Ocean Terrace developers to pay $3M to settle lawsuit with Miami Beach

City agreed to settle litigation that challenged methodology for calculating floor-to-area ratio

Miami /
Apr.April 23, 2021 01:30 PM
Alex Blavatnik and Sandor Scher with a rendering of the project (Getty, iStock)

Alex Blavatnik and Sandor Scher with a rendering of the project (Getty, iStock)

UPDATED, April 30, 2 p.m.: Miami Beach squeezed a $3 million payment from the developers of Ocean Terrace to end a dispute over floor-to-area ratio calculations for the North Beach mixed-use project.

Miami Beach city commissioners on Wednesday approved a settlement agreement with Ocean Terrace Holdings that squashes a lawsuit the developers filed against Miami Beach in Miami-Dade Circuit Court in August. The settlement passed without discussion, as part of the city commission’s consent agenda.

Ocean Terrace Holdings, whose principals are Alex Blavatnik and Sandor Scher, had challenged the city’s interpretation that elevator shafts, maintenance chutes and stairwells must be included in calculating a project’s floor-to-area ratio.

The duo’s company also accused the city of breaching a development agreement tied to their mixed-use project on Ocean Terrace and Collins Avenue between 74th Street and 75th Street.

Ocean Terrace Holdings sought damages of $800,000 a month, plus interest and attorney fees from the city. Blavatnik did not respond to an email and phone message seeking comment.

“This resolution clears the way for the long-desired revitalization of Ocean Terrace, allowing us to advance plans for a world-class oceanfront public promenade,” Scher said in an emailed statement. “We look forward to presenting our plans for the park and project to the Miami Beach Historic Preservation Board in the near future.”

According to a memo dated Wednesday from Acting City Attorney Rafael Paz, Miami Beach and Ocean Terrace held multiple mediation sessions that resulted in a deal that will require the developer to contribute $2 million to the city in two separate payments, due by Sept. 1.

Ocean Terrace Holdings also has to pay another $1 million that will be applied to the construction of a city-owned aquatic center on 72nd Street.

In exchange, Ocean Terrace will be allowed to exclude elevator shafts, mechanical chutes and stairwells in calculating the project’s floor-to-area ratio.

The project entails a 110-key hotel, a 58-unit luxury residential building, a 200-car parking garage and 18,000 square feet of retail. Shells of 12 renovated historic buildings also make up part of the development.

Ocean Terrace’s lawsuit came as a result of another Miami Beach developer, Crescent Heights, winning a favorable ruling from the city’s Board of Adjustment that disagreed with Planning and Zoning Director Thomas Mooney’s interpretation that elevator shafts, maintenance chutes and stairwells are part of a project’s floor-to-area ratio.

The city sued in Miami-Dade Circuit Court to overturn the board’s decision, but subsequently settled with Crescent Heights in February of last year.

Around the same time, the Miami Beach City Commission passed an ordinance that clearly states elevator shafts, maintenance chutes and stairwells are to be calculated when determining floor-to-area ratio.


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