Bidders weighing future uses of Miami Arena
By Sherri C. Ranta
Top dollar, or more than $25 million, is what the City of Miami hopes to attract Aug. 10 when the 16-year-old Miami Arena goes on the auction block.
As city officials hope to unload the revenue-losing entertainment complex, potential buyers are weighing the future of the 347,000-square-foot structure and its land on North Miami Avenue in the Southeast Overtown/Park West area.
Prospective buyer Hank Sopher, New York businessman and president of Quik Park of Florida, a parking lot company with properties in Miami, has a contract to buy the complex for $25 million. His bid and a contract, signed in May, set the opening price for public auction of the property.
Barring higher bids, a purchase by Mr. Sopher could take the property in at least three different directions.
He could sell to a residential or commercial builder and let that firm handle redevelopment, said Kathleen Davis, president of Weston-based Sports Management Research Institute.
Marketing materials for the arena auction show a potential for multi-family development - 300-units per acre - on the 4.7-acre site. Commercial uses could include office, retail and mixed use.
Known as a parking structure developer, Mr. Sopher also could build his own lot or multi-level garage on the site, Ms. Davis said.
"A 10,000-space parking structure at $25 to $30 a day [per space] adds up quickly," she said.
The complex could be retained for sports event and special events, officials suggest, but that has already proven to be financially draining for the city.
Mr. Sopher did not return telephone calls to his office last week.
The arena, former home of the NBA's Miami Heat, NHL's Florida Panthers and University of Miami's men's basketball team, loses money every year.
"Most parties agree, when the arena was constructed [in 1988], it was beautiful and practical at that time," Ms. Davis said. "But it didn't have proactive vision when it came to suites and amenities. It outlived its usefulness in a very quick period of time."
What is the highest and best use for the property? A study should be conducted as to what is legally permissible, physically possible and financially feasible, said Michael Cannon, managing director of Integra Realty Resources - South Florida, a real estate market analysis, valuation and consultation company.
"That should never been built there in the first place. It is the biggest mistake perpetrated on the taxpayers. The City of Miami floated a $58 million bond to build it," he said.
A "gazillion" ideas have floated around town for reuse of the property, Mr. Cannon said, but have never stuck. Suggestions included use as an inter-modal center for urban transportation, he said, with a baseball stadium situated atop the center. "That fell on deaf ears."
The arena is adjacent to Metrorail, Miami's urban transportation system, a quarter-mile from Interstate 95 and three blocks from American Airlines Arena, current home of the Miami Heat, and Bayside Marketplace, a city shopping and entertainment destination.
The movers and shakers of Miami's Overtown, Mr. Cannon said, are another factor in the redevelopment of the site.
"It's a controversial location. If it doesn't have a use that's marketable, the marketplace will reject it," Mr. Cannon said. "It will be interesting to see what happens. The city seemingly has a fall-back position with Sopher's contract."
Surrounding property owners, especially those owning parking lots used by arena-goers, could be a factor in redevelopment, observers say. Another consideration will be whether they are open to selling their land to the future arena owner or to others interested in redevelopment.
The arena property is part of a Federal Empowerment Zone.
At least two parking lots are adjacent to the arena but are not included in the auction proposal.
Miami-based Properties of Hamilton Inc. has seven lots on North Miami Avenue and Northeast Eighth Street, according to county property records. The Cromer Co. owns at least three lots on Northeast Seventh Street. Flagler Development has a 75,475-square-foot parking lot at 605 NW First Ave.
Pompano Beach-based Fisher Auction Co., the company overseeing the auction, is seeing some out-of-town interest, said Lewis B. Fisher III, company CEO. At least two prospectuses have sold since July 5, the day they became available. A few others, he said, have downloaded the order form.
How many bidders does Mr. Fisher expect to show up at the auction?
"Too early to tell," he said. "People are doing their fact-finding, studying the documents and doing pre-sale due diligence.
"We're certainly doing everything to create the perception of value and create the vision that could be there."
Fisher is advertising the auction in trade and industry publications, through direct mail and broker e-mails, he said, that number in the thousands. Advertisements are to run five weeks in the Wall Street Journal.
Potential bidders must register and provide at least $3 million in upfront funds just to bid, Mr. Fisher said.
"We're holding the auction at the arena," he said. "Where we have it within the arena will be dictated as to how many will be in attendance. Certain sections will be set up for the press, bidder information area, security and entertainment."