The Real Deal Miami

Miami Beach considers eliminating parking fees for buildings that reduce number of units

Two commissioners warn colleagues they are leaving millions in impact fees

November 14, 2016 12:45PM
By Francisco Alvarado

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Shore Club and renderings credit VisualHouse

Shore Club and renderings (Credit: VisualHouse)

Owners of older buildings in Miami Beach that significantly reduce the density of their properties could no longer have to pay city impact fees for off-street parking.

At their regular meeting last week, Miami Beach city commissioners, with a 5-2 vote, gave preliminary approval to the measure that greatly benefits historic hotels such as the Shore Club that don’t have onsite parking for guests.

City officials who support the legislation say it provides incentives to developers and property owners who reduce the number of units inside apartment buildings and hotels undergoing renovations. For instance, Manhattan-based HFZ Capital Group is transforming the 300-plus room Shore Club property into an 85-room hotel and 67-unit luxury condo, dubbed Fasano Residences + Hotel Miami Beach, slicing the number of units nearly in half.

The owner of a building that is required to have 100 parking spaces can have 50 spaces and then pay the city impact fees to not provide the other half, explained Miami Beach planning and zoning manager Michael Belush. However, if the owner renovates the building and reduces the units so that only 50 spaces are required, then fees for the other half are eliminated, he told commissioners.

“I’m very comfortable with it,” said Commissioner Joy Malakoff during the meeting. “It is actually incentivizing the reduction of density. [The fee] still has to be paid if more parking spaces are removed than units are reduced.”

Neisen Kasdin, an attorney and managing partner at Akerman representing HFZ, confirmed to commissioners that eliminating off-street parking impact fees would be a benefit for his client and owners of other Miami Beach buildings that have little to no onsite parking.

“As the ordinance stands today there is a penalty which prevents you from reducing the density,” he said. “What has happened in this city, the better properties are actually reducing density… reducing parking demand. To the extent the reduction cannot be completely accounted for, then you get to pay an impact fee.”

However, commissioners Kristen Rosen Gonzalez and Micky Steinberg warned their colleagues that they were leaving untold millions of dollars in impact fees.

“All those funds would go toward transit,” Rosen Gonzalez said. “We budgeted $36 million for transit and now we are going to eliminate what could potentially be millions of dollars in fees.”

Rosen Gonzalez also questioned city staff’s conclusion that the legislation would not have a negative economic impact. “We don’t know how many buildings this is going to affect,” she said. “We don’t know how many potential impact fees could be lost by the city.”

The commissioner argued a reduction in units doesn’t necessarily mean a building would need less parking spaces. “You could have potentially bigger units and people who own those units could have more money and could have more cars,” Rosen Gonzalez said. “I have friends who own luxury condos and they have two to three cars. We just don’t know.”

Steinberg said she was concerned with creating blanket legislation as opposed to eliminating impact fees on a case by case basis. “We don’t understand the financial implications,” Steinberg said.

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