Miami allegedly granted improper height increase for Design District hotel project: lawsuit

MacArthur Capital Group alleges its property will be adversely affected by city’s decision

Miami allegedly granted improper height increase for Design District hotel project: lawsuit
Dacra President Craig Robins, 3750 Biscayne Boulevard and 299 Northeast 39th Street (Dacra, Google Maps)

A New York-based boutique real estate investment firm is pushing to unravel developer Craig Robins’ proposal for a 36-story hotel in the Miami Design District.

An affiliate of MacArthur Capital Group filed a legal petition in Miami-Dade Circuit Court seeking to overturn recent zoning amendments for two development sites at 3750 Biscayne Boulevard and 299 Northeast 39th Street in Miami.

The Miami City Commission approved the zoning changes in May, which would allow Miami Design District Associates to increase the height on the 39th street property from 20 stories to 36 stories, as well as transfer density from its other commercial properties in the district to the new development.

The hotel is part of a massive mixed-use project that would also entail a 20-story office tower and a train station that could serve as a possible stop for the commuter rail service, Brightline.

Miami Design District Associates is a partnership between Robins’ Miami-based Dacra, Toronto-based Brookfield Property Partners and L’Catterton, the investment arm of LVMH. The group owns nearly 500,000 square feet of commercial space in the Miami Design District, the largest holdings of any landlord in the neighborhood.

MacArthur owns a one-story retail building and a surface parking lot at 3701 and 3737 Biscayne Boulevard, across the street from the hotel development site. According to its petition, the height increase and density transfers “will uniquely burden and adversely affect” its properties.

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MacArthur also claims that Robins objected to the company’s request in 2015 to close an alley so that MacArthur could build a four-story commercial building. MacArthur withdrew its application and didn’t move forward with its proposal.

Attorneys for MacArthur, Miami Design District Associates and the city of Miami declined comment.

On May 27, Miami city commissioners approved amendments to the Miami Design District special area plan, a controversial mechanism that allows owners and developers of nine or more contiguous acres to seek a slate of zoning changes that allow for denser projects.

In its petition, MacArthur alleges the city mishandled the amendment process to grant “improper height variances, unlawful density transfer rights, award bonus height and square footage and grant other special entitlements” to Miami Design District Associates. The two development sites are also cut off from the connected properties in the special area plan by the privately owned Florida East Coast Railway train tracks, MacArthur claims.

The legal challenge is the latest attempt by MacArthur to block Miami Design District Associates’ planned project. Since February, the company’s lawyers objected to the zoning amendments at a hearing of the Miami Planning and Zoning Appeals Board and two Miami City Commission meetings.