City of Miami

Overtown developers agree to split ‘transformative’ project

 
 
This architectural rendering shows a portion of developer R. Donahue Peebles' $250 million proposal for a hotel, apartments and commercial development in Overtown.
This architectural rendering shows a portion of developer R. Donahue Peebles' $250 million proposal for a hotel, apartments and commercial development in Overtown.
Overtown Gateway

aviglucci@MiamiHerald.com

In an unusual and unexpected move, a Miami commissioner on Thursday persuaded two developers competing to build a massive residential and commercial complex on public land in Overtown to split the baby, with each agreeing to take a city block to develop separately.

The compromise, engineered by Commissioner Michelle Spence-Jones, means the city’s Overtown redevelopment agency stands to get what it wants — a “transformative’’ project designed to repopulate and revitalize the long-blighted heart of the mostly black neighborhood — while averting a bitter fight that she said threatened to divide the community.

In practical terms, it also means that developer R. Donahue Peebles and the principals of All Aboard Florida, the new passenger rail company that plans to build a new train station a block away, must now quickly retool their proposals, submit them for approval by Miami-Dade County, which ceded the land for the project to the city, and reach a legal agreement with the agency, all within 90 days.

Peebles agreed to take on all the residential components on one block, including a required 60 affordable apartments, while All Aboard would build more office space on its block than it initially planned to — though the specifics have not been fully decided. Both projects will also include parking and significant street-level retail. Peebles still intends to build a 150-room extended-stay hotel on his block.

Spence-Jones asked the developers to retire to a private room at City Hall and try to work out a deal to share the project as the City Commission, sitting as the board of the Overtown community redevelopment agency, opened a hearing at which they were to select a developer. A CRA evaluation committee had scored the Peebles plan, valued at $250 million, as the best of three submitted, with All Aboard coming in second with a somewhat smaller project.

Originally, the CRA packaged together both blocks — which sit east of Northwest Second Avenue between Northwest Sixth and Eighth streets — as it sought proposals for development.

Spence-Jones said she was concerned that the increasingly bitter competition between the bidders was provoking a split in the community that risked upending the project. The city has been seeking to redevelop vacant land it controls in Overtown for two decades with little success. Community opposition helped derail a previous proposal by a Detroit developer, Crosswinds Communities.

The CRA also faces a tight deadline imposed by Miami-Dade under the agreement that made the land available for redevelopment by the agency. The county retains the right to retake control of the two blocks if development doesn’t commence by mid-2015.

“We’re not asking them to get married,’’ Spence-Jones said of the competing developers. “But this is a golden opportunity, and we can’t afford to have the community fighting.’’

The developers’ teams and CRA staffers returned two hours later with an agreement that’s not so much a shotgun marriage as settling for half of the wedding cake. Peebles’ local partner, developer Barron Channer, said assigning one of the two blocks to each team for a separate but coordinated scheme was the simplest, cleanest way to reach an agreement and proceed with development.

The developers must cooperate on one part of the project: A refreshed Sawyer’s Walk, the pedestrian path that divides the two blocks, which would be turned into a mini-Lincoln Road Mall.

The board approved the revised deal 4-1, with Commissioner Frank Carollo dissenting.

The revised project also altered some of the financial details. Instead of the expected long-term lease payments to the city, the developers would pay a total of $5.5 million for the land, which CRA appraisals have valued at nearly $20 million — a figure both teams have said is too high. The payment would be split evenly between the CRA and the county.

Each team would also contribute $1.25 million over 10 years to a fund to benefit the Overtown community.

The Peebles team, which is surrendering a portion of its expected commercial development, would get a $3 million grant from the CRA to support its housing program. Originally, neither team sought subsidies to build.

The county, meanwhile, will be asked to extend the time within which the development must be finished once approved, to 36 months from 24. Once construction begins, the county would not be able to reclaim the land, but developers would pay a $5,000 penalty for each day they’re late in finishing work.

“I’m glad you guys were able to sit down and come up with something that makes sense,’’ Spence-Jones told the developers.

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