Miami voters will decide in August whether a developer can build a swooping 1,000-foot observation tower behind Bayside Marketplace, which would undergo extensive renovations as part of the deal, city commissioners agreed Thursday.
But the commission deferred a vote on a set of complex lease agreements with Bayside’s operators and SkyRise Miami developer Jeff Berkowitz after Commissioner Keon Hardemon objected to a minority-participation deal he called “weak.”
The commission will take up the leases in two weeks to give Hardemon time to consult with community members and get his concerns — which include the amount Bayside is required to donate to a foundation that promotes minority business ownership and education — satisfied.
Commissioners nonetheless approved ballot language for a referendum to meet a Friday deadline for the Aug. 26 primary ballot. Berkowitz, who is privately financing the $400 million tower, told commissioners he would lose key investors if the vote was pushed to the November general election, effectively killing the project.
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“I cannot sustain this. I cannot wait until November,’’ said Berkowitz, a veteran Miami mall developer who has said he’s already spent millions on the project out of his own pocket.
Commissioners said they took him seriously. After taking a break to talk to Berkowitz and Bayside representatives, Hardemon returned to the dais with the compromise, which was unanimously approved.
Deputy City Manager Alice Bravo said none of the financial terms in the lease agreements, which tie the SkyRise plan to a lease extension for Bayside of 99 years, would change because of the delay. She said administrators fully expect to have the proposed agreements approved by the commission well before the referendum.
Under the deal, which promises a financial windfall to the cash-strapped city, Berkowitz would sublease a 1.85-acre spit of land from Bayside, now occupied by a marina parking lot, to build the tower, which he hopes will open at the end of 2017. He would pay the city a minimun rent of $1.06 million the first year, and, separately, would pay Bayside rent starting at $1.35 million a year.
Bayside, meanwhile, would increase its rent payments to the city, now $1 million a year, to a minimum $1.5 million. Bayside operator General Growth Properties, which leases the site from the city, would also commit to a minimum $27 million in improvements to the rundown retail and entertainment complex — Miami administrators won an increase of $5 million to the previously agreed-upon $22 million renovation minimum on the eve of Thursday’s vote — plus a one-time $10 million payment to the city.
The deal also calls for annual inflation-linked rent increases in both leases, allocates to the city a percentage of gross revenue from both SkyRise and Bayside, and brings the city increased revenue from an expansion of parking. Henry Torre, the city’s director of public facilities, told commissioners that Miami could reap as much as $293 million in revenue from the deal, which also includes other financial benefits for the city, by 2060.
“We have done a very good job in positioning ourselves to improve upon this deal,” Torre told commissioners, referring to the proposed modifications of the existing Bayside lease, after Commissioner Frank Carollo questioned some of the new terms. “I’m very comfortable with the financial terms.”
Berkowitz projects that SkyRise would attract more than three million visitors a year, generate $100 million in revenue in its first year, and become an internationally recognized symbol of the city.
The hairpin-shaped tower, designed by Miami’s Arquitectonica firm, would comprise three observation decks, a fine-dining restaurant, a nightclub, a ballroom, a store and three theme-park-style rides.
The first two rides would be a 570-foot controlled bungee jump and a 650-foot “drop” ride that Berkowitz says would be the longest in the world. Both would plunge people down the outside of the tower.
The third ride, in an interior theater, would be designed by the creators of Soarin’ — the simulated hang-glider ride that is Disney World’s most popular. SkyRise’s version would simulate flying above South Florida and plunging below the Atlantic Ocean for a view of reefs and marine life.
Berkowitz’s agreement with Bayside contains a clause allowing him to install a private gambling club in the tower, but city administrators said Thursday that would happen only if the state legalizes gambling and the city commission then agrees to allow it in SkyRise.
But it was the minority participation agreement that provoked the greatest contention during Thursday’s prolonged hearing.
That agreement, which does not involve Berkowitz, is between the city and Bayside and dates to 1985. It sets out goals for minority vendors and requires financial contributions from the mall’s operator to the Miami Bayside Foundation.
A proposed modification would have increased Bayside’s minimum foundation contribution from $100,000 to $350,000, but left other terms unaltered, Bravo said.
But Hardemon said the city had failed to push harder for better terms, and complained that officials had not taken the participation agreement as seriously as other sections of the deal. A few members of the public echoed the concern, saying African Americans are often underrepresented in big public deals.
Hardemon questioned foundation board member Josie Correa about why the organization did not demand more money. Hardemon asked foundation board member Josie Correa why the organization did not demand more money from Bayside, saying he thought the minimum contribution should be $700,000. When he questioned her motivations, suggesting she might be “in the pocket of this organization,” Correa shot back, “that's ridiculous.” Hardemon cut her off and eventually asked her to sit down because her allotted speaking time was over.
Hardemon later made a motion asking commissioners to defer the package of agreements and the referendum question. When it became apparent he would not get the votes to defer, he threatened to use a rule that allows commissioners to unilaterally put off items when they have not had enough time to study them.
But he relented after the other four commissioners appeared to take to heart Berkowitz’s warnings that the entire deal would die.
A previous version of this story mischaracterized the exchange between Commissioner Keon Hardemon and Miami Bayside Foundation board member Josie Correa.
El Nuevo Herald staff writer Brenda Medina contributed to this report.