Florida Marlins Garage Retail Dining Sites Meet Resistance
Written by Jacquelyn Weiner on August 4, 2011
By Jacquelyn Weiner
Real estate firm NAI Miami may have lost out on the Marlins garage retail-leasing gig, but its months of work on the project reveal the direction retail could take.
NAI’s response to a City of Miami request for letters of interest seeking a leasing agent for 53,281 square feet of retail in three of its stadium garages details several proposed restaurants, retailers that have said no and challenges ahead.
One major issue NAI confronted: "The immediate neighborhood [around the stadium] is a densely populated, heavily Hispanic, middle to lower income neighborhood," NAI wrote in its submission. "The new profile of the Florida Marlins season ticket holder, to date, is a Miami-Dade County resident in middle to upper income levels and not as heavily Hispanic."
Because of this, NAI initially targeted "higher-end entertainment, restaurant and retail uses" and conducted a national search "for ballpark related concepts."
This failed, according to NAI, citing Sluggers as an example.
Open since 1985, the sports bar and restaurant next to Wrigley Field in Chicago "initially expressed a high level of interest," in a Marlins-stadium location but rejected the site after visiting and "researching the immediate market," concerned that business wouldn’t remain profitable in the offseason.
"Multiple other higher-end entertainment, restaurant and retail uses were contacted and rejected the site because of the immediate demographics," according to NAI, "indicating they needed to be profitable 365 days per year and not just the 81 days when baseball is played."
NAI Miami was asked to begin stirring interest in the Marlins garage retail sites in early 2011 by the Miami Parking Authority, which recognized that the window of opportunity to seek tenants was shrinking.
The Marlins ballpark is to open in April 2012.
While the garages are being built and will be owned by the City of Miami, the quasi-independent parking authority is charged with managing city parking facilities.
However, either can manage retail within a city garage, so an agreement between the authority and the city outlining responsibilities for the garage retail is needed.
Miami commissioners voted last week to have City Manager Johnny Martinez move forward with that contract. The authority’s board was also to discuss the agreement at its meeting Wednesday.
However, retailers are expected to be open for business in less than a year, while the city has known its responsibilities in building the garages since signing the March 2009 stadium agreement with the Marlins and Miami-Dade County.
With no written contract stating who is to handle leasing and manage the garage retail, the Parking Authority asked NAI — which handles leasing at other authority properties — to initiate a "low key marketing plan" in early 2011 "with the full knowledge there was no formal commitment or obligation to engage NAI Miami as their leasing agent," according to NAI.
NAI said it had "just over 58% of the retail space" committed to under letters of intent from retailers/restaurants with submitted offers to lease the space.
Then at a June city commission meeting, stadium-area Commissioner Frank Carollo said he wanted to see what other real-estate firms could offer.
"Let’s welcome other leasing agents that have a strong, solid history of leasing," Mr. Carollo said at the meeting.
Two firms responded to the request: Terranova Corp. and NAI Miami.
A selection committee named Terranova No. 1. Commissioners approved Terranova unanimously last week.
While Terranova is new to the project, much of the initial legwork has already been done.
Terranova has not answered multiple inquiries as to whether it plans to utilize existing retailer agreements.
Spokeswoman Kelliann McDonald wrote in an e-mail that Terranova could not comment before commission approval. When asked the following week, she wrote that Chairman Stephen Bittel was unavailable for comment by press time.
NAI Miami President Jeremy Larkin referred specific questions on prospects to the company’s submission to the City of Miami.
According to the submission, uses proposed by interested retailers for space at the Marlins stadium garages include:
nPresidente Market & Café, a "neighborhood market and Latin café" taking up 8,438 square feet. The eatery would have a flexible layout, allowing a smaller market and larger eating space during baseball season and vice versa in the offseason.
n"An "elevated’ Pollo Tropical." Orders would be taken at a counter, with the rest of service — drinks, desserts and final payment — handled at tables by waiters.
nMenchie’s Frozen Yogurt, featuring a variety of serve-it-yourself mixable flavors and more than 40 toppings.
nTeriyaki Experience: a full-service, seated restaurant featuring Asian-style dishes and full liquor offerings.
nSonic Beach: a 5,500-square-foot Sonic restaurant open 24 hours a day, seven days a week, including waiter service and wine, beer and liquor.
Navarro Discount Pharmacy has also done a site visit, NAI wrote in its submission.
Retailers listed under "Meeting and Phone Conversations with Interested Parties" include Perdomo Cigars, Guayaberas Etc., Gilbert’s Bakery and Houlihan’s American restaurant and bar.
"Interested Parties Per Broker Contact" include Muscle Maker Grill, Quiznos, Brooklyn Bagels, Fuddruckers and GNC.
Among retailers that have said no, according to NAI’s submission: T.G.I. Friday’s, Dave & Buster’s, Shorty’s Bar-B-Q, Havana Harry’s, Chuck E. Cheese’s, CVS, Hurricane Grill & Wings, Lime Fresh Mexican Grill, Los Ranchos Steakhouse, Edible Arrangements, and Anthony’s Coal Fired Pizza.
The Marlins have yet to name in-stadium retailers or its "lead restaurant," but NAI mentions in its documents to the city that the team has had to change its expectations.
"Based on recent meetings with the Florida Marlins, their initial concept for their lead restaurant was a high-end dining experience," according to NAI’s submission to the city. "However, after multiple unsuccessful attempts to secure this, they have adjusted their targets downward to a more moderately priced restaurant/sports bar which they believe they have secured and should announce soon."
Also detailed in NAI’s submission to the city are obstacles and "Areas of Difficulty" in leasing out the garage retail space.
nSigning leases can much longer at public properties, given government requirements.
This includes "review by the [parking authority] board of each milestone," since the board meets only meets once a month; "city’s timetables;" "attorney review," and "tenant improvement budgets and cost."
"The timing for completion of a lease transaction will be longer than a typical market transaction, and, in some instances, may be twice as long," NAI wrote.
The company suggested that the city offer lease incentives, including expedited permitting and flexible pricing.
nA shrinking window of time before the ballpark opens.
NAI wrote that the timeframe from signing a letter of interest with a retailer to a soft opening can take 154 to 409 days, with restaurants on the longer end.
"As of today, unless everything goes as quickly as possible, there is minimal to no time tolerance for delays and we are probably already past that timeframe based on a realistic standard," NAI wrote.
Requiring a request for proposals process and city commission approval for each lease could further extend the timeline by 60 to 120 days, NAI wrote.
nRetailers typically expect a "vanilla shell" build out when renting a new space, yet the city hasn’t budgeted for that.
"When retailers and restaurants are leasing in newly built properties, they have an expectation of how the space will be delivered to them to finish it for their specific need," NAI wrote. "The most common standard of expectation is referred to in the industry as a "Vanilla Shell.’"
A typical "vanilla shell," according to NAI’s submission, includes smooth drywall walls ready to be painted, concrete floor slabs with a "smooth troweled finish" and broom cleaned, a washroom with a toilet and sink installed, water service to the point of meter connection and a hollow metal exit door.
NAI wrote that City of Miami Project Manager Robert Fenton said "current plans call for the retail space to be delivered with no walls, no services."
Build out to typical "vanilla shell" standards would cost the city an estimated $3.2 million, NAI wrote.
With other issues taken into consideration, including lack of grease traps for restaurants, "the funding for tenant improvements in order to attract the desired retailers and restaurants is short by $1.4 million," NAI wrote.
This encompasses using $3 million in bond dollars toward the build out.
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