Bahia Mar Redevelopment Plans Spark Debate
The Bahia Mar Hotel is one of Ft. Lauderdale’s most important properties. The marina is host to the Ft. Lauderdale Boat Show which draws more tourists to the Greater Ft. Lauderdale area than any other single event except perhaps the Super Bowl. The hotel is located along the prime area of the beach and the access to the ocean from the marina is only a short ride. However, the hotel is old and is lacking modern convention and ballroom amenities. There is limited retail space and the land is under utilized.
Four years ago, Tate Capital and Rok Investments purchased the ground lease and hotel and marina and immediately announced plans for re-development. The plans included 625 condominium units, complete renovation/modernization of the 236-unit hotel, 24,697 square feet of retail space, a 31,000 square foot supermarket, 27,263 square feet of restaurants, 44,725 square feet of office space, 17,123 fitness center, 220 boat slips and 2,167 parking spaces. The condominiums would be built in two 39-story towers, by far the tallest structures in Ft. Lauderdale.
To accomplish this, the developers would have to renegotiate the land lease as the hotel and marina sit on city-owned land which is subject to a 50-year ground lease. The developers and city negotiators ironed out a new 50-year lease with a 50-year option beginning at $1,000,000 per year. In addition, the developer would lease the Jungle Queen property for $150,000 per year. New revenue sharing provisions were included increasing revenue streaming to the city. The Developer would pay 1.1% of each condominium sale to the city. There would also be a $1.20 per square foot assessment for each unit paid to the city. In addition, a 4.25% annual assessment for hotel, office, retail and marina space would be paid until construction begins. This amount would reduce to 3% upon the start of construction and increase to 4.25% for hotel space and 5% for office, retail and marina space upon completion.
All of the foregoing was contingent upon city approval and upon developer entering into a new agreement with the Boat Show. This presented a Catch-22 for the developer as the plan could not be presented to the Boat Show until the city approved and the city wanted assurances that the Boat Show was committed.
Regardless, the plan moved through city staff and planning and zoning in November and December, finally reaching City Commission on February 3. The Commission approved moving forward to enter into lease negotiations. However, the Commission delayed action on the re-zoning and plan until April following lengthy discussion and public comment. The biggest concern is the height of the towers. Residents complain that the towers will block views of the marina and will cast shadows on the beach.
The Commission’s actions in voting to move forward with the new lease but delaying action on the re-zoning sends a very mixed message. The proposed lease contemplates revenue sharing that the developer agreed to based on a development plan that the city had reviewed and offered input on. The lease terms reflect that plan. Yet the city has delayed action on that plan, ostensibly because of height, which likely will cause a reduction in the number of units and/or square footage that the developer may achieve. Any such reduction should affect the revenue sharing formula in the lease. One has to wonder whether commissioners genuinely want to reduce the height and density. The city and developer will have to regroup and determine whether the condominium units can be moved elsewhere on the property and if so, at what cost, and to whom.
Regardless of how the costs are eventually re-allocated, I can’t see the city allowing this project to fall apart. Too many good things have been happening in Ft. Lauderdale and the Bahia Mar property is an iconic location which has potential to be a good source of revenue to Ft. Lauderdale for 100 years.
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