The Real Deal Miami

Crescent Heights close to deal with school board to build mixed-use tower in Miami’s A&E district, could lead to large-scale redevelopment

Plan is for 100k sf of office space to relocate the school district, plus 1,100 apartments and parking
By Francisco Alvarado | March 22, 2018 12:30PM

Rendering of the development, Alberto Carvalho and Russell Galbut (Click to enlarge)

A Miami-Dade School Board vote regarding the sale of a parking lot could lead to Crescent Heights’ dramatic redevelopment of a large swath of land in Miami’s Arts and Entertainment District.

The school board on Wednesday authorized Superintendent Alberto Carvalho to negotiate a deal with 1370 NE 2nd LLC, an affiliate of Crescent Heights, to develop a mixed-use tower on the 49,075-square-foot surface lot at 1370 Northeast Second Avenue and an adjoining 1.13-acre property owned by another company affiliate, PAC Center Garage LLC. The measure is the result of a request for proposals Crescent Heights, led by Russell Galbut, won over other competitors, including the Related Group.

Carvalho cautioned board members that an agreement may not be reached for at least a year. “In terms of the complexity and the number of partners involved, I would be very cautious about putting up a timeline,” he said. “It would be far more appropriate to bring an update in six months and beyond that, another six months. I don’t expect this to be a done deal by tomorrow.”

Should the deal reach fruition, it could lead to the relocation of the Miami-Dade Public Schools administrative building into the Crescent Heights project. According to the school board resolution, 1370 NE 2nd LLC would include 100,000 square feet of free office space for the nation’s fourth largest school district as part of the development. Crescent Heights would also build 1,100 apartments and about 1,100 parking spaces.

The 1.13 acre site owned by Crescent Heights is valued at $20.6 million, according to a school board memo. Once completed, the new offices and parking spaces would represent $60 million in value to the school board.

By moving into a new building, the school board could then begin marketing its current 9-acre headquarters site at 1500 Biscayne Boulevard for redevelopment. As one of the largest properties in Miami’s urban core that is also near two Metromover stations, the school board site would be very attractive to developers, or maybe, even Amazon should Miami make it to the final cut of cities being considered for the Internet giant’s second headquarters, Carvalho said.

The deal hinges on a third partner, the city of Miami’s Omni Community Redevelopment Agency, which would be receive 600 of the 1,100 parking spaces. Those spaces would be shared by the school board during working hours and by the Adrienne Arsht Center for Performing Arts during its events. In exchange for the 600 spaces, the school board wants the Omni CRA to provide property tax incentives on the 49,075-square-foot site that will be utilized by Crescent Heights.

Carvalho said structuring a development deal with Crescent Heights and the Omni CRA would yield more money than simply selling the parking lot. “Once it is sold, the investment stops,” Carvalho said. “The CRA’s involvement really magnified the return for us. This is the only such option that allows our relocation at no cost.”