2015-29131 Reso RESOLUTION NO. 2015-29131.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, PURSUANT TO SECTION 82-37(A)(2) OF THE
CITY CODE, SETTING A PUBLIC HEARING TO CONSIDER APPROVING, ON
SECOND READING,THE TRANSFER, VIA AN AIR RIGHTS EASEMENT
AGREEMENT, TO BETSY ROSS OWNER, LLC, THE PROPERTY IDENTIFIED
IN EXHIBIT "A," FOR THE CONSTRUCTION OF BRIDGE OVER THE OCEAN
COURT ALLEY BETWEEN THE CARLTON AND THE BETSY HOTELS;
CONTAINING APPROXIMATELY 181.66 SQUARE FEET IN TOTAL AREA;
FURTHER WAIVING, BY 5/7THS VOTE, THE COMPETITIVE BIDDING
REQUIREMENTS OF SECTION 82-39(B) OF THE CITY CODE, FINDING THAT
THE PUBLIC INTEREST WOULD BE SERVED BY WAIVING SUCH
CONDITION; DIRECTING THE ITEM BE SENT TO THE NEXT FINANCE AND
CITYWIDE PROJECTS COMMITTEE MEETING WITH A COPY OF THE
UPDATED APPRAISAL; AND DIRECTING THE CITY'S PLANNING
DEPARTMENT TO PREPARE A PLANNING ANALYSIS PURSUANT TO
SECTION 82-38 OF THE CITY CODE.
WHEREAS, Betsy Ross South Beach Hotel located at 1440 Ocean Drive (hereinafter
the "Betsy Hotel"), and the Carlton South Beach Hotel located at 1433 Collins Avenue
(hereinafter the "Carlton Hotel"), are owned by BETSY ROSS OWNER, LLC, a Delaware limited
liability company authorized to do business in the state of Florida (hereinafter "Betsy Ross");
and
WHEREAS, the Betsy Hotel and the Carlton Hotel are separated by a City public right-
of-way known as Ocean Court, an alley that runs south to north parallel to Ocean Drive; and
WHEREAS, the right-of way of Ocean Court located between the Betsy Hotel and the
Carlton Hotel as legally described in Exhibit "A" attached hereto and made a part hereof, was
dedicated by plat to the City as a public right of way; this dedication also includes the air rights
over the Ocean Court right-of-way (the air rights over the Ocean Court right-of-way are referred
to hereinafter as the "Easement Area"); and
•
WHEREAS, the City's Historic Preservation Board ("HPB"), pursuant to HPB Order and
Supplemental Order No. 7414 approved the installation by the Betsy Ross of an elevated
pedestrian bridge, which varies in length from 20 feet 10-7/8 inches to 20 feet 11-1/4 inches,
has a structural width of 8 feet 4-3/4 inches with a decorative cover that has a width of 30 feet 9-
3/8 inches, and located a minimum of 19 feet above the surface of the Ocean Court right of way
(that is, within the Easement Area), for the purpose of connecting the third floor levels of the
Betsy Hotel and Carlton Hotel (the "Pedestrian Bridge"); and
WHEREAS, the Pedestrian Bridge is intended not to impede vehicular access through
Ocean Court, up to the height of 19 feet above the surface of Ocean Court; and
WHEREAS, the City desires to grant an easement to Grantee for the sole purpose of
ingress, egress, transport, installation, maintenance, and repair across, over and through the
Easement Area, as may be required by Betsy Ross in connection with its operation and use of
the proposed Pedestrian Bridge; and
WHEREAS, under the air rights easement, the Betsy Ross shall bear any and all costs
of installation, maintenance, utilities, replacements, repairs, taxes, insurance and any and all
other costs and expenses, including any necessary relocation or undergrounding of existing
utilities in conflict with the Pedestrian Bridge, involved in its installation, operation and use of the
Pedestrian Bridge (the "Operating Costs"); and
WHEREAS, pursuant to Sections 82-37, the sale or transfer of City property, including
any interest in City property, as with an air rights easement, is to be referred by the City
Manager to the Finance and Citywide Projects Committee; and
WHEREAS, pursuant to Section 82-38, of the City Code, the Planning Department is to
prepare a written planning analysis, to be submitted to the City Commission concurrent with its
consideration of the proposed conveyance; and
WHEREAS, although the City's procedures for the lease of sale or sale of public
property also require an advertised public bidding process and an independent appraisal, these
requirements may be waived by 5/7tn vote; and
WHEREAS, the City has obtained an updated appraisal for the air rights easement area;
and
WHEREAS, the City Administration recommends that the Mayor and City Commission
waive the competitive bidding requirement, as permitted pursuant to 82-39(b) finding that the
public interest is served by waiving such condition, as the Betsy Ross is the only entity
interested in and could use the air rights easement between the Betsy Hotel and the Carlton
Hotel; and
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, pursuant to Section 82-37(a)(2) of the City
Code, setting a public hearing to consider approving, on second reading, the transfer, via an
air rights easement agreement, to Betsy Ross Owner, LLC, the property identified in Exhibit
"A," for the construction of bridge over the Ocean Court alley between the Carlton and the
Betsy Hotels; containing approximately 181.66 square feet in total area; further waiving, by
5/7ths vote, the competitive bidding requirements of Section 82-39(b) of the City Code, finding
that the public interest would be served by waiving such condition; directing the item be sent
to the next finance and citywide projects committee meeting with a copy of the updated
appraisal; and directing the city's planning department to prepare a planning analysis
pursuant to Section 82-38 of the City Code.
PASSED and ADOPTED this (2 day of September, 2015. ; -- ; ',/
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Of The Mayor And City Commission Of The City Of Miami Beach,Florida,Pursuant To Section 82-37(A)(2)Of The
City Code, Setting A Public Hearing To Consider Approving, On Second Reading, The Transfer, Via An Air Rights Easement
Agreement,To Betsy Ross Owner,LLC,The Property Identified In Exhibit"A,"For The Construction Of Bridge Over The Ocean
Court Alley Between The Carlton And The Betsy Hotels; Containing Approximately 181.66 Square Feet In Total Area; Further
Waiving,By 5/7ths Vote,The Competitive Bidding Requirements Of Section 82-39(B)Of The City Code,Finding That The Public
Interest Would Be Served By Waiving Such Condition; Directing The Item Be Sent To The Next Finance And Citywide Projects
Committee Meeting With A Copy Of The Updated Appraisal; And Directing The City's Planning Department To Prepare A
Planning Analysis Pursuant To Section 82-38 Of The City Code.
Key Intended Outcome Supported:
In/a
Item Summary/Recommendation:
Betsy Ross South Beach Hotel located at 1440 Ocean Drive(the Betsy Hotel),and the Carlton South Beach Hotel located at 1433
Collins Avenue(the Carlton Hotel),are owned by BETSY ROSS OWNER,LLC,a Delaware limited liability company authorized to
do business in the state of Florida (Betsy Ross).
The Betsy Hotel and the Carlton Hotel are separated by a City public right-of-way known as Ocean Court,an alley that runs south
to north parallel to Ocean Drive. The right-of way of Ocean Court located between the Betsy Hotel and the Carlton Hotel was
dedicated by plat to the City as a public right of way. This dedication also includes the air rights over the Ocean Court right-of-way
(the air rights over the Ocean Court right-of-way are referred to hereinafter as the"Easement Area").
The City's Historic Preservation Board(HPB),pursuant to HPB Order and Supplemental Order No.7414 approved the installation
by the Betsy Ross of an elevated pedestrian bridge,which varies in length from 20 feet 10-7/8 inches to 20 feet 11-1/4 inches,has
a structural width of 8 feet 4-3/4 inches with a decorative cover that has a width of 30 feet 9-3/8 inches,and located a minimum of
19 feet above the surface of the Ocean Court right of way(that is,within the Easement Area),for the purpose of connecting the
third floor levels of the Betsy Hotel and Carlton Hotel (the Pedestrian Bridge).
The Pedestrian Bridge is intended not to impede vehicular access through Ocean Court, up to the height of 19 feet above the
surface of Ocean Court. The City desires to grant an easement to Grantee for the sole purpose of ingress, egress,transport,
installation, maintenance, and repair across, over and through the Easement Area, as may be required by Betsy Ross in
connection with its operation and use of the proposed Pedestrian Bridge.
Under the air rights easement,the Betsy Ross shall bear any and all costs of installation, maintenance, utilities,replacements,
repairs, taxes, insurance and any and all other costs and expenses, including any necessary relocation or undergrounding of
existing utilities in conflict with the Pedestrian Bridge,involved in its installation,operation and use of the Pedestrian Bridge(the
Operating Costs).
Pursuant to Sections 82-37, the sale or transfer of City property, including any interest in City property, as with an air rights
easement,is to be referred by the City Manager to the Finance and Citywide Projects Committee. Pursuant to Section 82-38,of
the City Code, the Planning Department is to prepare a written planning analysis, to be submitted to the City Commission
concurrent with its consideration of the proposed conveyance. Although the City's procedures for the lease of sale or sale of
public property also require an advertised public bidding process and an independent appraisal, these requirements may be
waived by 5/7in vote.The City has obtained an updated appraisal for the air rights easement area.
The City Administration recommends that the Mayor and City Commission waive the competitive bidding requirement, as
permitted pursuant to 82-39(b)finding that the public interest is served by waiving such condition,as the Betsy Ross is the only
entity interested in and could use the air rights easement between the Betsy Hotel and the Carlton Hotel.
THE ADMINISTRATION RECOMMENDS ADOPTING THE RESOLUTION.
Advisory Board Recommendation:
Financial Information:
Source of Amount Account Approved
Funds:
OBPI Total
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Eric Carpenter, Public Works X6012
Sign-Offs:
Department 'rector Assista ;114 ager City j.
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T:\AGENDA\2014\ ecember\PUBLIC WORKS\1700 W 25 STS'-`Sum.doc
Agenda Item,_R1 T
MIAMI BEACH Date `i-2- 1
t
P___ MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members • e • C,, iss' n
FROM: Jimmy Morales, City Mana•- ;' �`7`
-.....DATE: September 2, 2015
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, PURSUANT TO SECTION 82-37(A)(2) OF THE CITY CODE,
SETTING A PUBLIC HEARING TO CONSIDER APPROVING, ON SECOND
READING,THE TRANSFER,VIA AN AIR RIGHTS EASEMENT AGREEMENT,TO BETSY
ROSS OWNER, LLC, THE PROPERTY IDENTIFIED IN EXHIBIT "A," FOR THE
CONSTRUCTION OF BRIDGE OVER THE OCEAN COURT ALLEY BETWEEN THE
CARLTON AND THE BETSY HOTELS; CONTAINING APPROXIMATELY 181.66
SQUARE FEET IN TOTAL AREA; FURTHER WAIVING, BY 5/7THS VOTE, THE
COMPETITIVE BIDDING REQUIREMENTS OF SECTION 82-39(B)OF THE CITY CODE,
FINDING THAT THE PUBLIC INTEREST WOULD BE SERVED BY WAIVING SUCH
CONDITION; DIRECTING THE ITEM BE SENT TO THE NEXT FINANCE AND CITYWIDE
PROJECTS COMMITTEE MEETING WITH A COPY OF THE UPDATED APPRAISAL;
AND DIRECTING THE CITY'S PLANNING DEPARTMENT TO PREPARE A PLANNING
ANALYSIS PURSUANT TO SECTION 82-38 OF THE CITY CODE.
Betsy Ross South Beach Hotel located at 1440 Ocean Drive (the Betsy Hotel), and the Carlton
South Beach Hotel located at 1433 Collins Avenue(the Carlton Hotel), are owned by BETSY ROSS
OWNER, LLC, a Delaware limited liability company authorized to do business in the state of Florida
(Betsy Ross).
The Betsy Hotel and the Carlton Hotel are separated by a City public right-of-way known as Ocean
Court, an alley that runs south to north parallel to Ocean Drive. The right-of way of Ocean Court
located between the Betsy Hotel and the Carlton Hotel was dedicated by plat to the City as a public
right of way. This dedication also includes the air rights over the Ocean Court right-of-way(the air
rights over the Ocean Court right-of-way are referred to hereinafter as the "Easement Area").
The City's Historic Preservation Board (HPB), pursuant to HPB Order and Supplemental Order No.
7414 approved the installation by the Betsy Ross of an elevated pedestrian bridge, which varies in
length from 20 feet 10-7/8 inches to 20 feet 11-1/4 inches, has a structural width of 8 feet 4-3/4
inches with a decorative cover that has a width of 30 feet 9-3/8 inches, and located a minimum of 19
feet above the surface of the Ocean Court right of way (that is, within the Easement Area), for the
purpose of connecting the third floor levels of the Betsy Hotel and Carlton Hotel (the Pedestrian
Bridge).
City Commission Memorandum- The Betsy Air Rights
September 2, 2015
Page 2 of 2
The Pedestrian Bridge is intended not to impede vehicular access through Ocean Court, up to the
height of 19 feet above the surface of Ocean Court. The City desires to grant an easement to
Grantee for the sole purpose of ingress, egress, transport, installation, maintenance, and repair
across, over and through the Easement Area, as may be required by Betsy Ross in connection with
its operation and use of the proposed Pedestrian Bridge.
Under the air rights easement, the Betsy Ross shall bear any and all costs of installation,
maintenance, utilities, replacements, repairs, taxes, insurance and any and all other costs and
expenses, including any necessary relocation or undergrounding of existing utilities in conflict with
the Pedestrian Bridge, involved in its installation, operation and use of the Pedestrian Bridge (the
Operating Costs).
Pursuant to Sections 82-37, the sale or transfer of City property, including any interest in City
property, as with an air rights easement, is to be referred by the City Manager to the Finance and
Citywide Projects Committee.
Pursuant to Section 82-38, of the City Code, the Planning Department is to prepare a written
planning analysis, to be submitted to the City Commission concurrent with its consideration of the
proposed conveyance.
Although the City's procedures for the lease of sale or sale of public property also require an
advertised public bidding process and an independent appraisal,these requirements may be waived
by 517th vote. The City has obtained an updated appraisal for the air rights easement area.
CONCLUSION
The City Administration recommends that the Mayor and City Commission waive the competitive
bidding requirement, as permitted pursuant to 82-39(b)finding that the public interest is served by
waiving such condition, as the Betsy Ross is the only entity interested in and could use the air rights
easement between the Betsy Hotel and the Carlton Hotel
JM/MT/ /JJF/BAM/EB
T:WGENDA\2015\September\PUBLIC WORKS\The Betsy air rights.Memo.doc
Appraisal Report
Prepared r
Mr. Demar Woodson
Right of Way Manager =
City of Miami Beach
Public Works Department
Property Appraised
Proposed Aerial Easement
Ocean Court,
= - Between 1440 Ocean Drive and 1433 Collins Avenue
Miami Beach,FL 33139
Date o f Valuation
..
August 19,2015
- Prepared by
Waronker & Rosen,Inc.
5730 SW 74th Street, Suite 200
Y` South Miami, Florida 33143
LEE H. WARONKER,MAI, SRA
CARLOS A. DIEZ,APPRAISER_
File#8215
= t*
Agenda Item f?7T
Date 1'2-1 S
Waronker & Rosen, Inc.
Real Estate Appraisers and Consultants
Miami-Dade County Office Broward/Palm Beach County Office
5730 SW 74th Street, Suite 200 10191 W. Sample Road,Suite 211-A
South Miami,Florida 33143 Coral Springs,Florida 33065
Lee H.Waronker,MAI,SRA Phone:(305)665-8890/Fax:(305)665-5188 Josh L.Rosen,MAI
lee @waronkerandrosen.com www.waronkerandrosen.com josh @waronkerandrosen.com
August 31, 2015
Mr. Demar Woodson
Right of Way Manager
City of Miami Beach
Public Works Department
1700 Convention Center Drive
Miami Beach, FL 33139
Re: Proposed Aerial Easement
Ocean Court, Between 1440 Ocean Drive and 1433 Collins Avenue
Miami Beach, FL 33139
WRI File No. 8215
Dear Mr. Woodson:
We have prepared an appraisal report of the above referenced property for the purpose of
estimating the value to the adjoining owner as of August 19, 2015. The value estimated herein
is not market value, it is the value solely to the adjoining owner. As part of this analysis, an
estimate of the market value of the fee simple interest in the adjoining land was developed.
However, this is not the primary focus of the assignment. The terms market value and fee simple
interest are defined in the pages of this report. This report has been prepared based on the scope
of work which is detailed on a following page. The reader of the appraisal is strongly advised to
read the scope of work so as to understand the scope of this appraisal.
This report is intended for use only by the client and intended users as noted herein. No
additional intended users are identified or intended. Use of this report by others is not intended
by the appraiser. No one else, or any other entities, should rely on this appraisal other than those
noted herein.
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 1
Mr. Demar Woodson
Right of Way Manager
City of Miami Beach
Public Works Department
August 31, 2015
The subject property consists of a proposed aerial easement spanning Ocean Court (a public
alley) between 14th and 15th Streets in the City of Miami Beach, Miami-Dade County, FL. The
proposed easement would span the 20 foot width of Ocean Court, and is intended to enable
construction of a pedestrian bridge connecting the buildings on either side of the easement at the
level of the third floor. The adjoining buildings are under common ownership, with frontage on
Ocean Drive and Collins Avenue. The Ocean Drive property is currently an operating hotel, and
the Collins Avenue property was until recently operating as a separate hotel, but is currently
closed and undergoing a major renovation. The easement and pedestrian bridge are proposed in
order to enable the integration of the two properties into a single hotel operation. The proposal
includes construction of a decorative spherical structure enveloping the pedestrian bridge that has
the appearance of a large rubber ball nestled between the buildings. Based on drawings provided
by the architect for the renovation, the proposed easement would have a length of 27.75 feet
(including the length of the spherical structure from north to south), and a vertical depth of 26.33
feet from the top of the spherical structure to the bottom. The public right-of-way has a width of
20 feet, according to the recorded plat.No survey or legal description of the proposed survey was
provided. Therefore, for purposes of this appraisal, the total floor area of the proposed easement
is considered to be the length of the spherical volume according to the architect's drawings
multiplied by the width of the alley, or 555 sq. ft., and the volume would be 14,615 cubic feet
based on the vertical depth indicated in the drawings. Zoning on the sites adjoining the easement
on both sides is MXE, Mixed-Use Entertainment District by the city of Miami Beach, FL.
The properties on either side of the proposed easement are owned in fee simple by a single
owner, through different entities. The Ocean Drive property is currently operating as the Betsy
Hotel at 1440 Ocean Drive, a 61-room 3-story full-service hotel built in 1940. The Collins
Avenue property is the Carlton Hotel at 1433 Collins Avenue, which before the renovation was a
67-room 3-story limited-service hotel built in 1937. The owner has owned the Betsy Hotel for
many years, but acquired the Carlton Hotel in October 2013 for $19,000,000 through a court-
ordered sale of the property resulting from the previous owner's bankruptcy. The owner
subsequently obtained approval from the City of Miami Beach Planning Department for a
renovation of the Collins Avenue building (the Carlton Hotel). These approvals include partial
demolition, renovation and restoration of the existing 3-story structure, construction of a new 1-
story ground level addition on the north side of the property, a new 4-story ground level addition
on the south side of the property and a new 1-story rooftop addition. This renovation/expansion
is now underway. In addition, the owner is proposing to construct a bridge to connect the Carlton
Hotel to the Betsy Hotel over the alley as noted above. Proposed alterations to the Betsy are
limited to the pedestrian bridge and improvements to the alley. For reference, a copy of a March
19, 2014 memo from the City Manager to the Land Use and Development Committee regarding
the proposed renovation and easement is reproduced in the Addenda.
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 2
Mr. Demar Woodson
Right of Way Manager
City of Miami Beach
Public Works Department
August 31, 2015
According to the City of Miami Beach Planning Department, the owner's proposed renovation
and aerial bridge are intended to enable the consolidation of the two properties into a single
operation,with a single front desk and an Ocean Drive presence. The former lobby of the Carlton
Hotel will be modified (the front desk operation merged with that of the Betsy) and a new
restaurant/cafe is to be built-out on the ground floor with a Collins Avenue presence and outdoor
seating. As discussed further in the pages of this report, the adjoining owner stands to receive
significant operational and financial benefits from the consolidation of the two hotels, a project
that would not be feasible without the pedestrian bridge connecting the buildings. This valuation
is based on consideration of those benefits.
Valuation Methodology
Valuations of easements typically employ approaches that begin with an estimate of the market
value of the adjoining land. In some cases, discounts are applied to account for the loss of utility
due to the fact that construction would not be allowed on the easement as it would be on the
adjoining sites. In others, a fee is estimated for a temporary construction easement based on a
reasonable rental rate for exclusive use of the land during construction. However, the concept of
market value (on which land value estimates would typically be based) is predicated on a
competitive open market, and presumes that buyer and seller are both typically motivated (i.e.,
that neither has an unusual motivation or incentive to buy or sell). The analysis indicates that the
proposed easement would provide unique benefits to the owner of the adjoining properties,
making it valuable to them to an extent that far exceeds the value of the adjoining land to any
other party.
For these reasons, the City of Miami Beach has requested a valuation that considers the value of
the easement to the adjoining owner. The City is under no requirement to grant easements of this
type, and City officials have considered the high cost that would likely be incurred if at some
future date it became necessary to re-acquire these easements from the adjoining owners,
especially in light of the fact that historically, valuation of easements for public acquisition has
been based on the loss in value to the burdened property.
The financial benefits derived from the consolidation of the hotels that the easement would
enable are very difficult to quantify without detailed financial information on the current
operating performance of the Besty Hotel, the historical operating performance of the Carlton
Hotel, and the renovation project currently underway. However, the analysis will assess in
general terms how the consolidation would enhance the potential operating performance of
hotels on the adjoining sites, and estimate a reasonable range of how much these potential
enhancements would be likely to increase the value of the underlying land, based on analysis of
market conditions in the South Beach hotel and land development markets.
Waronker&Rosen,Inc. Real Estate Appraisers&Consultants 3
Mr. Demar Woodson
Right of Way Manager
City of Miami Beach
Public Works Department
August 31, 2015
In order to prepare the analysis, in connection with a previous appraisal, we were supplied with a
set of architectural drawings for the proposed renovation, by Miami-based architectural firm
Shulman & Associates. The drawings are dated December 18, 2013. No survey or legal
description for the easement was provided (though the architect's drawings do include copies of
surveys of the adjoining sites). For purposes of the analysis, the sizes and specifications of the
proposed easement were taken by the appraisers from the architectural drawings for the proposed
pedestrian bridge. Any deviation from the information supplied and assumptions used herein will
likely result in a change of value.
As a result of our investigation, it is our opinion that the value of the proposed aerial easement to
the adjoining owner as of August 19, 2015, based on the methodology described herein, is in the
amount of
TWO MILLION ONE HUNDRED THOUSAND DOLLARS
($2,100,000)
The above value estimate does not consider any loss in value to the parent tract (that being
the entire segment of Ocean Court, the public right-of-way over which the proposed
easement is located). This appraisal assumes that the proposed easement is granted and
recorded in the public records as proposed and valued herein, with physical dimensions
and location matching those in the architectural drawings provided.
Very truly yours,
(71-et, (#. fAlk — —
Lee H. Waronker, MAI, SRA
State-Certified General Real Estate Appraiser
License No.RZ162162
Carlos Diez
State-Certified General Real Estate Appraiser
License No.RZ3420
Waronker&Rosen,Inc. 0 Real Estate Appraisers& Consultants 4
Table of Contents
LETTER OF TRANSMITTAL 1
TABLE OF CONTENTS 5
SCOPE OF WORK 6
CERTIFICATION 8
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS 10
INTRODUCTION 12
SUMMARY OF PERTINENT DATA 13
MIAMI-DADE COUNTY MAP 14
PLAT MAP 15
SURVEY 16
SURVEY 17
AERIAL PHOTOGRAPHS 18
SITE PLAN FOR PROPOSED RENOVATION 19
SITE PLAN FOR PROPOSED RENOVATION 20
DETAIL OF PEDESTRIAN BRIDGE 21
DETAIL OF PEDESTRIAN BRIDGE 22
RENDERING OF PROPOSED PEDESTRIAN BRIDGE 23
SUBJECT PHOTOGRAPHS 24
APPRAISER QUALIFICATIONS 30
DESCRIPTION&ANALYSES 34
PURPOSE OF THE APPRAISAL 35
CLIENT,INTENDED USER AND USE OF THE APPRAISAL 35
DEFINITION OF REAL PROPERTY INTEREST APPRAISED 35
DEFINITION OF MARKET VALUE 36
LOCATION AND ADDRESS 37
LEGAL DESCRIPTION 37
OWNER OF RECORD 38
HISTORY OF THE SUBJECT PROPERTY 38
SITE DATA 39
ZONING 40
FLOOD ZONE 40
REAL ESTATE ASSESSMENT AND TAXES 41
NEIGHBORHOOD OVERVIEW 43
SUPPLY AND DEMAND 44
EXPOSURE TIME 47
TYPICAL PURCHASER OF THE SUBJECT 47
HIGHEST AND BEST USE 48
APPRAISAL PROCESS 49
COST APPROACH 50
INCOME CAPITALIZATION APPROACH 51
SALES COMPARISON APPROACH 52
RECONCILIATION OF VALUE 74
ADDENDA 75
COUNTY AREA DESCRIPTION 76
FLOOD ZONE MAP 76
ADDITIONAL DATA 76
Waronker&Rosen,Inc. 0 Real Estate Appraisers&Consultants 5
Scope of Work
The appraisal problem herein is to estimate the value of a proposed aerial easement over a public
alleyway intended to allow construction of a pedestrian bridge connecting existing hotel
buildings on either side of the easement (which are under common ownership), but not
restricting continued use of the alley as a public right-of-way. The analysis indicates that the
proposed pedestrian bridge would provide unique benefits to the owner of the adjoining
properties, making it valuable to them in ways that it would not be to any other party. For this
reason, the City of Miami Beach has requested a valuation that considers the enhancement in the
value of the underlying land to the adjoining owner.
The proposed easement would enable the owner of the adjoining hotels to consolidate the separate
properties into a single hotel operation, with a single front desk and an Ocean Drive presence.
Hotels located on Ocean Drive typically achieve higher room rates than those on Collins Avenue,
and consequently achieve higher values. Integration of the Collins Avenue building into an Ocean
Drive hotel would enable the Collins Avenue property to achieve higher revenues than are possible
without integration,thereby raising the land value of the Collins parcel.
This valuation takes the approach of estimating the impact that the easement would have on the
market value of the adjoining land as a result of the ability to develop the site as a combined
hotel property with an Ocean Drive presence. The valuation methodology requires separate
estimates of the market value of the parcels on either side of the easement. Then, an estimate is
made of how much the value of the inferior Collins Avenue parcel would be increased as a result
of being connected to the superior Ocean Drive parcel by way of the easement. Finally, the
reasonableness of this estimate is tested through a feasibility land cost model that considers
typical parameters for the development of hypothetical hotel projects on the parcels in question.
The model indicates the feasibility land cost, which is the highest price that a developer would be
willing to pay based on a set of reasonable (market-derived) assumptions about the development
costs and market value of a typical project. These indications provide a check on the
reasonableness of the estimate of the increase in the value of the adjoining land that would result
from the easement.
All appraisals begin by identifying the appraisal problem. Data on the subject property can be
derived from various sources including but not limited to, the property owner, the county
property appraiser's office, recorded plats and surveys. When possible, more than one source is
utilized to confirm data and the data sources are acknowledged. Land size is based on surveys
(when available),public records and recorded plats. Land measurements are not performed.
Valued herein is vacant land which can be valued by the following methods:
1. Sales Comparison Approach
2. Market Extraction
3. Allocation
4. Land Residual
5. Ground Rent Capitalization
6. Subdivision Analysis
Waronker&Rosen,Inc. 0 Real Estate Appraisers& Consultants 6
The sales comparison'approach was,used herein and was considered the;most applicable method,
in the :valuation Of the subject property: A search was performed for the sale of properties
considered comparable to the subject property. Research of comparable sales and market data
include, but is not limited to using the following data sources: -
CoStar '
Imapp
Newspaper,clippings i
Board of Realtors' Multiple Listing Service
National Multiple Listing Service -
,_.Loopnet.com =
Comparable sales are inspected and the transactional information' is :reported.'Sale prices are
from public records and are_typically confirmed with a party to the transaction, i.e. buyer, seller,
real estate agent,°or closing attorney All information is analyzed in processing the appraisal
report and as support,for the estimated value.
The scope of work for this assignment has been described above and.is to be typical for an
assignment of the nature of the subject appraisal problem.
•
•
•
r•
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 7 ,.
Certification
The undersigned does hereby certify that,to the best of my knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
3. I have no present or prospective interest in the property that is the subject of this report
and no personal interest with respect to the parties involved.
4. I have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
5. My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
6. My compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the
client, the amount of the value opinion, the attainment of a stipulated result, or the
occurrence of a subsequent event directly related to the intended use of this appraisal.
7. My analyses, opinions and conclusions were developed, and this report has been prepared,
in conformity with the following requirements.
• Uniform Standards of Professional Appraisal Practice(USPAP)
• The Code of Professional Ethics and Standards of Professional Practice of the
Appraisal Institute
• The State of Florida requirements for state-certified appraisers
8. I have complied with the USPAP Competency Rule.
9. This appraisal report sets forth all of the limiting conditions imposed by the terms of this
assignment or by the undersigned affecting the analyses, opinions and conclusions
contained in this report.
10. No one provided significant real property appraisal assistance to the person signing this
certification.
11. The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives. Additionally, it is subject to review by the
state of Florida relating to review by the real estate appraisal subcommittee of the Florida
Real Estate Commission.
12. As of the date of this report Lee H. Waronker, MAI, SRA has completed the continuing
education program of the Appraisal Institute.
13. As of the date of this report, Carlos Diez has completed the Standard and Ethics
Education Requirements for Candidates of the Appraisal Institute.
14. I, Lee H. Waronker, MAI, SRA have made a personal inspection of the property that is
the subject of this report.
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 8
I
15. I, Carlos Diez have made a personal inspection of the property that is the subject of this
report.
16. Waronker & Rosen, Inc. have previously performed an appraisal on the subject property
in the past three years. We were not then, and are not now involved with the
management, leasing, disposition, or any similar service regarding the subject property in
the past three years.
- ___ —
Lee H. Waronker, MAI, SRA
State-Certified General Real Estate Appraiser
License No.RZ162162
Cirr.4.1
Carlos Diez
State-Certified General Real Estate Appraiser
License No.RZ3420
Date of Report August 31, 2015
Waronker&Rosen,Inc. 04 Real Estate Appraisers&Consultants 9
General Assumptions and Limiting Conditions
This appraisal report has been made with the following general assumptions:
1. No responsibility is assumed for the legal description or for matters pertaining to legal or
title considerations. Title to the property is assumed to be good and marketable unless
otherwise stated.
2. The property is appraised free and clear of any or all liens or encumbrances unless
otherwise stated.
3. Responsible ownership and competent property management are assumed.
4. The information furnished by others is believed to be reliable but, no warranty is given
for its accuracy.
5. All engineering studies are assumed to be correct. Any plot plans or illustrative material
in this report are included only to help the reader visualize the property.
6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering that may be required to discover them. The
values estimated herein are subject to typical inspections such as roof, structural, and
termite, if applicable.
7. It is assumed that the property is in full compliance with all applicable federal, state and
local environmental regulations and laws unless the lack of compliance is stated,
described and considered in the appraisal.
8. It is assumed that the property conforms to all applicable zoning and use regulations and
restrictions unless a non-conformity has been identified, described and considered in the
appraisal.
9. It is assumed that all required licenses, certificates of occupancy, consents, and other
legislative or administrative authority from any local, state or national government or
private entity or organization have been or can be obtained or renewed for any use on
which the opinion of value contained in this report is based.
10. It is assumed that the use of the land and improvements is confined within the boundaries
or property lines of the property described and considered in the appraisal.
11. Unless otherwise stated in this report, the existence of hazardous materials, which may or
may not be present on the property, was not observed by the appraiser. The appraiser has
no knowledge of the existence of such materials on or in the property. The appraiser,
however, is not qualified to detect such substances. The presences of substances such as
asbestos, ureaformaldehyde foam insulation or other potentially hazardous materials may
affect the value of the property. The value estimated is predicated on the assumption that
there is no such material on or in the property that would cause a loss in value. No
responsibility is assumed for any such conditions, or for any expertise or engineering
knowledge required to discover them. The intended user is urged to retain an expert in
this field, if desired.
Waronker&Rosen,Inc # Real Estate Appraisers&Consultants 10
12. The physical condition of the improvements, if any, described herein was based on visual
inspection. No liability is assumed for the soundness of structural members, since no
engineering tests were made of same.
13. Neither all nor any part of this appraisal report shall be disseminated to the general public
using the appraiser's name or appraisal designation, without prior written consent of the
appraisers signing this appraisal report.
14. Authorization is not allowed for the out-of-context quoting from, or partial reprinting of,
this appraisal report.
15. By reason of the report, there is no requirement to testify with reference to the property
herein appraised, unless arrangements have been previously made.
16. The reader should be advised that our employment was not contingent on the appraisal
providing a minimum valuation, a specific calculation or the approval of a loan.
Additionally, we have complied with the USPAP Competency Rule.
Limiting Conditions:
1. The allocation of total value between land and improvements applies only under the
described utilization. The separate valuations for land and improvements must not be
used in conjunction with any other appraisal and are invalid if so used.
2. The Americans with Disability Act (ADA) became effective January 26, 1992. The
appraiser has not made a specific compliance survey and analysis of this property to
determine whether or not it is in conformity with the various detailed requirements of the
requirements of the ADA. It is possible that a compliance survey of the property and a
detailed analyses of the requirements of the ADA, could reveal that the property is not in
compliance with one or more of the act. If so, this fact could have a negative impact upon
the value of the property. Since the appraiser has no direct evidence relating to this issue,
possible noncompliance with the requirements of ADA was not considered in estimating
the value of the property.
Waronker&Rosen,Inc. Real Estate Appraisers&Consultants 11
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Introduction
Taronker
1111 ' i raat
1 •slat•
i
i • p f,W s:r s
t
and
cOasjttar+s
osen
I N R P O R A T E D
Waronker&Rosen,Inc. 0 Real Estate Appraisers&Consultants 12
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Summary of Pertinent Data
Location: The subject property consists of a proposed aerial
easement spanning Ocean Court(a public alley)
between 14th and 15th Streets., Miami Beach,
Miami-Dade FL
Address: Between 1440 Ocean Drive and 1433 Collins
Avenue, Miami Beach, FL 33139
Type of Use: Proposed aerial easement
Zoning: MXE, Mixed-Use Entertainment District by the
city of Miami Beach, FL
Census Tract: 43.03
Flood Zone: AE(Map 12086C0317L)
Land Area(of adjoining parcels):
Ocean Drive Parcel: 14,537 square feet(0.33 acres)
Collins Avenue Parcel: 21,948 square feet(0.50 acres)
Value by Cost Approach: Not applicable
Value by Income Capitalization Approach: Not applicable
Value by Sales Comparison Approach: $2,100,000*
*Value of the proposed easement to the adjoining owner, based on the estimated increase in
the market value of the adjoining land that would occur as a result of the easement.
Date of Valuation: August 19, 2015
Date of Report: August 31, 2015
Waronker&Rosen,Inc. t$ Real Estate Appraisers& Consultants 13
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach, FL
1
Miami-Dade County Map
-4 - ananaare neacn
w 2¢Aventura
_ -.7...- I��
__ _ s i Palm 823 p�(� '�8 Isles
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5
Waronker&Rosen,Inc. 4 Real Estate Appraisers& Consultants 14
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Plat Map
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Waronker& Rosen,Inc. • Real Estate Appraisers& Consultants 15
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach, FL
Survey
(Ocean Drive Parcel)
ii
q
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Waronker& Rosen,Inc. • Real Estate Appraisers& Consultants 16
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Survey
(Collins Avenue Parcel)
II I
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Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 17
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Aerial Photographs
i' t, t OWENP# • IP___.11r."4V„..._. 40. " —:- -. 1 .,, „ ...,
.- 4.- !goo . ,� - L '•' O'Easem asy
" ...„ i i .d : K .w ta! ��6y�lik_ a r otel fir-',4 r
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m !. , J
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. 4-17.- ,.' M' "i' Ocean
c.... ;WI r Drive
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i r 1M 3.+r I..Doi . � I _ it
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r 1 - / /'
t ;Carlton , .
E each '. � i +� i , .
I �n-. Betsy Ross ' `( '• - _ _
N 1 . 's:. i i,
, Hotel " _ 1
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Ar
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}, A Proposed a •
itt . oca Easement ';+ -- i. bil
: a," 4^..b,..-
0 �sfli j, ,tit_ 11,LIII .� ..
Waronker&Rosen,Inc • Real Estate Appraisers&Consultants 18
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
1
Site Plan for Proposed Renovation
71'
711 1 Eh ,,,+•�r� -
.--,..:T 1 1 I 1 -
`ate. ) •`��� '- ' - I ,wa.,,.n�. ""sii I'n►n (��– 'li 41.....""'I]
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.....A ORED OVERALL PROJECT S E-CARLTO N HOTEL
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Note: circular shape over Ocean Court denotes location of proposed easement
Waronker&Rosen,In • Real Estate Appraisers& Consultants 19
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Site Plan for Proposed Renovation
(Angled 3D View)
1 ,611,4 \ \ ...MO1101110.•10,1•1000.
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LEGEND
KAMM
MIMED
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 20
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Detail of Pedestrian Bridge
(Plan View)
i
I I 1
1
i
ROOM 328 20'-3 1/2"
411 SQ.FT.
4 �t.
�
•i 6
I I
N
ra=T.....lri
LIBRARY/RECEPTION 829 SQ.FT. .. i
t 1
J A-2.03 1 I
II SVC.BAR
A-2.01
n PLAN
Note: Betsy Hotel (Ocean Drive parcel) on right, Carlton Hotel (Collins parcel) on left
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 21
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Detail of Pedestrian Bridge
(Elevation View)
PL
LOCATION OF BRIDGE WITHIN
SPHERICAL VOLUME
j
i
___] v to
le b i
y - •
........_ n
. __il
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IIh
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METAL MESH RAILING 42'ABOVE --_
FLOOR FINISH 6
1
jt
i
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E
NEW IMPACT ALUM.+GLASS -{!1 i ''
STOREFRONT SYSTEM.TYP. l i I
I
ELEVATION
Note: Betsy Hotel (Ocean Drive parcel) on left, Carlton Hotel (Collins parcel) on right
Waronker&Rosen,Inc. # Real Estate Appraisers&Consultants 22
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Rendering of Proposed Pedestrian Bridge
I
1
vi
4
s
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s E
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Rendering looking south from intersection of Ocean Court and 14th Place,just north of easement
location.Note: rendering reflects proposed rooftop addition and 1-story ground floor addition(in
foreground, on right)to Carlton Hotel. Betsy Hotel is on left.
Waronker&Rosen,Inc. 44 Real Estate Appraisers&Consultants 23
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Subject Photographs
ma
v- - i �_.t+, y.._ - d..• _-
w_
l' 1
I • I
a I
:a 1 , •.
Carlton Hotel (undergoing renovation/additions), looking east
from west side of Collins Avenue
4.00. . .\ 1'
24 'f' ; ,,r .) ' ''''''
' ' ,
� =_ sty,
Jam...A
Betsy Hotel, looking southwest from east side of Ocean Drive
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 24
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
�; �, 1
I t4
1 m ' r i•l �� J
y
J
a
Northwest corner of Carlton Hotel, looking North side of Carlton Hotel(on left), looking
east along pedestrian segment of 14th Place west along pedestrian segment of 14th Place
1
I
S
I
l
t ,
is' II
II 1 _ `
North side of Carlton Hotel Ocean Court(alley), looking south(Carlton
Hotel on right, Betsy Hotel on left)
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 25
Description and Analyses Proposed Aerial Easement, Ocean Ct,Miami Beach,FL
N , i\
. , '., / # .
-,- \ 1,1
l ,
11,:jr,It' ' '
litik
-1,1' '. \ 74 . lig , ..\
West side of Betsy Hotel East side of Carlton Hotel
(area of proposed bridge) (area of proposed bridge)
. ,
14 k i
: ' ''' 4
AV
! ,
I
-tj
de
14th Place looking east toward Ocean Drive Ocean Court looking south from point just
from north end of Ocean Court east of south portion of Carlton Hotel parcel
1
Waronker&Rosen,Inc • Real Estate Appraisers& Consultants 26
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Iii s , -'11 . 1 L=-_—_- !,
1 j
0,
11
j ►
lkik'.: s -
South portion of Carlton Hotel parcel looking 14th Place looking west(Besty Hotel at left,
northwest from Ocean Court Carlton Hotel at rear/center)
i
,,,, 11,> ."..- -
e,
OY
1 0 4i \ l i„,..., 111
_ 2,■ a."�
= ,. '. $ �.` ,; '7171 -
__,_ L <4 — *.--
North and east sides of Betsy Hotel and Ocean Drive looking south
entrance to 14th Place, looking southwest (Betsy Hotel on right)
from Ocean Drive
Waronker&Rosen,Inc. # Real Estate Appraisers& Consultants 27
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
A �E ,s
, ..lit. . I 7,- 4, 6 ,, ,-.,
ulit
I jilt
... --, - 4-41..,... L 1 4
i . , ., . ... L_., _ , .'
. 4:,. ,,., , ‘,. , , _
, _ ._ tii
+ _ _ &
Ocean Drive looking north 14th Street looking northwest(entrance to
(Besty Hotel on left) Ocean Court shown at right)
c "111, we—, - I A
-re
-
14th Street looking northeast
(entrance to Ocean Court shown at left)
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 28
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
WNW ' , , r
i t i lig .
so
i
in
Collins Avenue looking north Collins Avenue looking south
(Carlton Hotel on right) (Carlton Hotel on left)
I
I
I
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 29
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach, FL
Appraiser Qualifications
LEE H. WARONKER, MAI, SRA
Education: Master of Science in Management, School of Business and Organizational
Science, Florida International University, 1981 (Major—Real Estate)
Bachelor of Science Degree, The Florida State University, Tallahassee, Florida
1976 (Major—Real Estate)
Affiliations: MAI Designation (No. 6738)awarded by the Appraisal Institute in 1983.
SRA (SRPA)Designation awarded by the Appraisal Institute in 1981.
State-Certified General Real Estate Appraiser, State of Florida, License
Number RZ162, May 1990.
Registered Real Estate Broker, State of Florida, License#BK0152877 (1978)
Experience: Appraised various types of properties, including:
Industrial Buildings Restaurants Warehouses
Office Buildings Hotels and Motels Hospitals
Service Stations Retail Stores Marinas
Churches & Synagogues U.S. Post Offices Historical Buildings
Residences Condominiums Special Purpose Properties
President, Waronker & Rosen, Inc., (formerly Waronker & Associates, Inc.)
Miami, Florida, from 1987 to present. Vice President, Property Consultants,
Inc. from 1979 to 1986. Appraiser, The Keyes Company, 1978 to 1979.
Appraiser, Miami-Dade County Department of Right-of-Way, 1977 to 1978.
Instructor: Appraisal Institute. Taught Courses 1A-1, 1A-2, 8-2, 1B-A, 1B-B, 110, 120,
210, 310, 320, 410, 420, 430, 510, 550, 600, 610 and 620, et al
Author: Seminars entitled "Dynamics of Office Building Valuation", "Why the
Capitalization Rate is Always 10" and the "Appraisal of Real Estate 10th vs.
11th Edition".
Other: Special Master for the Dade County Valuation Adjustment Board, 1989 to
1996.Assisted in the editing of The Appraisal of Real Estate, 11th Edition and
13th Edition.
President of the Miami Chapter of the Appraisal Institute, 1990 to 1991.
Waronker&Rosen,Inc. Real Estate Appraisers& Consultants 30
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Appraiser Qualifications
CARLOS A. DIEZ
Education: University of Florida (Gainesville, FL)
Bachelor of Arts. Major: Economics
Stevens Institute of Technology(Hoboken,NJ)
Substantial progress towards the degree of Master of Engineering
Affiliations: State-certified general real estate appraiser, State of Florida, RZ3420
The Appraisal Institute, Candidate for Designation
CCIM Institute, Candidate Member
Appraisal Experience: Waronker& Rosen, Inc. September, 2007 to Present
Appraised a wide variety of property types, including:
Vacant land Office buildings
Restaurants Shopping centers
Hotels Free-standing retail properties
Industrial properties Apartment buildings
Residential and Commercial Condominiums Condominium Units
Land leases (leased fee and leasehold interests) Fractured Condominium Interests
Easements (including aerial and sub-surface) Special Purpose Properties
Appraisal,Investment Analysis and General Real Estate Education:
The Appraisal Institute
100, 101: Basic Appraisal Principles and Procedures
202: Residential Sales Comparison and Income Approaches
300: Real Estate Finance,Statistics and Valuation Modeling
400: General Market Analysis and Highest&Best Use
402: General Appraiser Site Valuation and Cost Approach
403,404: General Appraiser Income Approach(Parts l and 2)
405: General Appraiser Report Writing and Case Studies
420: Business Practices and Ethics
510: Advanced Income Capitalization
550: Advanced Applications
530: Advanced Sales Comparison and Cost Approaches
Seminar: Hotel Appraising—New Techniques for Today's Uncertain Times
500: Advanced Market Analysis and Highest&Best Use
833: Fundamentals of Separating Real Property,Personal Property,and Intangible Business Assets
Seminar: Marketability Studies:Advanced Considerations and Applications
CCIM Institute
CI 101: Financial Analysis for Commercial Investment Real Estate
CI 102: Market Analysis for Commercial Investment Real Estate
CI 103: User Decision Analysis for Commercial Investment Real Estate
CI 104: Investment Analysis for Commercial Investment Real Estate
FANSC: Feasibility Analysis for Retail Properties
MIMK: Advanced Market Analysis for Commercial Real Estate
Baruch College(CUNY)/Steven L.Newman Real Estate Institute
NCP2000: Urban Land Economics
NCP9000: Real Estate Development
Waronker&Rosen,Inc. Real Estate Appraisers&Consultants 31
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
1
Partial Client List
LENDERS TD Bank,N.A. GOVERNMENT AGENCIES
151 United Bank Totalbank Broward County School Board
Amerasia Bank U.S.Century Bank Broward County Public Works Dept.
Apollo Bank Wells Fargo Bank City of Coral Gables
BAC Bank Zions First National Bank City of Miami Beach
BNY Mellon Bank City of Miami General Services
BankUnited Administration
Bank of America LIFE INSURANCE COMPANIES Federal Deposit Insurance Corp.(FDIC)
Bank of Coral Gables Allstate Insurance Company Federal Home Loan Mortgage Corp.
Bank Leumi American General Life Insurance Co. (FHLMC)
Bessemer Trust Equitrust Life Insurance Co. Florida Dept.of Environmental
Branch Banking and Trust(BB&T) Fortis Capital Corp.&Life Insurance Protection
Bridgelnvest,LLC Company Florida Department of Transportation
Cl Bank Franklin Life Insurance Company Florida Keys Aqueduct Authority
CNL Bank General American Life Insurance Co. Miami-Dade Water and Sewer
Capital Bank Independent Order of Foresters Authority
Cigna Investments,Inc. John Alden Life Insurance Company Miami-Dade Co.-Aviation Authority
Citibank and Citicorp Kansas City Life Insurance Company Miami-Dade Co.-County Attorney's
City National Bank of Florida Lumberman's Life Insurance Company Office
Coconut Grove Bank Omaha Woodmen Life Ins. Society Miami-Dade Co.-General Serv.Admin.
Comerica Bank Standard Life Insurance Company Miami-Dade Co.-Housing&Urban Dev.
Credit Suisse First Boston Mortgage State Farm Insurance Company Miami-Dade Co.-Public Works Dept.
Capital,LLC Sun Life Insurance Co.of America Miami-Dade Co.-School Board
Espirito Santo Bank of Florida Miami Parking Authority
Executive National Bank CORPORATIONS Nature Conservancy,Florida Chapter
Fifth Third Bank Church of Jesus Christ of the South Florida Water Management District
First Bank of Miami Latter-Day Saints United States Department of Justice
First National Bank of South Miami Florida Power and Light Corp.(FPL) United States General Serv.Admin.
FirstBank Florida JC Penny Corporation United States Postal Services
Florida Community Bank The Wendy's Company Village of Pinecrest
Gibraltar Private Bank and Trust Chevron U.S.A.,Inc.
HSBC Bank,N.A. Johnson and Johnson Company LAW FIRMS
Holliday Fenoglio Fowler,LP Akerman,Senterfitt&Eidson
Intercredit Bank,N.A. DEVELOPERS AND INVESTORS Arnstein&Lehr,LLP
International Finance Bank Berkowitz Development Group Barranco&Associates,P.A.
Israel Discount Bank of New York Bristol Group,Inc. Berger Singerman
JP Morgan Chase Bank Fifteen Group,Inc. Berman,Wolfe Rennart Vogel&
Live Oak Bank Franklin Street Properties Mandler,P.A.
Lloyds Int'l.Bank(Lloyds of Flagler Development Corporation Carlton Fields
London) Goldman Properties Colson Hicks Eidson,P.A.
Lutheran Brotherhood Hampshire Real Estate Companies Greenberg Traurig,P.A.
Marquis Bank Lennar Corporation Holland&Knight
Morgan Stanley Mortgage Capital MDM Development,Inc. Kirkpatrick and Lockhart
Northern Trust Bank Napolitano Realty and Harnap Corp. Kutner and Associates
Ocean Bank Noble House Resorts and Hotels Richman Greer
OptimumBank Ocean Properties,Ltd. Shutts&Bowen,LLP
Popular Community Bank Panther Real Estate Stearns,Weaver,Miller,Weissler,
Professional Bank PLC Investments,LLC Alhadeff&Sitterson,P.A.
Regions Bank R.K.Associates,Inc. Steel Hector and Davis
Sabadell United Bank The Scott Robins Companies Tabas,Freedman,Soloff,Brown&
Space Coast Credit Union Wometco Enterprises,Inc. Rigali,P.A
Stonegate Bank Tripp cott
W
SunTrust Bank pp
Weiss Serota Helfman Pastoriza Cole&
Terrabank,N.A. Boniske,P.A.
Waronker&Rosen,Inc. 0 Real Estate Appraisers& Consultants 32
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Notable Properties Appraised
Miami-Dade County
Miami Seaquarium Virginia Key Miami Free Zone—Global Trade Cntr Miami
Miami International Airport Miami Metropolitan Hospital of Miami Miami
City of Miami Correctional Facility Miami Spinnaker Marina North Miami
Country Club of Miami Golf Course Miami Virginia Key&Rickenbacker Marinas Key Biscayne
Mel Reese Golf Course Miami Waterways Yacht Basin Miami
Burger King Headquarters—Waterford Miami Porto Vita Club and Spa Aventura
Doctors Hospital Coral Gables Ocean Steps Entertainment Center S.Miami Beach
Beacon Centre Development Miami Indian Creek Country Club Indian Creek
FBI Headquarters Miami BIV Tower Miami
Gables Waterway Executive Center Coral Gables Courthouse Tower Miami
Joe's Stone Crab restaurant Miami Beach South Shore Hospital Miami Beach
Doral Ocean Beach Resort(formerly) Miami Beach SouthCom Headquarters Miami
Metro-Dade Bus Facility Miami
Fort Lauderdale/Broward County
Florida Medical Center(Hospital) Ft.Lauderdale
Jackson Marine Center Ft.Lauderdale
Las Olas Centre Office Building Ft.Lauderdale
Martha's Restaurant Hollywood
Various Luxury Single Family Homes Fort Lauderdale
Seneca Industrial Park Pembroke Park
Monroe County/Florida Keys
Marriott Key Largo Bay Beach Resort Key Largo
Islander Resort Islamorada
Hawk's Cay Resort,Marina and DRI Duck Key
Westin,formerly Hilton Resort and Sunset Key Island Key West
Little Palm Island Little Torch Key
Louis'Backyard Restaurant Key West
Ocean Key Resort Key West
Sloppy Joe's Bar Key West
Truman Annex-Navy Base Key West
Other Florida Counties
Jupiter Beach Resort Jupiter,Palm Beach County
La Playa Beach Resort Naples,Collier County
Sheraton Four Points Orlando,Orange County
Spring Hill Suites Tampa,Hillsborough County
Hilton Carillon Park St.Petersburg,Pinellas County
Outside of the United States
Various Single Family Homes Cat Cay,Bahamas
Single Family Home Casa de Campo,Dominican Republic
Sapphire Beach Resort St.Thomas,U.S.Virgin Islands
Hotel Site Grand Turks and Caicos Islands
Montego Beach Resort Montego Bay,Jamaica
Botany Bay Subdivision(400 acres) St.Thomas,U.S.Virgin Islands
Ocean Club Resort Grand Turks and Caicos Islands
• Land lease under Ritz Carlton San Juan,Puerto Rico
Various Land Holdings St.Croix, U.S.Virgin Islands
Vacant Land West End,Grand Bahama Island
Buccaneer Hotel and Golf Course St.Croix, U.S.Virgin Islands
Waronker&Rosen,Inc. Real Estate Appraisers& Consultants 33
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach, FL
Description & Analyses
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Waronker&Rosen,Inc. Real Estate Appraisers& Consultants 34
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Purpose of the Appraisal
The purpose of this appraisal report is to estimate the value of the proposed easement to the
owner of the adjoining parcels as of August 19, 2015. As part of the analysis, an estimate of the
market value of the fee simple interest in the adjoining land was developed, in order to estimate
how the market value of the adjoining parcels would change as a result of the benefits afforded
by the proposed easement. The value to the adjoining owner is not considered market value. The
term fee simple interest is defined below. The term market value is defined on the following
page.
Client, Intended User and Use of the Appraisal
The intended user of this appraisal is City of Miami Beach (client). No purchaser or seller of the
subject property, nor any borrower are intended users of this appraisal and no such parties should
use or rely on this appraisal for any purpose. All such parties are advised to consult with
appraisers or other professionals of their own choosing. No additional intended users are
identified or intended for internal decision making relating to the possible granting of an aerial
easement over Ocean Court, a public right-of-way.
Definition of Real Property Interest Appraised
The real property interest appraised herein is that of the fee simple interest, defined as follows:
Fee Simple Interest: an absolute fee without limitations to any particular class of heirs,
but subject to the limitations of eminent domain, escheat, police power and taxation. An
inheritable estate.
Waronker&Rosen,Inc. 0 Real Estate Appraisers& Consultants 35
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Definition of Market Value
Market Value is the major focus of most real property appraisal assignments. Both economic and
legal definitions of market value have been developed and refined.' The Uniform Standards of
Professional Appraisal Practice (USPAP) states Market Value is "a type of value, stated as an
opinion, that presumes the transfer of property (i.e., a right of ownership or a bundle of such
rights), as of a certain date, under specific conditions set forth in the definition of the term
identified by the appraiser as applicable in the appraisal".2 This requires the appraiser to identify
the definition of market value and its authority.
The definition that follows is the basis of the valuation in this appraisal and the source is the
Interagency Appraisal and Evaluation Guidelines; December 10, 2010, Federal Register, Volume
75 Number 237, Page 77472.
Market Value is defined as "the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is not affected
by undue stimulus. Implicit in this definition are the consummation of a sale as of a
specified date and the passing of title from seller to buyer under conditions whereby:
• Buyer and seller are typically motivated;
• Both parties are well informed or well advised, and acting in what they consider their own
best interests;
• A reasonable time is allowed for exposure in the open market;
• Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
• The price represents the normal consideration for the property sold unaffected by special or
creative financing or sales concessions granted by anyone associated with the sale."3
This market value definition is referenced within the appraisal regulations of the following
governmental agencies:
• Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act(FIRREA) of
1989
• Department of the Treasury
• The Federal Reserve System(FRS)
• Federal Deposit Insurance Corporation (FDIC)
• Office of Comptroller of the Currency(OCC)
Appraisal of Real Estate, 14th Edition,page 58
2 USPAP 2014-2015,page U-3
3 Interagency Appraisal and Evaluation Guidelines;December 10,2010,Federal Register,Volume 75 Number 237,
Page 77472
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 36
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Location and Address
The subject property consists of a proposed aerial easement spanning Ocean Court (a public
alley) between 14th and 15th Streets, in Miami Beach, FL.
Address: Between 1440 Ocean Drive and 1433 Collins Avenue
Miami Beach, FL 33139
Legal Description
Collins Avenue Parcel:
Lot 18, Block, 19, of OCEAN BEACH ADDITION NO.2. occordina to the Plot
thereof. as recorded in Plot Book 2. at Page 56 of the Public Records of
Miami—'Dude cotrnly_ Horidn, :rr'I also (hut certuirt feud of hind desc iihecl 05
follows.
Beginning of the northwesterly corner of Hook 19, OCRAN BEACH ADDITION NO,2,
according to the Plot then cf, recorded in Plot Book Pace 56 of the Public:.
RecordS o{ Miam;—Bode County, Florida, thence easterly along the northerly line
of suid Block 19, a distance of 141,99 feet. more or less. to he westerly line
of a 20—lent ()Hey, nu thnwn on the aforesaid plot. then southwesterly cluing
the westerly line of sa-d obey, o distance of 110.5 feet. more or loss. to the
northeosterly corner of Lot 18, Block 19 es shown on oforesoid plot; then
northwesterly along the northerly line of snirl Lot 18, Block 19, u dislnnce of
140 feet to the Northwesterly corner of Lot 18, °look 19. as shown on
oforeso'd p!ot; thence northwesterly e!ong the westerly line of Block 19 as
shown on •oforesoid olct, a dislnnce of 87.7 feet, more or WIN, In the on*ni nt
beginning.
Ocean Drive Parcel:
Lot 1, Tess the North 13 feet Ants Let 2, In Black 19, of OCEAN OEAC'I ADDITION
NO.2, according to the Plot thereof. es recorded in plot Book 2. nt Page 56 UI.
the Public Records of Miuriii—Dude county. Florida
Neither a survey nor legal description for the proposed easement was supplied. The legal
descriptions above were copied from surveys included in the architect's drawings for the
proposed renovation. The drawings indicate that the surveys were completed by Hadonne Corp.
on October 15, 2013.
Waronker&Rosen,Inc. o, Real Estate Appraisers& Consultants 37
1
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Owner of Record
Ocean Drive Parcel: Collins Avenue Parcel:
Betsy Ross Owner, LLC Ocean Court, LLC
1841 Broadway 1221 Brickell Avenue
Suite 1009 Suite 1600
New York,NY 10023 Miami, FL 33131
Source: www.miamidade.gov
History of the Subject Property
The owner has owned the Betsy Hotel (the Ocean Drive parcel) for many years, but acquired the
Carlton Hotel (the Collins Avenue parcel) in October 2013 for $19,000,000 through a court-
ordered sale of the property resulting from the previous owner's bankruptcy. The owner has
since obtained approval from the City of Miami Beach Planning Department for a renovation
(now underway) of the Collins Avenue parcel (the Carlton Hotel) that includes an expansion of
the existing building (including addition of a new 1-story rooftop addition). Also proposed is
construction of a bridge to connect the two buildings over the alley. Proposed alterations to the
Betsy are limited to the pedestrian bridge and improvements to the alley.
Source: www.miamidade.gov and City of Miami Beach Planning Department
Waronker&Rosen,Inc. 0 Real Estate Appraisers&Consultants 38
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach, FL
Site Data
The subject property is a proposed aerial easement across Ocean Court, a public alley between
Collins Avenue and Ocean Drive.No survey was provided. This analysis is based on the location
of the proposed easement as depicted in architectural drawings provided. Based on the recorded
plat, the alley is 20 feet wide. Based on the drawings, it would have a length of 27.75 feet (the
length of the area taken up by a proposed spherical structure that would envelop the bridge that is
to connect the buildings on either side), and a vertical height of 26.33 feet. Based on this, the
easement would have a floor area of 555 sq. ft. and a volume of 14,615 cubic feet.
The parcels on the either side of the proposed easement are both trapezoidal but nearly square in
shape. The parcel on the east side (the Ocean Drive parcel) has frontage of approximately 123
feet along the west side of Ocean Drive. It also has frontage of approximately 101 feet along the
east side of Ocean Court, a public right-of-way that runs north-south between Ocean Drive and
Collins Avenue, and approximately 132 feet along the south side of 14th Place, a public right-of-
way that runs east-west between Ocean Drive and Collins Avenue. The segment of 14th Place
that lies along the north side of the Ocean Drive parcel connects to Ocean Court, allowing
vehicular traffic from Ocean Court to travel one way (eastbound) along 14th Place. Based on the
Miami-Dade County Property Appraiser's records, this parcel has a land area of 14,537 sq. ft.
The parcel on the west side of the proposed easement(the Collins Avenue parcel) has frontage of
approximately 137 feet along the east side of Collins Avenue. It also has frontage of
approximately 160 feet along the west side of Ocean Court, and approximately 142 feet along the
south side of 14th Place. The segment of 14th Place that lies along the north side of the Collins
Avenue parcel is a pedestrian-only right-of-way, such that vehicular traffic traveling north on
Ocean Court may not turn left at the northeast corner of the Collins Avenue parcel (it must turn
right, where 14th Place leads to Ocean Drive). According to the Miami-Dade County Property
Appraiser's records, this parcel has a land area of 20,258 sq. ft. However, this excludes a small
wedge-shaped parcel, identified in the Miami-Dade County Property Appraiser's records as folio
#02-3234-008-0730, which the survey included in the architect's drawings indicates as being
part of the Collins parcel. This parcel has a land area of 1,690 sq. ft. The Planning Department of
the City of Miami Beach stated to the appraisers that the City Attorney had recently determined
that based on a title search this parcel belongs to the Collins parcel, making the Miami-Dade
County Property Appraiser's records incorrect. Based on this, the land area of the Collins
Avenue parcel is 21,948 sq. ft.
The adjoining sites on either side of the proposed easement are level and at approximate street
grade. Utilities available to the adjoining sites are:
Electric: Florida Power and Light
Telephone: AT&T
Water: City of Miami Beach
Sewer Disposal: City of Miami Beach
Waronker&Rosen,Inc • Real Estate Appraisers& Consultants 39
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Zoning
The subject property is zoned MXE, Mixed-Use Entertainment District by the city of Miami
Beach, FL. This zoning allows apartments, apartment-hotels, hotesl and commercial
development. This zohihg is designed to encourage the substantial restoration of existing
structures and allow for new construction. The allowable FAR is 2.0. For a detailed listing of
allowable uses and restrictions, refer to the zoning code of Miami Beach, FL.
Flood Zone
The subject is within Flood Zone AE, areas subject to a one percent or greater annual chance of
flooding in any given year. Base flood elevations are shown as derived from detailed hydraulic
analyses. This flood zone requires mandatory purchase of flood insurance in participating
communities. This identification was located on Flood Insurance Rate Map, Community Panel
No. 12086C0317L, revised September 11, 2009. For insurance purposes, a surveyor should
be contacted to verify the exact zone by a flood elevation certificate, as well as its impact on
insurance. A copy of the flood zone map is located in the Addenda to this report.
Source:www.miamidade.gov and www.imapp.corn
Waronker&Rosen,Inc. 4 Real Estate Appraisers&Consultants 40
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Real Estate Assessment and Taxes
Taxing Authority: Miami-Dade County
Assessment Year: 2015
Millage Rate: 19.8148 (proposed)
Folio Numbers: 02-3234-008-0710 and 02-3234-008-0730 (Collins Avenue parcel)
02-3234-008-0581 (Ocean Drive parcel)
The following is a summary of the assessment:
Collins Avenue Parcel:
TAX ASSESSMENT TOTAL SQ.FT. ASSESSMENT
ANALYSIS ASSESSMENT SIZE* PER SQ.FT.
Assessed Land Value $7,681,250 21,948 $349.97
Assessed Value of Improvements $100,000 30,199 $3.31
Total Assessed Value $7,781,150 30,199 $257.66
*This is the size per the Miami-Dade County Property Appraiser's records.
Ocean Drive Parcel:
TAX ASSESSMENT TOTAL SQ.FT. ASSESSMENT
ANALYSIS ASSESSMENT SIZE* PER SQ.FT.
Assessed Land Value $8,722,200 14,537 $600.00
Assessed Value of Improvements $6,177,800 39,727 $155.51
Total Assessed Value $14,900,000 39,727 $375.06
*This is the size per the Miami-Dade County Property Appraiser's records.
Waronker&Rosen,In Real Estate Appraisers&Consultants 41
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
The real estate taxes are estimated as follows:
TAX CALCULATION TAXES PER SQ.FT.
Millage Rate(Millage Rate-1,000) 0.0198148
Times Total Assessed Value x $22,681,150 $324.36
Estimated Real Estate Taxes $449,422 $6.43
There is a 4% discount given for early (November) payment of taxes which would reduce the
estimated real estate taxes to $431,445 ($449,422 minus 4%).
Florida Statutes require assessments to be at 100%of just value (market value)with an allowable
adjustment to indicate net proceeds that would be derived from a sale. This adjustment varies
dependent on the taxing authority with the Miami-Dade County Property Appraiser's office
typically designating in the range of 15%. Based upon the market value estimated herein the
assessment is below what is appropriate.
Note that the assessed value for the Collins Avenue parcel includes the wedge-shaped parcel
(folio #02-3234-008-0730) that the County indicates is City-owned, and which is assessed at a
lower value per sq. ft. The land on the main portion of the Collins Avenue parcel (folio # 02-
3234-008-0710) is assessed at $375 per sq. ft., or 63% of the rate at which the Ocean Drive
parcel is assessed ($600 per sq. ft.).
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 42
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
I
Neighborhood Overview
General Neighborhood Data
Location: Urban
Built Up: 90%to 100%
Growth Rate: Steady
Property Values: Increasing
Demand/Supply: In balance
Present Land Use: Lodging and Retail
Change in Present Land Use: Not likely
Predominant Use: Lodging
Property Compatibility: Excellent
General Appearance of Properties: Excellent
Appeal to Market: Excellent
Adjacent Uses
East: Public Beach
West: Retail and Lodging
South: Office building
North: Lodging
Linkages Distance Access
Public Transportation: Within a few blocks Very good
Employment Centers: Three to five miles Good
Expressway Access: Five to seven miles Average
Miami International Airport: Ten to fifteen miles Good
Waronker&Rosen,Inc. 0 Real Estate Appraisers&Consultants 43
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Supply and Demand
Market conditions for commercial real estate in Miami-Dade County have shown significant
improvement overall since the declines that followed the recession and financial crisis of 2008,
with some of the most desirable locations and property types seeing very significant
improvement during the past two years. Geographically, the areas showing the earliest signs of
recovery were generally the waterfront neighborhoods near the urban core (especially Brickell),
Downtown Miami, Coral Gables and Miami Beach. The residential sector, which sparked the
financial crisis that led to the recession, was first to see significant levels of new development,
particularly in the luxury and ultra-luxury end of the market, with numerous waterfront
condominium projects achieving total or near total sellouts of units priced in the multiple
millions of dollars even before construction begins. The revival of the residential sector has also
supported a significant recovery in retail real estate, especially at the most desirable locations, as
has the general slow but steady improvement in economic conditions and overall employment,
which in turn have fueled modest improvements in the office and industrial sectors.
The subject neighborhood is dominated by lodging, retail and residential uses. It is in the heart of
the Art Deco district of South Beach, a world-renowned tourist destination. All three sectors
have experienced a very strong recovery in the subject neighborhood, which is among the most
desirable locations in the metro area, with values for retail and hotel values hitting record highs
during the past several quarters. It should be noted, however, that in areas like the subject where
ground floor retail and hotel uses can be very profitable, residential uses tend to be most
profitable only on sites that permit high-rise development, but the subject is located in a zoning
district that permits only mid-rise development (up to an FAR of 2.0). Also, the current
economics of hotel development make larger sites more appealing than smaller sites, as it is
generally more difficult for smaller hotels to achieve the same levels of efficiency and
profitability per room as larger hotels. As a result, many of the smaller parcels in the
neighborhood which were improved with smaller, older hotels have in recent years been
converted to retail use (which can be profitable even in small spaces that can be leased to a single
retailer). The larger parcels in the neighborhood continue to be dominated by hotel uses, with
most of the recent residential development occurring in other neighborhoods and zoning districts
that permit higher-density(in many cases high-rise) development.
The lodging sector in South Florida has been doing extremely well since recovering from the
recession and global financial crisis, the effects of which were felt through 2009. Since 2010, it
began to register notable improvements, with the Miami Beach market leading the way as the
first lodging submarket in the Miami area to show signs of recovery. By 2012, demand in the
Miami Beach market had returned to previous levels, and with the decline in new hotel
development activity brought about by the recession resulting in few new hotels being delivered
to market, the rising demand has resulted in robust increases in both occupancy rates and room
rates as well as significant amounts of renovation and re-positioning of older hotels. This
rebound is illustrated in the charts on the next page, which summarize recent trends in occupancy
and ADR (Average Daily Rate) for both Miami-Dade County and the Miami Beach market. The
data is from the Greater Miami Convention and Visitor's Bureau, and is based on data provided
by Smith Travel Research.
Waronker&Rosen,Inc. Real Estate Appraisers& Consultants 44
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Occupancy and ADR
Miami-Dade County
100% $300
95%
$250
90%
$176.66 $185.12 $200
85% $158.41 $160.14 $152.95 $163.44
$140.73 $143.98
80% $150
75% m 76.5% 77.9% 78.3%
■ 75.6% $100
70%
72.4% 71.4%
70.4% I I I $50
65%
60% 16_% II $0
2007 2008 2009 2010 2011 2012 2013 2014
■Occupancy(L) t ADR(R)
Occupancy and ADR
Miami Beach
100% $300
95%
$242.07 $252.20
$211.23 $223.70 $250
90% $199.53 $202.76 $197.56
$184.10 $200
85%
80% $150
75% — — 78.1% 7 %
75.3% 76.0% $100
70% 72.9% 72.4%
65% I — 68% I $50
65.1%
60% $0
2007 2008 2009 2010 2011 2012 2013 2014
■Occupancy(L) —0——ADR(R)
The charts on the following page show the year-over-year percent change in occupancy and
ADR based on the data reflected in the charts above, and indicate substantial rates of ADR
growth for the past few years, both across the broader market and in Miami Beach. Results for
2014 show a slight decline in the rate of ADR growth and a slight decline in average occupancy
in Miami Beach, suggesting that the market is moving from a rapid growth phase to more stable
conditions.
1
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 45
Description and Analyses Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Occupancy and ADR -% Change Over Prior
Year
Miami-Dade County
15%
10% +8.1%
+6.2% +6.9%
+4.8%ji
5% +1.1%
LIJJI
-5%
-10%
-15% -12.1%
2008 2009 2010 2011 2012 2013 2014
•Occupancy •ADR
Occupancy and ADR - % Change Over Prior
Year
Miami Beach
15%
109'° +7.3% +6.9% +8.2%
+5.9%
JUjJj: ::
-5%
-10%
-9.2%
-15%
2008 2009 2010 2011 2012 2013 2014
•Occupancy •ADR
During stable markets, or markets in equilibrium conditions, occupancy and ADR tend to move in
opposite directions, as decreases in a hotel's room rates tend to induce more guests to select it over
competing hotels, increasing its occupancy rates (and vice versa). The fact that Miami Beach hotel
occupancy levels continued to rise between 2010 and 2013 even under rapid room rate increases
provides evidence of very strong demand growth, while the more recent evidence suggests that
demand growth has begun to slow down with growth in room rates slowing in response.
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 46
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Exposure Time
Exposure time is the "estimated length of time that the property interest being appraised would
have been offered on the market prior to the hypothetical consummation of a sale at market value
on the effective date of the appraisal. Exposure time is a retrospective opinion based on an
analysis of past events assuming a competitive and open market"1.
This analysis considers the market value of the land on either side of the proposed easement as a
basis from which to estimate the value of the easement to the adjoining owner. The easement
itself would have no utility and therefore no value to any other party, so the concept of exposure
time would not apply. With respect to the market value of the adjoining land, the analysis
considers the exposure time of the vacant land at a market related price such as the estimated
market value herein. In estimating exposure time, sales are analyzed, real estate brokers and
property owners are interviewed and statistics from published surveys are considered. The
subject property site is very desirable given the very strong market conditions.
The exposure time for the subject as vacant land with the specific allowable uses is estimated at
six months. This estimate considers that the property would have been properly marketed and
priced. If the property were not to have been priced correctly or marketed through proper
channels, then it is not likely that the estimated market value nor the estimated exposure time
would have been achieved.
Typical Purchaser of the Subject
As noted above, the proposed easement would have no value to any party other than the
adjoining owner. However, the analysis considers the market value and typical purchaser of the
adjoining land. Based on the analysis, the typical purchaser of the adjoining properties as vacant
land would be a hotel developer.
i Uniform Standards of Professional Appraisal Practice(USPAP)2014-2015 Edition, Page U-3
Waronker&Rosen,Inc. Real Estate Appraisers& Consultants 47
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Highest and Best Use
The adjoining sites are valued for their highest and best use, which may be defined as follows:
That reasonable and probable use that will support value
as defined as of the effective date of the appraisal.
In analyzing the highest and best use, the following four questions are answered:
1. Legally Permissible. What uses are legally permitted on the subject site with
respect to zoning ordinances and deed restrictions?
2. Physically Possible. What uses of those legally allowed are physically possible
on the subject site?
3. Financially Feasible. Of those uses determined to be physically possible and
legally permissible, which ones will produce a positive return?
4. Maximally Productive. Of those that are feasible, legally permissible, and
physically possible,which will produce the highest rate of return or value?
As Vacant
The zoning on the parcels adjoining the subject property is MXE, Mixed-Use Entertainment
District by the city of Miami Beach, FL. This zoning permits a variety of uses, of which the most
likely to be feasible to develop are lodging, retail and residential uses. Residential uses at the
subject location would be most likely to be profitable in a high-density (high-rise) development
scenario (where residential uses tend to be most profitable on the upper floors). However, the
subject zoning allows a maximum.FAR of 2.0, limiting the size of any building to a mid-rise
structure. The subject location is dominated by hotels, with a number of the smaller buildings
along Collins Avenue occupied by retail users. On larger sites the most profitable type of
development is likely to be lodging, though possibly with a retail component at the ground level
such as a restaurant or café (along the lines of the renovation currently underway at the Carlton
Hotel on the Collins Avenue parcel, which includes a new restaurant with outdoor seating).
As Improved
As the subject property is being valued as vacant land, the analysis of the highest and best use as
improved is not applicable.
Waronker&Rosen,Inc. oA Real Estate Appraisers& Consultants 48
Description and Analyses Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Appraisal Process
An analysis of three separate approaches to value; sales comparison approach, cost approach,
and income capitalization approach, will be considered to estimate the value of the subject
property. Although these three approaches to value are considered within every appraisal report,
they may not be applicable to each and every property being appraised.
The cost approach is based on the principle of substitution which states that an informed
purchaser would not pay more for a property than the cost of reproducing a property with the
same utility. The cost approach can often yield reliable estimates of value for new construction.
This approach entails estimating the cost of producing the improvements, deducting an estimate
of depreciation, and then adding the value of the site as if vacant. To this value an
entrepreneurial incentive is added to arrive at the estimated value by the cost approach.
The income capitalization approach is based on the concept that value is created by the
expectations of future benefits and higher earnings should result in higher values. Income
producing real estate is purchased for the right to receive future income. The income
capitalization approach consists of methods to analyze a property's capacity to generate income,
and a reversion, and convert these monetary benefits into an estimate of value.
The sales comparison approach is based on the principle of substitution which suggests that,
within competitive markets, similar products will realize similar prices. Inherent in this concept
is the premise that a purchaser would not pay more for a property than the cost to acquire another
property with the same amenities and utility.
The final steps in the appraisal process are review and reconciliation of the data and conclusions.
In reaching a final conclusion of value, the entire process involving the approaches that were
estimated must be reviewed for accuracy, completeness and consistency. After analysis,
evaluation and reconciliation of the indications a value is estimated. The essence of this final
reconciliation should be a defensible and rational conclusion of value.
The only approach used in this appraisal is the sales comparison approach. The income
capitalization approach and the cost approach are not applicable to the valuation of the subject
property.
Waronker&Rosen,Inc. Real Estate Appraisers& Consultants 49
Cost Approach Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
Cost Approach
The basis of the cost approach is the principle of substitution. This principle suggests that a
prudent buyer would not pay more for a property than the cost to acquire a similar site and
construct comparable improvements.
Following are the procedures for preparing the cost approach.
1. Estimate the value of the land as though vacant and available to be developed to its highest and
best use.
2. Determine which cost basis is most applicable to the assignment: reproduction cost or
replacement cost.
3. Estimate the direct (hard) and indirect (soft) costs of the improvements as of the effective
appraisal date.
4. Estimate an appropriate entrepreneurial profit or incentive from analysis of the market.
5. Add estimated direct costs, indirect costs, and the entrepreneurial profit or incentive to arrive at
the total cost of the improvements.
6. Estimate the amount of depreciation in the structure and, if necessary, allocate it among the three
major categories: physical deterioration,functional obsolescence,and external obsolescence.
7. Deduct the estimated depreciation from the total cost of the improvements to derive an estimate
of their depreciated cost.
8. Estimate the contributory value of any site improvements that have not already been considered.
(Site improvements are often appraised at their contributory value -i.e., directly on a depreciated-
cost basis - but may be included in the overall cost calculated in Step 3 and depreciated, if
necessary).
9. Add land value to the total depreciated cost of all the improvements to develop the market value
of the property.
10. Adjust for personal property(e.g., furniture, fixtures, and equipment) or intangible assets that are
included in the appraisal.
11. Adjust the value conclusion, which reflects the value of the fee simple estate, for the property
interest being appraised to arrive at the indicated value of the specified interest in the property. 1
As the subject property is unimproved vacant land, the cost approach is not applicable.
The Appraisal of Real Estate, 14th Edition,2013,Pages 568 and 569
Waronker&Rosen,In • Real Estate Appraisers& Consultants 50
Income Capitalization Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Income Capitalization Approach
Income producing real estate is typically purchased as an investment, and from an investor's
point of view earning power is the critical element affecting property value. One basic
investment premise holds that the higher the earnings, the higher value, provided the amount of
the risk remains constant. An investor who purchases income-producing real estate is essentially
trading present dollars for the expectation of receiving future dollars. The income capitalization
approach to value consists of methods, techniques, and mathematical procedures that an
appraiser uses to analyze a property's capacity to generate benefits (i.e., usually the monetary
benefits of income and reversion) and convert these benefits into an indication of present value.'
In the income capitalization approach, an appraiser analyzes a property's capacity to generate
future benefits and capitalizes the income into an indication of present value. The principle of
anticipation is fundamental to the approach.2
An income capitalization approach was not applied as it was not within the scope of this
appraisal. Since this approach is typically not considered by purchasers of this property type, not
using it does not limit the reliability of the value estimated herein.
Appraisal of Real Estate, 14th Edition,2013,Page 439
2 Ibid.,439
Waronker&Rosen,Inc. Real Estate Appraisers&Consultants 51
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Sales Comparison Approach
The sales comparison approach is based on the principle of substitution. The principle of
substitution holds that the value of property tends to be set by the cost of acquiring a
substitute or alternative property of similar utility and desirability within a reasonable
amount of time.'
In the Sales Comparison Approach, an opinion of market value is developed by comparing
properties similar to the subject property that have recently sold, are listed for sale, or are
under contract (i.e., for which purchase offers and a deposit have been recently submitted). A
major premise of the sales comparison approach is that an opinion of the market value of a*
property can be supported by studying the market's reaction to comparable and competitive
properties.
Qualitative analysis is a relative comparison process without mathematics. Sales are ranked
based upon their desirability as compared to the subject. Comparisons can be expressed as
plus or minus as opposed to dollar or percentage adjustments.
Quantitative analysis is the process of applying mathematical techniques. Sales are adjusted to
the subject property on a dollar or a percentage basis. One method of supporting adjustments
is through paired data analysis. This method analyzes two sales and attributes the difference
in their sales prices to the characteristic which is different. This analysis requires an
abundance of sales data which is frequently not available.
Qualitative analysis is used herein to estimate a value by the sales comparison approach.
Characteristics of the sales considered superior to the subject are given a minus (-) adjustment.
Those characteristics of the sales considered inferior to the subject are given a plus (+)
adjustment. Each sale is given an overall adjustment indicating how it compares to the subject.
On the following page is a grid of the sales used for comparison to the subject property.
' The Appraisal of Real Estate 14th Edition,2013,page 379
Waronker&Rosen,Inc. 09 Real Estate Appraisers& Consultants 52
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Vacant Land Sales Grid
Following is a grid of the comparable sale properties used for comparison to the subject property.
Sale Sale Sq.Ft. Price/
No. Date Location Zoning Sale Price Size Sq.Ft.
June 1475 Collins Avenue
1 2013 Miami Beach MXE $7,390,000 12,400 $595.97
June 825 Collins Avenue
2 MXE/1-IPD $5,000,044 6,500 $769.24
2013 Miami Beach
March 251 Washington Avenue
3 2015 Miami Beach RPS-3 $8,250,000 13,000 $634.62
4 July 620 Ocean Drive MXE $5,270,000 6,500 $810.77
2013 Miami Beach
August 304-312 Ocean Drive
5 2013 Miami Beach R-PS3 $6,300,000 11,650 $540.77
6 February 88 SW 10'h Street T6-48B-0 $26,000,000 22,770 $1,141.85
2015 Miami
October 120-130 Ocean Drive
7 2012 Miami Beach R-PS3 $9,200,000 17,250 $533.33
October 2206 Park Avenue
8 2013 Miami Beach CD-3 $7,000,000 17,040 $410.80
9 January 2014 6747 and 6757 Collins Avenue RM-3 $21,000,000 41,624 $504.52
Miami Beach
10 April 2014 6901 Collins Avenue RM-3 $26,000,000 40,250 $645.96
Miami Beach
Subject Between 1440 Ocean Drive
and 1433 Collins Avenue
Miami Beach
Parcel A(1433 Collins) MXE 21,948
Parcel B(1440 Ocean) MXE 14,537
Waronker&Rosen,Inc. 0 Real Estate Appraisers& Consultants 53
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Vacant Land Sales Map
t'n NI in d Norway Dr
^NJ Q1al:l 1. tdN 91I SI • aZ Snow 0i 7 r-,..,e..i,ua P.:a*rf.SE r
_ _ 4
TM 070,St O P e... ' p e Hl;01Ih St ° N a!:i+4w •Q . iy a 1%4 q{
MNr t.,q i 8 a i w 4*S! - ,�[, O
NN/OSA rl
Na t>ka y t nt co.St Tt Nu i,Rs,1 er �7Nt`s% 7
Mw at4 a tic tuni s v ear,,,y Q,P, Il.tr Mr tiamaMv t.I.a.a Sale 10
hMM slat st r ttE O Mh s a.Vl�ytl
s �' L"°� t..Gmk .
"PAR`.3t 4� • .'.sK II.ne An., t'OK an Tt r:,vurn tatanA 1Sale 9 II ,NW UV,St t w.M....t 1
l f Y = I,,4,7. ,Sf S T.ew,w.D.Pelle 1441•Mud
NW 71,31 9t y NE 77rd ry
NN 720d i I fk nivi Si
4M t,`I .. ti 4 gcwe"riet%h wash
S 4 It
4 :=''',t'
'y' F MN 679,Si a '
7 r rdwn ? .1 AM 6,
t+sr Pin*ar T.
s t
C f
C 1,v 6,.7 ST
.sasm : rtw tplM�t _.
l!bony Clly
fit
NW Soh,, l PTe. aA., 13a.SI Ne
II, •��rrtn,n
WW',Sth Tena cv , o-.,na Pt,. r$51.E 51 I
l imw eaMtl
IeMxnn Audi Sr t7N0 _ _• yt..w:s,Nr ra...ew.lr 1Q+
l L fM k Q K,7th Si ,
.
NW_ r IF. _ P : • <♦
NW _ 1 II=_1 ,: _ . . ,: a r e S : Y Qd .r �$1 'itxh F W iti
,NW e" y'.- et f 1 �F$F
i X 1 t„14,...,:.. . art. Nt,Al +
� � ,'2+r7�>�rn� }, ? ]A' '_ -._-. -...__:- '"'ks �pe6 j j .1 l a Y „ f r „
r P 1 a' ~,I 9 Mw 9. • 1 __ filrhytn in lywYt Phnom
{d U C ! d A
2.9 E} I. Not X._9 1!Iii ,-, Sale 8
1. r7 w NW 741n 'S 1• a
I NW.etn SI 4 F' lmtfet g a
4. 1_ :4th 1 Woad,
P
r- �• •t y r Irt.'2eq„St lamb klnit y �,yrr lye"01.
_ Cam" 1.*i Alva Pr,
1JW vo 81 C 4.PST gale 1 h
na, r,.r HI.
ie _ - s *. ; 1Subject
_pfn tsg _- .. v y ._ "a 160h St `t �
�' 2 Sae ''r VA St ` ,/,'
U +ri11h Si NW It7M`.+Y , k" 4. Sale L :
NN id,9 S ,. i ,, p a„ `, Nur ;Sak 4
w NW 6th S} Qn:] i, .,,,,,A `'.' N c.. .tar
?T
r ay, Lund[�� i
NW 3id SI, .. �Q�_,r F,�iVY , Q q� Sale 3 k� �
NW lel Si ,-..fir ' lA'''"W r.:::%. 8.,, 4 e h+I&at- 9., sy IS It 241 '°'4 r,/, twat'rt+k .r. �. -
�W ha St k ?cn rA .�aY F '.d Jl•wt If.Kil
t SW 3,d Sr Si'
;w tin Si r� g sw.y St* r Sale fi nn �o T+tl std \``
s3 t.. r,.l,w.n k tn.}n�y a+bh* �C_\
',,lY 6th vl ; x •; ttw, Newt,*way fxid✓• `f• �Sak 5
�) 5w Rh ft i / ? !Sale 7
v 77� » Kif..n•
C e-'1N ltlh SI v I_•"" .
(••CHM
�' ,. I
t °'''''t _} a
A d
Waronker&Rosen,Inc. ❖ Real Estate Appraisers& Consultants 54
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Comparable Land Sale 1
Property Location --�
1475 Collins Avenue
Miami Beach, FL 33139
Miami-Dade County w aircV
Property Identification Olt
Tax ID. 02-3234-019-1230 feAltir;
WRI No: 303153R
Units of Comparison 1F • a - i
Price/Sq.Ft.: $595.97 - -
Price/Acre: $26,392,857 4
Property Description
Square Feet: 12,400
Acres: 0.28
Topography: Grade level
Shape: Trapezoidal
Zoning: MXE, Mixed-Use Entertainment District by the city of Miami Beach, FL
Recording Information
Sale Price: $7,390,000
Sale Date: June 2013
ORB/Page: 28681/0518
Grantor: Empire Ocean Residence Realty, LLC
Grantee: CVS 10346 FL, LLC
Financing: All cash to the seller
Prior Sale: None in the past five years
Verification: Grant Savage, listing broker at Point Group Advisors, Inc. (305-913-5505)
Comments
This parcel is located at the southeast corner of Collins Avenue and 15th Street. According to the
listing broker, the property had been in court-appointed receivership and was sold to the highest
bidder in a bidding process. The buyer is the development arm of CVS Pharmacies, which plans
to construct a CVS store at the site.
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 55
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct,Miami Beach,FL
Comparable Land Sale 2
•
Property Location .@ut •
825 Collins Avenue -4110 Ab4- -
Miami Beach, FL 33139 afterfr.t ,� r ! ''�'
Miami Dade County
;rte r 4
Property Identification 1
Tax ID: 02-4203-052-0110, -0010, r `. -ify
-0030, -0040,-0100, -0120, -
-0070, -0080, -0090, -0050 - _ L -4 •
' .l
and-0060
WRI No: 303152R � `,a ,.
Units of Comparison
Price/Sq.Ft.: $769.24
Price/Acre: $33,333,627
Property Description
Square Feet: 6,500
Acres: 0.15
Topography: Grade level
Shape: Rectangular
Zoning: MXE/HPD, Mixed-Use Entertainment and Historic Preservation District by the
city of Miami Beach, FL
Recording Information
Sale Price: $5,000,044
Sale Date: June 2013
ORB/Page: Various
Grantor: Various
Grantee: FCI Miami Beach One, LLC
Financing: All cash to the seller
Prior Sale: $3,195,000 in May 2012
Verification: El Zielial, buyer(786-234-4321)
Comments
This is the purchase of all 11 units in a 47 year-old residential condominium located on Collins
Avenue, between 8th and 9th Streets. The deal was closed on same day on 11 separate deeds.
The buyer confirmed their intention to dissolve the condominium and demolish the building to
make way for a new 10,350 sq. ft. retail building for which approvals are in place.
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 56
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct,Miami Beach,FL
Comparable Land Sale 3
Property Location •_ - . ..e
251 Washington Avenue "_
Miami Beach, FL 33139 .. 4' �� ,
muir �
►,
Miami-Dade County . .,•
Property Identification r
Tax ID: 02-4203-003-1090, ii 0.•
02-4203-003-1080 `° lip up t4
WRI No 303830 Nei ►� 1
Units of Comparisons '��� 1.'v .• ,
Price/Sq.Ft.: $634.62 `' '' e
CP
Price/Acre: $27,500,000 •
Property Description
Square Feet: 13,000
Acres: 0.3
Topography: Grade level
Shape: Rectangular
Zoning: RPS-3, Medium-High Density Residential Performance Standard District by the
city of Miami Beach, FL
Recording Information
Sale Price: $8,250,000
Sale Date: March 2015
ORB/Page: 29526/2117
Grantor: SOBE Second Street, LLC
Grantee: SOUTH5, LLC
Financing: $5,600,000 in seller financing with an interest rate of 6%
Prior Sale: None in the past five years
Verification: Peter Andolina,broker(pandolina @metro l.com)
Comments
This is a rectangular parcel located on the east side of Washington Avenue, just south of 3rd
Street. Frontage on Washington Avenue is 100 feet and the depth of the parcel is 130 feet. There
is also frontage at the rear along a public alley (Collins Ct.). The zoning permits residential uses
and hotels up to a building height of five stories and an FAR of 1.75. Commercial uses are not
allowed.
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 57
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Comparable Land Sale 4
•
Property Location
620 Ocean Drive
Miami Beach, FL 33139
Miami-Dade County •, At r
a im-g
Property Identification "
Tax ID: 02-4203-004-0050
�,y4
WRI No: 303603 '" , , s
Units of Comparison •
Price/Sq.Ft.: $810.77 i~• ��' 4,1
Price/Acre: $35,133,333
Property Description
Square Feet: 6,500
Acres: 0.15
Topography: Grade level
Shape: Rectangular
Zoning: MXE, Mixed-Use Entertainment District by the city of Miami Beach, FL
Recording Information
Sale Price: $5,270,000
Sale Date: July 2013
ORB/Page: 28721/2580
Grantor: 620 Partners, Ltd.
Grantee: 620 Park Central Partners, LLC
Financing: All cash to the seller
Prior Sale: None in the past five years
Comments
This parcel is located on Ocean Drive, between 6th and 7th Streets, across from the beach. The
buyer is the owner of the adjoining property, the Park Central Hotel, a historic 125-room Art
Deco hotel. The buyer has filed for approval of a new four-story hotel building to be built on the
site and incorporated into the existing hotel.
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 58
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Comparable Land Sale 5
Property Location '1
304-312 Ocean Drive
Miami Beach, FL 33139
Miami-Dade County ,f f, ''E'
•
Property Identification •• 4 „�' 11 .
Tax ID: 02-4203-003-0510, 02-4203- �`
003-0500 _
WRI No: 303602
Units of Comparison -____: •
Price/Sq.Ft.: $540.77
Price/Acre: $23,333,333 stoi
Property Description
Square Feet: 11,650
Acres: 0.27
Topography: Grade level
Shape: Square
Zoning: R-PS3, Medium-High Density Residential Performance Standard District by the
city of Miami Beach, FL
Recording Information
Sale Price: $6,300,000
Sale Date: August 2013
ORB/Page: 28879/662
Grantor: 304 South Beach, LLC
Grantee: Sea Spray Development, LLC
Financing: All cash to the seller
Prior Sale: March 2011 for$4,040,000
Comments
This is a square parcel consisting of two adjacent lots located at the northwest corner of Ocean
Drive and 3rd Street. One of the lots was improved with a 16-unit apartment building built in
1937 that was abandoned and boarded up but carries a historic designation. A previous owner
had obtained approvals to renovate the building and build a new structure on the adjacent lot and
combine the buildings into a 27-room hotel with a restaurant. The plans were never realized due
to the soft market. After the sale, the buyer obtained approval to demolish the existing building
and construct a new four-story multifamily building.
Waronker&Rosen,Inc. • Real Estate Appraisers&Consultants 59
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Comparable Land Sale 6
Property Location
88 SW 10th Street
Miami, FL 33130
fitIA‘2
Miami-Dade County z T
ZL-sit .....
Property Identification . rot
Tax ID: 01-0207-040-1140; 01-0207- ;
040-1081. 01-0207-040-1120; '
01-0207-040-1100; 01-0207-
040-1130; 01-0207-040-1090. -� -
WRI No: 303831
4
Units of Comparison
Price/Sq.Ft.: $1,141.85
Price/Acre: $50,000,000
Property Description
Square Feet: 22,770
Acres: 0.52
Topography: Grade level
Shape: Square
Zoning: T6-48B-O, Urban Core Open Transect Zone by the city of Miami, FL
Recording Information
Sale Price: $26,000,000
Sale Date: February 2015
ORB/Page: 29513/0438
Grantor: Rockville Hospitality, LLC
Grantee: GW Brickell, LLC
Financing: Seller financing for $11,000,000 at an undisclosed interest rate, payable in full on
July 15, 2015.
Prior Sale: December 2013 for$9,000,000
Verification: Richard B. Schreibstein, attorney(443-276-1818)
Comments
This parcel is located at the southeast corner of SW 10th Street and SW 1st Avenue. The location
is across the street to the east from the Brickell station of the MetroRail and across the street to
the south from the Mary Brickell Village retail complex. The buyer is a prominent Brazilian
developer of hotels and high-density residential projects. The seller is a Maryland-based hotel
management company. The seller's attorney confirmed that there is no affiliation past or present
between the parties. The seller had purchased the site in December 2013 for$9,000,000 ($395.26
per sq. ft.), realizing a gain of 189%over 14 months.
Waronker&Rosen,In 44 Real Estate Appraisers&Consultants 60
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
ex, .111‘1*;
Comparable Land Sale 7
Property Location '''L,
oura
120-130 Ocean Drive
Miami Beach, FL 33139 4.11
y .
Miami-Dade County
Property Identification _ ,
Tax ID: 02-4203-003-0190; I Mt' ftrv .
-01G 11111P 4ff
02-4203-003-0200 and I .r .,,
02-4203-003-0210
WRI No: 303105R .00:' " ' _ •1 j
Units of Comparison
•
Price/Sq.Ft.: $533.33
Price/Acre: 23
$ 000,000
Property Description
Square Feet: 17,250
Acres: 0.4
Topography: Grade level
Shape: Rectangular
Zoning: R-PS3, Medium-High Density Performance Standard Residential District by
Miami Beach,FL
Recording Information
Sale Price: $9,200,000
Sale Date: October 2012
ORB/Page: 28315/1488
Grantor: Ocean Drive CFI, LLC
Grantee: 120 Ocean Drive, LLC
Financing: All cash to the seller
Prior Sale: None in the past five years
Comments
This parcel is located on the west side of Ocean Drive,just north of 1st Street, one block from
the ocean. It was purchased by an affiliate of Terra Group, a prominent South Florida developer.
The company is developing a 10-unit 18 story luxury residential condominium on the site with
commercial space. The project was mostly pre-sold before construction began.
Waronker&Rosen,Inc. • Real Estate Appraisers& Consultants 61
Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Comparable Land Sale 8
Property Location •`' rA +`
2206 Park Avenue \ •, .
Miami Beach, FL 33139
Miami-Dade Count
Property Identification ,�•� '►�:,
o
Tax ID: 02-3226-001-0320 & 02-3226- ;°; °
001-0330 • - +•,,
WRI No: 303829 .' *'"
" -�*-'-� fir?
Units of Comparison a f ";;:
Price/Sq.Ft.: $410.80 .' - ', �
1• 1114 fr +Y ,t�j it LT
Price/Acre: $17,948,718 �/ _ rII�' ►
• f
L •
Property Description
Square Feet: 17,040
Acres: 0.39
Topography: Grade level
Shape: Trapezoidal
Zoning: CD-3, Commercial High Intensity District by the city of Miami Beach, FL
Recording Information
Sale Price: $7,000,000
Sale Date: October 2013
ORB/Page: 28875/2553
Grantor: Xenia 2206, LLC
Grantee: Vintro Villas, LLC
Financing: Conventional loan
Prior Sale: None in the past five years
Verification: Gary Silberman, attorney (gary @silberman-law.com)
Comments
This parcel is located at the northwest corner of Park Avenue and 22nd Street. The buyer is the
owner of the adjoining property, a 13,600 sq. ft. parcel improved with a recently renovated
25,931 sq. ft., 51-room hotel. In 2014 the owner applied to the Planning Board for approval to
develop a mixed-use commercial/hotel/residential project on the combined site. The combined
building is to exceed 50,000 sq. ft. The combined site has frontage of approximately 150 feet
along Park Avenue and 275 feet along 22nd Street, with additional frontage along a canal at the
rear.
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Comparable Land Sale 9
Property Location
6747 and 6757 Collins Avenue ,,r,
Miami Beach,FL 33141 1.4! .T ±i p
Miami-Dade County • i; :i !; ; .
IAN i.r°4 • .,
Property Identification 'j
Tax ID: 02-3211-007-0430 and -0440 ,
WRI No: 303612R . s• ;$ •
Units of Comparison _=. ,, •
Price/Sq.Ft.: $504.52 ' 'n" <'
Price/Acre: $21,875,000 ' ' i'.
Price/Unit: $1,615,385 , '' ,;�.` `
Property Description
Square Feet: 41,624
Acres: 0.96
Topography: Grade level
Shape: Rectangular
Zoning: RM-3, Residential Multifamily, High Intensity by the city of Miami Beach, FL
Recording Information
Sale Price: $21,000,000
Sale Date: January 2014
ORB/Page: Not yet recorded
Grantor: 6747 Collins Development Corporation
Grantee: Not yet recorded
Financing: All cash to the seller
Prior Sale: $4,600,000 in October 2010
Verification: Mark Rutherford, broker(305) 503-1107
Comments
This is an oceanfront parcel located on Collins Avenue, between 67th and 69th Streets. The
buyer is planning a 13-unit luxury residential condominium with large full-floor units averaging
5,620 sq. ft. each, and two 2-story villas at 8,688 sq. ft. each. All units will have 360 degree
terraces and private elevators.
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Comparable Land Sale 10
Property Location y.
6901 Collins Avenue * �.,r ' ' �,
Miami Beach,FL 33141 � -
Miami-Dade County '•� 0.7 tii,1'°
Property Identification _ ■'` �,_. • '• +�
Tax ID: 02-3211-001-0050 �^.� a' tit
WRI No: 303613 �- i '" a
CILt. 4-7
Units of Comparison �
Price/Sq.Ft.: $645.96 * -�
O
Price/Acre: $28,260,870
Ot
• •
Property Description
Square Feet: 40,250
Acres: 0.92
Topography: Grade level
Shape: Rectangular
Zoning: RM-3, Residential Multifamily, High Intensity by the city of Miami Beach, FL
Recording Information
Sale Price: $26,000,000
Sale Date: April 2014
ORB/Page: 29108/4995
Grantor: FL GS Collins Avenue, LLC
Grantee: SMGW Golden Sands, LLC
Financing: $12,000,000 in debt financing from a private equity firm.
Prior Sale: August 2005 for$19,000,000
Verification: Mario Borda and Mary Kate Swann, CBRE
Comments
This is an oceanfront parcel located at the northeast corner of Collins Avenue and 69th Street. It
is the former site of the Golden Sands Hotel, and is located just north of the Canyon Ranch hotel
and spa. The site had been approved in 2005 for development of up to 40 residential units, but
the buyer plans a 20-story luxury condominium development with only 14 large, floor-through
residences, including a 7,000 sq. ft. penthouse.
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Adjustment Grid
Below is a grid which illustrates qualitative adjustments used to compare the comparable sales to
the subject property. Percentage adjustments were not utilized. In order to utilize percentage
adjustments it would be necessary to pair (compare) sales to extract value differences. This is
difficult as there is normally insufficient data to provide pairings for all value differences. Below
is a grid which illustrates the adjustments made. A plus (+) sign indicates the unit of comparison
of the sale must be adjusted upward as that characteristic is inferior to the subject. A minus (—)
sign indicates the unit of comparison of the sale must be adjusted downward since the
characteristic is superior to the subject. An equal (=) sign indicates the comparable sale
characteristic is similar to the subject.
Due to differences between the Collins Avenue and Ocean Drive parcels with respect to
location and size, separate adjustments were made to the comparable sales with respect to
each parcel. Note that because there are no significant differences with respect to shape and
zoning, the adjustments for these characteristics are the same for both parcels. Conditions of
sale and market conditions adjustments also apply equally to either subject parcel.
Adjustments With Respect to the Collins Avenue Parcel
Sale Price/ Conditions Market Overall
No. Sq.Ft. of Sale Conditions Location Zoning Size/Shape Adjustment
1 $595.97 = ++ - = -/= +
2 $769.24 = ++ - _ --/+ =
3 $634.62 = _ + _ -/= +
4 $810.77 -- ++ -- _ --/_ ---
5 $540.77 = ++ _ = -/= +
6 $1,141.85 = _ -- --- =/= ----
7 $533.33 = ++ _ = _/_ ++
8 $410.80 -- ++ +++ = =/+ +++
9 $504.52 = + +/= ++
10 $645.96 = + - _ +/= _
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Sales Comparison Approach Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Adjustments With Respect to the Ocean Drive Parcel
Sale Price/ Conditions Market Overall
No. Sq.Ft. of Sale Conditions Location Zoning Size/Shape Adjustment
1 $595.97 = ++ ++ _ =/= ++++
2 $769.24 = ++ ++ _ -/+ ++++
3 $634.62 = = +++ _ =/= +++
4 $810.77 -- ++ + = -/= +
5 $540.77 = ++ +++ + =1= ++++
6 $1,141.85 = = - --- +/= ---
7 $533.33 = ++ ++ + =/= ++++
8 $410.80 -- ++ ++++ = _/+ ++++
9 $504.52 = + +++ = ++/= ++++
10 $645.96 = + ++ _ ++/= ++++
After considering the individual differences, either a plus (+), minus (—) or equal (_) sign has
been placed in the "Overall" column. This indicates the overall adjustment that the sale would
require as compared to the subject property.
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Conclusion of Land Value by the Sales Comparison Approach
The sales comparison approach compared similar properties to the subject property and
adjustments were made for the pertinent characteristics. Based on these comparisons values were
estimated for the subject property. The different adjustments to the two parcels lead to different
value indications. The indicated adjustments are discussed below.
Conditions of Sale:
This category considers if the comparable sales were arm's length. An arm's length sale means
the buyer and seller each acted prudently, knowledgeably, and were under no necessity to buy or
sell, i.e., a sale that is other than a forced or liquidation sale. Also considered are if any of the
sales were purchased by an adjoining owner, whereby a premium was paid.
Sales 4 and 8 require negative adjustments for conditions of sale because the buyers are the
owner of the adjoining properties (the sites being purchased for expansion of the adjoining
hotels). In addition, note that these properties were completely vacant, a rare opportunity in an
area with many historic-designated buildings which are not allowed to be demolished. The
ability to build new, expanding an existing building onto an adjacent vacant site, without the
need to adapt a historic structure to a new design (which can raise development costs
significantly) is an advantage in the local market.
Market Conditions (Time):
This adjustment considers current market conditions as compared to market conditions in place
at the time of the respective sale. For sales selling when market conditions were superior, a
downward adjustment was made. Sales selling when market conditions were inferior were
adjusted upward. Sales selling when market conditions were similar did not require adjustment.
All the sales except Sales 3 and 6 require positive adjustments for market conditions, which have
improved since those sales occurred.
Location:
Location adjustments were made separately with respect to each parcel. Sales considered
superior to the subject were adjusted downward. Sales considered inferior to the subject were
adjusted upward. Those sales considered similar did not require an adjustment. Note that the
Ocean Drive parcel's location across the street from the beach is superior to the Collins Avenue
parcel, enabling higher hotel revenues (and, consequently, land values) to be achieved.Note also
that the Collins Avenue parcel is not on a corner, but it benefits from a pedestrian alley along the
north side that provides more direct access to Ocean Drive and the beach compared to other
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interior parcels on the east side of Collins Avenue. Note that the difference in desirability
between the two parcels means that comparable properties that are superior to the Collins parcel
may be inferior to the Ocean Drive parcel, and parcels that are slightly inferior to the Collins
parcel may be very inferior to the Ocean Drive parcel, etc.
Zoning:
AU the sales except Sale 6 have comparable zoning. Note that the zoning in Sales 3, 5 and 7
permits higher density development, but a narrower range of uses, in comparison to the subject
zoning. These influences offset each other, so that no adjustment is indicated. Sale 6 requires a
large negative adjustment because it benefits from very high density zoning permitting up to 48
stories.
Size and Shape:
The size adjustment is based on the principle of economies of scale whereby larger sites tend to
sell for less per square foot. Smaller sites were considered superior and adjusted downward,
larger sales were considered inferior and adjusted upward and those sales similar in size were not
adjusted. Because the Collins Avenue parcel is larger than the Ocean Drive parcel, the sales of
smaller sites require a larger negative adjustment with respect to the Collins parcel, and the sales
of larger sites require a larger positive adjustment with respect to the Ocean Drive parcel.
With respect to shape, Sale 2 is relatively elongated in shape, which due to its small size
constitutes a disadvantage that would tend to raise development costs, indicating that a positive
adjustment is needed. However, Sale 4 does not require a shape adjustment because it was
bought by the adjoining owner, and adding the parcel to the adjoining site nullifies its shape
disadvantages to the adjoining owner. Sale 8 requires a positive adjustment for its trapezoidal
shape, making it a parcel with a more efficient rectangular main segment and a triangular rear
segment that is much less likely to be usable (even for the adjoining owner).
The cumulative adjustments indicate that the Collins Avenue parcel should achieve a sale price
per sq. ft. below Sales 4, 6 and 10 (a range of$646 to $1,142), above Sales 1, 3, 5, 7, 8 and 9 (a
range of$411 to $635), with Sale 2 providing a conflicting indication of a value near $769. The
adjustments indicate a value for the Ocean Drive parcel below Sale 6 at $1,142 and above the
remaining sales ($411 to $811).
The analysis would support value estimates per sq. ft. of$640 for the Collins Avenue parcel and
$900 for the Ocean Drive parcel. Based on the parcel size of 21,948 sq. ft., the market value of
the Collins Avenue parcel is estimated at $14,050,000, rounded. Based on the parcel size of
14,537 sq. ft.,the market value of the Ocean Drive parcel is estimated at$13,100,000, rounded.
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Additional Analysis
Additional consideration was given to the January 2014 sale of the property at 230 20th Street
(between Collins and Liberty Avenues) for $7,000,000. It is a 10,625 sq. ft. lot zoned CD-2,
improved with a 2-story, 10,685 sq. ft. residential structure constructed in 1947 and in fair
condition. The building carries a historic designation and may not be demolished. The buyer
obtained approval for a complete renovation of the existing building along with construction of a
1-story rooftop addition and separate 5-story addition. The sale represents a price of$659 per sq.
ft., and even if the buyer considered the existing structure to contribute some value, say $50 per
sq. ft. of building, this would imply that he valued the land at $609 per sq. ft. On the other hand,
the buyer may well have paid less for the site than he would have been willing to pay if it were
vacant and unencumbered by historic restrictions. This sale would require positive adjustments
for location and market conditions, and in any event is less reliable due to the uncertainty about
the actual contributory value of the improvements, but it otherwise supports the value indications
from analysis of the comparable sales.
Also considered in the analysis were the three current listings of comparable properties shown in
the table below.
Sale Sq.Ft. Price per
No. Location Zoning List Price Size Sq.Ft. Comments
1 304-312 Ocean Drive R-PS3 $14,000,000 11,650 $1,202 NWC Ocean Dr.and 3`d St.
Miami Beach Last sold August 2014 for
$6,300,000($541 per sq.ft.).Per
broker,includes approved plans
for four luxury townhouses.
2 803 5th Street C-PS2 $7,250,000 9,000 $806 NWC 5th St.and Meridian Ave.
Miami Beach
3 426 Euclid Avenue C-PS2 $4,700,000 7,000 $671 SWC 5th St.and Euclid Ave.
Miami Beach Last sold November 2013 for
$2,000,000($286/sq.ft.).Per
broker,includes approved plans in
place for 30-room hotel and 30-
seat restaurant.
Subject Between
1440 Ocean Drive and
1433 Collins Avenue
Miami Beach
Parcel A(1433 Collins) MXE 21,948
Parcel B(1440 Ocean) MXE 14,537
Listings do not provide a reliable indication of market value, as they represent the seller's
aspiration but do not reflect buyers' expectations. Most listings are priced near or above market,
since those priced below market are usually quickly removed from the market by buyers.
Therefore, since market values are more likely to be below list prices than above, a list price on a
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comparable property that is below the value indicated by the analysis can provide a check on the
reasonableness of the analysis (and contradict it).
After appropriate adjustments, the asking prices above do not conflict with the conclusions from
analysis of the comparable sales. Note that Listing 1 was listed in July and points to higher
values after adjustment for location. This is a record-high asking price for the neighborhood with
the highest sale being several hundred dollars per sq. ft. lower, and it would not be unusual for a
final closing price after negotiations and adequate exposure to the market to be well below the
asking price. Note also that the highest and best use for Listing 1 is more likely to be an ultra-
luxury residential project, whereas at the subject location hotel and commercial uses are more
likely to be most profitable,making any indication from this listing less reliable.
Benefits Afforded to the Collins Avenue Parcel by the Proposed Easement
By enabling the construction of a pedestrian bridge connecting the buildings on either side of the
alley, the proposed easement would allow consolidation of the two hotels into a single operation
with an Ocean Drive presence. This would raise the achievable revenues of any hotel operation
on the Collins Avenue parcel (which would then be an annex of an Ocean Drive hotel, capable of
achieving higher room rates, instead of a free-standing Collins Avenue hotel), thereby raising the
value of the underlying land. This is because for any potential development project, increases in
achievable revenues increase the market value of the finished project, which raises the feasibility
land cost (the highest price that the land for a development project can be acquired for while still
achieving the developer's minimum required return).
However, such a scenario would not raise the value of the Collins Avenue parcel to the same
level as the Ocean Drive parcel. If, for example, the additional land being annexed by the Ocean
Drive property were adjacent to it on Ocean Drive, creating a single, contiguous property with
additional Ocean Drive frontage (essentially the scenario depicted in Sale 4 at $811 per sq. ft.),
the value would be much greater. A consolidated hotel spanning two connected but essentially
non-contiguous parcels is likely to achieve lower total revenues than a similar sized hotel on a
single contiguous tract, even if marketed as a single hotel property. Also, a single large tract
would be more desirable from a development perspective, as it would allow construction of a
single, unified structure, whereas a large tract consisting of two connected but otherwise non-
contiguous segments has the disadvantage of requiring construction of two separate structures,
which raises development costs. As a result, while the value of the underlying land on the Collins
Avenue side of the easement would be enhanced by the ability to connect the parcels, the
enhancement is likely to be less than it would be if the two parcels comprised a single contiguous
tract on the Ocean Drive side.
The value indication for the Ocean Drive parcel is 41%above the Collins Avenue parcel on a per
sq. ft. basis. Based on the analysis above, the enhancement should be expected to be significant,
but much less than the difference in value between the parcels, on the order of 10% to 20%
above the Collins Avenue value. An enhancement of 15% is estimated, raising the value of the
Collins Avenue parcel to approximately $736 per sq. ft., or $16,150,000, rounded. This
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represents an enhancement to the value of the Collins Avenue parcel of$2,100,000 ($16,150,000
less $14,050,000).
Test of Reasonableness: Feasibility Land Cost Model
In order to assess the reasonableness of this value estimate, a feasibility land cost model was
constructed using assumptions for hotel operating performance and development costs for
"typical" Collins Avenue and Ocean Drive hotels. The model reflects the perspective of a typical
hotel developer considering the feasibility of development on the subject parcels based on
achievable revenues, market values and typical costs, and is analogous to the type of initial
review or feasibility test that many developers conduct in order to determine whether deeper
consideration of a site or negotiations are worthwhile. For the developer, the model answers the
question "what is the highest price I can pay for a site and still meet my profit objectives, given
certain assumptions about the development costs and value of the property that can be developed
there".
Note that these assumptions are not based on the specific hotels operating on the adjoining
properties, as no operating data whatsoever was provided about these properties. However, the
assumptions about hotel Average Daily Rates (ADRs) and occupancy rates are based on analysis
of recent operating data for numerous other comparable and competing hotels in the vicinity of
the subject. The assumptions about development costs and ratios to sales are based on typical
figures observed across a variety of comparable hotel properties, as well as consideration of
current industry benchmarks and current cost estimates as published by Smith Travel Research
and Marshall Valuation Guide. The FAR used in the model is based on the zoning applicable to
the subject parcels, and the average room size is based on consideration of the renovation
(currently underway) of the Carlton Hotel, as well as the range of typical sizes for comparable
and competing hotels in the area. Finally, the capitalization rate is derived from observation of
recent sales of operating hotels comparable to those that would be likely to be built on the
subject sites. The model assumptions are representative of what a typical hotel developer who is
knowledgeable about the current market would use to test feasibility.
The model, shown on the following page, indicates the feasibility land cost for typical
(hypothetical) hotel properties that could be built on the Collins Avenue and Ocean Drive
parcels. The only difference between the two is the ADR, assumed to be $170 for the Collins
Avenue property and $210 for the Ocean Drive property. The 20% to 25% difference is a
reasonable representation of the "premium" in ADR that the typical Ocean Drive hotel is likely
to achieve over the typical Collins Avenue hotel. The model also shows the results for an
"enhanced" Collins Avenue hotel, based on a reasonable estimate of the ADR that a Collins
Avenue hotel that has been annexed by an Ocean Drive hotel (connected, but not fully
contiguous) would be likely to achieve (higher than the ADR of the typical Collins property but
below that of the typical Ocean Drive property). The "enhanced" Collins property is assumed to
achieve an ADR of$180, which is 5%to 7%above the typical Collins property.
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Feasibility Land Cost for Hypothetical Collins Avenue and Ocean Drive Hotels
Model Assumptions
ADR,Collins Avenue Hotel $170
ADR,Ocean Drive Hotel $210
Average occupancy 80%
Room Revenues Ratio to Sales 90%
NOI Ratio to Sales 40%
Capitalization Rate 6.25%
FAR 2.0
Development Cost per Room $130,000
Sq.Ft.per Room 500
Development Cost per sq.ft. $260
Entrepreneurial Incentive 20%
Land Area per Room(sq.ft.) 250
Calculations
Hypothetical
Hypothetical Hotel/ Hypothetical Hotel/ "Enhanced"Collins
Collins Avenue Parcel Ocean Drive Parcel Avenue Hotel
ADR $170 $210 $180
Days in year x 365 x 365 x 365
Average occupancy x 80% x 80% x 80%
Room Revenues $49,640 $61,320 $52,560
Other Revenues* + $5,516 + $6,813 + $5,840
Total Revenues $55,156 $68,133 $58,400
NOI Ratio to Sales x 40% x 40% x 40%
Net Operating Income $22,062 $27,253 $23,360
Capitalization rate x 6.25% x 6.25% x 6.25%
Market Value per Room $352,996 $436,053 $373,760
Entrepreneurial Incentive** - $58,833 - $72,676 - $62,293
Market Value Before Incentive $294,163 $363,378 $311,467
Development Cost per Room - $130,000 - $130,000 - _ $130,000
Feasibility Land Cost per Room $164,163 $233,378 $181,467
Land area per room(sq.ft.) x 250 x 250 x 250
Feasibility Land Cost per sq.ft. $657 $934 $726
*(room revenues_ratio to sales)-room revenues
**(market value per room_(1+entrepreneurial incentive))-market value per room
The model indicates the market value per room that would be achievable based on typical
assumptions for room rates, occupancy, room revenues, total revenues, expenses (implicit in the
net operating income), and the capitalization rate. Deducting a typical entrepreneurial incentive
and typical development costs from the market value indicates the maximum amount that the
typical developer could pay for the site and still realize the desired incentive (profit).
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The model indicates feasibility land costs per sq. ft. of$657 for the Collins Avenue parcel and
$934 for the Ocean Drive parcel using ADR assumptions of$170 and $210, respectively, which
are very close to the value indications derived from analysis of the comparable sales. The model
also indicates that an increase of 5% to 7% in the achievable ADR of the Collins Avenue
property (to $180) would be sufficient to raise the feasibility land cost to $726 per sq. ft. This is
also close to the value estimate of the "enhanced" Collins Avenue property (derived by applying
an estimate of 15% to the difference between the per sq. ft. values of the two parcels). Because
the model employs reasonable market-derived assumptions, it provides a good check on the
reasonableness of the value estimated by analysis of the comparable sales. The model supports
the earlier indication of a 15% increase in the market value of the hypothetical "enhanced"
parcel. Therefore, the analysis supports an estimate of the value of the proposed aerial easement
to the owner of the adjoining properties of$2,100,000.
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Reconciliation of Value Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Reconciliation of Value
The reconciliation process considers the approaches which were utilized in this report. Each
approach to value is analyzed as to its reliability and applicability. These approaches indicated
the following values:
Cost Approach Not applicable
Income Capitalization Approach Not applicable
Sales Comparison Approach $2,100,000*
*Value of the proposed easement to the adjoining owner, based on the estimated increase in
the market value of the adjoining land that would occur as a result of the easement.
The cost approach estimates the land value and adds the depreciated value of the improvements.
As the land being appraised is vacant, this approach is not applicable and was not applied herein.
The income capitalization approach analyzes the projected income and expenses of a property
and capitalizes the net income into a value estimate. Typically vacant land is not purchased based
on its ability to generate income. This method is not applicable and was not applied herein.
The sales comparison approach compares sales of similar properties to the subject property and
is the only applicable approach to value. These sales were analyzed for differences such as
conditions of sale, financing, market conditions, location, zoning, shape/size, and other
characteristics. The strength of this approach relies on the quality of the comparable sales. Sales
which closely resemble and can be compared easily with the subject are most desirable. The
sales utilized were considered comparable and make the sales comparison approach the only
reliable indication of value.
In order to estimate the value of the proposed easement to the adjoining owner, the analysis
considered the impact that the easement would have on the market value of the fee simple
interest of the adjoining parcels (as though vacant). Therefore, the cost approach and the income
capitalization approach were not applicable. Full reliance is placed on the sales comparison
approach, based on the methodology described above. Based on the analysis, the value of the
subject property to the adjoining owner, as of August 19, 2015, is estimated at $2,100,000. The
value estimated herein is not market value, as the value estimate is a value solely to the
adjoining owner.
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Addenda Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Addenda
ronker
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.nd
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osen
I N R P O R A T E D
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Addenda Proposed Aerial Easement, Ocean Ct.,Miami Beach,FL
County Area Description
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Addenda Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Miami-Dade County and Area Description
General Overview
Miami-Dade County, often referred to as "Miami" is known internationally for its weather,
beaches, banking, find art, shopping, and Latin culture. While many pass through the Cruise
Capital of the World, 2.5 million people call it home.
Miami-Dade County is at the southeastern tip of Florida and is the south-easternmost state in the
continental United States. Its land area is approximately 1,946 square miles and is bordered by
Broward, Collier, and Monroe Counties to the north, southwest, and south, respectively. The
county is bordered by the Atlantic Ocean to the East and Everglades National Park to the West.
Demographics
As of the 2013 Census report, Miami-Dade County has 2,496,435 residents. Over half of those
were born outside the United States; 70 percent fall between the ages of 25 and 55. As depicted
in the following graph,the county's population has risen steadily since 1970.
Resident Population in Miami-Dade County,FL(FLMIAM6POP)
Source: U.S.Department d Commerce: Census Bureau
2,600_
2,600 — ''
2,400 - — ._....__� -
N 2,200 -
2,000 . —1[—
c 1.600 -
1,600 _ _ d
~
1,400
1,200 _
19 19 19-- 0 1995 2000 2005 2010 2015
Shaded areas indicate US recessions.
FRED -- 2014 research.stlouisfed.org
Miami-Dade County Population Projections
2015 Projection 2020 Projection
based on 2011 Percentage change based on 2011 Percentage change
Estimate 2011 to 2015 Estimate 2011 to 2020
2,591,790 3.8% 2,717,631 4.9%
Miami has a positive reputation for international business, and developers are marketing their
new projects to those individuals. Therefore,the county's population is expected to increase at an
even greater rate approaching the year 2020.
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Addenda Proposed Aerial Easement,Ocean Ct.,Miami Beach,FL
Miami is the largest city in the County. Other populous municipalities include Hialeah, Miami
Gardens, Miami Beach, and unincorporated land. Actively growing are some new cities since
2000 such as Cutler Bay and Doral.
Brief History
Miami was founded in 1866 after the end of Spanish rule in Florida. Before the turn of the
century, prominent figures such as William and Mary Brickell and Henry Flagler established a
community and connected the young city to the rest of the United States. Island people moved
here for work.
In 1910, John Collins discovered fresh water on Miami Beach, and within a decade, the
population soared, and businessmen bought up the land. The city quickly became a popular spot
for tourists, but it crumbled under the hurricane of 1926. During the decades of war, parts of
Miami-Dade County became training grounds for military. Residents then slowly built back up
the tourism industry.
The early 1960's marked the beginning of the arrival of large numbers of Cuban Refugees into
Miami-Dade County and South Florida. In the years following, significant numbers of
immigrants have come from Haiti, Cuba and other Latin American countries.
Government
Miami-Dade County has a strong mayor form of government, with nine elected individuals (one
mayor and eight commissioners) making up the Miami-Dade County Board of Commissioners.
The mayor appoints a professional administrator to manage the daily activities of the county
government and a county attorney to handle its legal matters.
Some governmental activities, services and functions previously handled by individual
municipalities are now handled by the county. Among these are real property assessment and
valuation, health and welfare, most water and sewers, traffic engineering, public libraries, public
transportation, public housing, urban renewal, seaport, airport, regional parks and air and water
pollution control. In addition to these, Miami-Dade County provides services to the
unincorporated areas of the county such as: police and fire protection, building and zoning
regulation, trash and garbage collection and disposal, parks and recreation, consumer protection
and corrections and rehabilitation of adults and youth offenders.
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Economic Base
The primary industries that support Miami-Dade County's economy through employment are
trade, transportation and utilities, followed by education/health services and government. The
most known is tourism, a major industry for Miami-Dade County. The following chart reflects
the county's demographics by trade, with tourism ranking the highest number of companies,
followed by retail and finance, insurance and real estate.
Miami-Dade County
Demographics by Trade
50000
45000
40000
35000
30000
25000
20000
15000
10000 •No.of Companies
5000 ill ,
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A year-round growing season allows the agricultural industry to be the top vegetable supplier
and producer in the country. The industry employs more than 20,000 people and produces more
than $2.7 billion in economic benefits each year. As a result, agritourism has sprouted an
industry throughout the agricultural area where visitors can sample and purchase locally grown
products.
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Transportation
Miami International Airport (MIA) and its linkages are considered to be the driving force for
growth behind its surrounding area. Airport traffic in 2013 included over 40 million passengers,
2 million tons of freight, and 2 million tons of cargo. Other airports within the county include
Kendall-Tamiami Airport and Opa-locka Executive Airport. The aviation industry directly and
indirectly contributes $26.7 billion and 282,043 jobs to the local economy.
PortMiami annual activity includes 4.3 million cruise passengers and 7.4 millions of tons of
cargo. The port contributes more than $27 billion annually to the South Florida economy and
helps provide direct and indirect employment for more than 207,000 individuals. It is currently
undergoing construction for a two-way underwater tunnel between the port and downtown
Miami. Scheduled to be completed in 2015 is the Deep Dredge Project, set to deepen the
channel from its current 42-foot depth to minus 50 feet in order to accommodate super cargo
ships now being constructed.
Within Miami-Dade County, major roads include the Palmetto Expressway (State Road No.
826), a major north/south expressway; the Dolphin Expressway (State Road No. 836), a major
east/west expressway; Interstate 95 and the Florida Turnpike. All of these represent Miami's
expressway network and make almost any destination in Miami-Dade County within 30 to 45
minutes driving time.
Transportation systems include a Busway in south Miami-Dade County linking to Metrorail, an
elevated rail rapid transit system connecting portions of Miami-Dade County. In July 2012, a
new Metrorail station in MIA links south Miami-Dade County, downtown Miami and the entire
elevated rail line. The enables seamless connections to the Metromover systems and to a web of
transportation arteries in neighboring counties leading to the rest of Florida.
The Miami Intermodal Center (MIC) links the airport, East/West Rail, Amtrak, Tri-Rail,
Airport/Seaport Connector and Metrorail mainline rail. Located near the State Road No.
836/State Road 112 Connector, it presently contains the bulk of the rental car agencies. East of
the airport in the future it will contain retail, commercial, residential and tourist-designed
development.
The Metromover automated people mover system is located in downtown Miami and is an off-
shoot of the Metrorail system. There are also Metrobus buses, most of which are in service daily
throughout the county. The Metromover system includes the Brickell Avenue financial district
and also runs north to the Omni area. Other transportation services in Miami-Dade County
include Tri-Rail, railroads and taxicabs. Railroad service by Amtrak is accessible in northwest
Miami-Dade. Tri-Rail is South Florida's commuter train system which services Miami-Dade,
Broward and Palm Beach Counties.
Education
Based upon student population, the Miami-Dade County School system is the fourth largest
public school system in the nation with 415 institutions including elementary, middle, high, K-8,
charter, alternative and magnet schools. Many private institutions exist as well.
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Several colleges and universities located in the county are University of Miami, Barry
University, Florida International University, Miami-Dade Community College, St. Thomas
University, Florida Memorial College and Johnson & Wales University.
Medical
Miami-Dade County has the largest concentration of medical facilities in Florida. The largest
institution is Jackson Memorial Medical Center, the second largest public hospital in the nation
which shares many teaching, treatment and research capacities with the University of Miami.
Private hospitals include Baptist Health System, Mercy, Miami Children's, and Mount Sinai.
Sports
Professional, college and even local neighborhood sports draw spectators, participants and
investors to a high degree and create a positive atmosphere. Professional football (Miami
Dolphins), basketball (Miami Heat), baseball (Miami Marlins) and ice hockey (Florida Panthers)
are continual draws. As of January 2014, business negotiations are currently underway to bring
Major League Soccer to Miami. There are two horse tracks and a dog track. Several of these
tracks have been approved for slot gambling or table gambling, depending upon location in a
municipality or Indian reservation. Also offered are golf, tennis, as well as the numerous water
sports, given the significant bodies of water.
Arts and Culture
Known for the wealth of ethnic diversity and heritage, Miami-Dade County has a cultural mix of
festivals, concerts, theater, and dance performances. Adrienne Arsht for the Performing Arts of
Miami-Dade County opened in 2006 and is home to the Concert Association of Florida, Florida
Grand Opera, Miami City Ballet, and the New World Symphony. The county is also home to
several museums and wildlife attractions.
Summary
During its history, Miami-Dade County and the Greater Miami area have experienced significant
changes and growth. Trends indicate that the growth will continue with Miami-Dade County
rapidly becoming an international city with a diverse culture. The economic base and the
bilingual population should continue to attract new residents and businesses into Greater Miami.
Sources including, but not limited to:
United States Census Bureau(Jan.2014).http://quickfacts.census.gov/gfd/states/12/12086.html
Miami-Dade County Portal(Jan.2014).www.miamidade.gov
The Beacon Council(Jan.2014).www.beaconcouncil.com
Federal Reserve Economic Data(Jan.2014).http://research.stlouisfed.org/fred2/
Miami Herald(various articles).http://www.miamiherald.com/
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Flood Zone Map
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Flood Zone Map
Prepared for:
InterFloodr Waronker & Rosen,Inc,
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www.interflood.00m• 1-800-252-6633 Miami Beach,FL 33139-4108
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County
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Additional Data
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® MIAMI BEACH
Clly of Miami Beach,1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeochA.pav
COMMITTEE MEMORANDUM
TO: Land Use and Development Committee
FROM: Jimmy L.Morales,City Manager
DATE: March 19,2014
SUBJECT: DISCUSSION:BETSY/CARLTON HOTEL RENOVATION AND POSSIBILITY OF
AN AIR RIGHTS EASEMENT AND GREEN ALLEY
HISTORY
On December 11, 2013, at the request of Commissioner Ed Tobin, the City Commission
referred a discussion item to the Land Use and Development Committee, regarding the
Betsy/Carlton Hotel renovation and the possibility of an air rights easement and green alley,
in order to provide a covered connection between the 2 structures,over a City Alley(Ocean
Court).
BACKGROUND/ANALYSIS
On February 11, 2014, the Historic Preservation Board approved/considered a new
development entitled°Carlton Hotel',at 1433 Collins Avenue.The subject project proposes
to substantially retain and restore the existing 3-story Carlton Hotel building, including the
construction of two new four(4) story ground level additions, a one (1) story ground level
addition and a partial rooftop addition. Additionally, the applicant is proposing, subject to
City Commission approval, to construct a new pedestrian bridge spanning Ocean Court
(alley)that would connect the Carlton Hotel to the Betsy Hotel located at 1440 Ocean Drive,
to the immediate east. The following is a summary of the historic status of each of the
existing structures:
1440 Ocean Drive-The Betsy Hotel
Constructed in 1941 and designed by architect L.Murray Dixon in the Colonial Revival style
of architecture, the subject structure is classified as 'Contributing' (Historic) in the Miami
Beach Historic Properties Database and is located within the Ocean Drive/Collins Avenue
Local Historic District and the Miami Beach Architectural District.
1433 Collins Avenue-The Carlton Hote'
Constructed in 1937 and designed by Henry Hohauser in the Art Deco style of architecture,
the subject structure is classified as 'Contributing' (Historic) in the Miami Beach Historic
Properties Database and is located within the Ocean Drive/Collins Avenue Local Historic
District and the Miami Beach Architectural District.
In order to unify the operation of both the Canton Hotel and the Betsy Hotel, the project
applicant has proposed to construct an enclosed pedestrian bridge spanning twenty (20)
feet across the Ocean Court public alleyway, connecting the third levels of both hotels.
From an Appropriateness standpoint, both Planning Staff and the Historic Preservation
LUDC#10
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Land Use and Development Committee
Betsy-Carlton Air Rights Easement and Green Alley
March 19,2014 Page 2
Board have no objection to the proposed bridge connection, as it would not be visible from
either the Collins Avenue or Ocean Drive public rights-of-way,and could be easily reversed
in the future. However,the approval of the HPB Board is subject to the approval of the City
Commission and the applicant will also have to ensure that all other Public Works,Building
and Life-Safety requirements can be satisfied,including sufficient dearances.
When the matter was referred by the Commission in December,the Land Use Committee
was asked to consider the following:
1. The future vision for alleys between Collins Avenue and Ocean Drive(Ocean Court)
2. An overall policy on'Air Rights'over alleys
3. The underground rights for alleys
4. What the City can expect in return for granting air rights and underground rights
within public alleys
City staff from the Planning and Public Works Departments have met with the owners and
operators of the Betsy-Carlton Hotel, to discuss the overall approach to improving the
connecting alleys and public right-of-ways. Attached is a draft proposal of the types of
improvements contemplated for the affected portions of the alley.
CONCLUSION
The Administration recommends that the Land Use Committee discuss the matter further
and provide appropriate policy direction. If supportive of the general direction of the
proposed air rights easement being requested,it is further recommended that the matter be
transmitted back to the Full City Commission for further input.
Attachment
JLM/JMJ/TRM
M:lSCMBI000PDATESILa d Use and Development CornmitteM20141March 19. 201418etsy Carlton Alley Easement-MEMO LUDC Mar
2011.dooc
LUDC#11
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