So Close, Yet So Far


Jack Portman sat on stage in the Flamingo Ballroom with his hands clasped together staring out into the audience. He looked a little red, and when he spoke his usual charming drawl seemed hoarse. This was his third straight meeting in as many straight days spent in the convention center he hopes to renovate. His counterpart Dan Tishman had attended those meetings with a cast on one of his legs. Tishman’s leg had been acting up on that third day, and he decided to stay home when his team presented to the center’s Advisory Board. More than just a busy week of marathon meetings, it had been a whole year since a Request For Qualification instantly created prime South Beach real estate for a luxury hotel. That year-long process had been revving for months to a finish. A June 5th decision had been tentatively scheduled, but the indecision that spawned from the Commission Workshop just a day before made it seem as if that was far from certain.

Portman perked up when Stu Blumberg, Chairman of the Miami Beach Convention Center Advisory Board, addressed the 800-pound Gorilla in the room; how exactly was the Commission going to choose a developer.

“Based on the functionality to attract large conventions?” he asked the room. “The Fu-fu design of the building?”

“Is it green space?” he continued. “They [the center's management] aren’t selling green space.”

“Is it the best financial package?” Blumberg asked, then added, “The Lowes didn’t have the best financial package, they had the best design.”

Those were all questions that have yet to be answered, and could not be answered that day as no Commissioner attended the Advisory Board meeting to the project Mayor Matti Bower has called “the most important thing we have on the table.”

Portman wanted those answers too.

“That would make a lot of sense,” he said. “ have a basis on how a decision is made, and for there not to have a set of criteria is a little baffling.”

In front of the commission are vast walls of text and numbers generated by the two finalists’ Letter Of Intent. Reasonably, the commissioners have called for more meetings to discuss it all. The 52-acre redevelopment has many moving components from retail, restaurants, residential units, cultural units, green space, and parking spaces. All of which could or could not make a final cut. Any deletions made by the city would cut the potential revenue and possibly add to the cost of the project.

Commissioners were thwarted when they floated the idea that they would like see the numbers crunched with certain components taken out; it even went as far as capping to two variables per commissioner.

Those doing thwarting were the developers themselves.

A frustrated Tishman said that randomly taking out components are “not as easy as you think.”

“Every time you change one thing,” Tishman went on, “there is a domino effect.”

His competitor agreed.

“We are both frustrated,” said Portman. “each of us, and our team have worked beyond the expectations anyone here could have, and we’ve had enough.”

“For them to give us a list of things they want us to reconsider and get back to them, we are not willing to do that,” said Portman

“They need to move on, figure out what their criteria is, and make a decision.”

The city could decide only to upgrade the convention center, in what developers call a “base case.” That would include a ballroom and headquarter hotel.

South Beach ACE’s base case would include an 800-room hotel on top of the MBCC, an internal ball room, and a Food and Beverage Venue located just outside the hotel center. The center’s meeting space would be realigned in a horizontal fashion. The hotel would reside in the western portion of the center. Parking for the center would remain the same as the P-lot would not be touched, but the city would have to negotiate a place in the district to develop parking for the hotel. Just outside the hotel, to the west of the Jackie Gleason Theater would be a 40,000 square foot food and beverage building. The reasoning for this location according to South Beach Ace’s LOI is to force clients out of the center for nourishment, thereby “fostering” guests natural decent towards the Lincoln Road area.

This base case would cost $506.2 million.

In it’s LOI, South Beach Ace does not recommend a base case Stating that base case wouldn’t generate enough revenues to fund the center’s scope in creating a “world class center district.”

It goes on to say:

The Base Case scenario fails to maximize the City’s full potential, does not position the Center and the District among the leading and cutting edge convention destinations, and does not fully revitalize the City center of Miami Beach which falls short of the RFQ’s stated intent of attracting high impact conventions that will provide expanded economic impact for the City.

In the Portman CMC base case includes the MBCC renovations, a hotel, a freestanding ballroom, off site infrastructure, and replacement parking. The most noticeable change from the preliminary mock ups is the inclusion of a hotel as part of the center. In previous renderings the hotel would have replaced a demolished Jackie Gleason Theater, but pressure from the community caused Portman CMC to rethink their move.

As the new ballroom would be on top of the P-lot, this base model needs to replace about 595 parking spaces. It will do so by creating a joint hotel and center parking garage over the center’s loading dock area.

Portman CMC’s base case would cost $498 million.

If Miami Beach decides to venture past the base case , the total costs envisioned by the developers are as follows: South Beach Ace at $1.2 billion, and Portman CMC at $1.15 billion. The extra niceties are part of what the LOIs call the “phase 1” components.

Both teams have a cultural component.

South Beach ACE calls for an 18,000 sf building set in it’s plan cultural band, west of City Hall and south of the center. This would be privately financed. The programing for the center has not been announced.

Portman CMC’s facility would include 61,000 sf of leaseable space. In it’s final pitch Portman announced the center would have a Museum of Latin American Culture.

Included in the cultural center are plans for a recording studio and a broadcast studio. Portman told the SunPost that his group had tenants in mind, but were unable to have a concrete deal in place in time to present both studios as part of the last presentation. They went unmentioned.

Renovating the city’s 17th street parking garage is also a big sticking point in the LOIs.

South Beach ACE would remodel the structure by placing in it 59,500sf of retail and restaurants. The lost spaces would be made up by building two extra levels on top of the existing structure. As future consideration, South Beach ACE holds an agreement with the city that after they build the center and any phase 1 components they could add an additional 80 residential units to the top of the 17th street garage. They will also negotiate with the city to find a place in the district to relocate any misplaced portion of the city’s fleet management operation.

Portman CMC has two methods it’s throwing out to the city. One would involve remodeling the first floor of the garage and placing 77,000 sf of retail, and around 9,000 sf restaurant on the roof level. The displaced parking spaces would be made up by constructing an additional floor. This is case one, case two would involve demolishing the parking garage and recreating it. That would come with an additional $15million price tag. Upon completion the parking will be managed by a third party operator chosen by Portman CMC.

Commisioner Deede Weithorn has expressed her desire to keep the 17th street parking garage under the control of the city.

The great equalizer so far came with the Jackie Gleason Theater. Public outcry forced Portman CMC to abandon their plans to demolish it. The new plan includes renovating the building to it’s original facade, and opening up the side of the building with new retail. The insides will be renovated if needed to fit a possible Cirque Du Soleil show. They are asking for a 33-year lease.

Tishman’s group would also renovate the facade to its’ original look, while opening up the back side of the building for a new stage area. While publicly being a supporter of Live Nation during the community input sessions, South Beach ACE is requiring a restructure of the agreement between the theater and the concert promoter.

Finally the last component that might raise some ire is that of the residential units on public land.

Commissioner Jerry Libbin hasn’t ruled out approving them, but has been the most vocally opposed to the idea of any residential units.

The anti-convention center wing in the community have targeted the residential and retail components to hook their message to.

Commissioner Jonah Wolfson’s petition initiative skirts that sentiment by amending the city charter to make such land leases subject to a 60% voter approval. Although many could say they know where Wolfson’s agenda lies, he has participated in asking questions on the LOIs.

Tishman’s group would have 261 residential units, in several buildings on the P-lot.

Portman CMC would spread their 300 total units with 100 in the P-lot, and 200 in the Washington Avenue side of the Convention Center.

It remains to be seen how many of those units make it to the final negotiated design. Both companies have a time line they envision they see the convention center would be opened. Portman CMC places it in mid 2017, while South Beach ACE has it in mid 2018.

In total lease payments over 99 years PortmanCMC is at $328million while South Beach Ace is at $247million. A difference of $81million.

The Commission’s digestion of the information will ultimately make their decision, but perhaps who feeds it to them will as well.

That mere perception that someone with a connection to one of the teams would be advising the dais caused the commissioners to throw out the analysis of Tomas Mobley. Mobley heads the convention center division of Global Spectrum, the company the city hired to run the MBCC.

Mobley pointed out four areas that were both plans differed, and which one would disturb the center less. Portman CMC by far got the most favorable take. It was all for nothing as several on the dais questioned the appearance of favoritism when a link between Mobley and a lobbyist used by Portman CMC was established.

No one questioned his integrity, it was just the perception that lead to the dismissal of his analysis.

The bias voices are out there too, and they want the public and commmission to hear. They come unapologetic and directly from the teams themselves. During the presentations they openly assaulted each others’ presentations.

Tishman snarked at Portman’s change in master plans, inferring elements were lifted from his: “imitation is the sincerest form of flattery.”

The Portman CMC team attacked the design of the South Beach ACE floor plan, marveling at the endless walks guests would endure if that plan were selected.

None were as catty as the twitter beef, or tweef for the hip, both lauched at each other through the social media site.

In one exchange Portman’s @MiamiBsquare accuses @SouthBeachACE of not listening to the residents because their plans hadn’t changed.

@SouthBeachACE responds: “We took our ideas from the community, not our competitor. Listened from day one and got it right.”

Both their twitter time lines add a little humor and sass to this long process full of dense numbers and big decisions.

A process the Mayor isn’t currently happy with from all indications at the first commission workshop. She will not tolerate getting it wrong, even if it means more meetings, or even voting no.

“This is not going to be my legacy,” said Bower. “I’d love it to happen, a better place for business and the community, but I’m not going to do it wrong. “

She walked off the dais declaring she needed a break, a splatter of applause in the audience acclaimed her and welcomed in the beginning of the new process.

About Frank Maradiaga

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