community, or other parts of the country and world. The following also affects the strategy. ./ Commercial investment and business activity is driven by demand factors associated with the "market." Strengthening demand is essential for strengthening commercial activity and investment. ./ The "reopening" of The Carillon, should the proposed activity reach fruition, will be a significant market catalyst for restaurant and certain other retail activity. ./' The Normandy Isles commercial core area, centered around the fountain, is in need of an "anchor" that can draw regular patronage to it. The current tenant mix is relatively weak. ./ The proposed reuse of the Byron-Carlyle for artistic related endeavors could play a role in altering the economics of the eastem-most portions of the 71st Street corridors, when coupled with additional reinvestment. ./ The eastern few blocks of 71&. Street, closest to the beach, but west of Collins Avenue is currently without focus and without economic vitality. It is noted that at various times throughout the text, names of specific businesses are mentioned. Their identification or inclusion neither represents an endorsement by The Chesapeake Group nor any indication of interest or acceptability on their part. The strategy presented is comprehensive and represents opinions with respect to activities, programs, and actions that TCG believes could or should be implemented. It is also recognized that as a result of the comprehensive nature, not all elements are likely to be implemented. N.'."laolfhoo"a . Hoya'". While the market analysis emphasized opportunities associated with commercial activity; commercial opportunities are defined and driven by "markets" or components of demand as defined above. The primary market for commercial activity as defined in the market analysis consists of residents of North Beach. Thus, success with commercial enhancement or revitalization will be largely affected by success with neighborhood enhancement and related activity. The strategic program indicated herein for the neighborhood involves a two-pronged or dual approach. The dual emphasis is on rehabilitation of existing properties and development of select available parcels for residential infill. 2 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future The following are fundamental issues that either describe or impact the residential market in North Beach. 1. Perception of lack of safety in some sections of the community 2. Tumover of residents as indicated by turnover of students in area public schools 3. High proportions of rental or non-owner occupied units in North Beach 4. The existence of'undersized" units 5. The perceived proportion of lower income residents in some sections of North Beach 6. Concem for "displacement" of current residents or "gentrification" of the area 7. The high proportion of property abutting or in close proximity to water, including the ocean, bay and canals. 8. The comparative affordability of property in the area 9. Character of individual communities and many of the existing structures Because of regional growth pattems; the changes that have occurred in neighborhoods and communities to the north in Surfside, to the south in Miami Beach, and to the west in the Upper Eastside of Miami, west of Biscayne Boulevard; and some of the defined characteristics identified in the above list, opportunities exist to elevate the general housing stock in North Beach. Within the region, an additional 15,000 households are expected to be added or absorbed over the next five years. These additional households will help to maintain the viability of the existing housing stock as well as generate increased demand for new housing. Current conditions are such in North Beach that there are units both dispersed and clustered that were built in the past that were never intended for full-time, year-round occupancy. Yet today they serve such a function. Numbers of those units fail to meet federal and local scale or size standards for such occupancy. Mitigating these conditions on a broad basis will promote enhanced neighborhood viability and will result in fewer households living in North Beach in the foreseeable future than exist at present. Thus, unless income levels of the residents that remain are elevated or raised, commercial demand will decrease. In order to foster neighborhood stability and mitigate negative impacts on current residents, rehabilitation of existing units by increasing the average size of the unit must be coupled with programs to avoid displacement and enhance income levels of the current residents. (1) Improved neighborhood conditions are likely to benefit, to the greatest extent possible by the conversion of numerous "undersized" units to fewer but larger units. In order to facilitate this process, (2) additional regulations will be necessary to require such actions by property owners, Units should be converted irrespective of age and current occupancy. (3) Code enforcement will be essential both with the above process as well as with the physical enhancement of regulation sized units. Code enforcement should be both consistent and comprehensive. Due to cost factors and the need to allocate resources, the process could be Initiated in speCific areas at different times. Furthermore, (4) consistent and comprehensive code enforcement should not be limited to residential activity, but should Include commercial and other uses as well. 3 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future The ability to enforce current codes in the City is, to a certain extent, dictated by occupancy. Requirements for non-occupied units differ from those for occupied units and buildings. Because of this distinction, those who select to board buildings up for extended periods of time instead of investing can benefit from the "system: Not requiring "bringing the building up to code," whether occupied or not, helps to increase blighting influence in the community and encourages current owners to hold on to properties that otherwise might be sold to more aggressive investors or to homeowners. Thus, (5) the City should examine changing the policy so as to enforce all codes on all units and buildings, Irrespective of occupancy. Expansion, targeting, and creation of several mechanisms and programs should be pursued in an order to minimize financial pressures on current properly owners and tenants brought on by enhanced code enforcement and changes in unit size,. (6) A revolving loan fund should be developed or focused upon North Beach targeted toward housing rehabilitation, Such a fund could employ both public and private resources, or could result from a new financing proposal set forth further in this strategic program. Many traditional revolving loan funds employ financial institution resources, foundation resources and state, local and federal government resources, including but not limited to those associated with the Department of Housing and Urban Development. In addition to the revolving loan fund targeted for rehabilitation of structures, particularly those that are below minimum standards, (7) resources should be targeted for North Beach to facilitate and foster homeownership among current tenants, Homeownership will not only mitigate some of the displacement caused by the conversion of units, but will help to provide a more stable community, enhanced educational experiences through reduction of classroom tumover, and a sense of ownership in the neighborhood. (8) Many tenants or renters do not own the units In which they live as a result of two primary factors. These are the inability to provide funds for down payments and questions of credit worthiness that result In increased risk for those that provide conventional financing. Homeownershlp programs that address both issues should be targeted toward North Beach. In addition to the targeting of available programs, (9) consideration should be given to the establishment of a Community Development Bank that would further enhance the available resource base and serve a potentially vital function In the community. Success with stimulating available financing for homeownershlp opportunity could also ~e achieved through the (10) targeting or establishment of a bank mortgage pool, whlth would facilitate the sharing of risk among conventional financing sources, and the (11) creation of a targeted "first time" home buyer program, Many of the suggestions for stimulating reinvestment in the neighborhoods and mitigation of blighting conditions traditionally results from the prodding, facilitation, and tenacity of the community. A partnership between the residents, business community Interests, and the local government Is needed to facilitate the Institution of the targeting efforts, new financing tools, and enhanced code enforcement, (12) Carefully orchestrated "educating" by the community Interests Is essential to cause change and guide the reinvestment process. This Is not only an appropriate role for a community based development corporation, but It Is unlikely to happen without such community organizational capacity. .. 4 DRAFT The Chesapeake Group. Inc. BuildIng A Foundation For The Future As defined, much of the needed effort centers on rehabilitation of the existing building structures and housing stock. While much effort should be directed toward the rental housing stock, efforts should not be exclusive to rental units. Investment is also essential in the owner occupied stock. Owner occupied units often deteriorate or suffer from disinvestment as well. Such deterioration results In North Beach as In other communities because the current owner cannot afford the cost of maintenance, This Is particularly true In senior households, To mitigate disinvestment or to stimulate reinvestment of owner occupied units, two additional forms of financing could be of assistance as they have been elsewhere. These are: (13) reverse mortgages, where money Is borrowed based on equity, but not repaid until the time of sale; and (14) Investment in both future appreciation and equity premised upon a position taken In the unit by a financial Institution lender. Recouping of funds, including interest, also occurs at the time of sale of the unit in the latter as well. It is noted that the latter program can be employed to cover rehabilitation costs for "first time" or newly purchased units as well. One of the primary concems that is expressed with respect to the "marketability" of the North Beach neighborhoods is insufficient parking. As defined, rehabilitation of the existing housing stock by increasing the average size of units will result in a diminished number of housing units. The proportional dedine should more than offset any rise in needed parking that results from the potential rise in income levels that might result in a higher ratio of personal vehicles per unit. However, even if the offset does not mitigate the problem in total, it is not unusually for very successful established urban neighborhoods to thrive with perceived "tighf parking, including neighborhoods in the Miami-Dade area and throughout the country in cities in the Midwest; the West, such as San Francisco; and the East such as Baltimore, New York, Boston, Philadelphia, and Charleston. Other options to expand parking, as were identified in the early to mid-1990's plan done for North Beach, include angled parking where possible and the creation of neighborhood lots. New Housin Opportunities While maintenance of the architecture, scale of structures and neighborhoods, and other components of the character of North Beach are of prime Importance to its continued viability and enhancement, (15) also advantageous are Infili and redevelopment deemed appropriate for the neighborhoods. There are several opportunities to expand the housing base in the area. It is noted that such expansion will have essentially no measurable impact on the viability of commercial activity in the area because the total number of potential units at reasonable density levels (those not dissimilar to existing densities) is small. In total, revenue or sales that accrue to businesses are likely to be statistically insignificant. However, such infill units can have a significant beneficial impact on the psychology and reinvestment pattern in the housing market. 5 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future (16) The key site or sites for Inflll that can have the most significant Impact Is associated with the city owned parcels situated west of Collins Avenue, but abutting Collins between 79th Street and 87th Street. (17) The advantageous market position for such housing would be combining home office/business activity, where the owners of the units would both live and work there. The following are some criteria that should be applied to the development of those parcels that would enhance the prospect for market success. ./ "Wiring of units to contain technology Infrastructure and electrical power for communications and wired infrastructure provided to the site by the City. ./ Townhouse densities at a level of about 10 to 12 units per acre. ./ Consistent exterior design standards even if there are multiple developers of the units. ./ Office operations situated on either first or upper floors. The goal is to (18) achieve prominence within structure by design, potentially taking advantage of the view of water from the third or upper story. Strategic Parcels 1 - ./ Departure from previous plans in that, (19) no "hotel" Is suggested to be Included In this area. Current Miami Beach regulatory definition for hotels states that such structures are "intended to be occupied by transient residents." The definition could apply to less than quality facilities as well. ./ (20) ''Tweaking'' current regulations, allowing certain types of advertising/marketing, business telephones registered at the addresses, and lifting of "no employee limitations" to a small number (two to three maximum). 6 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future Residential Marketin (21) Marketing will be a key to generating both Investment In the established housing stock and In creation of new housing. The marketing activity should focus on or emphasize: v' The establishment of distinctive Individual neighborhood Identities and promotion of them; v' Families and related activities; v' Range of waterfront options, from the ocean and bay to canals with boat storage and access; v' Affordablllty and price range (Current home values for waterfront in particular, are below other areas of the barrier islands in Miami-Dade.); and v' Architectural character of existing units. (22) The existing communities should be marketed using specifically generated materials. Marketing materials for residentiaVneighborhood based efforts should include: 1. A neighborhood based brochure. This would be a multi-page piece, with emphasis and orientation in the manner noted above. 2. Publication ads. 3. Web site for and with linkages to Realtors, The first piece could or should be printed using two different quality materials. One would be of the quality for distribution with and through newspaper and magazine insert or supplement (newspaper type paper stock). The second would be In glossy format for other means of distribution. It is also suggested that: v' Ads could be placed In visitor-orlented publications. . ./ Pomotlonal materials could be distributed to human resource departments of large regional employers. Assistance with printing costs and actual printing could come from area public utilities, financial institutions, newspapers and other major business interests. II.v.tl.. .f 11....".1411..... As defined, one of the ways of mitigating displacement and enhancing community vitality is by elevating or raising the income levels of existing residents. Training and education are traditional means of expanding economic opportunity. Such training should also be of assistance with eliminating labor pool issues identified by the business community and with addressing issues associated with "lineage" and business succession. Employment training, Intended to raise existing residents' Income levels, could be handled through linking residents with existing area Institutions. Those existing institutions that would assist with skill enhancement include those that follow. 7 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future Miami Dade Community College Florida International University Johnson & Wales Nova University Florida Atlantic University Miami-Dade County Public Schools Effective attempts at reaching area residents will require a great deal of coordination. Such coordination could come from the City or the North Beach Development Corporation. However, neither would have experience with such activity or intimate familiarity with the educational institutions. Thus, (23) It is suggested that one existing higher education Institution function as the coordinating entity for this activity, Because of their expressed Interest and role played by similar Institutions In other communities, Miami- Dade Community College could act as the program coordinator. (24) The effort could be handled by creating a "higher education center" In North Beach, with multiple Institutions. Shared facilities by Institutions offering advantageous course work leading to GED, Associate and Bachelor Degrees, potentially advanced degrees and "certifications," and continuing education credits could be offered. With a proper facility, universities from outside the region could be enticed to offer programs leading to Bachelor and Advanced degrees, certifications, continuing education credits, or other technical training. (25) Outreach to residents would be handled through developed marketing materials distributed through religious institutions, non-higher education schools, existing adult education programs, Immigration services, and others. While the intent would be to bring a range of educational opportunities to Miami Beach and North Beach in particular, the higher education center could serve the larger regional population as well. As defined, there is also a need to stimulate entrepreneurial activity if for no other reason than to prevent the loss of existing business activity caused by the retirement of current owners and the associated vacant buildings and blight that would ensue. (26) The establishment of an "apprenticeship" program would be beneficial to both the business and residential communities. Recruitment of "new ownership" can be effected through the community's colleges and vocational and technical schools by identifying students with potentially successful entrepreneurship profiles. Establishing contact with each of the schools, an evolutionary program including internship, apprenticeship and ultimate business purChase can be structured to connect the right business partners. Such a program might involve the following. ./ Internship - introduction and part-time work while attending school ./ Apprenticeship - 1 - 3 years working and learning in the business ./ Purchase - with previous ownership staying on for 1-2 years Participating institutions in such a program could include the following. It Is noted that the Institutions are the same as those previously Identified for training activity. Thus, the two activities could be linked and coordinated by Miami-Dade Community College, with and through the "higher education center" facility. 8 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future 1. Miami Dade Community College - Entrepreneurial Education Center 2. Florida Intemational University - School of Business 3. Johnson & Wales - Culinary Institute 4. Florida International University - Hospitality Management 5. Nova University - Business & Entrepreneurship Center 6. Florida Atlantic University - Small Business Development Center 7. Miami-Dade County Public Schools - Vocational and Adult Education Centers Components of this effort that would focus the attention on North Beach could include the following. ./ Community recruitment speakers from each identified school outlining the program, it's benefits and requirements. ./ Business scholarships for North Beach residents to attend and graduate with business management, specific industry skills and entrepreneurship skills. .,.. Cooperative partnerships with banks and other financial entities to sponsor the student apprenticeships and assist with financial planning and procuring resources for the purchase and financing of businesses. .,.. Public Relations in the business media, to create awareness of the entrepreneurship activities and opportunities in North Beach (and Miami Beach). These activities can include media relations as well as attendance at trade shows, career days and business expos to create awareness of the program and recruit both business sponsors and student/apprentices. It Is also noted that North Beach would maximize the benefits of such a program if there were a commitment on the part of those who participate In the program to also live In the community. (27) Special financing arrangements for those making such a commitment should be pursued. .......... D.".'op.."t Increasing revenues to existing operations and other enhancement to the existing business community are fundamental to enhancement of North Beach. Through the housing efforts and "income elevation" activities as well as the proposed apprenticeship effort, the strategic program will alter future market conditions. In the meantime however, such neighborhood based economic enhancement activity will take time to evolve. Activity to enhance existing business must be expanded as well. In order to assist existing businesses, the following activity is suggested. It is noted that (28) the primary coordinating entity for such activity should be a community based development corporation. 9 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future ./ (29) A cooperative advertising and marketing program should be initiated. Initially the focus could be on collective restaurant ads aimed at the region's visitor base. The initial activities would be on a volunteer basis, but could evolve into a permanent "special benefit district structure" as in local areas such as the Miracle Mile in Coral Gables or those found in virtually all shopping centers. ./ (30) The establishment of a "cooperative buying group" for small Independent food establishments, affording greater buying power and potentially lower prices for area residents. ./ (31) The development of targeted events and activities that promote a certain cluster of businesses, One such event would be a "Taste of North Beach: on site at current restaurants. Such an event, unlike others, would be oriented toward lunch time, when current patronage is at its low point. ./ (32) The development of a "Frequent User" club oriented toward lunch at area restaurants and other food service establishments, Discounts could also be offered for lunch and diner for those showing proof of stays at area hotel facilities. ./ (33) The establishment of a special benefit district to enhance area security (and potentially marketing), employing off-duty police officers, funded by commercial area property owners. ./ (34) Changing the "cap" to $50,000 and (35) refocusing the existing building renovation grant program to Include at least 50% of the expenditures to exterior renovations. Consideration should also be given to targeting the program to specific geographic areas or types of business, I..'.... & I.v..'or It..r."...' In addition to the other strategic component activity, success with economic development efforts will require actual recruitment of new activity. Typically, recruitment is given a great deal of "lip service: Many economic development entities, community-based development corporations, and others involved in the industry state that they intend to do recruitment, but more often than not, essentially provide various forms of technical assistance after an entity comes "knocking on their door. Others solicit indirectly, through publications, but do not participate in typical "door knocking" activity associated with other forms of "sales." (36) There are several types of entitles from which North Beach would benefit, if their numbers increased within the community through recruitment efforts. First are hotels and motel operations. The second is (37) businesses defined as meeting needs based on the estimates of market demand. The third, but directly related to the other two, is (36) investment Interests associated with redevelopment, rehabilitation, and in-fill development activity . 10 The Chesapeake Group, Inc. Building A Foundation For The Future DRAFT There are (38) four Important steps or elements In a quality recruitment process or program to aggressively pursue new, additional, or expanded activity. These general steps or elements are: A. Site Identification; B, Identification of those to be solicited; C. Defining appropriate methods for solicitation based on the particulars; and D. Consistent execution of a process. The following are statements or suggestions with respect to each of these components. Site identification - Critical sites for which rehabilitation, redevelopment, or development is sought or desirable should be Identified. A "site" can consist of multiple properties with multiple owners or a single property. land assemblage can be a component of the development process. It Is very important to note that the entity seeking the development, rehabilitation, or redevelopment does not necessarily have to own any or all of the site for which investment/development interests are solicited. For example, it is not uncommon for an individual property owner to seek outside interests to develop a parcel that becomes only one piece of a larger development. An example of such a project, not in Miami Beach but in Miami- Dade County can be found in Coral Gables, where the Rouse Company was recruited by one property interest, but decided that multiple properties were necessary in order to create the desired, viable critical mass. That process has led to the development of a major commercial venture that is now under construction. A multiple parcel solicitation process could be very advantageous for North Beach. For example, significant investment is required to "turn around" the area southwest of the "72rwl Streer site. Seeking an interest that has the capacity to develop and redevelop more than just the "7200 Street" site proper or can develop such a property to benefit reinvestment in the immediate area, would be advantageous. The need for such multi-parcel development in North Beach is not limited to that opportunity, but to others as well that could result in the attraction of a much needed convenience anchor for commercial activity in Normandy Isles. Community-based development organizations throughout the country have seized the opportunity to attract investment/developer interests without ownership of parcels as well. Essential land assemblage can be handled by the development interest as required. Sometimes such assemblage requires public participation, but often it does not. Identification of those to be solicited. The second step is to identify those to be solicited. (39) Standard CD software, based on SIC (Standard Industrial Classification) Codes and "Vellow Page" listings, can be employed as could other materials to identify potential investment/development interests. Other sources Include: 11 The Chesapeake Group, Inc. Building A Foundation For The Future DRAFT y" Publications oriented toward real estate Investment trusts, developers, property management, etc. y" Trade and professional association membership mailing lists. It is suggested that (40) recruitment not be limited to South Florida or the Miami-Dade area. Often entities from outside the area can bring a broad range of experience and may not have "built in perceptions" of North Beach and Miami Beach that may be prevalent in the local development community. Definina aDDroDriate methods for solicitation based on the Darticulars. In defining how to recruit or solicit interest, there is a range of options. These are: Public Relations - Creating Awareness within the industry specific, general business and professional communities that increases the receptiveness and effectiveness of all marketing efforts. Public Relations programs typically include press releases and other forms of outreach for which "out of pocket costs (non-labor) is minimized or non-existent. - Direct Marketing - A well-developed, pro-active method with a singular purpose. That purpose is response. Since the targets are defined, convincing, specific messages addressing their concems with the relevant benefits and advantages are delivered in a highly efficient method. There are several methods of communications to reach the identified groups, including submitting news releases to trade newsletters and editorial staffs, direct mail, and targeted e- mail campaigns. Classified Advertising - Generally associated with press and trade publications. today also includes most forms of intemet advertising. Classified advertising should be carefully placed to be effective and because of cost factors. Advertising through the sponsoring group's site or related sites is an additional opportunity that could be successful, but unlike other forms of outreach, it is dependent upon the entity that one would want to solicit finding the solicitor. (41) Recruitment efforts for North Beach sites at this time should focus on public relations, direct mall, select trade journal advertising, and posting on the development corporation's web site. The developer/Investor recruitment should be coordinated and orchestrated by a local development corporation. Efforts that involve publicly owned land should be joint efforts. Those that involve no publicly held land could be partnered. Consistent execution of a Drocess. . Given the need for reinvestment, (42) multiple solicitations for multiple properties are envisioned. (43) There needs to be a reasonable allocation of resources to develop materials and perform the needed services. Resources need to be both fiscal In nature as well "manpower" oriented. It must be systematized, performed regularly, targeted, timed, and niche focused. (44) Standard, uniform marketing materials should be part of the package as well as those that can be modified for Individual targeted recruitment efforts. 12 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future Targeted recruitment activity should include, but not necessarily be limited to: A. Additional hotel operations that are affordable and family oriented and, thus, differentiated from other Miami Beach mass and efforts; B, Restaurants and related food service establishments; C. Convenience anchor for the Nonnandy Isles commercial area; D. Development Interests for slte"speclflc activity defined In this strategy and others called for In the developing plan for North Beach. It is noted that "affordability" should be a key marketing element stressed for this and all other recruitment activity defined for North Beach. ......t..".. ap.e.t'e a.t.. In addition to the defined eight blocks of residential sites along the area in the northern part of the study area, west of Collins, (45) there are several other strategic sites or components of the strategy for which reinvestment activity should focus. These are: v' The Carillon Hotel; v' "72nd Street" parcel and area southwest of the parcel between the parcel and the Byron Carlyle Theater; v' Sites In Normandy Isles for a prospective convenience anchor; and v' Supennarket expansion or replacement opportunities, new competitor. Discussion of three of these has been to some extent, or could be linked together. The following are suggestions for those sites or activities, exclusive of The Carillon. (46) For the Carillon, conversion of the structures and site to a family oriented hotel would be significant, Fostering the Implementation of the currently proposed plan for the site, In concept, should be made a priority by both the community-based development organization and the City of Miami Beach. The Carillon's regeneration as a hotel will assist with stimulating the commercial community and the critical mass of reasonable hotel rooms in North Beach. It is probably the best known structure in the area; its continued "non-functioning" may be viewed by investment and development interests as being indicative of the larger "North Beach perceived problems." '7r Street" site. Probably more attention has been paid to the "72M Street" site than any other parcel of land in the area. This is a result of public ownership, a recent RFP for development of the parcel, the most recent RFQ, and its strategic location one block from the ocean and abutting the ocean front park to the east and open space to the west. 13 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future This past year, the City of Miami Beach solicited interests for development of the parcel. The Request for Proposals or RFP included mandated parking. The successful proposer proposed several uses on the parcel, including substantial parking. The other uses included a movie theater, a "black box" or performance theater, a supermarket, and some additional ancillary retail activity. During the review process, changes in the industry resulted in a failure to have firm commitments from a movie chain. The "black box. required a subsidy. After extended negotiations, the City broke off negotiations with the development interest. The initial RFP process has been replaced by the City with a Request For Qualifications or RFQ. The current process prOVides the opportunity to perhaps examine the site again to indicate or provide criteria for its future development. First, it is recognized that public input meetings have indicated support for an expanded supermarket in the community. Demand projections indicate that there is sufficient demand to warrant an expanded supermarket, but that the construction of a new modem supermarket that would be at a different location than the current supermarket would likely result in the closure of the existing supermarket and other smaller markets in the area that satisfy demand at present. Thus, from an overall community perspective, the fundamental issue is what is the best general location for a supermarket. There are potentially three options. One of these options is the current site. The second would be at the 7200 Street site, while the third would be in Normandy Isles commercial core. Of the three options, the easiest to accomplish is the 72nd Street site. Development on that parcel for such a use would be relatively easy, affording a traditional suburban supermarket layout in a relatively urban setting. While potentially the easiest to accomplish, it is by far not the best site for a supermarket from a community development or investment perspective. One reason for this not being an advantageous site is that a supermarket is not likely to provide an anchor for the mixed-use area to the southwest of this site, between it and the Byron Carlyle. It is assumed that the Byron Carlyle has a reasonable chance of being converted to a cultural facility. Activity on the 7200 Street site should bolster that focus. Convenience retail is not synergistic with the cultural facility and is thus unlikely to have spin-off patronage that can stimulate reinvestment in the area between the 7200 Street site and the Byron Carlyle. A second major reason that this is not the most advantageous site is its lack of synergism with major clusters of other convenience activity. Normandy Isles has the largest viable collection of convenience retail and related services at present. Yet, this area is also in need of strengthening. The best method for strengthening the commercial activity in that area is to provide a new anchor. For all convenience retail, the best traditional anchor tenant is a supermarket. Thus, from a strategic development standpoint, a Normandy Isles location would be preferred. There are some potential sites in that area for a supermarket that are strategically advantageous from a community investment perspective, However, all will require negotiated agreements between multiple property owners for their participation and inclusion in the project or acquisition of parcels and structures. 14 DRAFT (47) The 12nd Street parcel owned by the City should be viewed as one parcel within a larger redevelopment area and site that spans from It over to the Byron Carlyle. In selecting the developer Interest for the parcel, (48) consideration should be given to viewing the site and development within this larger context and to the developer's ability to execute development of the 72rtd Street parcel and the contiguous parcels. (49) The City should develop schematic concepts that would help to show options for the redevelopment of that area with the 72nd Street parcel being an Initial or part of an initial phase. (SO) Design of the site should give consideration to the proximity to the water, the long term relationship to the area to the southwest and the linkage to an open space network to the east and west. When approaching the 120d Street parcel In this manner, the parcel becomes an Incentive for additional Investment, including but not limited to regional serving office and entertainment related activity. Sites in Normandv Isles for a Drosoective convenience anchor. (51) There are several areas within Normandy Isles that could benefit from redevelopment and foster general commercial reinvestment through the recruitment of an anchor tenant, such as a supermarket. At least two of those areas are defined in the Illustration to the right. The Chesapeake Group, Inc. Building A Foundation For The Future Strateg ic Site 2 As previously noted, property assemblage would be required. However, such assemblage does not necessarily Involve public condemnation or even acquisition, or necessarily acquisition by others. Current property owners may be interested in equity positions In a project obtained through their holdings, 15 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future Furthermore, leadership in solicitation and .pack- aging" of proposals for development of the sites should be the purview of the community-based development corporation. SUDermarket eXDans/on or reD/aeement ODDor. tune/ties and new com- Detitor, At the current time, the existing Publix is in a monopolistic position, having been the only supermarket in North Strategic Sites Beach, having stores to the south and recently announced investment to the north, and being the proposed entity associated with the previously noted terminated RFP process for the 7200 Street site. (52) Recruitment of Interest by an alternative supermarket - one other than Publlx - would stimulate willingness on the part of Publlx to address creative design and site alternatives that they may not being willing to address without sueh perceived competition. When competition or perception of competition is created, the entity in .control" shifts from the "monopoly" to the community, In so doing, serious options for redevelopment, either at the existing Publix's site or in Normandy Isles, could progress. Addl".".' ......,..". Much of the implementation activity indicated falls under the purview of a community-based development corporation. While the role in the process is indicated in the strategy near the appropriate suggestions, there are additional roles in a development process for such an economic development arm. The three additional potential roles are: A. Involvement with property assemblage; B. Creation of.shell buildings"; and C. Financing, It is noted that creating shell buildings, bearing the risk of a developer/investor but causing direct investment, will depend upon fiscal resources and technical abilities or assistance. The technical capacity can be obtained through joint ventures with experience or contractual relationships. 16 DRAFT The Chesapeake Group, Inc. Building A. Foundation For The Future &41411'1...' ...411.. ...~... There are a host of funding sources that can be employed in both financing and funding of development activity. The resources include those employed by Miami Beach at present and some additional alternatives not presently available in North Beach. The former include COBG funds and revenues from visitor-based activity. The latter Include the development of a Community Development Corporation, Community Development Bank, and a "Social Capital Fund," (53) Of the new sources, the "Social Capital Fund" should be given the highest priority. The Social Capital Fund would be Identical to any traditional "mutual fund," with a few critical exceptions, The fund would be established by and as part of any traditional brokerage. Money is Invested, not "given" to the fund, It can be removed by the individual Investors, However, unlike other funds, a proportion of the earned income is "given" to a designated 501(c)(3) organization that would Invest the money In economic and community development activity. The Investor would get an annual tax deduction for the contribution. While the direct funds reinvested would be lower than in a traditional fund, the total "retum" is only marginally different because of the accrued tax benefit. In the illustration that follows, a "capitalization" of $10 million is used. These funds could come from individual investors, corporate interests, pension funds, private pension resources, unions, etc. The illustration assumes an annual return of 10%. This figure is conservative, well below returns recorded in the recent past by managed funds. Assurning only a 10% return, $500,000 would be earmarked for the non-profit, with the tax benefit of the contribution accruing, and the other one-half would be reinvested. Capital would continue to accumulate, but the "gift" amount would hold constant. Thus, the proportion of the return, but not the actual dollar amount "granted" to the non-profit of the total resources and earned income would diminish annually. The cap of dollars could be "set" from the onset, so that returns greater than 10%, if achieved, would resort in greater capital accumulation, not "grants," (54) The new resources could be used for a variety of purposes Including but not limited to any and all that follow: ~ Direct capital expenditures for infrastructure and buildings; ~ Repayment of floated bonds for buildings, parking, Infrastructure, etc.; ~ Administrative costs for the organization; and ~ Marketing and other direct outlays toward community reinvestment. The illustration depicting the funding flow to and from the Social Capital Fund follows on the next page. 17 DRAFT The Chesapeake Group, Inc. Building A Foundation For The Future Social Capital Fund Capltallzatlonl Resources (ex.: $1 OM)' Annual Return (ex,: 10% or $1 M)" 501 (c)(3) Tax Deduction (ex.: $500,000)'" Reinvested Return (ex.: $500,000) ED r.lated organization ED r.lated activity .Consldered mlnlmallnlt!al capitalization amount. Amount capitalized grows annually based on reinvestment. "Return estimates likely to be understated Significantly. Dollar amount CQuld be capped or percentage. "'*Reaource. ayallable for community and economic development activity 18