Opponents of a developer’s request to permanently close off several streets that would be incorporated into the Miami Worldcenter site claim that city officials are giving away valuable public rights-of-way in downtown for next to nothing, The Real Deal has learned.
The first of two public hearings about closing sections of Northeast Seventh, Eighth and Ninth streets to vehicular traffic is on Miami commssioners’ agenda for Thursday.
Nearby property owners are already expressing frustration about the closure possibility.
“Allowing them to have that extra square footage as part of the project’s footprint seems rather backwards,” Chris MacLeod, who owns three properties on Northwest 11th Street, told TRD. “The city should be selling it to them at market rate.”
Nitin Motwani, a principal partner in the 750,000-square-foot retail project, said the closures are necessary to ensure a unified site that conforms to the Miami 21 zoning code. He dismissed the complaints, noting Miami Worldcenter has to pay the city a fee to close off the streets.
The one-time fee would total about $184,000, according to the city.
“We followed the same process every other developer who requests use of the public right-of-way goes through,” Motwani told TRD. “We did not receive preferential treatment or any special favors.”
Closing the streets would help the neighborhood become more pedestrian and bicycle friendly, Motwani maintained. Miami Worldcenter’s petition was recommended for approval by both the city’s Planning Advisory Board and Planning and Zoning Department.
MacLeod counters that closing off the streets benefits Motwani and his partners much more than area residents. The closures would allow the developers to increase the project’s scale by increasing the Worldcenter site’s overall footprint, even if the closed streets are not developed, he said. The additional square footage can be built anywhere within the project site.
“They are getting about an additional 90,000 square feet that will allow them to increase the floor area ratio,” MacLeod said. “That is a substantial giveaway considering the density of the neighborhood.”
The city could negotiate a better deal similar to a pair of real estate transactions involving the Southeast Overtown/Park West Community Redevelopment Agency, according to MacLeod. In November, an affiliate of Miami Worldcenter paid about $3.8 million to the CRA for a small portion of the Park West Promenade, a railroad right-of-way between Northeast 10th and 11th streets and Northeast First Avenue and Northwest First Avenue.
A larger segment of the promenade was acquired by developer Marc Roberts and the Simkins family for about $6.4 million. A former Worldcenter partner, Roberts is no longer involved in the retail project. Instead, he and the Simkins family submitted plans with the Federal Aviation Administration for the construction of a 647-foot high-rise on the site, which is near the mall site, according to exMiami.
“It just doesn’t make sense for the city to give away a public right-of-way to a private developer,” MacLeod said. “If closing the streets is for the public good, then the city should lease it to them or close it as part of the overall master plan.”
MacLeod is not alone in his opposition. Brian Basti, a board member with the Downtown Miami Partnership and co-owner of the Grand Central nightclub, which sits on land owned by Worldcenter, told TRD he believes the developers are getting a sweetheart deal.
Worldcenter tried to evict Grand Central beginning early last year, claiming the music venue didn’t have the proper insurance required on its lease. The lawsuit was dismissed after Grand Central lawyers argued the developer did not properly deliver a certified letter to Grand Central notifying it of the breach and giving Basti and his partners a chance to correct the error.
The Third District Court of Appeals recently ruled in the lounge’s favor.
Basti insists there is no bad blood between him and the Worldcenter principals, however.
“I understand the developers are putting their necks on the line,” he said. “But any time the city gives something away for free, I am not for it.”