3 City Owned Properties, 3 Proposals, and 3 Votes for Miami

3 city-owned properties up for big changes are on the ballot this election cycle.

Anytime there is a parcel of city land up for lease, purchase, or major renovation, the protocol is usually to put it on the ballot. This is to provide political cover in an otherwise contentious decision on either side, and to allow for a non-competitive bid process. This fall, 3 parcels of city-owned land are up for major changes, and it is up to voters to decide on them: Jungle Island, Melreese Golf Course, and the Miami Riverside Center. Each of these is complex and involve multiple parties, but we will go through them below.

The Jungle Island Hotel deal is the most straightforward, and most pressing as it is on the primary election ballot (Aug 28th). Owners of Jungle Island, ESJ Capital Partners, wish to build a 13-story, 300 room hotel with a Jungle Theme. The addendum specifies that if this option is executed, the lease payments of the hotel (separate from the current payments of Jungle Island Park which are in excess of $500,000) would be $250,000 for the first 3 years and $1.15 million or 5% of gross sales (whichever is higher) thereafter. They will also be required to pay $700,000 to the adjacent Ichimura Miami-Japan Garden for maintenance, and $500,000 to a low-income e housing fund.

ESJ bought the former “Parrot Jungle” in 2017 for $60 million and assumed $45 million in debt, when the former management was struggling to make ends meet. The new owners have set out on an ambitious track to create more of an adventure park than the former education focused attraction. There are plans and construction underway for a tree walk village, a new playground, a trampoline park, a new restaurant, a flow rider (surfing simulator), and zip lines. This hotel is part of that trajectory, and capitalizes on its location and theme.

Finally this amendment will extend Jungle Island’s lease to 2099 with a 15-year extension option. If passed, it will shape what the city wants of an attraction in such a prominent location, a small quaint education center, or a large family entertainment and adventure attraction.

I have already written extensively about the MLS proposal at Melreese Golf Club. It proposes a no-bid lease of 180 acres of city owned land in exchange for annual lease payments of $3.7 million, $20 million in pubic improvement, and full site cleanup. The proposed site plan proposes a 25,000 seat stadium, 2 million sqft of retail/office space, 750 hotel rooms, and a large public park.

If Miamians vote yes, they have to know that at its core this deal is a billion dollar real estate venture, wrapped with the sexiness and allure of a new soccer team owned by David Beckham. That is not to say not to vote for it, just know what the vote is for. If you believe Miami’s future includes a soccer team, this proposal of an undervalued lease on city-owned property to create an entertainment district, central stadium, and public park would help to ensure that success. If you do not, than I think you already know what your vote is.

Lastly, Adler Group’s proposal for the Miami Riverside Center building, currently the home of the city building department, parks and recreation, and more. In return for the lease, the city would receive a new administrative building, lease payments, and a 2% cut of any asset sale of what will be built on the site at 444 SW 2nd Ave. The current proposal includes 3 residential towers and ground floor retail.

This deal has been in negotiations since Adler group won a competitive bid to redevelop the land and build the city’s administration building in August 2016. The terms include a 99 year lease with an option to purchase. They would build 3 residential towers with varying income level targets, and a fourth tower that would house the new administration facility. The deal is also contingent on the Municipal building being built first, before any permit is approved on the residential towers. This deal has been in negotiations for over a year and a half and many of the details are hashed out. It shows responsible, deliberate governing, and should be approved.

These three diverse proposals show the range of ways a city can use its assets to obtain strategic goals while retaining lease payments and control. If negotiated thoroughly, a discount in lease payments can be exchanged for even more in future tax basis or other goals for the city. This strategic method of use of city (and even county) assets can be used to help with other goals, such as affordable housing, better transit, public parks, and more.

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Sources:

https://www.thenextmiami.com/three-big-real-estate-deals-to-be-decided-by-voters/

https://www.miamiherald.com/news/local/community/miami-dade/article212577274.html

https://www.miamiherald.com/news/local/community/miami-dade/article215559065.html