Miami-Dade County

Bayside lease, SkyRise tower up for Miami approval

The 1,000-foot-tall, $400 million observation tower that developer Jeff Berkowitz wants to build on the downtown Miami waterfront has been alternately hailed as visionary and decried as a folly. And that’s when it’s not provoking sniggers for its suggestive shape.

But Berkowitz and the city are now dead serious about getting SkyRise Miami built on a 1.85-acre spit of publicly owned land behind Bayside Marketplace.

To pave the way for the tower, Berkowitz, Miami officials and Bayside’s operators have reached a complex deal — virtually all of it to be privately financed — that would result in an extensive facelift for the aging retail and entertainment complex while plowing tens of millions of dollars into the cash-strapped city’s coffers.

First, though, Miami city commissioners must agree to put the deal, which calls for extending Bayside’s lease to 99 years, up for a referendum as early as August. The commission will take up the proposal Thursday.

Then, if voters approve, Berkowitz, who has pledged to dip into his own pocket for the first $30 million of the tower’s cost, must raise the balance from private investors.

Berkowitz and Miami administrators say the risk falls entirely on the developer, while the potential payoff for the city and Bayside operator General Growth Properties — which would be obligated to spend at least $22 million on improvements — is substantial.

The agreements are premised in part on some prodigious attendance and revenue projections for SkyRise that its proponents contend are entirely realistic — more than three million visitors a year and first-year revenue of $100 million.

Under the new lease, rental payments to the city for use of the Bayside property, which includes the tower site, would rise from the current $1 million a year to a minimum of $2.6 million in the first year of expanded operations — $1.06 million from SkyRise and $1.5 million from Bayside. The rents would increase annually based on inflation.

Both entities would also give the city a percentage of gross revenues above a certain cut-off point, meaning the city stands to earn $200 million more over the life of the lease, according to projections provided by Berkowitz. Under the current Bayside lease, the city is entitled to a percentage of profits, but that clause has not yielded a penny in 27 years of the mall’s operation, Miami officials say.

In addition to increased rent, Bayside must make a one-time, $10 million payment to the city. The city could also see additional revenue from an expanded parking garage and a valet lot beneath the tower’s base of at least $241,000 a year, in addition to the minimum $675,000 share it now gets from the parking operation. SkyRise would provide a new fire substation and a new marina office to the city without charge.

“The city was extraordinarily aggressive in negotiating,” said Berkowitz, a veteran mall developer whose projects include Dadeland Station and The Shops at Fifth & Alton in Miami Beach. “These were the most brutal negotiations I’ve ever been involved in.”

General Growth communications vice president David Keating declined a request for an interview.

Miami administrators say the agreement gets the city several things it wants at no cost to taxpayers: a revamp of Bayside, substantially improved lease terms and a major new tourist attraction they believe could do for Miami what Gustave Eiffel’s pet project did for Paris 125 years ago.

SkyRise would include three observation decks that would provide views with a 40-mile radius, enough to see the Everglades, north Key Largo and northern Broward County on a clear day, Berkowitz says.

It would also constitute, in effect, a vertical entertainment center, with a fine-dining restaurant, a nightclub, a ballroom, a store and three theme-park-style rides: A 570-foot controlled bungee jump and a 650-foot “drop” ride that Berkowitz says would be the longest in the world, both of which would operate along the tower’s exterior flanks; and a theater designed by the creators of Soarin’, the simulated hang-glider ride that is Disney World’s most popular. SkyRise’s version would have visitors “fly” above South Florida and “plunge” below the Atlantic Ocean for a view of reefs and marine life.

The hairpin-shaped tower would occupy what is now a marina parking lot. Its base would contain two areas — an open-air covered amphitheater and a shop — that Berkowitz said would be publicly accessible without a tower admission charge, as well as an interactive exhibition space.

The developer says he will also extend the landscaped Baywalk from Bayfront Park all along the back of Bayside, now an unappealing hodgepodge of a service area for the marina and restaurants, to the base of SkyRise and create an adjacent public plaza.

Berkowitz has also sought $10 million in state money for improvements, including a reconfigured access road at Bayside’s southern entrance and the Baywalk extension. The Florida Legislature approved $2 million, but that was vetoed by Gov. Rick Scott. Berkowitz said he would probably try again for the money.

The tower project has not drawn organized opposition, but it has received some skeptical scrutiny from blogs like the Crespogram Report and Curbed Miami, which have questioned its viability and its unusual design.

Its architect, Arquitectonica co-principal Bernardo Fort-Brescia, has likened its shape to a jumping fish or a cresting wave, and said it is designed as a mostly porous structure to allow it to withstand winds of up to 186 miles per hour. Berkowitz says the design has been engineered and tested in wind tunnels several times.

Though some wags have compared the tower to various phallus-like objects, most people seem to like it, said Berkowitz, even as he chuckled over an online comment by one woman who said it reminded her of a sex aid.

Berkowitz also said SkyRise’s design and mix of attractions have no rival among the score or so of popular and profitable observation towers around the world, most of which are shaped like pointed spires, including Tokyo’s 2-year-old Skytree, which attracted over 6 million visitors its first year.

“I can tell you I’ve visited 12 towers around the world, and there’s nothing that approximates what we’re trying to do,” he said in an interview. “This is a totally unique design. It’s going to be a symbol of the new Miami.”

The deal also requires Bayside to embark on extensive renovations demanded by the city. Some officials, including City Commissioner Marc Sarnoff, whose district includes downtown and who chairs the Downtown Development Authority, have long complained that General Growth has allowed the property, which opened in 1987, to become rundown.

On a recent visit, sections of the complex, including common areas, the food court and some restaurants, appear dated and even dingy. Signage is often cheap-looking, railings are corroded and some outdoor dining areas are cluttered. Still, General Growth says the complex receives over 20 million visitors a year.

Sarnoff says he wholeheartedly supports the SkyRise proposal, but questions whether the agreements require Bayside to do enough to improve its appearance and maintenance.

“The lease requires it be kept in a first-class condition. It’s not even second-class condition now,” Sarnoff said. “My paramount concern is that we see a significant change in the capital infrastructure and maintenance of Bayside, because it needs a lot.”

The agreements would extend Bayside’s lease, which still has 46 years to run, by an additional 53 years.

City administrators say they will hold General Growth’s feet to the fire. The agreements not only enumerate improvements — including new flooring, paint and finishes, lighting, restrooms, repairs to worn stairs and a total redo of the food court — but also include renderings detailing how they should look when done, said Deputy City Manager Alice Bravo.

In addition, Bayside will be required to add two levels to its three-level garage and cover its blank garage facade on Biscayne Boulevard — where the Bayside sign now sits on a landscaped plot — with 17,000 square feet of new shops opening to the sidewalk, Bravo said. Critics have long complained that the garage wall constitutes a dead spot along the boulevard and that Bayside’s design isolates it from the street.

“The idea is that a street is more inviting if you have activated storefronts rather than just the side of a parking garage,” Bravo said.

The retail operations and SkyRise together should prove profitable for Bayside’s operator, she said. Because SkyRise would sublease from Bayside, the tower also must pay rent separately to the mall operator, starting at $1.35 million a year, and improvements made by its operator should be commensurate, the city says.

“We think that it will be a benefit to Bayside,” Bravo said. “We see the renderings of SkyRise, and we see it’s a modern, up-to-date design. We want Bayside’s appearance to improve as well to match that.”