Miami’s iconic Dinner Key auditorium, home to commissioners and the city’s mayor, is not for sale, but the city’s second most-valuable property – a 3-acre site along the Miami River – could soon be the site of the city’s newest mixed-use luxury development.
On Thursday, Miami city commissioners voted 4-1 to allow city officials to continue talks with the Adler Group, which wants to build two 36-story towers on the site with a combined 900 apartments, 20,000 square feet of retail space and 150 hotel rooms.
Records show Adler proposed a 90-year ground lease with a present-day value of $70 million. In return, the city would gain 3 percent of all gross revenues generated from the development. That means Adler will pay the city an estimated $335 million over the length of the lease.
Adler would also partner with the city to finance and erect a new built-to-suit Class A office building with 375,000 square feet and 1,200 parking spaces at an estimated cost of $125 million. It’s not clear where the new city office complex would be located but three locations have been mentioned: adjacent to the Lyric Theater in Overtown, next to Marlins Park or as part of a massive complex that Adler is building at the Douglas Road Metrorail station.
The city’s real estate director, Daniel Rotenberg, said on Thursday there had been changes to the original offer from Adler but he would not divulge details.
An earlier analysis of the deal commissioned by real estate consultant firm CBRE raised concerns about a projected $50 million gap between what the city would pay for its new office complex and what Adler had proposed to pay for the prime waterfront parcel. Commissioner Frank Carollo, who voted against the motion, told his colleagues he “was sick and tired of the city being ripped off and it’s always with waterfront property.”
Following the vote, Adler Group issued a statement that said it was “thrilled by the opportunity,” adding “we are committed to the city to develop both projects and look forward to working with the community on shaping the future of this area.”
Adler’s proposed project, dubbed Nexus Riverside Central would be combined with a site just to the north of the city’s Riverside Center at 444 Southwest Second Avenue. Adler paid $14.25 million for the site last year and plans a 462-apartment residential tower on the land called Nexus Riverside, with 7,000 square feet of ground-floor retail.
While commissioners approved moving forward with negotiations, some commissioners expressed reservations about the city’s ability to do so.
Commissioners Ken Russell and Francis Suarez urged the city attorney’s office to hire an outside legal expert on real estate to draft the deal, but commissioners rejected a motion that would have required the city to do so. Still, Russell, who said he voted for the motion after commissioners adopted a motion to require Adler to include “affordability” in their proposed project, told The Real Deal he was hopeful the city attorney would consider bringing in outside expertise.
“The other side is bringing their ‘A’ game. We want to make sure the city gets the best deal.”