The Real Deal Miami

Hospital law may limit future South Beach project

By Erik Bojnansky | January 14, 2009 10:32AM

A city charter amendment on the use of former hospitals may derail a
developer’s plans to turn South Beach Hospital into a mixed-use
shopping mall, the Miami Beach city attorney’s office said Monday.

Russell Galbut, president of residential condominium company Crescent Heights, wants to invest more
than $200 million renovating the 10-story South Beach Hospital, scarred
since Hurricane Wilma hit in October 2005 and empty since the state
closed it down in March 2006. Galbut wants to merge it with a future
mixed-use commercial project called 600 Alton Road that
stretches from Fifth Street to Eighth Street between Alton Road and
West Avenue.

Galbut is seeking zoning that allows commercial use, residential
apartments, hotels and entertainment. He says his current proposal is
two-thirds the size he’s now entitled to build. “We down-zoned to
comply with [Miami Beach’s charter],” Galbut told the Land Use
Committee, which consists of four city commissioners, during its January
12 meeting.

But City Attorney Jose Smith said the hospital district charter amendment may force Galbut to redesign his project.

An irate Galbut said this was the first time he heard Smith’s opinion,
even though he repeatedly asked for one. “Really, we got sandbagged,”
he said.

Two charter amendments threaten to limit Galbut’s project. The first is
the Save Miami Beach amendment, which requires a voter referendum for
any increase in density on Miami Beach.

The second amendment is commonly referred to as the hospital amendment.
Properties zoned as hospital have a floor area ratio of 3, the highest
category in Miami Beach. (Floor area ratio, or FAR, is used to
calculate the future density of a parcel.) Under the hospital
amendment, once a hospital ceases being a hospital, the property
reverts to the ratio of the parcels abutting it.

The hospital amendment was passed by voters in January, roughly a year
after Mount Sinai Medical Center’s board of directors announced its
intent to sell the Miami Heart medical campus and solidify its right to
develop a 10-story building on the site. Residents of the neighboring
Mid-Beach single family neighborhoods clamored for a down-zoning. Miami
Heart’s future zoning became the biggest issue of Miami Beach’s
November 2008 election, with candidates in favor of controlling the
zoning of former hospitals emerging victorious.

Galbut sought an FAR of 2.0 for the 105,198-square-foot lot where South
Beach Hospital stands, which matched the density for a 52,500-square-foot residentially zoned parking lot owned by Galbut that’s adjacent to
the hospital.

But Smith says another parcel also owned by Galbut, a parking lot
59,569-square-feet in size, is next to the former hospital. Zoned
commercial, that lot has an FAR of 1.5. Smith says at least part of the
future hospital may need to have a lower ratio, like the hospital lot,
rather than the residential lot, which would allow greater density.

Galbut’s attorney, Neisen Kasdin, a former mayor of Miami Beach, says
in cases where the law isn’t clear, state law rules “in favor of the
property owner.”

Commissioner Saul Gross, though, fears that the current roads will not
be able to accommodate the traffic 600 Alton Road will generate.
Commissioner Victor Diaz, while generally in favor of the project, said
he will not go against Smith’s interpretation and is reluctant to
weaken the hospital and Save Miami Beach charter amendments. “I will
not prostitute the city charter for any project,” he said.

Diaz also feared that discussing the issue further may only provide
Galbut more ammunition if the issue does go to court. “Anything we say
now can and will be used against the city as is fully within his

In the end, the Land Use Committee encouraged Smith to provide Galbut a written opinion to delineate his options.

Galbut said he just wants to have an idea what can be built on his
properties. “We are happy to do what the city wants but they have to
tell us what they want.”