Team to negotiate lease for Watson Island hotel-marina development
By Paola Iuspa
Miami City Manager Carlos Gimenez said he is ready to name a team that will negotiate a lease with Flagstone Properties for a mega-yacht marina, hotels and retail on Watson Island.
What he can not control, Mr. Gimenez said, is whether he will remain in his post to appoint and hear recommendations from this group, once the new mayor takes charge. Gimenez said Tuesday that he will continue as city manager, if asked.
The new mayor takes office Monday.
If he stays, Mr. Gimenez said he will immediately appoint city employees and professionals from the private sector to bargain with the developer. Dena Bianchino, assistant city manager, is in charge of the lease for the City of Miami. But her role also could change along with the new administration.
"We are beginning negotiations this week," said Judy Burke with Shutts & Bowen, Flagstone's land-use attorney. "We look forward to moving on to the next step in the process."
Both sides agreed "it will be a complicated deal," Ms. Bianchino said.
"This is a very large complex and very important for the developer and for the city," Ms. Burke said.
The proposal, approved by public referendum last week, calls for the city to lease 13.4 acres in the northwest corner of the manmade island to Flagstone to build the $281-million Island Gardens mixed-used project.
The lease would be for 45 years. In return, the plan calls for the developer to pay the city at least $1 million a year during construction, expected to take about 3 years. Once the complex opens, Flagstone would pay $2 million a year in guaranteed minimum base rent, plus 1% of total gross revenues and 2.5% from timeshare license sales.
Ms. Burke said the lease payment would start from the moment the city issues the building permit. Flagstone officials have said they planned to start construction by the first quarter 2003.
What needs to be clarified during negotiations is whether the developer pays the $2 million from the time the entire complex opens or from the time the upland portion opens. Experts have said the construction of the mega-yacht marina could take much longer than the balance of the project because of the complexity of those permits.
The current plan also promises to have more than 60% of the area open to the public.
During negotiations, the financial terms could improve and the design could change, but not drastically, Ms. Bianchino has said. City officials think reaching a compromise could take about six months.
Mr. Gimenez said a change in the administration, prompted by the new mayor, should not delay the process.
Ms. Burke said her client would not be able to apply for a building permit until agreements are signed. But she said Flagstone could go before the city commission at any time to request a major-use special permit, which would signal approval of the conceptual plans and include a series of public hearings.
"For that," she said, "we don't need to have a lease."
Ms. Bianchino said the city is hiring two appraisal companies to make sure "the money they offer is fair."
The city also must apply to the state for a land-use change. When the state deeded the island to Miami in the 1940s, it was tied to a condition the city use the island for public use. Flagstone's project is commercial.
"We did the same thing with Parrot Jungle," Ms. Bianchino said, referring to another tenant preparing to move to Watson Island. "The state approved the change without any problem."
The Flagstone proposal includes two high-end hotels surrounded by luxury shops, 14 restaurants and a fish market encircled by gardens and artwork.
In partnership with Fairchild Tropical Garden and the Historical Museum of Southern Florida, the proposal calls for saltwater gardens and a maritime museum.
Flagstone - with offices in Miami and Orlando - is led by Mehmet Bayraktar of Turkey, who is CEO & chairman of a board that includes Sherwood 'Woody' Weiser of The Continental Cos. and Eric Kuhne of Eric Kuhne & Associates Architecture Landscape Urban Design & the Civic Arts.
The three principals previously have been involved in developing waterfront projects, including Carousel Shopping Center in Istanbul, Ritz-Carlton Hotel in Key Biscayne, Darling Park in Sydney, Australia, and Bluewater in England.
The Miami Children's Museum now under construction and the planned Greater Miami Visitor & Aviation Center also will be on Watson Island.