Miami Beach

Traffic, public benefit top talking points in Miami Beach hotel debate

This rendering shows the overhead view of the proposed convention center hotel in Miami Beach. The 800-room hotel would be 288 feet tall.
This rendering shows the overhead view of the proposed convention center hotel in Miami Beach. The 800-room hotel would be 288 feet tall. Provided to the Miami Herald

To build or not to build — that is Miami Beach’s question.

The possibility of a new 800-room hotel for the Miami Beach Convention Center is stoking debate over the size, traffic impact and public benefit of the new development. Emotions are flaring in public forums and on social media. Skewed political advertisements are adding a lot of noise to the fray.

And with a presidential primary drawing a higher number of voters to the polls, more than 1,000 residents have already cast ballots.

The opposition considers the proposed building an oversize imposition in a relatively flat area in the middle of South Beach that will put more cars on the city’s congested streets.

Proponents want the city to lease 2.65 acres of public land behind The Fillmore Miami Beach at Jackie Gleason Theater to Portman Holdings, an Atlanta-based developer who would privately finance the construction of a $400 million, 288-foot-tall hotel linked to the convention center, which is already undergoing a $600 million renovation to expand meeting space and upgrade technology.

At 288 feet, you either have a problem with the size of the hotel in that location or you don’t. But both sides are fueling an intense debate on two other hot-button issues surrounding this hotel: traffic and public benefits to the city.

Traffic

The city commission had planning giant AECOM do a traffic study in advance of the hotel ballot question back in 2014. That December, commissioners voted 6-1 to accept the study, with longtime hotel detractor Jonah Wolfson voting no.

The study made projections that assumed the hotel would be 75 percent occupied. It used traffic data from three weekdays in April 2013, and predicted that three nearby intersections would have more congestion during a consumer show if the hotel was built.

The document also notes a difference in traffic impact between consumers shows, events such as auto shows that bring in day trippers, and conventions, or industry meetings that attract out-of-towners who fly in. According to the study, fewer cars will be on the road with more citywide conventions than consumer shows.

Last year, the Miami Beach Convention Center hosted five conventions and 55 consumer shows. Officials from the city and local tourism and hotel groups want to alter that ratio by attracting as many as 25 to 30 conventions.

Read about support for the hotel from hospitality professionals and opposition from residents and preservationists

Hotel proponents say that the renovated convention center will be a magnet for citywide conventions, not the trade shows it usually hosts that bring commuters from Miami-Dade County to the Beach. The thinking is that conventioneers are more likely to walk around to nearby amenities, such as Lincoln Road, or use alternative transportation, such as taxis and ride-sharing services, to get around.

South Beach resident Louis Solish said that in his years in the media industry, he did not rent cars when attending conventions. He said all the other development on the Beach is what’s driving traffic problems, and the hotel won’t really make it worse.

“They fly in. They fly out,” he said. “They don’t rent cars.”

Others like community activist Jo Manning, who worked in the publishing industry for 25 years and traveled to several conventions as an attendee and exhibitor, said she never used a car once she reached the hotel. When she was not doing business at the convention, she’d get around on foot.

“Lincoln Road is going to do so well,” Manning said. “And local restaurants and shops.”

But even some Beach business owners say the new hotel will inevitably create congestion — day trippers, alternative transportation or not.

“These people still need to come out though [Interstate] 95 and the Venetian [Causeway] and they need to get there,” said Nicola Meyer, vice president of revenue and distribution at family-owned South Beach boutique hotels Circa 39 and The Palms Hotel and Spa. “Imagine there is a huge convention and everyone wants to see the Wynwood district, they will still go there somehow, they will cause traffic somehow.”

Other business owners are more skeptical of making traffic a central issue, saying the congestion is part of a larger issue that does not play directly into the convention center hotel.

“That hotel is going to generate traffic, yes, but is it generating more traffic that there is now? I don’t think so,” 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.

Other residents are wary of any new development at all because of the present morass of cars that can clog the island any day.

“It’s anybody’s guess what the traffic is going to be like — it’s already bad,” said Jane Losson, who lives two blocks away from the proposed site of the hotel. “I am very skeptical about traffic studies in general.”

Public benefits

Both proponents and the opponents have thrown around misleading numbers for how much money the hotel is projected to bring in on a yearly basis, presenting low and high figures that suit their goals.

Mailers and television ads backed by Portman and the Greater Miami Convention and Visitors Bureau imply Miami Beach will receive an average of $24.6 million in public benefits a year from the lease. That’s true, but only in that it is an average of lease payments and taxes over the course of the 99 years.

By the same token, several lower figures are being shared by local activists on social media.

The city’s financial analysis shows rent payments totaling $418,557 after the hotel’s first year in operation, 2018. That’s a combination of a minimum rent and variable rent, depending on revenues.

The first three years that are 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 operating 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.

When that figure is added to the taxes that would have to be paid by Portman, such as hotel bed taxes and resort taxes, the projected public benefit for the first year is about $4.8 million.

This projection for annual dollars to the city increases to about $10.1 million by the hotel’s fifth year of operation, $13.8 million in year 30 and $25 million in year 60. This assumes certain revenue hurdles are cleared each year.

“When I heard that we’re going to get $25 million for projects in Miami Beach, I thought that was a great idea,” said Tom Richerson, a resident and commercial real estate developer. “But when I went and looked into the numbers, it doesn’t quite add up.”

Currently, the land proposed for the hotel has a small city office building designed by Art Deco pioneer Henry Hohauser, a back room of the Fillmore and a parking lot that generates $263,700 annually for the city.

Should the 99-year lease be approved, Portman would use $400 million of private financing to build the hotel. No public subsidy would contribute to this. The project would have to clear one of the city’s land use boards, the Design Review Board, before shovels hit the ground.

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.

Joey Flechas: 305-376-3602, @joeflech

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