Miami’s $100 million marina expansion is hotly contested

In Miami, where waterfront land is at a premium, a competition to turn two city marinas into a swanky island attraction has set off a high-stakes scramble as three competitors try to blow their rivals out of the water.

With a potential 75-year contract on the line, marina developers with local, national and international players are jostling for the right to redevelop Miami’s Rickenbacker and Marine Stadium marinas on Virginia Key, which in February became the new home to the Miami International Boat Show. The site has existed as a cluster of boat stacks, wet slips and restaurants for decades, but Mayor Tomás Regalado’s administration wants a team to redesign the area as a high-grossing destination.

This month, Miami’s top administrator endorsed a $100 million plan by RCI Group, the company that runs the Miami Beach Marina in South Beach. In a partnership with design firms Arquitectonica and Pininfarina, RCI Chairman Bob Christoph has proposed to tear down much of what exists on the site’s 10-acre upland and build a project baptized the Virginia Key Harbour & Marine Center.

The centerpiece: a sleek dry-storage building that instead of fork lifts uses an automated system to warehouse boats indoors, and when ready for use, plucks them from their resting place and drops them in the water. RCI Group and its partners also want to build an oblong, two-story building to house a casual and fine dining restaurant, a public baywalk and a new grid of docks in the basin.

In total, the new project would dramatically expand the area’s wet and dry slips to 1,286, including close to 1,000 dry stack spaces for boats smaller than 60 feet. The remaining 300 wet slips on either side of the spit of land where the Rusty Pelican restaurant sits would be mostly reserved for larger yachts.

By year 10, just after the last phase of the redevelopment is expected to be completed, RCI estimates the complex will result in $4 million in annual payments to the city — and $6.7 million in net annual profits to the operator.

“It’s one of the biggest projects in the city, on one of the most precious lands, and the final product will have to go to the voters,” said Regalado, whose administration just finished creating a $24 million exhibition area next door. “I'd like to see it [on the ballot] in November.”

But for that to happen, Regalado’s administration first needs permission from the Miami City Commission. And that’s no guarantee, as Suntex and Tifón Miami, the second- and third-place bidders, have both filed bid protests and alleged a series of oversights and gaffes by Miami’s asset management team, selection committee and legal department.

Attorneys for both say the city should either disqualify their respective competitors and declare their client the winner, or start the whole evaluation or solicitation process from scratch. Should commissioners side with the second-ranked Suntex, out of Dallas, they’d choose an $84 million project that includes more than 1,300 dry and wet slips, a yacht club, Fresh Market and a 30,000-square-foot Marine Max showroom. Tifón Miami, a partnership that includes an Argentinian marina developer, Fortune International Realty’s Walter DeFortuna and current Rickenbacker Marina operator Aabad Melwani, would build a $70 million complex with 100,000 square feet of retail, an automated dry stack system similar to RCI Goup’s, and three restaurants to possibly be run by Segafredo Zanetti Espresso, Novecento and Bertoni Caffe Gelato.

A hearing on the imbroglio is tentatively set for May 12 before the city commission — plenty of time for a small army of attorneys and lobbyists to launch salvos.

“We knew there would be protests,” said City Manager Daniel Alfonso, who based his recommendation off the scores of an evaluation committee. “We'll let the commission decide.”

Among the issues commissioners will be asked to consider:

• Whether the city bungled the competition last month when it allowed RCI Group to submit a “preferred” plan that would place 300 parking spaces on the ground level of its dry stack facility instead of pushing those spaces into a Miami Parking Authority garage that the city said must be built as part of the project. Complicating the situation, the city initially told RCI it could not present such a proposal to the city’s selection committee, only to then quickly reconsider that position.
• Whether a committee convened to evaluate the three proposals made “arbitrary and capricious” decisions that skewed the scores and led to a flawed endorsement by Alfonso.
• Whether past litigation with the city, or inadequate résumés, should disqualify any of the three competing teams

In the meantime, all three bidders have employed attorneys and lobbyists to represent them.

According to the city clerk’s office, RCI Group hired Floridian Partners’ Brian May and is represented by the law firm Bilzin Sumberg. Suntex hired Arnstein & Lehr attorney and State Senator Miguel Diaz de la Portilla and is working with lobbyist Fernando Diez and publicist Seth Gordon. Tifón Miami is represented by Holland & Knight.

Should commissioners choose to throw out the process, Melwani would remain as the Rickenbacker Marina operator until the city selects a new tenant or bidder for the site pursuant to a legal settlement he reached months ago with the city. But Commissioner Ken Russell, who represents Virginia Key, said no decisions have been made yet.

“Virginia Key is such an important topic right now. Everybody is watching what's going on there,” he said. “Who knows what will come out of this.”

This story was originally published April 19, 2016 at 4:34 PM with the headline "Miami’s $100 million marina expansion is hotly contested."