Coconut Grove Hotels Catch Big Break On Business Improvement District Assessment Dues
Written by Yudislaidy Fernandez on February 19, 2009
By Yudislaidy Fernandez
Coconut Grove’s hotels got a big break on their assessment dues at the approval hearing for the long-awaited Coconut Grove.
The Coconut Grove Playhouse also asked to get exempt from paying an assessment for its parking garage but was rejected.
After a four-year effort, Grove commercial property owners voted in November to create a self-taxing business improvement district to pay for enhancements and market the Grove.
Miami city commissioners last Thursday heard the cases of half a dozen property owners seeking cuts in their assessments.
Representatives of participating hotels — the Doubletree, Wyndham Grand Bay and Residence Inn by Marriott — sought reductions, arguing the hotels already invest significant marketing dollars to promote the area.
The proposed assessments, based on the hotels’ room totals, called for 196-room Doubletree Hotel to contribute $18,000 and 140-suite Residence Inn to pay $16,000.
Barbara Wendel, general manager at Doubletree Hotel, argued the hotel should not pay $18,000 in taxes because it already spends $80,000 to advertise the hotel and the Grove and provides the city with bed tax revenues of 6%.
"We believe we have provided extra funds to the city in this fashion," she said.
Sam Kelly, general manager of Residence Inn by Marriott, said the tagline of Coconut Grove is in all its advertisements.
He said the hotel spends about $275,000 to advertise and market the hotel’s location and generated $410,000 in bed-tax dollars last year.
David Collins, executive director of the Coconut Grove Business Improvement Committee, agreed the hotels do spend a lot of money already to advertise the Grove as a destination and suggested annual flat rate of $10,000 for each of them.
But Commissioner Mac Sarnoff, who represents the Grove, pushed for a higher assessment of $12,000 and won support of the commission.
"I think these hotels are getting a great deal based on BID dollars and BID resources towards marketing, cleanliness and safety," he said.
The adjusted rate was set to $12,000 for all the participating hotels.
In the most difficult financial times, Mr. Collins said, property owners felt it was important to invest in improving business for the Grove.
Improvement district benefits include cleaner streets, more security, increased marketing and more business for retailers and restaurant owners, he said.
But not everyone got a tax break.
Coconut Grove Playhouse, shut down since 2006, sought to pay zero for the parking lot it leases to a private company, but commissioners refused.
Under district rules, parking facilities used by building tenants are exempt from paying an assessment, but those that charge patrons to park must pay.
Miguel Lara, an attorney representing the Playhouse, argued that revenues from leasing the parking are used to maintain the landmark.
"The main purpose is charitable purpose," Mr. Lara said, adding the revenues pay for the theater’s utility bills and regular maintenance.
Art Noriega, executive director of Miami Parking Authority, said the 42,000-square-foot parking lot should pay its dues because patrons are charged.
Mr. Sarnoff pointed out the district already has to spend money to patrol the lot because the parking operator doesn’t provide adequate security.
Commissioners agreed the Playhouse should pay its $6,300 parking assessment.
Coconut Grove’s improvement district is to generate a little under $1.4 million its first full year: almost $500,000 from district taxes and $900,000 from city funding, Mr. Collins said.
For the first assessment period, since the district’s approval comes in the middle of the fiscal year, property owners are to pay six months totaling about $230,000, he said.
Other property owners, including the CocoWalk retail complex, got their assessments reduced because the city incorrectly included tenant parking — exempt from a property’s countable square footage.
CocoWalk was left paying an annual assessment of $68,623.
Assessment bills are to reach the mailboxes of participating businesses in April.
Michael Manno, property manager of Office in the Grove at 2699 South Bayshore Drive, also asked commissioners for more fair representation in the improvement district board.
"Each way you look at it, this board is clearly focused on restaurants, retail and not the commercial side at all," he said. "We ask to have a say in the matter."
Mr. Collins said in a later interview the improvement district’s board is to have several commercial property landlords.
The city commission is to give the improvement district final approval in March.
Commissioner Tomás Regalado said the improvement district’s creation is an example of how businesses can come together to achieve common goals.
"This is an example of what the business community does when they see that they need to do something by themselves and not depend on government for everything."