Miami Beach

Miami Beach voters to decide on new 25-story hotel for convention center

Renovation of the Miami Beach Convention Center

Renovation of the Miami Beach Convention Center continues on Friday, Feb. 25, 2016. Renovations include a future northern expansion area which will contain an enclosed loading dock a 60,000 square foot ballroom on the second level, overlooking a r
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Renovation of the Miami Beach Convention Center continues on Friday, Feb. 25, 2016. Renovations include a future northern expansion area which will contain an enclosed loading dock a 60,000 square foot ballroom on the second level, overlooking a r

As early voting begins Monday, Miami Beach voters will decide if a 25-story hotel will replace a nondescript parking lot adjacent to Miami Beach Convention Center.

If 60 percent of voters want it, the lot and a small city office building would be demolished to make way for an 800-room hotel that would rise 288 feet behind the Fillmore Miami Beach at Jackie Gleason Theater. A developer wants to lease the city land and privately finance a $400 million hotel that would connect to the convention center.

But the plan’s survival depends on the outcome after ballots are counted on March 15.

For local tourism leaders, the hotel is an essential part of the Miami area’s emergence as a market that can sustain citywide conventions. Spending $600 million to renovate the convention center would be wasted if the center doesn’t have a headquarter hotel, they say.

“Having this hotel is like having indoor plumbing — it’s a necessity,” said William Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau. “We are making a major public investment in what would be a state-of-the-art convention center. But, in the marketplace today many of our competitors have one, two, three and somehow four adjacent headquarter hotels.”

Having this hotel is like having indoor plumbing — it’s a necessity.

William Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau

The vote for a hotel is the result of highly publicized battle waged two years ago when an earlier conception of a revamped convention center district drowned in a wave of political change. That’s when several newly elected city leaders, including Mayor Philip Levine, decided to take a simpler tack.

Instead of a massive 52-acre redevelopment, the city took a two-pronged approach: Get the Miami Beach Convention Center renovated on its own and lease public land nearby to a developer for a privately financed hotel.

Step one has begun, with renovation of the convention center under way. Now the hotel that tourism chiefs have longed for has ignited a debate over whether the facility will be a boon for the local economy — or a boondoggle that will create more traffic snarls and overwhelm the neighborhood.

Another hotel-convention center combo is in the works across the bay in downtown Miami. The Beach wants to build its hotel first and get a jump on attracting convention business.

“We understand the city of Miami is going to be building a conference center and hotel,” Levine said. “And they should. So I would imagine that’s good competition.”

Terms of the lease

The question for voters centers on 2.65 acres at the northeast corner of 17th Street and Convention Center Drive, behind the Fillmore, just north of Lincoln Road and a few blocks away from the New World Symphony complex.

The city has negotiated a ground lease with Atlanta-based Portman Holdings that would allow the developer to build the hotel on this land.

Here are the details of the deal:

▪ 99-year lease for hotel

▪ Portman would privately finance the $400 million project

▪ 320 on-site parking spaces

▪ After the first three years, considered a “warm-up” period for the new hotel as new convention business is projected to come in, the Beach would receive a minimum fixed rent or 2.5 percent of the gross operation revenues, whichever is greater. In years four through seven, that minimum rent is set around $1.5 million annually and goes up slightly each year.

▪ Hotel would set aside 80 percent of its rooms for large, citywide conventions booked 30 months in advance. These rooms would be available at block rates below market prices.

▪ Facility would include a 26,500-square-foot grand ballroom and a 21,000-square-foot junior ballroom.

The hotel’s rooms would rise in a curved structure set atop a pedestal at the same height as the convention center. The base would hold the ballrooms, restaurants and one small sundry shop. A pool deck would be built atop the base inside the curve, facing the convention center.

 
 

Support

Tourism chiefs say that in the convention business, an adjoining hotel is like having a golden ticket.

It opens the door to healthcare, technology and finance groups of 10,000-plus — the kind of affluent visitors that will energize a local economy, Talbert said.

In recent years, the Miami Beach Convention Center hosted a variety of major trade and consumer shows but no conventions of the scale and caliber that tourism officials say will come once the center’s renovation is completed in 2017.

288 feet Height of the proposed convention center hotel

In 2014, only five conventions were booked at the convention center, said Rolando Aedo, chief marketing officer for the bureau. The center had some success with a 10,000-person dermatology conference a few years ago, he said, but a lack of modern amenities and a hotel means fewer big-time bookings.

“They have said, ‘Look, we love you, but we are not going to come back,’ ” Aedo said.

In the past, convention delegates have had to stay in various high-end and boutique hotels in South Beach, posing a challenge for meeting planners who must book room blocks at multiple venues.

Convention planners skip the stress and instead book in other major cities with convention center/hotel combos, including Orlando, Atlanta, Chicago, Washington, D.C., and New York.

“Most cities that have convention centers that have been there a while but have not had the hotel package are getting the hotel package because that’s a huge competitive advantage,” said Chris Vranas, executive director of the American Association of Orthodontists, which may hold its annual 2023 convention, with 19,000 attendees, in Miami Beach.

That’s if the hotel is approved.

$100 million Amount of incremental revenue projected to come to Miami Beach per year with the convention center hotel

The tourism bureau has booked four conventions through 2028, with 12,000 to 19,000 attendees each, that say they will come — if the hotel is built.

Miami Beach’s struggle to attract large conventions has meant lost business in recent years, said Wendy Kallergis, president and CEO of the Greater Miami & the Beaches Hotel Association.

Most smaller South Beach hotels say they support building a major convention center hotel in hopes of attracting overflow bookings when the main headquarter hotel is filled, Kallergis said.

Also, boutique hotels expect overflow business when larger chain hotels are filled with convention delegates and other tourists, said Aedo of the tourism bureau.

But some hotel owners are still skeptical of the size of the proposed high-rise.

One concern among hoteliers is competition for workers. The new hotel is expected to need 440 employees and the Beach labor pool may not support that, said Nicola Meyer, vice president of revenue and distribution at family-owned South Beach boutique hotels Circa 39 and The Palms Hotel and Spa.

Meyer said that although she supports a new convention center hotel, she already has trouble finding Miami-area employees to work in the Beach and she must recruit workers from Colombia, the Philippines and the Dominican Republic.

She also wonders who will fill a large headquarter hotel when there are no conventions in town.

Tourists, private parties and smaller conferences will fill the new hotel year-round, according to Roger Zampell, Portman’s senior vice president of development.

“It’s why the [proposed] hotel has its own ballroom,” Zampell said. “To keep the hotel full when the hotel is not full from the convention business.”

Miami Beach hotels added about 1,500 rooms in the last year, according to the tourism bureau, creating more competition for guests.

A big convention in town may be just the thing to fill up rooms, said Mike Palma, executive vice president and managing partner for the Clevelander South Beach Hotel on Ocean Drive and Essex House Hotel on Collins Avenue.

“If you don’t have the right groups, the right sizes, no one is going to fill those [nearly] 2,000 rooms,” Palma said.

Palma said his hotels are impacted when conventions — regardless of size — come to town.

You are going to reignite Miami Beach. Yeah, it’s going to hurt sometimes but the long term vision is going to help.

Mike Palma, executive vice president and managing partner for the Clevelander South Beach Hotel

Convention attendees usually stay longer than the average weekend tourist and are here during the crucial weekdays when tourist business is low, said Peggy Benua, general manager at boutique hotel Dream South Beach on Collins Avenue.

“When you have a group like that, especially for a little boutique hotel, that could make your whole period,” Benua said.

Opposition

Not all onlookers want to see this plan realized.

Nothing happens without 60 percent voter approval — a threshold created in the aftermath of the 2013 election cycle, where one of the hotel’s most vocal opponents, then-Commissioner Jonah Wolfson, led the charge to make it harder to approve public land leases in the convention center district.

Wolfson, whose term ended in November, has again emerged as a dissenting voice against the hotel, this time as a former elected official. His main contention: a bad traffic situation in South Beach will only get worse, and no effective mass transit is in place to accommodate such a development.

The traffic is horrible … we don’t need any more hotels.

Julia Avila, Beach resident who lives near convention center

He and others consider the methodology of an oft-cited traffic study flawed because it used traffic data from three weekdays in April 2013. That study does say that three nearby intersections would probably see more congestion with a hotel.

“It’s a bizarre and untrustworthy study that isn’t worth the paper it’s printed on,” Wolfson said this week.

The pro-hotel crowd insists there will actually be less traffic because the kind of meetings the new center and hotel will attract bring out-of-town visitors who will use taxis or ride-sharing services instead of local day-trippers driving in for trade and consumer shows.

Critics also wonder whether other nearby hotels will agree to discounted room blocks for conventioneers who don’t stay in the headquarter hotel.

Nobody else has a room block but us. It’d be nice if people offer up a room block. It would help sell the convention center.

Jack Portman, Portman Holdings

Current Commissioner Kristen Rosen Gonzalez has changed positions on the hotel since her successful election campaign last fall. She opposes the hotel’s size and location, saying it will worsen traffic and calling it on her Facebook page a “gargantuan imposition.”

Some residents have echoed these concerns.

“I am sure those who make the decisions don’t drive during rush hour morning or night,” said resident Marj O’Neill-Butler. “We are already overbuilt to a great extent. The infrastructure cannot support the amount of people trying to live or visit on the Beach.”

On Friday, the Miami Design Preservation League announced its opposition to the hotel.

“At 26-plus stories the proposed building is out of scale with this part of the city,” wrote Steven J. Pynes, chairman of the league’s board. “This site will place a high-rise tower squarely in the middle of a low-rise area of the city.”

Others say the city cannot withstand a large convention center hotel.

“The Miami Beach mayor and commission need to realize that the infrastructure can no longer support all the high-rises and hotels,” Susan Sonson said. “We need less development and more infrastructure to support what we already have.”

This article includes comments from the Public Insight Network, an online community of people who have agreed to share their insights with the Miami Herald and WLRN. Become a source at MiamiHerald.com/insight.

Early voting

Begins at 7 a.m. Monday at City Hall, 1700 Convention Center Dr., and at the North Shore Branch Library, 7501 Collins Ave.

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