Portman Holdings to develop $405M convention center hotel

Miami /
May.May 21, 2015 09:45 AM

The revamped plan for a new convention center hotel in Miami Beach cleared another hurdle on Thursday when the Miami Beach City Commission voted 6-1 to authorize lease negotiations with Atlanta-based developer Portman Holdings to build the project.

Earlier this month, Portman revealed it would develop a 300-foot-tall, 800-room convention center hotel on the site of the Fillmore Miami Beach’s parking lot. The hotel would also feature 95,210 square feet of meeting space, 320 parking spaces, a fitness center, spa, business center, and five food and beverage establishments.

Following the meeting, Jack Portman, the company’s vice-chairman, said the city is getting an experienced partner that is privately financing the entire $405 million project.

“The city of Miami Beach is entrusting us to create an iconic Convention Headquarter Hotel and we are prepared to deliver,” he told The Real Deal. “Portman Holdings will work closely with the city to finalize an agreement that will bring significant economic and community benefits.”

Portman said the hotel will act as a gateway that connects the city’s soundscape park next to the New World Symphony to a new park promenade being planned for the Miami Beach Convention Center campus, which includes the Fillmore.

No one from the public spoke out against the project and Miami Beach elected officials expressed confidence in Portman’s ability to build the hotel. Commissioner Jonah Wolfson was the sole dissenting voter. “I think we are fortunate to have Portman,” said Mayor Phillip Levine.

The company was the only contender left at the end of the bidding process after another firm was disqualified because it proposed using public money to build the hotel. Portman’s vice-chairman assured commissioners the project will be primarily financed with a private $162 million construction loan, $145 million from an institutional investor, and $17 million in equity.

The details of the 99-year lease and development agreement still has to be hammered out by Portman and City Manager Jimmy Morales. The deal will also require final approval from 60 percent of Miami Beach voters in November.

In a related action, the city commission also awarded an $18 million contract to manage the $500 million renovation of the convention center. Now, Clark Construction will work with city staff and design firm Fentress Architects to create construction documents and price them during the next five months.

“We have to determine once and for all if the design that we have can be built in the $500 million budget we have set,” said Maria Hernandez, the city’s project director for the convention center district. “We have every reason to believe it will be, but we have Clark to confirm that.”

If Clark and the city can agree the project can be built with $500 million, the company could start putting out bids to subcontractors by the fall. The city wants to break ground on the renovation this December after Art Basel.

In 2013, the city had selected South beach ACE, which included Dutch architect Rem Koolhaas, to lead a $1.1 billion renovation that featured a hotel suspended over the convention center, with a park and residential/retail component. However, the deal quickly turned political during the city elections that year. A campaign to kill the project succeeded in having the proposal thrown off the ballot.

In January 2014, a new city commission led by Levine scrapped that plan and started from scratch.


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