SkyRise Miami & Bayside lease approved by Miami Commision

The operators of Bayside Marketplace and the developer of SkyRise Miami are happy to find that Miami commisioners signed off on 99-year deal to refurbish the rundown retail and entertainment center and build a 1,000-foot observation tower on the bay. The signed off happens last Thursday and it came with a unanimous approval, which came after plenty of hand-wringing over what would happen if the tower isn’t built — follows a move two weeks ago to seek a public vote required for waterfront projects on city land.


Without a deal in place, the referendum would have been meaningless. “We’re ready to make our campaign. We’re ready to convince the voters that this package is the best thing for the city of Miami,” SkyRise developer Jeff Berkowitz told commissioners.


Berkowitz has proposed a $400 million hairpin-shaped tower that would comprise three observation decks, a fine-dining restaurant, a nightclub, a ballroom, a store and three theme-park-style rides. Bayfront would improve and expand the marketplace, which sits on land leased from the city.


To build the privately financed tower and make the renovations, Berkowitz and Bayside need voters to pass an Aug. 26 referendum. And on Thursday they needed the City Commission to pass two complex lease agreements and a minority contracting deal.


Under the approved agreements, Bayside operator General Growth Properties would pay a $10 million upfront sum to the city. Bayside will also hike its rent paid the city to $2.3 million and commit to a minimum $27 million in improvements, said Henry Torre, the city’s outgoing director of public facilities.


Berkowitz, meanwhile, will pay Bayside rent, and will pay the city a little more than $1 million a year once he builds and opens the tower on a 1.85-acre parking lot, which he is subleasing behind Bayside.


He plans to finish the tower by the end of 2017.


Commissioners, however, grew frustrated when they learned that Berkowitz wanted to change language in the deal that would have required him to pay the million dollars to the city after four years even if the tower isn’t built.


“History tends to repeat itself,” said Commissioner Frank Carollo, mentioning large, voter-approved projects that haven’t quite panned out. “For [Jungle Island] we had voter approval and also for [a yacht marina on] Watson Island we had voter approval. Apparently we’re going to have to amend the contract now.”


The tweaked agreement now gives Bayside the ability to take over the tower’s construction if Berkowitz fails. If after six years they too can’t build the tower, the commission will renegotiate the leases.


Berkowitz, who says he’s invested millions of his own dollars into the SkyRise project, insisted the concerns were unnecessary.


“The bottom line is I’m going to build the tower,” he said.


The deal — which amends lease agreements that otherwise would have remained intact another 46 years — also calls for annual inflation increases in both leases, grants the city a cut of gross revenue from both SkyRise and Bayside, and brings the city more money from expanded parking. Torre, who announced Thursday he is resigning and taking a job at a private company, said Miami could reap as much as $293 million from the agreement by 2060, at which point the lease becomes even more generous to the public.


Bayside and Berkowitz also agreed Thursday at the urging of Commissioner Keon Hardemon to pay a sum of $350,000 to the Liberty City Community Revitalization Trust, and then another $200,000 annually. They already agreed to pay $350,000 a year to the Miami Bayside Foundation, created to encourage minority-owned businesses at Bayside.


Hardemon said the money paid to the Liberty City foundation will be accounted for, and will be used to fund improvements in “a place in our city where we have the greatest need for economic development.”