Miami could be getting a new public administration building next to an existing one on the Miami River in 2023 if city commissioners finalize a development deal.
The proposal calls for a minimum 230,000-square-foot, 20-story office building and an adjacent 1,000-space parking garage with about 700 spaces for the city and the remainder for the developer.
Miami-based Adler Group LLC and the city are on the cusp of finalizing a deal for construction of the administration building and up to three residential buildings.
The project is set for nearly 5 acres northeast of the river Interstate 95 and south of Southwest Third Street.
The City Commission is set to vote on agreements June 27 after action was initially scheduled for Thursday’s meeting.
The project dates back to at least 2016 when the city noted its staff operations were outgrowing the Riverside Center at 444 and 460 SW Second Ave. Miami issued a call for developers in February 2016 and picked Adler by year-end.
The two-part solicitation offered construction of the new city office and the sale or lease of the property where the Riverside Center now sits.
“What the city was looking for was the ability to try to monetize their current site on the river to get money from that to help pay for the new headquarters,” said Adam Mait, vice president of acquisitions and development for Adler Group.
The complex deal involves a land swap. Adler affiliate Lancelot Miami River LLC owns a 1.6-acre vacant lot at 230 SW Third St. north of the city’s 2 acres at 444 SW Second Ave. and 1.1 acres at 460 SW Second Ave. The city lots are the sites of the Riverside Center and its garage.
Under the new proposal, Adler would lease the two Riverside Center lots and build its project there, while the city would buy the western portion of Adler’s lot at 230 SW Third St. for the office.
Adler plans to lease from the city for about six years and then buy the property for $69.4 million, said Mait, Adler’s acquisitions and development vice president.
“It’s all dependent on market conditions, and I certainly don’t know from today, five, six years out what the market is going to look like,” he said. “But I do believe we have the intent to purchase it likely early on in the term versus significantly later.”
The annual rent would start at $3.62 million and increase 1.5% per year. In the sixth year, the rent would be the greater of the rent with all the annual increases or 3% of gross revenues. Adler also would pay a 2% capital transaction fee.
At the same time, the city would buy land from Adler for the office building, and Adler would be the development manager for a 4% fee of actual expenditures.
The city expects its new office and garage to cost about $140 million, which might be funded through a bond or other forms of financing.
Adler’s plans to start its project with a 36-story apartment tower with 300-400 units just east of the new administration building on Adler’s lot.
After that, it would build two condominium towers at 50-60 stories on the two city lots, although that plan may change down the line, Mait said.
Adler also must improve the pubic river walk along the site, pay a living wage and price 10% of its units at workforce housing rates. Mait said at least some of the workforce housing would be in its apartment tower.
Construction on the administration building would start within a year. and that building and the apartment tower should open in 2023, Mait said.
Commissioners are to consider a lease agreement for the city lots as well as a development management and construction agreement with Adler. Also, they are to vote on issuing $150 million in financing to cover the office development.