As Miami Beach embarks on the renovation of its Convention Center, as well as building a headquarters hotel, unanswered questions must be addressed before nearly $1 billion is spent. The Convention Center needs a new look, but let’s be clear: Miami Beach is not a “convention city.” It is a “convention destination.” There is a distinct difference.
Based on its popularity, one would have thought that in the final analysis, there would be more than one construction company bidding. Even stranger, with hotels reaching peak occupancy and rates, only one hotel developer showed interest in the headquarters-hotel project.
It begs the question that, with an almost billion-dollar budget, why did one of the premier destinations in the world attract minimal interest?
During the process, the industry was told that with a 36-month timeline for construction, the Convention Center would never completely shut down, and that there would always be two halls open. That changed last month when the City Commission voted to shut down the center beginning in January 2017 for at least five months.
The Greater Miami Convention & Visitors Bureau could not book anything for 2017, and had to wait until 2018. Reason given: The city could not implement a voter-approved 1-percent increase in the bed tax in time to sell bonds.
That decision needs to be questioned. In the initial project proposal involving a master developer, it was established that once an agreement was signed, the tax would be implemented. When the master developer was eliminated, the city became the developer, and in 2014 signed an agreement with Fentress Architect to do 30-percent design drawings.
When the city changed to a “construction manager at risk” process, the city attorney ruled that not until that agreement was signed could the tax kick in.
Why is the Fentress agreement different? It’s not! The tax should have been implemented then, thus avoiding the 2017 shutdown. This question was never raised by city commissioners when they agreed to shut down the Convention Center. Why not? The result is lost business and a negative message to meeting planners.
General consensus over the years indicated a need for a headquarters hotel. As the process moved forward, industry leaders remained silent on a significant issue, though I did not.
In order for citywide meetings to come to Miami Beach, there must be room-block commitments and rate consensus. “Room block” simply means individual hotels, other than a headquarters hotel, must set aside rooms to accommodate the group.
Historically, other than the Loews and Fontainebleau, which may or may not participate because they lack availability, no hotels between those two have participated in these blocks because of size and rate.
Without those commitments one must question the success of the proposed hotel or even if it’s needed.
In 1988, the hotels were asked to commit 18,000 rooms to support the bid for Super Bowl. The NFL established a not to exceed rate for the block. The hotels verbally agreed, but the NFL insisted on signed agreements from each hotel and got them.
Before the city selects its hotel developer and proceeds to a voter-approved 99-year lease, the Convention Bureau and Hotel Association must convene an industry meeting in order to get written commitments to support the headquarters hotel. A verbal agreement is not acceptable.
Mayor Philip Levine, an able leader through tough issues, needs to get these commitments. History says it can be done.
I have spent 53 years in the Miami Beach hotel industry; chaired the Convention Center Advisory Board for more than 20 years and was founder and president of the Greater Miami and the Beaches Hotel Association for 20 years. This experience gives me a unique perspective on this important project.
It’s a matter of transparency. With so much at stake, everything needs to be put on the table and honestly discussed.
Stuart Blumberg is former president of the Greater Miami and the Beaches Hotel Association and former chairman of the Miami Beach Convention Center Advisory Board.