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159-2000 LTC CITY OF MIAMI BEACH CITY HALL 1700 CONVENTiON CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:\\ci.miami-beach.fl.us , L.T.C. No, 159-2000 LETTER TO COMMISSION August 11,2000 TO: FROM: Mayor Neisen O. Kasdin and Members of the City Commission ~ Lawrence A. Levy City Mana r SUBJECT: APPLIC ION FOR THE 2000 ANNUAL REDEVELOPMENT AWARDS PROGRAM The year 2000 marks the sixth year of the Florida Redevelopment Association Awards Program. To recognize the projects and people involved in redevelopment, the Roy F. Kenzie and the W. Mills Awards will be given for outstanding examples of redevelopment and leadership in Florida. The City of Miami Beach has applied for two of these awards, The Florida Redevelopment Association (FRA) brings together professionals from around the state who are involved in preserving and improving Florida's communities. Founded in 1974 to promote redevelopment and growth of downtowns, the organization's original base was comprised of Downtown Development Authorities (DDA). The focus was later broadened to encompass Community Redevelopment Agencies (CRA) and the Florida Main Street Program cities, Today, the FRA also includes non-profit organizations, consultants, private developers and cities that do not have DDAs, CRAs or Main Street programs. The goal is a comprehensive association of all players in Florida's urban revitalization work. In recognition of the successful attraction of convention-quality hotel rooms to Miami Beach, the City recently submitted the Loews Miami Beach Hotel Project to the category of "Management Programs and Creative Partnerships," and the St. Moritz Hotel Renovation to the category of "Outstanding Rehabilitation, Renovation or Reuse Building Project." Winners will be announced, and awards presented at the Florida Redevelopment AssociationIFlorida Main Street Annual Joint Conference on October 18-20, 2000 at the Hyatt Sarasota in Sarasota, Florida. $Q LAL:ctit:KSC:ebs c: Murray Dubbin, City Attorney Christina Cuervo, Assistant City Manager Mayra Diaz-Buttacavoli, Assistant City Manager Matthew Schwartz, Assistant City Manager Ronnie Singer, Executive Assistant to the City Manager Max Sklar, Chief of Staff Kent Bonde, Redevelopment Coordinator Kevin Crowder, Economic Development Specialist Alex Rolandelli, Economic Development Coordinator Attachments (2) ST. MORITZ HOTEL RENOVATION One of the most significant historic preservation projects in Miami Beach is the complete restoration of the St. Moritz Hotel, considered by many as the crown jewel of the City's Art Deco Historic District. After years of neglect, the 127- room hotel was meticulously restored to its former glory as part of a larger development initiative, involving the recently opened Loews Miami Beach Hotel. Heralded as the first convention-quality resort hotel built in Miami Beach in more than three decades, the 800-room property is the result of an extensive public/private effort which began almost ten years ago, The focus of this effort was to attract new hotel investment in order to support the expanded and renovated Miami Beach Convention Center, In light of the difficult hotel development and lending environment in the early 1990's, the City realized that significant public assistance in the form of land acquisition, parking and/or financial participation with certain public area components ofthe project, would most likely be needed. Achieving this goal involved an extensive cooperative effort of both the public and private sectors, In order to initiate the partnership, the City developed an incentive package to induce private development interest to build new convention-quality hotel rooms, As part of the package, the City through its Redevelopment Agency, assembled a suitable oceanfront site in the heart of the Historic District, The 6.acre site comprised a number of smaller privately owned parcels, one of which comprised the vacant 5t. Moritz Hotel. The site represented a unique opportunity to integrate an existing historic structure with compatible new hotel development. This concept won the support of the City's conservative historic preservation community, which traditionally opposed new development activity in these sensitive areas, Using its powers of eminent domain, the Redevelopment Agency acquired the lots comprising the proposed hotel site for approximately $21 Million, A Request for Proposals (RFP) was then issued which attracted responses from eight major hotel development companies, During the ranking and selection process, the overall design of the hotel, its compatibility with the surrounding historic district, and the treatment of the St. Moritz Hotel weighed even more importantly than the financial aspects of the proposals, In this respect, the proposal submitted by Loews ranked far above the others received. Unlike the majority of historic hotels in Miami Beach, the renovation of the St. Moritz as a stand-alone development was not economically feasible, The total cost of the Loews project was approximately $141 Million, of which an estimated 22 percent ($31 Million) went into the St. Moritz, The restoration of the historic hotel was as daunting of a task as it was costly, The structure had been vacant and open to the elements for almost a decade. The salt from the ocean, humidity, rain and vandalism had taken its toll on many of the original exterior and interior features and fmishes, The ability to replicate these details required extensive research and creativity on behalf of the Architectural Team, An even bigger challenge involved bringing the property into compliance with Life Safety, South Florida Building Code and Federal Accessibility requirements, which often times conflicted with the directives of the City's Design Review and Historic Preservation Boards, (the two Boards charged with reviewing and approving all new and/or rehabilitation projects in the City), In the end, the efforts have paid off. The St. Moritz was restored in a manner that is sensitive to the original siting and integrity of the building, The building's exterior facades were completely restored, with particular emphasis on the keystone veneer and the original stainless steel channelletlering comprising the name of the St. Moritz, The widows and the exterior doors were also replicated with modem code-approved versions, The original upper and lower lobby areas were refurbished to their original state, including such details as the ceiling moldings, light fixtures, wood and leather wall panels, the marble and terrazzo flooring and stairwell handrails, Furnishings in the public areas and the stainless steel elevator doors were also replicated with great care, The restaurant was restored to its original luster, complete with parquet flooring, wood moldings, recessed lighting and plaster profiles for which special molds had to be created, The hallways on the guest room floors were also reproduced in the original design. Only the guestroom inventory was modified from the original design, in that the units were reduced from 127 to 112 in order to provide more spacious guest rooms that meet today's criteria for convention-quality rooms. ST. MORITZ HOTEL RENOVATION FLORIDA REDEVELOPMENT ASSOCIATION 2000 ANNUAL REDEVELOPMENT AWARD OUTSTANDING REHABILITATION, RENOVATION OR REUSE BUILDING PROJECT Submitted By: The City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 LOEWS MIAMI BEACH HOTEL After years of years of planning and joint participation between various public and private entities and following an extensive bidding and selection process, the 800-room Loews Miami Beach Hotel opened its doors on December 30, 1998, as the fIrst new hotel to be built in Miami Beach in over thirty years, This event marked one of the most successful public-private joint ventures in recent years, The hotel's room inventory is located in a new 16-story tower containing 684 rooms and the historic St. Moritz Hotel containing 116 rooms, The hotel includes 93,250 square feet of function and meeting space. The Loews project resulted from a public initiative that began a decade ago, with the development of a [mancial inducement package and the issuance of a Request for Proposals (RFP) entitled, "Convention Hotel Opportunities. Miami Beach, Florida", The initiative was prompted by the need to attract new convention-quality hotel rooms to serve the expanded and renovated Miami Beach Convention Center, which underwent a $92 million expansion in 1990, In light of the difficult hotel development and lending environment in the early 1990's, the City of Miami Beach realized that signifIcant public assistance in the form of land acquisition, parking and [mancial participation would be needed, With limited fInancial resources at its disposal and no publicly owned land suitable for hotel development, the City began to evaluate creative fInancing mechanisms, The cornerstone of the City's strategy was the creation of the City CenterlHistoric Convention Village Redevelopment and Revitalization Area in 1992, encompassing 332 acres around the Convention Center, The establishment of a Community Redevelopment Area (CRA) provided tax increment fInancing (TIF) capabilities, providing a constant source of revenue to undertake a variety of projects designed to expedite the revitalization of the area, Concurrently, the City through its Redevelopment Agency (RDA) developed a fInancial inducement package capable of leveraging $50-60 million, This included using TIF to assemble a viable site and to [mance certain public area components of the hotel project. The City's Resort Tax on hotel rooms was increased by one cent, and the increase was dedicated towards the hotel development initiative. Since the hotel project was viewed as a regional initiative, the Greater Miami and Visitors Bureau contributed $2,7 million towards administrative and bond related costs associated with the project. With the inducement package in place, the RDA assembled a six. and-a-halfacre oceanfront site and issued a RFP, which resulted in the selection of Loews Hotels, Groundbreaking took place in September 1996, and the hotel opened two years later, on December 30, 1998, The economic impact on the city is tremendous and will continue to bear fruit through its annual collection of taxes. The Loews project has provided the City of Miami Beach with over 800 new jobs, generating almost $17 million in payroll. During the fIrst year of operation alone, the hotel generated $3.2 million in property taxes and $1,1 million in resort taxes, Direct and indirect spin-off investment due to the Loews project has been substantial. The project has been a catalyst for more than $900 million in hotel development/redevelopment projects in the neighborhood, which will add another 3, I 00 jobs to the area, Some projects that are currently underway include: the $64 million, 424-room Royal Palm Crowne Plaza Resort, Marriott's 230-room resort, the Shore Club, which will re-open its restored 340-room hotel in the fall and Ritz Carlton is also involved in a renovation project. Furthermore, the Loews Hotel compliments the Convention Center with its public facilities including meeting/function space, food and beverage outlets, hospitality suites and recreational facilities, This allows for the city to be even more competitive in the convention market, attracting bigger and more sophisticated events, Therefore, the Loews project is generating a signifIcant upgrade of the City's goods and services, housing units and hotel rooms. In exchange for approximately $53 million in direct public participation, the project is generating a return in three major areas: unsubordinated annual base rent of $500,000; percentage rent through participation in net cash flows after debt service based upon a tier system; and as indicated earlier, a signifIcant increase in the tax base, including property tax; resort tax, convention tax and utility taxes, The tax increment produced by the project is anticipated to be approximately $1,2 million initially and expected to grow signifIcantly over the next 25 years; and the RDA will receive the proceeds from the sale of the hotel, expected to occur sometime after the 25th year of operation, Additionally, given the constraints of hotel site, only 120 of the required 680 parking spaces could be accommodated. Therefore, the developers constructed a municipal parking garage for 800 cars to accommodate the parking needs for the hotel and other projects underway in the area. The bottom floor of the garage, known as the Anchor Shops, created opportunities for new businesses in the 21,500 square feet of retail space available for lease. The urban design at the anchor shops serves as a pedestrian link between two of the city's most important economic assets: Ocean Drive and Lincoln Road. The City is now at the point of realizing its ambitious goals set out more than 10 years ago. This accomplishment has been achieved against a backdrop of an extremely difficult hotel development and lending environment. Through these developments the City has become a premiere international destination. LOEWS MIAMI BEACH HOTEL FLORIDA REDEVELOPMENT ASSOCIATION 2000 ANNUAL REDEVELOPMENT AWARD MANAGEMENT PROGRAMS AND CREATIVE PARTNERSHIPS A ,- Submitted By: The City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139