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LTC 126-2023 Update on Apartment Hotel Permits in the R-PS Districts South of Fifth StreetDocuSign Envelope ID: 6AFF54FA-98F5-4259-9026-5334BF3F1 BFE / /\I A/\J\I City of Miami Beach. 1700 Convention Center Drive. Miami Beach. Florida 33139. www.mi amibeachfl.gov OFFICE OF THE CITY CLERK LTC No. 126-2023 LETTER TO COMMISSION TO: FROM: Honorable Mayor Dan Gelber and Members of the City Commission Alina T. Hudak, City Manager�� DATE: March 15, 2023 SUBJECT: Update on Apartment Hotel Permits in the R-PS Districts South of Fifth Street This L TC provides an update on the active permits to renovate and/or remodel existing apartment hotels in the South of Fifth Street neighborhood for the following addresses: •310 Meridian Avenue -Located in the R-PS2 Zoning District and the Ocean Beach Local Historic District. •333 -343 Jefferson Avenue -Located in the R-PS2 Zoning District and the Ocean Beach Local Historic District. •226 Jefferson Avenue - Located in the R-PS1 Zoning District. By way of background, in October of 2021, the City Commission adopted Ordinance No. 2021-4448, prohibiting any future apartment hotels in the R-PS1 and R-PS2 zoning districts. The above noted propert ies were all issued building permits for the conversion of the existing structures to an apartment hotel prior to adoption of this Ordinance. As a general rule, amendments to the Land Development Regulations ("LDRs") cannot be enforced against property owners with an active land use board order or building permit. As such, any apartment hotels that were legally established prior to adoption of Ordinance No. 2021-4448 became "legal non­ conforming" when the Ordinance was adopted. Under Section 118-395 of the LDRs, non-conforming buildings that are repaired or rehabilitated "by more than 50% of the value of the building as determined by the building official" shall comply with "the current development regulations in the zoning district in which the property is located." This means that, if the value of work exceeds 50% of the value of the building, any non-conforming use on a property must terminate. Conversely, if the value of the work is less than 50% of the value of the building, a legal non-conforming use on the property may continue. A related requirement, known as the FEMA 50% rule, applies for purposes of determining whether a non­ conforming building must be brought into compliance with current flood damage prevention regulations.1 The Building Department uses the same appraisal/valuation methodology for both the 50% rule under the Land Development Regulations and the FEMA 50% rule. (For purposes of this L TC, the term "50% rule" shall include both the 50% rule under the LDRs and the FEMA 50% rule.) 1 Under National Flood Insurance Program ("NFIP") regulations, which are adopted in City Code Sections 54-37 and 54-48(1 )(a}, if an improvement to an existing structure costs more than 50% of the original structure's current value ("substantial improvement"}, it must be brought into compliance with the flood damage prevention regulations, in order to be insured. DocuSign Envelope ID: 6AFF54FA-98F5-4259-9026-5334BF3F1 BFE L TC - Apartment Hotel Permit Update - RPS Districts March 15, 2023 Page 2 of 3 Additionally, in August 2022, Miami Beach voters approved an increase in allowable floor area ratio (FAR) for the conversion of existing apartment hotels on properties in the R-PS2 and R-PS3 districts, to non-transient residential apartments. The City Commission promptly adopted Ordinance No. 2022- 4511, codifying the FAR incentive approved by the voters. Once the LDR amendment was adopted, the Administration notified all owners of properties with apartment hotels in the subject zoning districts, including the above noted properties, of the newly approved FAR incentive. 310 Meridian Avenue On December 16, 2019, a building permit was issued for the renovation of the existing structure and the conversion of a residential apartment to an apartment hotel. In 2022, the owner of the property was advised that the scope of work proposed for the project exceeded the 50% rule, based upon the appraisal of the building provided by the property owner. A stop-work order was then issued on October 29, 2021, and the property owner was advised that the building permit could not move forward unless the application was revised to convert the building back to a residential apartment building, because apartment hotels are now prohibited in this district. The property owner was also advised to revise its plans to comply with current flood damage prevention requirements. In response to exceeding the 50% rule, the new property owner submitted revised appraisal documents, showing that the work did not in fact exceed 50% of the value of the building. In order to confirm the accuracy of the owner's submissions, the City submitted the owner's revised appraisal documents to the State Office of Floodplain Management for additional review. Upon review of the updated appraisal reports and supporting permit documents provided by the City of Miami Beach Floodplain Manager, the State of Florida's Floodplain Manager and NFIP coordinator concluded that the revised appraisals and support documents provided by the property owner were sufficient and acceptable. In addition to the updated appraisal that the State Floodplain Manager reviewed and approved, adjustments were made to the project valuation. The decision of the State Floodplain Manager is binding on the City's Floodplain Manager. Based upon the State Floodplain Manager's acceptance of the revised appraisals submitted by the property owner, the value of the work proposed under the building permit does not currently exceed the 50% rule. This means that the property owner may retain its non-conforming apartment-hotel use, as long as the value of the work remains under 50% of the value of the building. Considering this revised information, on February 7, 2023, the Building Official lifted the previously issued stop-work order and the permit for the property at 310 Meridian Avenue is now active. To date, the property owner has not indicated whether the owner is interested in taking advantage of the voter- approved FAR incentive to convert the building to non-transient residential apartments. 333 Jefferson Avenue Due to work taking place on site that exceeded the scope of the building permit, the property owner was required to file an application with the Historic Preservation Board ("HPB") for an after-the-fact Certificate of Appropriateness for partial demolition of the buildings located at 333 and 343 Jefferson Avenue and modifications to the west (front) fa~ade of 343 Jefferson Avenue (HPB21-0490). As part of this application, notice to all property owners within 375 feet, and a public hearing before the HPB was required. The HPB considered the application at two (2) separate public hearings, and neighbors had an opportunity to attend and provide testimony at both hearings. On March 8, 2022, following the second public hearing, the HPB approved the application for an after-the-fact Certificate of Appropriateness. On March 31, 2022, an entity owning property within 375 feet of 333, 337, 343 and 345 Jefferson Avenue filed an appeal to the Historic Preservation Special Magistrate of the Board's decision to grant the after-the-fact Certificate of Appropriateness (HPSM-2022-003). On December 30, 2022, the Historic DocuSign Envelope ID: 6AFF5 4FA-98F5-4259-9026-5334B F3F 1BFE L TC - Apartment Hotel Permit Update -- RPS Districts March 15, 2023 Page 3 of 3 Preservation Special Magistrate found that the appellants were afforded due process, that the essential requirements of the law were followed and that there was competent substantial evidence to support the decision of the Board. Accordingly, the Special Magistrate affirmed the decision of the HPB to grant the after-the-fact Certificate of Appropriateness. No appeal of the Historic Preservation Special Magistrate decision was filed before the 30-day jurisdictional deadline, and the Special Magistrate's decision is now final. Now that the work approved by the HPB may continue, the owner may proceed to repair and rehabilitate the contributing buildings located on the property. The property owner must still submit revised plans and amend the building permit for the project before any additional work may take place. To date, the property owner has not indicated whether they are interested in taking advantage of the voter approved FAR increase to convert the buildings to non- transient residential apartments. 226 Jefferson Avenue Subsequent to voter approval of the FAR incentive to convert apartment hotels to residential apartments, the owners of 226 Jefferson Avenue contacted the City and expressed an interest in pursuing the new FAR incentive, and abandoning their building permit for an apartment hotel. To date, the owners have filed a draft covenant to affirm that none of the units in the building will be rented on a short-term basis (i.e. for less than six months and one day). Additionally, the owners have nearly completed the Certificate of Use (CU) process to convert the building back to a non-transient residential apartment building, thereby fulfilling (at least as to this property) the objectives of the FAR incentive approved by the City's voters on August 23, 2022. «44# ks#., C: Rafael Granado, 1 y erk Rafael Paz, City Attorney Joseph Centorino, Inspector General F:\PLA N\$ALL\CM_RESP\2023\L TC - Upd ate on Apartment Hotel Permits in RPS Dlstricts.docx